Mr. Fessenden returned yesterday,— a long absence for such a period as this. The course pursued at the Treasury Department in withholding money from the naval contractors for months after it is due is reprehensible and injurious in the highest degree to the public credit. Mr. F. is not responsible for this wrong. It was the work of Chase, who, in order to retire his interest-bearing notes, seized the money which legitimately belonged to the naval contractors to the amount of $12,000,000. As a consequence we shall lose some of our best contractors, who feel there is bad faith and no dependence on the government.
Some of the contractors for light-draft monitors are writing pressing letters. If disposed to act fairly, they should be promptly met; but if attempting to take advantage of our necessities, we must see that the public suffers no detriment.
Olcott, the detective, sends me a curious letter of E. Delafield Smith, with a not less curious indorsement by Olcott. Smith thinks the transactions of his office have been scrutinized and asks Olcott. O. inquires of me how he shall answer.
SOURCE: Gideon Welles, Diary of Gideon Welles, Secretary of the Navy Under Lincoln and Johnson, Vol. 2: April 1, 1864 — December 31, 1866, p. 114
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