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| ae ‘House Calendar No. 87.

63D CONGRESS, HOUSE .OF REPRESENTATIVES. REPORT
2d Session. No. 500,

994444

Us DL
V ui) | FUR-SEAL INDUSTRY OF ALASKA.

Aprit 4, 1914.—Referred to the House Calendar and ordered to be printed.

Mr. Roruermet, from the Committee on Expenditures in the Depart-
ment of Commerce, submitted the following

REPORT.

The Committee on Expenditures in the Department of Commerce
proceeding under its general powers to inquire into the leasing of
sealing privileges on the Pribilof Islands of Alaska, the conduct of
the lessees on the said seal islands, the management by the officials
of the Government in charge of the fur-seal herd after the expiration
of said leases, beg leave to report as follows:

Specific charges having been filed with the committee August 31,
1913, alleging that the agents of the Government had conspired with
the lessees of the seal islands to take seals in violation of law and the
provisions of their contract, and also that the said lessee company had
secured the lease from the Government by fraud and perjury, the
committee determined to investigate these questions and report its
findings of fact to the House. Extended hearings were had, begin-
ning October 13, 1913, and ended March 14, 1914.

The committee, after due and careful deliberation, finds the fol-
lowing facts:

I. That when the United States took possession of the fur-seal
herd, in 1867-68, by virtue of the treaty of cession from Russia,
and leased it to the Alaska Commercial Co., a corporation, for 20
years from May 1, 1870, the herd consisted of about 4,700,000 seals.
(See pp. 56-58, hearing No. 1.) During the period of this lease,
1870-1890, the lessees took 1,856,224 seals, deriving therefrom a net
profit of $18,753,911.20, while the net profit of the Government there-
from was but $5,264,230.08. (See hearing No. 1, pp. 176-178.)

II. That on March 12, 1890, a second lease was entered into with
another corporation, known as the North American Commercial Co.,
of San Francisco, for a period of 20 years. That when this lease was
executed a survey of the herd made in July of that year disclosed the
fact that there were about 1,000,000 seals on theislands. That this re-
duction of the herd was due to the combined effect of killing 100,000
seals annually on land, since 1870, and the energetic prosecution of
pelagic sealing, first begun in a noteworthy degree in 1883-84, and

then actively prosecuted since 1888. (See pp. cae
n
ce

y FUR-SEAL INDUSTRY OF ALASKA.

That the herd had been depleted to such an extent in 1884 that the
Alaska Commercial Co. had difficulty in securing their average annual
quota. In spite of this fact, however, the said company continued
to take an annual average of about 100,000 seals, until their lease ex-
pired in 1890. On the expiration of this lease, the herd had been
depleted to such an extent that the new lessee, the North American
Commercial Co., had great difficulty in 1890, and failed in obtaining
their quota, and then commenced to kill female seals and yearlings,
which is now, and was in 1896, prohibited by law and the regulations
of the department. This unlawful killing of seals was reported July
31-September 7, 1890, to Hon. Wilham Windom, the Secretary of
the Treasury—he died January 29, 1891—and his successor, Hon.
Charles Foster, took no steps officially to prevent a recurrence of such
loss to the Government; but, on the contrary, immediately removed
the agent on April 5, 1891, who reported it, and assigned him to
another position in the service. (See pp. 304-314, hearing No. 1.)

That the conduct of the lessees, the North American Commercial
Co., through its officers and agents, coupled with the work of and the
interest they had in pelagic hunting, so reduced the seal herd of about
a million seals that in August, 1910, the number of seals on the islands
did not, as officially reported, exceed 133,000. That the lessees had
killed in 20 years 343,356 seals, from which they derived a net profit
of approximately $5,000,000, and by reason of which the Government,
after paying the expenses incident to the management of the fur-seal
herd during said period, derived no profit; but, on the contrary,
suffered a cash loss of more than $1,350,000. That the record of 40
years of leasing of the seal islands of Alaska (1870-1910) discloses the
fact that the Government has suffered a property loss of not less than
$80,000,000, caused by the almost complete commercial ruin of the
said seal herd, while the net revenue received by the Government,
under both leases, amounted to but $3,914,000 approximately. (See
pp. 176-178, hearing No. 1.)

Ill. Your committee finds that the second lease which the Goy-
ernment entered into, namely, with the North American Commer-
cial Co., was obtained by fraud; in part, having consisted in the filing
of a false affidavit on the part of Isaac Liebes, president of said com-
pany. ‘Testimony discloses the fact that the said Liebes, as president
of said company, did, on March 12, 1890, declare under oath in the
form of a written affidavit, which was placed on file in the Treasury
Department, with the papers in the case, to the effect that neither
he nor any of his associate lessees, was engaged in the business of
pelagic sealing, or in any violation of law. When in truth and in
fact, he, the said Isaac Liebes, was, at the very time of the filing of
said affidavit, in full knowledge of the fact that his associate lessee,
Hermen Liebes, was the owner of the schooner James Hamilton Lewis,
and that she had been outfitted by him, illegally cleared January 10,
1890, for hunting fur seals at sea, and for the very. purpose of com-
mitting depredations on the high seas and in American waters, and
on the seal islands of Alaska, during the summer of 1890. That on
September 17, 1890, he, the said Isaac Liebes, president, as aforesaid,
became part owner of said vessel James Hamilton Lewis. That the
said Herman and Isaac Liebes, officers and stockholders of the said
North American Commercial Co., and as owners of the said James
Hamilton Lewis corresponded, combined, confederated with one

HM Sy FUR-SEAL INDUSTRY OF ALASKA. 2

Mie ander McLean, known as a notoricus British pirate, for the pur-
pose of committing, and in fact did commit, depredations on the high
seas, 1n American waters, and cn the Pribilot Islands, by way ‘of
unlawfully killing fur seals belonging to the Government of the
United States. (See pp. 224, 225, 285, 290, 294, 295, hearing No. 1.)

Your committee is of the opinion that the conduct of the officers of
the North American Commercial Co. during 1890-91 and subsequent
thereto was such that the officials of the Government should have
promptly revoked the lease and prevented this great loss of property.

In this connection it may be stated that the following is a clause
which appears in the lease:

The Secretary of the Treasury reserves the right to terminate this lease and all
rights of the North American Commercial Co. under the same at any time on full and
satisfactory proof that the said company has violated any of the provisions and agree-
ments of this lease, or any of the laws of the United States, or any Treasury regulation
respecting the taking of fur seals or concerning the islands of St: George and St. Paul
or the inhabitants thereof.

That the said North American Commercial Co. gave a bond dated
March 12, 1890, in the sum of $500,000 conditioned for the faithful
observance of all laws and regulations of the Treasury Department,
said bond being signed by I. Liebes, psesident; H. B. Parsons,
assistant secretary ; and Darius O. Mills, Lloyd Tevis, Herman Liehes,
by D. O. Mills, attorney in fact, and Stephen B. Elkins, as sureties,
and approved by William Windom, Secretary of the Treasury, and
which said bond is on file in the department, as part of the record in
the case.

IV. Your committee further finds that, in spite of the ruinous
record made during the last 20 years by the North American Com-
mercial Co., under “the supervision of the Government agents of the
seal islands of Alaska, H. H. Taylor, the president of said company,
C. H. Townsend, of the advisory board fur-seal service, Department
of Commerce, and George M. Bowers, Commissioner of the Bureau of
Fisheries, did recommend to the Secretary of Commerce and Labor,
the Hon. Charles Nagel, that he enter into another lease of the said
islands for 20 years. The testimony discloses the fact that the
Secretary of Commerce and Labor had intended to enter into another
contract to release the islands to the highest and best bidder.
Strenuous objections to any leasing of the islands, however, were
made by public-spirited citizens, and this prevented the renewal of
the lease. (See statement of Charles Nagel, dated Mar. 19, 1914,
and review of same, appendix to hearing No. 3.)

V. That since the lessees were prevented from further killing by
the expiration of their lease and by the passage of the act of Con-
gress approved April 21, 1910, which act prohibited the re-leasing
of the islands for the purpose of killing seals, the Secretary of Com-
merce and Labor was placed in full control of affairs on the said
islands.

Your committee, after due and careful deliberation, finds that the
lessee company took 128,000 yearling seals in violation of law during
the term of thcir lease. That this was done in collusion with the
agents of the Government on the islands. That on May 4, 1896,
the Hon. John G. Carlisle, Secretary of the Treasury, issued regu-
lations which prohibited the killing of yearling seals and seals whose
skins weighed less than 6 pounds. That, in spite of this regulation,

4 FUR-SEAL INDUSTRY OF ALASKA.

the lessee company, in collusion with the Government agents on the
islands, took about 8,000 seals in violation thereof, during the first
season of its prohibition, i. e., June and July, 1896. (See pp. 207-
208, hearing No. 1.)

That there were no other regulations issued until May 1, 1904.
Then the Carlisle regulations were, in effect, reissued, as the ‘‘ Hitch-
cock rules,” whereby the killing of any male seals under 2 years of
age was prohibited, on the well-established fact that the sex between
the male and the female yearling seals can not be told apart, as they
haul out upon the islands, without physical examination.

That no further regulations were issued until May 9, 1906. No
changes were made then as to the ages or the prohibition of killing
yearling seals, but a change in the minimum weight of skin to be
taken from ‘‘six pounds” in the Carlisle and from “five and one-
half’? pounds in the Hitchcock regulations to “five pounds” was
made. It is quite apparent to the committee that the object of both
the Carlisle and Hitchcock regulations as to weight of skins was to
prevent the killing of young or yearling seals. These rules were made
with the assumption that those skin weights would be properly made
when the pelts were taken from the bodies of the seals.

VI. The committee further finds that in 1896 and thereafter the
leasing company, in conjunction and connivance with the Govern-
ment agents on the islands, killed yearling seals and added sufficient
blubber in skinning the animals so as to bring the skin weights within
the regulations. By lowering the weight of the skins it made the
fraud and deception easier, because it took less blubber on the small
skin to bring them within the regulations. In this connection it may
be well to note that Mr. Frank H. Hitchcock, who, as chief clerk of
the Department of Commerce and Labor, appeared before the Ways
and Means Committee on March 9, 1904, and said that he had been
sent to represent the Secretary of Commerce and Labor, and to make
the following proposal to the committee (Fifty-eighth Congress,
second session, on House joint resolution 124, appears the following
hearing, Ways and Means, p. 35):

Mr. Hircucock. First of all we propose to limit still further the ages at which seals
can be taken. We will prohibit altogether the killing of seals under 2 years of age.
Killing will thus be restricted to seals between 2 and 4 years old.

Mr. WiuutaMs of Mississippi. You propose to forbid the killing of seals under 2
years old?

Mr. Hircncock. Yes.

Mr. WitxiAMs of Mississippi. At 2 years of age that is the very time you can tell
the difference between the bull and the cow. In other words, if you kill nothing
under 2 years old there should be no reasonable excuse for a mistake in that respect.

Mr. Hircucock. You are quite right; that’s the point. The great objection to
the killing of these small seals, and, I take it, the only objectign, is the difficulty of
distinguishing the males from the females.

On July 28, 1910, Secretary Charles Nagel received from the Bu-
reau of Fisheries a marked copy of the above hearing, and sends that
notice of this reception to the House Committee on Expenditures in
the Department of Commerce and Labor, June 24, 1911. (See p.
987, Appendix A, H. Doc. 93, 62d Cong., Ist sess.)

Secretary Charles Nagel had full knowledge of the fact that on
March 9-10, 1904, the Department of Commerce and Labor pledged
itself to the Ways and Means Committee not to allow any seals
killed on the Pribilof Islands ‘‘under 2 years of age,” and this pledge

FUR-SEAL INDUSTRY OF ALASKA. 5

was also given to the Senate subcommittee in charge of Alaskan
affairs, of which Senator Dillingham was chairman, on March 8, 1904.
(See p. 235, hearing No. 1, Jan. 17, 1914, House Committee on Ex-
penditures in the Department of Commerce. )

It is conceded on all sides that the sex in young seals can not be
told apart when they appear on the islands and that they are born
equal in number. (See p. 182, hearing No. 1.)

In the judgment of the committee this raises a strong presumption
that half of the yearlings so taken were females, which is made a
crime under the statute. _

This method of taking seals continued until the end of the killing
season of 1909, the termination of the lease. After that the business
was conducted by the Government under the direction of Hon.
Charles Nagel, then Secretary of Commerce and Labor.

VII. The committee finds that the taking of seals on the Pribilof
Islands, under the direction of former Secretary Charles Nagel, from
1910 to 1912, inclusive, was conducted in the same manner, and by
the same officials, as in the latter years of the leasing company.
Before the said Charles Nagel had full authority under law to take
seals on the islands, and during the last year of the lease, he was
repeatedly notified of the unlawful killing and depredations com-
mitted by the sealing company, and the Government agents on the
Pribilof Islands, with records of such work, during the years of 1906,
1907, and 1908; he was warned April 26, 1909, that they would be
guilty again, under his direction, of the same conduct. This warning
was disregarded; the same leasing parties were on the islands in 1909,
and took, in violation of law and regulation, 7,230 small pups and
extra small pups, which were yearlings, and exclusively the property
of the Government. |

The committee further finds that the said Charles Nagel, on May
7, 1909, appointed George A. Clark, as a special expert assistant to
visit the islands, examine conditions, and make a report to the depart-
ment, which he did September 30, 1909. In said report the special
assistant aforesaid states that yearlings are taken, and ‘“‘no seal is
too small to be killed,” to wit:

It is on the killing field, however, that the great need of a guiding and controlling
hand is shown. In 1896-97 the Government agents ordered the drives. This season
they have been entirely in the hands of the lessees. The young males set aside for
breeding purposes having been marked, the lessees have been free to take what they
could get, and this resulted in their taking practically all of the bachelors appearing
on the hauling grounds.

* * * With a fixed legal quota, and a limited time in which to secure it from a
failing herd, there naturally results close, severe driving. In the eagerness to see that
no possible bachelor escapes, the edges of the rookies are encroached upon and cows
included in the drives. Fifty of them appeared in drives toward the close of this
season. A drive that can not be made without including cows should be omitted.
A drive which appears on the killing field with 15 to 20 cows in it should be released
rather than incur the danger of clubbing any such cow by mistake. There should be
some one in charge of the herd with power and discretion to do this. With a limited
killing season, however, this would be unfair to the lessees. There should also be
power and discretion to waive the limit and extend the time of killing if necessary.

There has been on the killing grounds since 1900 a constant struggle on the part of
the leasing company in the closing years of its concession to get every possible skin
from the declining herd. Its work has been aided by a high arbitrary legal quota and
by a lowered minimum weight of skin, enabling it to gradually anticipate the quotas
of succeeding years by killing younger animals. As a result there has occurred in
these years probably the closest killing to which the herd has ever been subjected.
Aside from the diminished supply of male life on the breeding grounds in 1904, this

6 FUR-SEAL INDUSTRY OF ALASKA,

is shown in the fact that though the herd has declined two-thirds in size, the quota has
never fallen more than one-third in size as compared with that of 1897.

During the present season and for some seasons past a minimum of 5 pounds has
been in force, the skins taken ranging in weight all the way from 4 to 14} pounds,
bringing all classes of animals from yearlings to 4-year-olds into the quota.

* * * * * * *

A killing was made at Halfway Point as usual on the return trip. It yielded 32 skins.
Fifteen animals—young bulls—too large for killing and 9 shaved heads were exempted,
but no small seals whatever. As the end of the killing season approaches it is plain
that no seal is really too small to be killed. Skins of less than 5 pounds weight are

taken and also skins of 8and 9 pounds. These latter are plainly animals which escaped
the killing of last year because their heads were shaved. Otherwise it does not seem
clear how they did escape. (See pp. 184, 185, 187, 188, hearing No. 1, 1914.)

The committee further finds that the said Charles Nagel, disregard-
ing the Clark eee and substituting by printing, November, 1909,
another report, which denied Mr. Clark’s findings of fact, and all
former notices in writing of the illegal killing of seals on the islands
by the lessees, received on May 9, 1910, from Henry W. Elliott the
following letter:

LAkKEWoop, Onto, May 9, 1910.
Hon. CHARLES NAGEL,

Secretary Commerce and Labor.

Dear Str: The reason why a new and competent audit of the seal-island books must
be made in your department, and why it is demanded imperatively for the public good,
is - follows, briefly stated:

The law has been openly violate on the killing grounds of the islands, and the
aoe of the lease ignored by the lessees thereof at frequent intervals, and repeatedly,
from July 17, 1890, up to the close of the season of 1909. This violation of the law
and the contract has been chiefly by the act of killing female and yearling male seals;

said killings have not been in negligible numbers, but have run up into the tens of
thousands of female and yearling male seals.

II. This illegal and improper killing has been ordered by the lessees, and falsely
certified into your department as the taking of male seals according to law and the
rules of your department.

III. The full and complete proof of this illegal killing as specified above exists on
the islands and in the records of the sales of those skins. Any competent and honest
auditor of those records will lay them open and so disclose the truth of those charges
as made in items I and IT.

Very truly, yours,
Henry W. Evuiorr,

The said Charles Nagel ignored this letter which is part of the record
of the department, satel was again notified to the same effect on May
24, 1910, by another letter from the said Henry W. Elliott, which is
also part of the record of the department.

After receiving these warnings of the guilty conduct of the lessees
in conjunction with the Government agents on the islands during the
year 1909, the said Charles Nagel, in 1910, under rae: of the
Government, sent to the islands the same Government 0 flicials, who
again killed young or yearling seals in violation of law in the same
manner as was done in conjunction with the sealing company prior
thereto in 1909. In that year, June and July, 1910, ‘they killed 7,733
yearlings. (See pp. 642-645, hearing No. 2, and pp. 702-709, hear-
ing No. 3.)

‘In the judgment of the committee half of that number were females.

In 1911, after said Charles Nagel was fully aware that the Commit-
tee on Expe nditures 1 in the Department of Commerce was investigat-
ing the conduct of the lessees and Government agents and the killing
of seals on the Pribilof Islands, he again sent the same Government

FUR-SEAL INDUSTRY OF ALASKA. i

agents to the islands. They killed 6,241 yearlings in violation of law
and regulation in 1911. This occurred during the months of June and
July, 1911.

it 1912 the said Charles Nagel sent the same guilty Government
agents again to the islands, and 1,178 yearlings were killed out of the
small total taken of 3,773 seals, in violation of law and regulation.

VIL. Your committee finds that a regulation as to the weight of
skins is futile, for the reason that the skin of a yearling can be ‘taken
and sufficient blubber may be added by skinning to make it weigh as
much as, and more than, that of a 2-year-old pelt which is properly
skinned. The committee further finds that the records made by the
agents of the Government in the Bureau of Fisheries during the lease
of the sealing company and subsequent thereto were made by skin
weight and not by skin measurement, as should have been done.

IX. Your committee find that Isaac Liebes and the late Herman
Liebes were engaged in pelagic sealing at the time that the lease was
obtained from the Government; that the late Darius O. Mills, of
New York, was a member of the leasing company, as was the late
Stephen B. Elkins, Senator from West Virginia; that Lloyd Tevis
and Herman and Isaac Liebes were also incor por ators and shareholders
of the leasing company known as the North American Commercial
Co., of San Francisco and New York. (See pp. 224, 225, 285, 290,
hearing Now)

The evidence is full and complete that said licensees had full.
knowledge of this guilty killing of yearling and female seals aforesaid ;
and did “annually divide up ‘and partic ipate in the profits ‘of said
illegal killing of seals since 1891 to the end of their lease, May 1, 1910.
(See pp. 305-307, 313-316, hearing No. 1, and p. 707, hearing No. 3.)

X. Your committee find in further evidence the proof that ihe
Russian sealing records of 1800-1834 have been deliberately falsified
by the report of Dr. David Starr Jordan on Fur Seal Investigations,
Parts 1-4, 1898, being a report made to the Secretary of the Treasury,
February 24, 1898.

The significance and design of this falsification of the Russian
records of land killing from 1800 to 1834, whereby the herd on the
Pribilof Islands was nearly reduced to complete extinction, and to
its utter commercial ruin to the latter date, is apparent and self-
confessed to the committee by Dr. Jordan’s associate and secretary,
George A. Clark, who, on February 23, 1913, testified as follows:

Mr. Ciarxk. The whole fur-seal difficulty at the present time turns on that. If the
Russians killed only males, then you have a right to stop land killing, and to say that
land killing had something to do with the present state of our herd. If the Russians
killed females, then the crisis through which the herd passed in 1835 was due to killing
of females just as the crisis through which the herd has passed in 1911 has been due
to killing of the females by pelagic sealers on the high seas.

Mr. MoGutre. This is one of the most material points that has been up. (See p.
551, hearing No. 2, 1914; House Committee on Expenditures in the Department of
Commerce. )

The testimony and documents produced to the committee show
beyond dispute ora shadow of doubt that Dr. Jordan used a false
translation of the Russian record of the killing, which enabled him
to untruthfully assert that ‘‘the Russians killed males and females
alike’? on the rooketies of the Pribilof Islands from 1800 to 1834,
thus destroying the herd and compelling that 10 years’ close time
which was ordered for the herd by the R. A. Co., from 1834 to 1844,

8 FUR-SEAL INDUSTRY OF ALASKA,

before commercial killing was again resumed. (See pp. 183-186,
hearing No. 1; pp. 671-678, hearing No. 3.)

That Dr. David Starr Jordan should have made an elaborate report
to the Secretary of the Treasury in 1898, wholly based upon a de-
liberate and studied falsification of the Russian sealing records of
1800-1834, is proven by the official records of the Proceedings of the
Tribunal of Arbitration, Volumes VII, pages 13-14, 152-153, and
VIII, pages 305-323, end which proof is fully carried in the testi-
mony given on pages 671-678, hearing No. 3.

That Dr. Jordan :nd his associates, who peepee this false-based
report aforesaid, did so to shield and conceal the truth as to the
ruinous work of the land killing by the lessees cn the Pribilof Islands
is beycnd question, since the truth in the premises had it been told
by Jordan in 1896 and 1898 would have compelled the immediate
removal of the lessees from the islands and would have led to a
betterment of the conditions involved at once.

Your committee, taking due note of all the testimony given and
carefully reviewing the same, together with that relating to the cer-
tified records given it by the United States Bureau of Fisheries, of the
London sales of fur-seal skins, which were secured as small pups and
extra-small pups illegally on the Pribilof Islands by the lessees thereof
in violation of the law and regulations of the Government, find that,
said lessees have taken since 1896 at least 128,000 such yearling fur-
seal skins as were distinctly prohibited and denied to them by law
and regulations, said illegal and ruinous killmg being annually done
by them from i896 to the end of their lease, May 1, 1910. (See hear-
ing No. 1, pp. 215-280, 1914.) The committee therefore recommends:

(1) That the Attorney General be requested to take such steps as
may be necessary to collect the bond of $500,000 from said North
American Commercial Co. and the sureties thereon.

(2) That the Attorney General be requested to institute civil pro-
ceedings against Isaac Liebes and his associate lessees and legal repre-
sentatives to recover such damages as he and his confederates did to
the seal herd of Alaska from 1890 to 1910 and to proceed against such
other persons who are and may be also implicated.

(3) That, with a view to carrying these recommendations into
effect, the Clerk of the House be directed to forward to the Attorney
General a certified copy of this report, together with a complete set of
the official hearings held before and by this committee on this sub-
ject, with the request that the Attorney General proceed in the case
as the law and evidence direct for the good of the public interests
concerned.

()

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