The New York herald., 1870-03-07

key Manufacturers and Operators
in This City and observation-disclosures
raj Paralysis Of the Trade-Be.
ginning Of the End and What
Is Likely TO BE the End.
The raid ON the whskey dealers Of the Thirty.
second district by Collector Bailey the 10th Of last
January and seizures Of whiskey and the books ana
papers Of the sixteen parties against whom search
warrants were obtained. has At length, after the
laws usual tedious delays-tnough there were pro-
misses OF immediate investigation at the time
reached the preliminary stages or an examination
before the United States COMMISSIONER Court.
Connected with the operations OF the representatives
OF the Internal Revenue Department IN this city, and
particularly directed against liquor Dealers there
has been no case Of the same magnitude nor ap-
preaching 1t IN the degree Of public interest ielt
alike In the proceedings aud result. portion or
the result has already been reached In the dismissal
OF the case against Cooke, which for several days
past has been IN process OF examination before
United States Commissioner Belts and to which
more particular reference Will be made IN a subse-
quent paragraph. Meantime, some new and inter-
estng facts, growing out OF THESE arrests and
seizures, which were not developed In the court
proceedings, are given below.
The extent to which the business interests OF the
community, and more particularly that OF wnisKey
dealers and those indirectly connected with the
trafnc, as the producers OF the raw material, have
been parayzed by the late raid OF Collector Bailey
can hardly be imagined, and statement OF the real
facts would scarcely be credited DID the erect not
extend beyond the arrested parties itmight these
parties themselves say, be possibly endured al
though ending. Us 1t undoubtedly will, IN the rum
No tharnc aly thnv
have been entirely suspended from business since
their arrest now extending over period of seven
weeks. They have been unable in tins time
to collect the debts due them and TO meet
their own obligations, upon which there was, or
course, great reliance upon the regular profits OF
their business but which they have been deprived
OF since their arrest. The banks, In the doubtful
condition OF their business have not been willing to
nid them. But others, they assert though not quite
alsastrOnsly rs themselves nave peen ana are
still greatly affected In their business interests. No
wnisSey dealer feels secure since upon suspicion OF
fraud practscd upon the government ne is liable, ac-
cOrdng to the precedent established Collector Bal
ley to be arrested any moment and his business sns
pended Producers OF gram and other raw material
Hare at loss what to do IN respect 10 giving credits
twhe bayers are equally at q loss as TO purchases
Iirom want ol security III their business ihis STATE
this city but extends all the country It's extent
being coequal, indeed, 10 tae extent OF whisKey
manufacture ana widespread prevalence OF internal
revenue officers. TINS subject might be enlarged
indefinitely, but II Is unnecessary TO do So.
A most important point OF consideration in con-
nectlOn with this late raid, and one upon winch
the arrested parties are emphatic and explicit
III their statements IL the motive inducing
Illegal arrests. The whisSey dealers concede that the
internal revenue laws are somewhat diicuiJ To
enforce, since containing many provisions under
which technical violations oil the laws are con-
| stantly occurring. Tney admit the fullest force OF
the facs that these laws were intended to provide
revenue for the government, but claim most point-
edly that tney were not meant to ram business men
operating under them. lt Is well known. and one
attempts 10 deny IT, that many unprncipled men hays
| committed large frauds on the government. IN,
great dincuty Is the disposition to the preparation
OF US great frauds by the government agenls who's,
duty IL Is 10 enforce the laws. The allowance OF In
formers interests to those instrumental III obtain
ing judgments under the law is, II Is alleged con
| tfnuay leading revenue officers, VITO are clothed
| with most extraordinary powers, to make seizures
| on mere suspicion. aud to commence the most
| trivial preteYts prosecutions involving the run o.
| business interests and sappng the very foundations
| Of the revenue u Is their duty 10 collect. iais wa,
most forclbly illustrated IN the late arrests when
| DOCKS ana papers enough were seized tt
fiji almost second Astor Library, which books and
| papers were taken TO tne oice OF tue Collector OF
! The Ihrty-second district, IN whose custody they
stli remain. The basis OF this wholesale procedure
| as ls well known, was the allegation OF frauds per-
petfated previous 10 the fall 0f 1885, and which
frauds, so far as developeds amount to the mod,
| SUN OF $500 Under the law, however Collector
Bailey, who is the mstigat0r OF prosecutions
expects to receive IN case alone $4,000 as ms
share OF the penalties, with visions of millions oil
iurtncr penalties In ne future The result ls for the
iurIherance Of MS plan, caplLal In the hands OF per-
sons OF good business standing, amounting to many
millions oil dollars mas been tied up directly
! and much more Indirectly, and the credit
! OF the most substantial houses shaken. And more
tnan this, thousands OF barrels OF whiskey DcarinS
the United states tax paid stamps now IN the thirty
second district are liable 10 seizure any day on tht
| mere aegatlon or Collector Bailey OF suspicion o
probable fraud. AS stated above, the result thaI
| banks are unwilling 10 make advances, uIsters II
| the West are nnVing to forward their goods to tn,
! market and trade IS paralyzcd. All this Is done
moreover, nearly two years after the frauds charged
are alleged TO nave been committed and at time
wnen the law Is beng fully enforced and the govern
| ment claims to be collecting all the revenue
on distilled spirits. IL urtler alleged tDat score.
Oi business men have been thus subjected to rum
| tnat tnousanis OF persons dependent on this one
| DraDcn Of manuiactule nave been thrown out oi
employ yment, not That the government may receive
| what IS due H. out That Certain officers may avai
themselves OF the collection OF penalties IN wnicG
| they alone have sole ana exclusive Interest II
successful Wuch IS believed to be altogether doubt
the government wiif nave lost by the INJURY done 10
| the business interests oi the community vastly
| more than ihey can possibly recover rs penal
| ties, even were IL not well established tact tal
III these cases the government gets almost nOhug,
the expenses ana the inormefs share eating ul
| nearly The whole OF the amount recovered, as was
| snown In the watson ~ Crary case the particu
| lars OF which have already been published IN tie
| HERALD, and the trutn OF which no one has At
| tempted TO deny.
| A strong defence is made by the liquor dealer s
| from the evidence advanced against tnem iu the
| case Of Cooke, now Undergoing preliminary examl-
nation before United States Commissioner Betts. In
this case 1t Is alleged, and the allegation was
| Daseu upon the lestllnonV lalu Deiore lie
| Commissloner, that the only important fac
| developed was tnat the principal witnes,
| for the prosecution, Mr.. Webb, Mr.. Baileys
confidential deputy, Is the same individual who II
| 1866 was dismissed from the army for mlsappro
prlaion OF government funds, as paymasLer, besides
| beng sentenced 10 De nned or Imprisoned IN IN,
| State Prison at Concord, NJ H.; and that the otbe
witness, GrlRgs was 10 receive position from bir
Bailey for testiiying against them AS TO the case Of
| Mr. cooke, against whom have appeared the vii
nesses just named, the liquor dealers were perfectly
willing to leave TINS to the Commissioner TO decide
upon the testimony ana the merits, as he certainly
| did do. At the same time they protest against tnc
manner or arrests and seizures violent processes
altogether exceeding legal limits also against the
alleged unlawful detention OF the gauger Stephenr
at a motel In this city, without those privileges OF
counsel accorded to the c0mmonest criminal ana the
| use oi ali maliner Of threats and imprecations 10
| induce him 10 testify against thom hr. BAILEY Is
aso charged, IN copying the papers, with omittlng
material portions and made no denial or the charge
before the Commissioners. There Is no objection 10
the rigid enforcement OF the law; but 1t IL claimed
that II should be done for the benefit OF the govern
and for the benefit OF spies and informcrs.
a-A1a