The daily dispatch. [volume] (Richmond [Va.]) 1850-1884, 1868-06-12
THE wHIsKEY FRAUDS.
How the Internal Revenue Depar tment
is Managed
The League between Assessors, Col
lectors, and DisttHers,
INTERESTING DEHRLoPhEETs.

Richard Anderson, Horatio anderson, YER
non g. Shepherd, o. s.. Manson, and A. y.
Goldman, were yesterday arraigned before
the Circuit Court of the united States
Chief Justice Chase presiding to answer a
join: indictmentfo conspiracy to defraud
the Government Of the tax on whiskey. At
the time the misdemeanor is said to have
been committed John II. Anderson was The
collector Of internal revenue for the
fourth district Patterson, the assessor Of
the. same Robert w ,Elsom, iHoratio An
derson, A. J. Goldman, and Vernon g..
Shepherd were inspectors !; and Me- Creary,
r. Anderson, and Manson, clerks. Messrs.
Chandler, Hennessy, and Weed appeared
for the Government, and General Wells,
'0uld, and Darlington represented the ac-
cused. = j. 81
The evidence elected yesterday reveals
to a startling extent the way in which the
revenue tax is collected from ,distillers.
C John N. Clarkson was the first witness
sworn. He first testified as to his acquain-
itance with the parties named in the indict-
ment. Mr.. John Anderson became collec-
tor in July, 1866, and was removed in the
fall of 1867. Mr.. Patterson entered upon
the discharge Of, his duties later, and held
over until the winter or spring of 1868.
Witness owned one-half of the distillery
known as SC Denmead's."
He proceeded Sometime in the month, of
June or July Mr.. Richard F.. Walker in
formed me that Mr.. John n. Anderson had
been appointed collector for the Fourth Dis
trict, formerly o portion of this district.
He said he knew Anderson very well, and
that they had already. conversed about the
operations of the distillery across the river,
and about how money could be made. Mr..
Walker afterwards brought, Mr.. Anderson
and Mr.. Goldman to my room at the EX-
change Hotel, when we had talk about
the distillery business, but nothing definite
was arrived at. A few days afterward we,
the same parties, met again in another
room at the Exchange. Mr.. Anderson said
then that he had recently been appointed
to the Office of collector, and had received
it for the purpose of making money.
He inquired what Howlett's distillery
had been paying for the privilege
of shipping whiskey without paying the
tax. refused to answer the question,
telling him that did not know, but that
Mr.. Clendening Zone of the owners) would
pay him literally. He replied that he had
no doubt of that, and supposed there would
be no difficulty. 1t was then understood
that Goldman would see Clendening and
consummate an arrangement, which lafter-
wards learned he did. At that second in
terview the fact that great deal Of contra
band whiskey, made in small stills, was
coming into the market, was commented
upon. L told Mr.. Anderson that he would
find it to his interest, and to ours, to stop
these. He promised me that they should
all be stopped, and that he would suffer no
distilleries to run unless I had an interest
in them. Under that agreement aided in
building the Roxdale, the Den1nead, Brock
enborough, and Amphill distilleries, all in
the Fourth (Anderson's) District. How
lett's was already in operation. They
cost large amount of money, perhaps
S2OO,OOO. Under the first arrangement
made between Goldmansand Clendening-
which was that Anderson should receive
$500 per month to wink at the Illicit ship
ment of whiskey-things worked smoothly
for some time but in the fall of 1866 Mr..
Goldman came into my room and said that
he and Anderson had just come from How
lett's distillery, and that Mr.. Anderson was
in the hotel and wantedto see me-. asked
him why he didn't bring him up. He said
because he was in an III humor about his
pay, not having received the whole of his
fee. Anderson then came up, rather in
toxicated, and repeated that he had not re-
ceived the whole of his moiety, and want
ed to know whether Goldman had received
it to be paid out. i told him | did not
know. He reioined that this sort of thing
wouldn't. do !, he must be regularly paid.
L inquired what we, who were building new
distilleries, were in the future to expS;t.
He then wanted to know if 81, 600 month
would be too high q charge for extend
ing the same & privileges to sDenmead,
Amphill, and Roxdale, as had been extended
to Howlett-that is, that we be allowed to
ship from them as much whiskey without
the payment of tax as we thought we could
safely do. told him would communicate
his proposition to the other owners Of the
distilleries. Some months afterward met
Mr.. Anderson and Mr.. Patterson, who had
Just come from Inspector William H. Par
rish's store, and had concluded q contract
with him by which he was to cooperate
with Anderson in the illicit shipment of
.whiskey. for $4,000 per annum. Mr.. An
derson was to receive $l2, 900, and inde-
pendent of these sums, the storekeepers
were to receive 81 800 each. MIR. Goldman,
however, one of the storekeepers, insisted
upon getting more, and received it. Mr..
James Grey, another, only got $4,000.
Horatio Anderson, his successor, also re-
ceiyed only $4,000. The regular pay
of the storekeepers was four dollars
per diem. By the LIST Of March, Mr..
Anderson and Patterson became dissatis-
fed with the $4,000 given them, and,
through; Mr.. Elsom, demanded $52, ,000-an
increase of thirty thousand dollars. To do
this they proposed to reduce the sums
given the storekeepers. demanded a
Compliance with the original agreement.
He then said things would be- all right.
Anderson then claimed that Parrish owed
him and Patterson about $4,000, which we
had to pay under protest. When the de-
mand for $52 1000 was made, the distilleries
had to be stopped. Goldman was then
much enraged becaused Elsem had been
appointed general inspector over him, and
said that he and Anderson oughttosbe allowed
to run the machine by themselves. he
then threatened that he would expose the
whole concern, but afterward changed his
mind. I persisted in my refusal to come
into the new arrangement, being de-
termined that if ruin must come, We
should ell be ruined together. I offered
them $4,000 as o compromise, but it was
declined. Then declined further ,negotia-
tions. Mr.. Denmead next tried to bring
the parties to terms. They then came down
to $40 ,G00;. but I told them that wouldn't
do and finally they got down lower still.
Colonel Segar, was then in Washington $