Cooper to Mr. Bee, June 11, 1879

Mr. Cooper to Mr. Bee.

Sir: In reply to your inquiries under date of the 10th instant, in regard to the nature of the bonds taken from manufacturers of cigars and tobacco by officers of internal revenue in this the San Francisco district, answering your inquiries in the order made, I have to say:

• I have been in the internal-revenue service in San Francisco some seven years and for six years and up to the 20th of last March I held the position of principal deputy in the collector’s office;
• The nature of security on what is generally known as cigar and tobacco bonds has been, up to within a very recent date, of a commercial nature, such as bonds, stock in trade, personal effects, &c.
• This system has prevailed under the administration of the late collectors L. H. Gary, John Sedgwick, and under Mr. Higby until within a few months past, and the government has met with, no loss from this class of bonds.
• When the Chinese manufacturers of cigars were required to furnish bonds with sureties having and owning realty, they found it difficult to comply, and were obliged to pay a bonus for parties to act as their bondsmen. I cannot say that I personally know any “professional bondsmen,” but a bondsman on one of these bonds told me that he received $100 for so doing, and that the Chinaman transferred to him his bankbook, worth $1,000, as security.
• Business men regard the commercial security given by established Chinese merchants as better than a security purchased from professional bondsmen.
• I know of no loss to the government under the old system and nature of security. Since my connection with the revenue service here there has been no occasion to bring suit on a cigar manufacturer’s bond. Since the requirement of realty on the bond I learn that 15 or 20 factories have discontinued business.
• I regard the surety of an old established Chinese merchant based on stocks and personality as ample and good, though not better than that of realty.

Very respectfully,