THE SANBORN CONTRACTS
THE forty-second Congress, at its second session, repealed all laws which provided for the payment of moieties, or commissions, to informers, so far as related to internal revenue taxes. But a provision was inserted by the Conference Committee, which attracted no attention, providing that the Secretary of the Treasury might employ not more than three persons to assist the proper officers of the Government in discovering and collecting any money belonging to the United States whenever the same might be for the interest of the United States. The Secretary was to determine the conditions of the contract, and to pay no compensation except out of money recovered. No person was to be employed who did not file a written statement, under oath, stating the character of the claim under which the money was withheld or due, and the name of the person alleged to withhold the same.
Under this law John D. Sanborn of Massachusetts, an active supporter of General Butler, applied for a contract which he obtained on the 15th of July, 1872, for the collection of taxes illegally withheld by thirty-nine distillers, rectifiers and purchasers of whiskey. He was then himself an employee of the Government as Special Agent for the Treasury Department. Secretary Boutwell being then absent or otherwise unable to attend to his duties, this contract was signed by Assistant Secretary William A. Richardson. Sanborn had already been employed to work up certain whiskey cases for which he had been paid $3,000 by the Government, and these cases were included in the foregoing contract.
On the 25th of October, 1872, Sanborn made application to have added to his contract the names of 760 persons,