CUSTOMS FRAUDS.

Otago Witness, Issue 2914, 19 January 1910, Page 71

CUSTOMS FRAUDS.

<£!•■ LONG SERIES IN AMERICA. SUGAR TRUST’S MISDEEDS. The New York correspondent of the Melbourne Argus wrote as follows on November 26: — The greatest house-cleaning ever known in the New York Custom House is now in progress. Of the 200 men engaged in j weighing', sampling, measuring, etc., or | dutiable imports, 128 have been dismissed. I About a score of them arc under indictment, and others are to come before the courts. This is mainly the work of the new collector, Mr Loeb, who took office in March last, having been for some years secretary to President Roosevelt. This house-cleaning is a sequel to the discovery some months ago that the SugarTrust (the American Sugar Refining Company) had defrauded the Government of several millions of dollars in tariff duties I by means of devices attached to the wo ighI mg machines on the docks m this city, where cargoes of raw sugar are received. Having been mulcted in 136,000d0l in a test suit involving one cargo, the trust confessed guilt, and reached a settlement with the Government by paying 2,000,GC0c!ol in cash. Then, in a civil suit brought in the interest of a. Philadelphia sugar refinery, ! which it had kept out of business by a | trick, it compromised by paying about 2,000,00Cdbl to the complainant. The evidence in this case, however, had disclosed a violation of the criminal provisions of the Anti-Trust law, and therefore the millionaire officers of the trust were indicted. Two of them .got away by pleading the Statute of Limitations : their associates say they will island trial. Collector Loco sent to the courts the case against Musica and Son, importers of cheese and figs. At the trial was given the testimony of three Custom House weighers, who admitted that they had taken bribes from the defendants for under-weighing, j the rule having been that they divided with the importers the sum thus saved, or stolen, in duties. Each consignment yielded I several hundred dollars. They admitted that they had done this sort of thing for yea is. The accused firm was composed of an old man and his son. To save his father, the young man pleaded guilty, and was sent to prison. It had been very difficult to break into the ring of thieves, and it appeared' that to make a beginning Loeb had not only promised immunity' to the three weighers, but had also agreed to keep them in. the service. There was a loud public outcry about retaining them. Whereupon the evidence of wholesale frauds began to appear. Government detectives and other employees who made the investigations were permitted to toll their .stories. Our papers have been, full of them. Very little is said now about Loeb’s promise to the three. -The public is wondering how far up in the service the corruption went. At least two former members of the Cabinet arc involved. To some persons the frauds of the Sugar Trust have been known for 10 years, but detectives or informers wore at once discouraged when they sought to procure the exposure and punishment of the guilty. The papers to-day announce the marriage at Point Loma, California, where Mrs Tingley, the successor of Madame Blavatsky, has an now 73 year old, to a young widow. Gage, formerly Secretary of the Treasury, and now 73 years old, to a young wlidow, Gage, who had) been a Chicago bank president, retired from the Cabinet to become president of a large bank in New York. Some time later he retired from that office to become a convert to- theosophy as taught by Mrs Tingley. "When, evidence as to the sugar frauds was shown to him 10 years ago, he then be ing Secretary of the Treasury and in control of all the Custom Houses, he told the complainant or detective to lay the facts before hie friend, H. O. Kavcmeyer, then president of the trust, adding that doubtless the latter would correct all abuses. When the story was told to Kjtvemeyer, the latter angrily drove the deteci five out of his office. As it is generally ' believed that Hav-e mover (now dead) Ira.:! | suggested and paid for the frauds by which the Government had lest many millions, it is not surprising that he treated the complainant with scant courtesy. That was the end cf the attempt at exposure and correction. Last week Gaga denied that he had done this, or that such evidence had ever been submitted to him. But now comes an assistant secretary who was with i him at the time, and shows that the story i is true. Therefore there is room for many interesting questions. These were not petty frauds. They affected the sampling- as well as the weighing, and they involved millions. The 2,000,000d0l surrendered was only part of the stealings. One of Gage’s successors in the Cabinet was Leslie M. Shaw. Ho had been a bank president in the West. After he retired from the Treasury {at President Roosevelt’s suggestion, it is said), he became the- head of a bank (or trust company) in New York, and is now president of a similar Institution in Philadelphia. At one time he hoped to be the nominee of his 1 party for the Presidency of the United ! States. When ho was in the Cabinet a ! Customhouse employee who had accepted, i as his associates were accepting-, a bribe I for falsifying samples of sugar repented, and confessed to tho appraisers, who sought to interest the secretary in the matter. For some reason nothing was done. In the course of time this appraiser lost his placet His -successor promptly discharged the repentant and confessing employee. Tho former appraiser sent to Secretary Shaw a letter, enclosing the bank bills which the employee had received as a bribe, and asking what should be done with them. He now produces tho secretary’s written reply, returning ‘ the enclosures,” ans suggesting that they be contributed to the conscience fund ! These arc samples of (he testimony which is new coming- out. The situation is conrplicateo by attempts to satisfy political grudges. John E. Pa.rson.s, now an old man, was employed as a lawyer to make tho agreement upon which the. Sugar Trust, one of tho first of our industrial combinations, was founded. His fee is said to have been 750,000d01. Thereafter he was tho trust’s general counsel and the adviser of tire Havemeyers. He is now under in dietmeat. His son Herbert, a member of Congress, is the Republican party's leader or manager in this city, and he was regarded with much favour _ by President Roosevelt. There is no evidence that he had any knowlodire of the frauds, but it is

true that many employees in the Customhouse were appointed on his recommendation. Certain persons and journals that hate Roosevelt, or that oppose young Parsons for partisan reasons, arc striving to make this scandal servo their purposes. It is absurd to suppose that Roosevelt was willing to condone fraud or cover it up. There is proof that ho personally encouraged the detective who was at work last, year on the fraudulent weighing machines. There will be a hvely investigation by Congress this winter. This Sugar Trust has for years exerted a pernicious influence upon tariff legislation. The Demoora tic rcfov»u tariff of 1894 was a i toe ted it in the Senate, and it was due largely to the changes made in the sugar duties taere that the Democratic President (Mr Cleveland) declined to sign the bill. ihere was evidence that senators had been indueod to make profitable speculations in Sugar Trust stock. Again, in the Republican tariff of 1887, the Sugar Trusts protective duties were the cause of scandal, and in the vccently-enjacted tar lit the trust’s advantages were almost wholly retained. Throughout all this tariff: legislation public opinion lias marked Mr Aldrich the Republican leader of the Senate, as the Sugar Trust’s considerate friend. Me is the senator whose management ot legislation during the recent tariff d»bate caused a revolt in his party. As the head of the Monetary Commission, he has now undertaken tip reform the currency and national banking system ot the country, and his advocacy of any plan, however good and desirable it may be, will raise up enemies to encounter the adoption of it.