Being a little late at Cabinet, found the President, Seward, and Stanton with my letter before them in relation to Osborn. Stanton was evidently not satisfied with my presentation of the case, and yet was not prepared to specify his objections. He spoke of the publishers as equally deserving arrest, which I did not controvert, but expressed an opinion that all implicated should be attended to. I furnished proof as to the complicity of Osborn. On this further proceedings might be had. Seward was interested in a late singular decision of Judge Wylie of the District Court against Baker, for false arrest and imprisonment at the instigation of the late Secretary of the Treasury, the present Chief Justice Chase. Under this decision, he said, no Cabinet officer was safe. Stanton said he would be imprisoned a thousand years at least.
This proceeding of the court had evidently caused Stanton to hesitate in the matter of Osborn, and hence he wanted me to make special request for the arrest, not only of O. but the different editors, who, he thought, should be punished. I did not incline to that view. O. had surreptitiously obtained information and sold to editors. The President remarked that he thought an example of Osborn might answer without a squabble with the editors. Both he and Stanton dwelt on the disinclination of General Dix to have a fight with newspapers.
An investigation as to the true condition of matters with Judge Wylie in the Baker and Gwin case was directed. The President suggested a difference in this and arrests under the military department.
I have had much difficulty in regard to the Dictator and the Puritan. The large balance due falls heavily on the contractors, who claim they are losing interest at the rate of about two hundred and fifty dollars per day. It is very hard that they should thus suffer, but the law for their relief is very bungling in its phraseology. I have delayed action, and consulted with several. Admiral Smith, Fox, and Faxon advise payment. Lenthall objects. I requested Senator Grimes to examine the papers and the law yesterday, and had intended to associate Mr. Rice with him, so as to have an opinion from the Chairman of each naval committee; but Rice had gone to Boston. Grimes advised payment, so I ordered half a million to be paid towards the Puritan, but none to the Dictator until we had a more satisfactory and full report.
SOURCE: Gideon Welles, Diary of Gideon Welles, Secretary of the Navy Under Lincoln and Johnson, Vol. 2: April 1, 1864 — December 31, 1866, p. 206-7
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