FRAUDS AND SPECIAL INVESTIGATIONS.
In the last annual report I dwelt at some length upon the subject of fraudulent pension claims. Attention was invited to the defects of the present system of determining the right to a pension, and the opinion was expressed that those defects rendered hands so easy, and that consequently there was, in fact, so large a percentage of cases wrongfully established, as to challengethe careful consideration of Congress, and that some remedy should, i.e possible, be devised. The experience of the past year has confirmed and emphasized that view.
The principal weakness of the system consists, as was then stated, in accepting as a basis of adjudication ex-parte affidavits, which the Government has no power to sift by cross-examination, while at the same time it has no means of research for adverse testimony. In my opinion there can be, under these conditions, no security to the Government against dishonest claims, and probably the proportion of such claims which will be successfully prosecuted will increase, rather than diminish, the dishonest attorneys becoming more skilled, and the temptation to fraud becoming greater, as the average value of pension is enhanced by the accumulation of arrears and growing liberality of legislation.
Frequently considerable time is necessarily consumed in obtaining such evidence of violation of the law as will warrant the institution of proceedings in the courts, and in such cases, among the obstacles to success in seeming the punishment of offenders is the shortness of the period during which, under the statute of limitation, an indictment must be found. In view of this fact, I earnestly urge your attention to the propriety of recommending to Congress the necessity of an extension of the term of limitation to Five,years.
The special service, as at present organized, is necessarily mainly occupied with cases of suspected fraud, where pension has already been allowed. It is doing important, valuable, and successful work. Every effort has been made to increase its efficiency and to perfect its organization. The direct saving to the Treasury from its work is many times greater than the sum expended in maintaining it; and the indirect saving by repressing fraud is known to this office to be most satisfactory. But as a means of prevention of fraud it is entirely insufficient, and in my belief no remedy will he found to be adequate which does not subject all the parol proof offered in support of claims to the sifting process to which it is subjected in ordinary courts of law, and which does not empower the Government to inquire into the facts in each case independently of claimant and his attorney, and there is no doubt that the reduction of the roll which would result from the adoption of such methods would justify the cost of such a system, even though that cost should be very considerable.
MEDICAL DIVISION—EXAMINING SURGEONS.
Since the date of my last report the number of examining surgeons has slightly decreased. During the year ending June 30, 1873, 25 have been dismissed on account of professional incompetency; 30 have been dropped because of change of residence; 43 have been dropped for various other reasons, including neglect of duty; 08 have resigned; 19 have died; and 176 have been appointed. The whole number at this date is 1,394.
Although there has been a slight decrease in their number, the area represented by the roster is considerably greater than at any time hitherto in the history of the office. The rapid settlement of the Western States and Territories, the population of which contains no inconsider-
