Freedmen's Bureau-Generals Howard and Balloch.

The approval by the Second Comptroller of the application of the public money to the purposes just mentioned is no protection to the Commissioner and chief disbursing-officer of the Bureau, unless such approval was given by the Comptroller while officially passing on their accounts; in which case the action of the Comptroller would be conclusive until such accounts are re-opened or the settlement thereof set aside on some valid ground, such as fraud, mistake, &c.

Those officers, notwithstanding a criminal prosecution against them on account of the aforesaid investment may now be barred by the limitations of the statute, remain civilly liable for so much of the public money received by them as has not been lawfully accounted for.

DEPARTMENT OF JUSTICE,

October 24, 1874.

SIR: I have examined the papers which accompanied your communication of the 16th ultimo, relative to certain transactions of General O. O. Howard, late Commissioner of the Freedmen's Bureau, and of General George W. Balloch, late chief disbursing-officer of that Bureau; and I now proceed to answer the questions propounded by you in that communication.

The transactions referred to are, the investment in United States bonds of moneys received by those officers from the Treasury, under the circumstances hereinafter stated, and the application of the profits derived from such investment to the purposes hereinafter mentioned.

The questions propounded to me are the following:

"1. Were Generals Howard and Balloch, or either of them, disbursing-officers of the United States within the meaning of the acts of March 3, 1857, June 14, 1866, and other acts herein cited, (among which are the act of August 6, 1846, and resolution of March 29, 1867;) and had they, or either of them, any lawful right thus to convert the money received by them into United States bonds?

"2. Had they, or either of them, a lawful right to expend, for any purpose whatever, the premium or interest arising therefrom; and, if so, have they any lawful right to re-imburse themselves therefrom for any erroneous or double payments made to claimants without any fraudulent intent on the part of said officers, and after the usual precautions had been taken to verify the identity of such claimants; or to pay to employés of the Bureau any sums, on account of extra

Freedmen's Bureau-Generals Howard and Balloch.

compensation, from this or any other fund; and what legal effect has the approval of the Second Comptroller upon such re-imbursement or payment?

"3. If found that the conversion in question was unlawful, what form of civil or criminal prosecution ought to be and now can be instituted against either of these officers, especially General Balloch, for such violation of law, or to recover any portion of the interest which may be found due to the United States; and should the entire interest arising from these bonds be turned into the Treasury as a miscellaneous. receipt without any abatement ?"

The facts upon which these questions have arisen, so far as they seem to be material to the consideration of the points really involved, are as follows:

By the act of March 3, 1865, (13 Stat., 507,) there was established in the War Department, temporarily, a Bureau of Refugees, Freedmen and Abandoned Lands, (ordinarily called the Freedmen's Bureau,) to which was committed "the supervision and management of all abandoned lands, and the control of all subjects relating to refugees and freedmen from rebel States, or from any district of country within the territory embraced in the operations of the Army," under such rules and regulations as might be prescribed by the head of the Bureau and approved by the President. Provision was made for the appointment of a Commissioner, under whose control and management the Bureau was to be placed, and likewise for the appointment of a number of assistant commissioners; and the Secretary of War was authorized to assign to the Commissioner a certain number of clerks. But the act also provided that any military officer might be detailed and assigned to duty thereunder, without increase of pay or allowances.

On the 12th of May, 1865, an order was issued from the War Department, in which, by direction of the President, Major-General O. O. Howard was assigned to duty in that Department as Commissioner of said Bureau.

By a subsequent order issued from the War Department, dated June 6, 1865, Lieutenant-Colonel George W. Balloch, then chief commissary of the Twentieth Army Corps, was assigned to duty as inspector of the Subsistence Department, un

Freedmen's Bureau-Generals Howard and Balloch.

der the act of March 3, 1865, entitled "An act for the better organization of the Subsistence Department," and by the same order he was directed to report in person to Major-General Howard, Commissioner of Refugees, Freedmen and Abandoned Lands.

On the 13th of June, 1865, an order was issued by Gen. eral Howard, as such Commissioner, which announced that Lieutenant-Colonel George W. Balloch, commissary of subsistence, inspector of Subsistence Department, having been duly assigned by orders from the War Department, was on duty in said Bureau, and directed that he be respected accordingly.

Subsequently another order was issued by General Howard, dated "Bureau Refugees, Freedmen and Abandoned Lands, Washington, D. C., June 20, 1865," containing the following directions:

"Lieutenant-Colonel George W. Balloch, on duty as chief commissary and inspector of Subsistence Department of this Bureau, in connection with the duties of his office as here announced, will temporarily perform the duties of chief accounting and disbursing officer of this Bureau. He will keep a complete record of all funds accruing from every source connected with the Bureau, and of all expenditures in every department of the same."

By the 1st section of a resolution approved March 29, 1867, (15 Stat., 26,) Congress enacted, "That all checks and Treasury certificates to be issued in the settlement of claims for pay, bounty, prize-money, or other moneys due to colored soldiers or marines, or their legal representatives, now resid ing, or who may have resided, in any State in which slavery existed in the year 1860, the claim for which has been or may be prosecuted by an agent or attorney, shall be made pay. able to the Commissioner of the Freedmen's Bureau, who shall pay the said agent or attorney his lawful fees and expenses, and shall hold the balance subject to the order of the claim. ants on satisfactory identification," &c. The 2d section also enacted, "That the Commissioner of the Freedmen's Bureau shall be held responsible for the safe custody and faithful disbursement of the funds hereby intrusted to him." And by the 3d section it was further enacted, "That all money

Freedmen's Bureau-Generals Howard and Balloch.

held or disbursed under the provisions of this resolution shall be held and disbursed under the same rules and regulations governing other disbursing-officers of the Army."

Before the passage of that resolution, Congress had, by the act of July 16, 1866, (14 Stat., 173,) further continued in force, with some amendments not important in this connection, the aforesaid act of March 3, 1865, establishing temporarily the Freedmen's Bureau; and those acts were still further continued in force by the act of July 6, 1868, (15 Stat., 83,) except as therein modified. The latter act, in section 4, provided, "That officers of the Veteran Reserve Corps or of the volunteer service, now on duty in the Freedmen's Bureau as assistant commissioners, agents, medical officers, or in other capacities, who have been or may be mustered out of service, may be retained by the Commissioner, when the same shall be required for the proper execution of the laws, as officers of the Bureau, upon such duty and with the same pay, compensation, and all allowances from the date of their appointment, as now provided by law for their respective grades and duties at the dates of their muster-out and discharge," &c.

On the 1st of September, 1868, General Howard, acting in pursuance of the provisions of the enactment just quoted, issued an order retaining General Balloch (then about to be mustered out of service, and who in fact was next day mustered out, to take effect September 1, 1868) in the Freedmen's Bureau, as assigned to duty therein by the orders of June 6, 1865, and June 20, 1865, herein before mentioned; and the latter thenceforth remained on duty in that Bureau, as chief disbursing-officer thereof, until some time in October, 1871, when he was finally relieved from duty and ceased to be an officer of the Bureau.

In the meantime considerable sums of money had been intrusted to the Commissioner of the Freedmen's Bureau, under the aforesaid resolution of March 27, 1867, for payment of the claims of colored soldiers, sailors, or marines, as provided in that resolution. Part of this money, amounting to about $300,000, was invested by General Balloch, with the concurrence of General Howard, in United States securities, and the profits derived from the investment, in the shape of interest and premium, were applied to various purposes,

Freedmen's Bureau-Generals Howard and Balloch. among which were the re-imbursement of General Balloch for claims paid to the wrong parties, the payment of extra compensation to employés of the Bureau, also the payment of accounts for stationery, printing, &c.

Concerning that investment, General Howard writes as follows, in a letter to the Secretary of the Treasury dated October 7, 1871: "After the funds for payment of certificates for bounty come into my hands, I first pay the attorney of record and the claimants as fast as I can; but often there is to the credit of my chief disbursing-officer quite a large sum. Upon consultation with, as I believed, the proper officers of your Department, I allow to be changed currency into United States securities."

One of the officers here referred to by General Howard is the Second Comptroller, who, in a report to the Secretary of the Treasury, dated the 10th of March, 1874, makes the following statement: "Early in 1870, I think about the last of January, General Howard called on me and said that funds had accumulated in his hands from these payments to him, (i.e., payments made to him under the provisions of the resolu tion of March 29, 1867,) and wished to know if there was any legal or other objection to his investing the money while looking up the beneficiaries. My reply was, in substance, that the case was an anomalous one, but that there was no law which forbid the payee of an adjudicated or settled account from investing the proceeds, and that the laws in regard to investment of public funds by disbursing-officers, especially the acts of August 6, 1846, (9 Stat., 63,) and June 14, 1866, (14 Stat., 64,) did not apply in this case, and that he might legally and properly invest the money in United States bonds, deposit them in the Treasury, and account for the interest. I am of the same opinion now that I was then. General Howard informed me that he had consulted with General Spinner, who concurred in this view of the law and favored the investment."

To return to the questions submitted: These are understood to have reference to the sort of official relation sustained toward the Government by General Howard and General Balloch, while on duty in the Freedmen's Bureau, especially with respect to the custody and disposition of the funds intrusted