[Indorsements.] HEADQUARTERS DEPARTMENT OF THE COLUMBIA, Official copy (with inclosure) respectfully furnished the assistant adjutant-general, headquarters Military Division of the Pacific, for the information of the Treasury Department. O. O. HOWARD, Brigadier-General, Commanding. HEADQUARTERS MILITARY DIVISION PACIFIC, Respectfully forwarded to the Adjutant-General. J. M. SCHOFIELD, Copy of communication of commanding officer, Fort Wrangel, to the collector customs, Sitka, inclosing sworn statement of T. J. McCully, charging Charles V. Baronovich, a trader, with smuggling dutiable goods into Alaska from British Columbia, &c. Official copy. E. D. TOWNSEND, APRIL 1, 1876. Respectfully referred to Special Agent Mills, San Francisco, Cal., for such investigation as he may be able to make. BLUFORD WILSON, Solicitor. I found the complaining witness, McCully, at Wrangel, who substantiated verbally to me everything contained in his affidavit, but seemed unwilling to testify against Baronovich. Upon further questioning him, I ascertained that Baronovich had paid him the greater portion of the sum claimed by him, and I shrewdly suspect this affidavit was made more to compel a settlement than for any great zeal for the welfare of the public service. At all events, I found that McCully would prove a most unwilling witness. Subsequently I took the Wolcott and steamed for Karta Bay, where the trading post of Baronovich is situated. I read to him the charges, which he indignantly denied, interlarding his conversation in broken English with oaths and expletives. The antecedents and previous character of this man are bad, and I have no doubt but that he has been a systematic smuggler for years. I made thorough examination of his store and stock of goods on hand, and found no other evidences of smuggling. He has sold nothing to speak of for two years, his fishery has been closed, and he has done no business of any kind worth mentioning. He is deeply in debt and very poor. In addition to this, the man is so badly paralyzed and is a helpless cripple, he can barely speak distinctly and can hardly get about. In fact his system is so broken that in my opinion he cannot live long. A party of San Francisco capitalists have purchased his copper mine, and from the high character of the gentlemen composing the company, I feel assured there will be no more smuggling at this point if they can prevent it. Baronovich has made his last cruise, his sands of life are nearly run, and no longer will his pirate craft thread the water of Karta Bay and adjacent archipelago laden with contraband goods. In order to prosecute him, it would be necessary to have him indicted either in the courts of Oregon or Washington Territory, at great ex pense, and in view of the time that has elapsed, the difficulty of obtaining testimony to convict, and all the circumstances of the case, and feeling satisfied there will be no repetition of the offense, I respectfully recommend no further proceedings be had, and the papers in the case are herewith returned. EXPEDITION OF THE REV. MR. DUNCAN, MISSIONARY, TRADER, MAGISTRATE, ETC., AT METLACATLAH, BRITISH COLUMBIA. Among other matters which have laid dormant for two years, awaiting an opportunity for personal investigation, has been the following correspondence submitted to me by the department: CUSTOM-HOUSE, SITKA, ALASKA, Collector's Office, June 15, 1876. SIR: I have the honor to lay before you the following. During the afternoon of June the 7th, while at Port Wrangel, I received per hands of an Indian the following dispatch from Deputy Collector Milletich, stationed at Tongas: "SIR: I have just been informed by a reliable party that Mr. Duncan, missionary of Metlacatla, British Columbia, is now fitting out four large canoes, with goods consisting of blankets, silk goods, ammunition, guns, and molasses, &c., to the amount of five or six thousand dollars, and intends in a few days to send the canoes, with Indians of that place, to the Chilcat country, A. T., to trade those goods. I understand that Mr. Duncan makes a business of sending goods to Alaska; he has been smuggling goods in Chilcat and other places in Alaska Territory for a great number of years. Had I any facilities at hand, I should have endeavored to capture the smugglers, but I am alone on this island, and cannot get any Indians for a crew, they being absent from their village. I would further inform you that about the 18th instant three canoes, from Silka and Tacou, called at this port on their way to Fort Simpson and Skeena River, British Columbia. I understand that they left the latter places loaded with molasses which they purchased there, and are now on their way home. "I am, sir, very respectfully, &c., "A. MILLETICH, "Acting Deputy Collector and Inspector." While reading the above communication a fleet of eight canoes hove in sight of the custom-house, ten or more miles to the westward, heading north through Duke of Clarence Straits. Believing it to be a "Hydah fleet on their way to Wrangel, but little attention was paid to their movements for the space of an hour, when finding that only one, the leading canoe, headed toward the port, I concluded that it was the smuggling fleet, and thereupon proceeded to inaugurate a chase with such means as I could command. After There being no steamer of any kind in the harbor, I went to the Stickine Indian town, and, after two hours' delay, succeeded in employing a canoe to chase. waiting an hour for the head Indian to collect a crew, he refused to go. Another hour was spent, and I succeeded in employing a canoe with twelve paddles and steersman, and got them off with a guard of troops furnished by Captain Jocelyn, commanding post at Wrangel, and Deputy Collector Dennis, under orders to follow the fleet to the Northwest Stickine Sands, and if finding that the fleet had entered and was any distance out in Prince Frederick's Sound, to abandon the chase, for the reason that the canoe was too light to venture. My only hope was to catch them on the sand, waiting for the flood tide to get over into the sound, or that they might go into camp, but in neither instance was I right; the tide was a neap or half tide, which left the channel open, and, with a half gale, they pushed on. The elements seemed to conspire against my success, because, in less than ten minutes after leaving Wrangel, a strong wind, rain, and fog came in from the west, which operated seriously against the expedition, which, by the peculiar configuration of the islands, made it favorable for the smugglers. Nevertheless, against the storm, the canoe traveled about twenty miles in less than two hours. Finding it impossible to overtake the running fleet in less distance than one or more hundred miles, Mr. Dennis gave up the chase. In conclusion, I must say that it was only by arousing the cupidity of the Indians that I was enabled to get a canoe at all; viz, I paid them $26 to run out, and agreed to pay for the capture of one canoe $100, and for the fleet $500 cash. I am, sir, very respectfully, your obedient servant, Hon. B. H. BRISTOW, Secretary of the Treasury, Washington, D. C. M. P. BERRY, Collector. Respectfully referred to Special Agent W. G. Morris, San Francisco, Cal., for such investigation as he may be able to make and report of result of same. GEO. F. TALBOT, Solicitor. I personally interviewed Major Berry and Mr. Dennis upon the subject matter of this communication. They pointed out the spot to me where the canoes first hove in sight, and their avenue of escape, and it was very plainly seen how easy it was to prevent capture under the circum stances. The trade with the Chilcat Indians has until within a very few years past been most valuable, they having the richest, most costly, and valuable furs of any tribe in Southeastern Alaska. Latterly it has not been so much sought after, owing to the low price of furs. Our British neighbors have always been keenly alive to the value of this trade, and have reached out for it and brought it past our own doors to British Columbia, several hundred miles to the southward. It is a source of unpleasant feeling to be compelled to admit that I have no good reason to doubt the accuracy of the statement of Major Berry, in reference to the complicity of the Rev. Mr. Duncan in the above smuggling case. Indian testimony upon this point is conclusive. He may not have been directly interested pecuniarily in the success of the venture, but that he sold the goods to the Indians cannot be a matter of doubt. Again, he is missionary, civil magistrate, Indian agent, trader, and justice of the peace, and it cannot be disputed that these Indians could not have departed upon this expedition with canoes heavily laden without Mr. Duncan being cognizant of the whole transaction. It may be said, however, in extenuation, but not in justification, of his course, that Mr. Duncan has been on this coast trading with the Indians for over twenty years; that it has been the custom of the country and the whole coast, for a hundred years or more, for the different tribes in Russian America (Alaska) and British North America to barter furs and exchange commodities; that they have never been interfered with by the customs authorities of either nation. There does not seem to be any moral responsibility attaching to the residents of Alaska and country adjacent thereto in regard to illicit trade. The ports of entry are few and no cruising cutters to look after canoes and boats, and trade is carried on now as it has been for a half century past. That the United States loses much revenue can easily be seen. Mr. Duncan is an Episcopal minister, a missionary, but is not under the jurisdiction of the lord bishop of British Columbia, and acknowledges no allegiance, spiritual or temporal, to his lordship. He runs a sort of independent diocese of his own at Metlacatlah; and, to use an expression made to me concerning him by a contemporary, "He combines the cause of religion with the sale of cotton shirts"-quite a natural thing under all the surroundings. He has been the instrument of a great deal of good. His mission school is a great success. He has done wonderful work in christianizing and civilizing the Indians with whom he has come in contact. He has induced them to take great interest in the construction of their dwellings. In fact, he has completely metamorphosed their condition. A high compliment is paid him and a description of his labors given in the interesting report of Mr. Vincent Colyer, special Indian commissioner to Alaska in the year 1869. Judge Swan in his report likewise speaks highly of his efforts (see Appendix No. 1), and also in his letter to myself, which appears hereafter. While according to this gentleman everything which is claimed for him by his friends and impartial observers, it must be conceded that measures must be taken to prevent any recurrence of any like expeditions in the future. The Chilcat trade is too valuable to permit it to be the source of clandestine importations from a foreign province. It belongs of right to our own citizens, those of Alaska and elsewhere; it should be fostered and encouraged, and our own traders and merchants should be protected in taking their goods, wares, and merchandise to exchange for the choice furs and peltries of that region. Mr. Duncan will either have to enter his goods at our custom-houses, and prevent his Indians from a repetition of this offense, else there will be some seizures, and perhaps bloodshed, in Alaskan waters. In October, 1879, there is to be given in the Chilcat country a grand potlatch. Preparations for it will have consumed two years by the time it is had. Large quantities of rich and valuable furs and peltries of all kinds will be traded and given away. The usual amount of Hoochenoo will be consumed. This will be a rich field for the Metlacatlah Indians to work in, and unless we have a revenue-cutter there at this time, the coast will be swarming with Hudson's Bay blankets and other foreign goods. This very fiasco of a chase demonstrates the necessity of steamlaunches in these waters. If there had been a cutter cruising in the Alexander Archipelago the Indians would not have dared to attempt a voyage of the kind. A steam-launch could have easily overhauled them and thousands of dollars worth of goods confiscated. For some unexplained reason, the accounting officers of the department disallowed the sum, $26, paid by Collector Berry for the hire of the canoe, and he was compelled to pay for the luxury out of his own pocket. He supposes it was upon the Mongolian principle of "no catchee, no pay." At all events, such rigorous stoppages are not conducive to zeal upon the part of customs officers, and this example before them will cause them to pause before they again incur a like expense. ABOLITION OF THE CUSTOMS DISTRICT OF ALASKA. The discussion of this question is approached with no little delicacy, inasmuch as the honorable Secretary, in his annual report at the com mencement of the second session of the Forty-fifth Congress, used the following language: Since the withdrawal of the troops from Alaska last spring, the management of the Territory has practically devolved upon the Treasury Department. The only officers who could exercise any authority were the collector of customs at Sitka and his deputies stationed at other points within the Territory, the duties of the officers at the seal islands being confined exclusively to the protection of the seal interests. It was feared that the sudden withdrawal of the troops might result in a conflict between the whites and the Indians; but thus far little disturbance has occurred. The white population at Sitka is very limited, and the expense of maintaining customs officers there |