to the chairman of the House Naval Affairs Committee in 1863 and testified before a Senate committee, resulting in the passage of a law simplifying honest bidding and making manipulation difficult. Smith identified the names of clerks who accepted bribes and created an Analysis of Certain Contracts for the United States Secretary of the Navy. The report showed how specific contractors were able to consistently bid low. Retail Honest Other price bidder bidder item A 100 110 75 The other bidder learns that very few or none of item A item B 50 60 90 will be purchased, so he prices that article artificially === === === low and can price item B ridiculously high as long as total 160 170 165 his total bid is below that of the honest bidder. The naval bureau chiefs were angered that a civilian contractor questioned their integrity and embarrassed them by appearing before Congress and documenting the charges. Instead of eliminating the dishonesty in their subordinates, they targeted the Smith Brothers. Every transaction with the company was examined, and justification was demanded for every error or imperfect item supplied by the company. Despite the scrutiny, Smith was always able to provide a convincing explanation. Senate committee In January 1864, a Senate committee chaired by John Parker Hale formed to investigate naval contract fraud. The Navy brass despised Hale since he helped convince Congress to ban flogging in 1850 and grog rations in 1862. Hearings lasted almost four months, with the Smith brothers providing key testimony. The committee's report was not released until June 29, but it was obvious from testimony that it would confirm Smith's accusations and dismiss the Navy's allegations against the Smith brothers. Arrest On June 17, 1864, two weeks after the conclusion of the Hale hearings and two weeks before the report was to be made public, both the Smith brothers were arrested. The timing was not an accident; having the principal witnesses in jail would tend to discredit the Senate report when it was released. Early in the morning, a detail of marines grabbed Franklin and dragged him to a waiting boat, where he was transported across the harbor to Georges Island and Fort Warren. They had no warrant, only a telegraphed order from Gideon Welles, Secretary of the Navy. The marines broke down the door of Smith Brothers & Company, seizing records and correspondence, then did the