, 1866-02-22
TIE DUBUQUE WH1s6ET FRAUD.

THE DUBUQUE WH1sEET FRAUD.
An Interesting Chapter Of Internal
Revenue HistoEy-Facts In the Case
OF Rhomberg d. Co.
In April, 1906, much sensation was caused
In certain business circles In the Northwest by
the seizure, under the Internal Revenue Act,
Of large amount Of highwines and alcohol,
the product Of distlllery at Dubuque, lows.
II IVES the earliest Of theswhiskey frauds pre-
scented to tbs Department for its action. It
was notable from fta magnitude, from the In
volved rights Of various parties at stake In
Its iasue. and from certain singular complica-
tious that grew out Of It's progress and In
creased it's difficulties. This gives value to
its authentic documentary history, to which
an added intesest Is secured in Chicago and
other points at the West where the principal
parties In interest resida. The history IN
question Is gtren in a letter from the Secretary
Of the Treasury, called out by Senate rcso-
luton early In December. This resolution
was an inquiry for information In regard to
the seizure and the settlement, to both Of
which pertain features that constitute them
Important precedeuts in line OF decisions,
along which this branch of the Gov.
a,nTos,t has felt ns wav w,t6on,
~ ,,a ,e rract{ca1 lrnoty,cdec and VIII, co,,.
6sssea c,nd,iies of original systeu,. .Tha1.tter
cr>e., sacratarv Mcf. f.ullncb il . SENATE ,,or,;,,h
~ - fs,ohtaer na oes containing tha ra.a,.,
~ ro,nm;ss;oncrs Lewis. Orion and pci,,ns
t..o ubosn hards. na sncrr*efra i,cr,rtartse ~
that of1,ce the case nj d,ffercnt =, erns 49,
nsssca Far The rcosonz ahove statod - 49,
s.,-iaw 1T thts 5nnnrtant casr m vi. srthas
49, m, ,n4e-oet anr readera "''>A'''
T., tta ,r,ntcr NJ 1894 Nese-e =. ph
r, fooon IN nm q narg 49, oa..,,. ,ao ~.
t;,Is,s ab,,sh1ncnt a. nnhneaa ~ss' W. c W..
~ 49, or,ts oro,;n,r ,,-assad II .sta,s. o
-. 49,, 1..t-o ,,-,Sn,t rUh.to...s -. 80
herc I.cc, 1,s co,,ree +, e,othar a,.a,,t t,,s
,,ron,,etor If The cz,ab1,.hn,ent .'s,.saa ~ ~
tsrc horn taken abaclr hv NJ cbonra - 49, ~
m which the tar OF - ner c,1lor 1vss e. ~
,nto effect. n difference of one mon,h .rs,ns,
}ss znterests. and commenced ass1,s-,.
ofskflfnlly manaped f1aud mon The f:,p.,n
mcnt, This quality of skin in it, acconn,ish.
ment furnished the immunity under when ia
1na.-nitude crew, and Yas tbe ;nsf,,,ma,t ~
bringing unsuspectipg parties tn shara n t,,a
ultimatc perils and loss. Payinr f,ntr ~, ~,
1s3 ral}ons Of hfghBipes dnrinp tbc ,s.,oa ~
uninterrupted operations, be sbinned to~Ssw
york early In 1865 A ,,rnhnrt IN a1o,1,., s.s
hirhwfnes euual to jHS oo0 e.a1,ons ~ 1,,",,
,rines m e1ress of soiAn1 1n1Ion. or.- T..
arnonnt m which t3nty W,s cn1}ectca
ono procass of the fraud In tha d;s.,,,,,
.rour nther mcthods wax IN .a-r,. .,...s.s'
t1on m . ccr,.,n nnrnicr NJ hsrr.,. ~ -
gines nd .f1c,word cm ntv;na 49, .a.atss.
.rto tbe n,cobo, stil rs3,,I;7r -. .su,s ,.Saa,s
w,,h othar rr;nes Ths s,,,,, ~ . ua1 ,sie
corernn,crt sd heon s,cs,.nas, s " :. "nasa tne
~ ~. eot,r-e ,vas a 1;tt1. 80 e1eo noo ,.
Rhomhcrr 4. On, a,one hecn conc ce,,,as g., ~ 49,
r,on.r+v tba ,roraaa;ro, ,ran,a -. =, wv
Farr si,,n,. ~ in 1sto- ca.os H.. ss ~ ossA '
rra os ~ nro;n1+v hv 4no ,aoas,a @ ~ W.
fa,,,d - t., tba hars. or sn.sa. ae ouIGc'S
49, % ,,a1a ~ 49, ,sr.a ,,n.aaas pa5..es
~ ~ 49, ,a1.,.s.. - .n,".. tuaue' taa'
~" ..o@,sets 1900 ~ a,.ha'.',' ~ sue a,1an
.r1'. ~. a,fo ~. ~ 1a:e9 sno"ms
c,ssas.. nsT.,S -:, " r. e.uns''a ~ IL
es4so' 1 ~ ~ -" ~ - t'o" oaltels
VI NV o ~, oa.iers ~ oi aicono', OF
~ estta'en ~ '"'9e ~ s~'~sov. upon WHICH
tac Ness!e' s'uEes o SOUS, bankers, OF this
e1ty' "na tne DupoQue bfanch Bank had
maoe ~ advances upon eican ollls Of lad1ns Of
f:o'VV. VI 1nls sum s-'os wv came from the
GnlcaEo parties named, ana from the Branch
oanS Inc remalooe1' Inc latter had made
lurlnel ao'ances oo naaler1ai of sl4l,uUo, a
total interest," thefelofc, OF SSD,0oU Of these
outside parties n inc proceeding.
1ne seizure oi I4e dlstlllefS premises took
place Apflt IL was lonnd to be fully
stocked Tor The prosecution OF large busi-
ness. and with pertshable property. This
last furnished the considerations under which
the revenue officers, on instructions from
Washington, Kept tie dlstlNery running for
some time longer, converting the grain into
spirits, and the lumber into Packages for the
same, by which operation 5000 gallons OF
spirits were produced, tie dlstil'ess being
government officers. Ont Of this last condi-
tion grew the most serious complication Of
all, for. pending the decision In the seizures
previously made, insolTing the whole ms
chhieEy and material, under the views that
the tax Of S3,oo must be collected on every
I gallon Of highwines made, the whole per
sonal property at Dubuque, then in United
State Aarrhal's hands, was dlstrained for taxes,
With this inrolution on tnrolntion Of cmbar'
rassment, the Internal Revenue Department
I set at work Its best Efforts to unite the knot
From the pamphlet 1t falls TO appear that the
tlrce successive commissioners precisely
| anYe+d ~ tn the ttetat,a. Int thav cr1,r;3ei1
| a. -
IN resort 10 lne wisely permitted provision
! Of the law, In compromise In all cases wher,
! tho 1rto+ne,a ~ t,a r,ro,r,ont ,r,1, ,,,t, y,
best secured. II Is into the nature Of TIL:
I eomprorfse and It's results to t,,c Tre,s,,rx
| toAP. o'I'SN -. '@e '191t'a ~ sHe tisasu'
that the Senate inquiry Is made, and the let
Ter of ihc Secretary enters.
,. ,u,,., IA s.oto1 .ho. ", ,-,,,,,,.. =,
the Department to consult the interests o.
| thp har,Eers IN nucsttnr wasx rre,.,v m
= e'' "
hahced py the 1act thaI at different stages 0l
the transaction the Inter had obtained the
! I'm nnff facAt rHt ~