The Wheeling daily intelligencer. [volume] (Wheeling, W. Va.) 1865-1903, 1873-04-28
THE CASE OF PHELPS, DODGE
& CO.
What the Correspondence shoI

What the Correspondence Shows.
WASHINGTON, April 2O.-The Treas.
ury Department publishes the CORES.
pOndenCe relative 10 the case Of Phelps,
Dodge & Co. 1t appears therelrom that
on January Sd, last, Special Agent Joyne
reported TO Secretary Boutwell, as the re-.
suit OF the examination OF the books Of
said firm, that the firm had deliberately
violated every provision Ol the law oil
1868, covering the invoicing and entering
Of imported merchandise, paying advalor.
EN- duty. The total value Of the invoices
examined amounted to 81, $780, 900, which,
under the law Is plainly forfeited
to the United States, not by any
technical construction, or far fetched
Interpretation, but by deliberately and
systematically stating the cost Of the
goods below the purchase price byA false
invoice, made false for no conceivable rea,,
son but 10 lessen the duties. The Items
proven IN these several invoices 10 be uns
dervalued when taken separately amount.
cd to $275,000. The percentage Of loss
on the whole amount Is therefore small,
yet, says Jayne, the importations oi the
house are very extensive, and II the same,
or nearly the same, percentage Of fraud
extends through impOrtstions other than
those included in the statement on which
VIC have positive proof, the entire loss to
the revenue must have been some ten or
fifteen thousand dollars per year, perhaps
more. ks ...-.r
United States District Attorney Bliss, un.
der date OF January I'd, writes 10 Solicitor
OF the Treasury Banfeld, transmitting
tho offer Of the compromise made by
Phelps, Dodge & Co. Davis says that
tho investigation showed that the defend.
ants committed two apparently distinct
species OF fraud. One. consisted in in.
voiCing tin shipped from Liverpool and
the prices paid for II In Wales, Of which
naturalization there Is no means Of know
ing the amount, while tho other species
of fraud consisted in u triaihg un'
dervaluation of some single items or
class OF itemsin an invoice, In which most
Of the items were correct There is no
actual evidence oi fraud, says MIR. Bliss, IN
either class prior to January, 1871. The
books neither before nor since contain any
evidence Of fraud, but II is found In the
memoranda'and in the duplicate invoices.
IfthesO ever existed for importations prior
to about January, 1871, they have been
destroyed. The intormer asserts that the
fraud extended several years, and there Is
considerable indirect proof that this Is so
In the similarity Of rates and standard
items before and since January 1871, the
envoices showing the same prices, before
1871, In tho classes Of goods shown to
have been undervalued, since that time
the enYoices entCree since carly in 1871,
which are tainted with fraud. The items
on which under valuation occur, amout
'$271 OH 90. The underValuation is
$665S79. The total amount Of duties
lost TO the Government was ,O64 6S.
Total importatiOns Of the defendants are
about six millions year. While the In.
vestigating is going on, various proposals
OF COMPROMISE were made, but noneIwere
such that the Collector deemed it'best to
hold out hope that they bO accepted.
Bliss, after duo confederation, however,
recommends acceptance OF the compro.
mise now offered. He was influenced
to this course by the TACT that the nomi.
nal amount claimed is SO enormoms in
comparison with the amount Of under
valuation and fraud, and that different
10 obtain verdict Tor the amount claim
cd, that the smallness OF the fraud also
makes the amount offered an adequate,
perhaps extraordinary punishment for
The offence committed. The proposition
enclosed by Bliss is from the attorneys OF
Phelps; Dodge & Co, and while protest.
ing that no iraudule1t intent had ever
been entertained by the firm towards tho
revenue. They offered the Treasury
$4,000 in currency on the sole ground
OF all intent 10 detrSud the revenue; and
the second he declined 10 recommend be-
cause 1t contained a condition that the
sum offered should be u full satisfaction
for all violations OF laws between Janu.
ary 1st, 1867 and January 1st, 1878. No
facts being submitted to justify the Sec.
retary Of the Treasury in giving 80 broad
a release, the third proposition is open to
the same objection, and Banfeld declines
to recommend it. On February 18th,
however, Bsnfeld writes Secretary Bout
well that he was inclined to accept thelast
proposition upon the understanding and
condition that the release to be given
shall cover only such alleged frauds as
have been called to the notice Of theTreas.
ury Department by Special Agent Jayne.
Mr. Boutwell, on the same day authorized
B4nfield to make a settlement in accord
anco with the terms Of his letter.. This
part oI tho proposition was accordingly
transmitted 10 District Attorney Bliss,
who on March 9th replied that the matter
in dispute had been finally settled for the
sum OF $271,0l7 20. The final settle
ment Is accompanied by letters from Mr..
Jayne TO the effect that his investigations
covered all importRtions Of the house for
FIVE years the next preceding JAN
uary 4th, 1873; that there may have
been acts in connection with tho
entry Of impOrtations in violation Of
statutes. MIR. Jayne also on January 9th
recommended the acceptance Of the offer.
A second proposition offers the same
amount as the compromise oil all viola.
tions 9l the revenue laws and settlement
Of all duties, penalties and iorteitures bc'
tween the LIST oil January 1868 and the
same date 1873. This proposition was
verballyIrejected by Bsnfeld and was sub.
sequenily withdrawn AR. Bliss on Feb
ruary the 9Th enclosed TO Bandeld third
proposal from the attorneys OF Phelps,
violations Dodge s. Co., Offering to com.
promise all OF the revenue laws for sum
Z An5t nYH no T., &. ,naor.