The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1874-06-20

Ana that construction remains even unto this
Tas ror we nna IN tne autnorizea tarn Oh the
June d. 1872, which took of ten per cent from the
duties the following remarkable announcement
than batteries and ahaif cents per
ABOVE pe cent n ad yaoe er ' oer than the
And yet, with this vast fraud upon the revenue
by this nrin staring them In the lace, II they had
Means have recommended the diminution Of duty
on TIN plates, upon the petition OF Phelps, Dodge
Co., TO one cent per pound, and passed the bill
through under suspension OF the rules
THE INVOICES
such being the undeniaDle recorded facts In re-
/ gard TO Phelps Dodge Il Co.. what was the special
agent OF the Treasury to believe when he found
them charged with fraud, especially when Ialse
and double invoices were produced TO him IN De-
cemoer lS72a Why he could nos but beneve that
these men were continuing to take all manner OF
government, and doubtless he examined their
books with that belief. And what did ue lnds He
found that they had a CORES pondlng house in Liv-
erpool, and that that house was engaged in
signing invoices OF tin plates TO tho house OF
Phelps, Dodge Co. In this country daily, and
sometimes three or four invoices per day; that III
every case those invoices were sworn to as pur-
chasers involce-tnat is, that the goods had been
purchased IN open market by the house OF Phelps,
James Il Co., and that the prices annexed to the
articles therein were the true and genuine prices
OF tin plates in which they could cheat-because
the prices Of the ordinary kind OF tin plate were
ported by that firm in every instance they
had double invoice from the manufac-
Z
were not purchased by Phelps, Dodge & Co. or
Phelps, James Co. in open market at all but were
manufactured for those firms. which and
the same firm; and that in every instance when
they swore they nad bought these articles in open
market they swore falsely, and knew 1t, because
they knew the article was manufactured TO order
for their nrm, and they should have sworn to the
cost price OF the manufactured article, which he
found each time had been IN the possession oil the
firm before the oath was made, and IL was higher
cost than the invoice price to which they made
oath. SO tnat they and those whom they employed
had been guilty OF deliberate and corrupt perjury
every day IN the year and every year
the law allowed the officer to look back.
And he found the evidence OF that
in this-that every one OF these custom house in
voices, OF which they had duplicates In the books
o. the hrm, had thin paper copy OF the true
manufacturers cost pasted over it, in order that
the goods which they had undervalued so as TO
smuggie them by false invoices into the country
Under these circumstances the special agent re-
ported to the Secretary OF the Treasury the facts
Mr.. William T. Dodge employed four lawyers-Mr.
New York, and learned lawyer in revenue law
Mr. Henry Z. Knox, candidate Tor Supreme
Judge OF New York; Judge Fullerton, the fore
most criminal lawyer in the city OF New York with
gentleman who had been Attorney General OF
those LAWYERS, after examining his case carefully
for SIX weeks advised him three times to at once
Srtcle VII Which alsed invoice ey articles amounted
70 more than quarter Of a million Of dollars
sna Mr. william xen f. 3oag from and these his
ners, after full consultation, agreed to that
proPosition,.--nay, ardently desired It, and
Treasury that on account OF certain lrregulari-
tles' which had been found in their business, they
which the District Attorney in the meantime had,
az their request, brought against them for
: amount OF their tainted and fraudulent invoices.
That suit was brought In that form at the request
OF the counsel OF Dodge, alter the compromise had
promise should be accepted 1t might cover every
CAIN for penalties against Phelps, Dodge Co.
TIIR A nj
When the letter Offering 10 pay that great sum
came to the secretary OF the Treasury, George S.
which Will be found in the testimony:-"I cannot
accept this compromise. will not be put in the
blackmailer Either you have committed fraud or
you have not committed fraud. Hyou have not CON-
anytnlng viii consider the Question of compTo.
mise, but cannot compromise under your state
ment tnat you are guilty OF irregularities ony."
Dodge 4 Co., after consultation with their four
eminent counsel VINO advised their clients to plead
guilty suit charging them with importing
goods to S1OOo,oo0 IN value by false invoices and
fraudulent apphances; and. thereupon Phelps,
I Dodge q Co sent an offer OF compromise admit
ting their guilt individually and collectively and
renewing their otter to pay y the s27i,ooo; and
ing III they withdrew the ofer.
FAILURE OF sUBTERFUGEs.
Meantime the matter had got into the newspa-
pers The Christian Association, OF which Mr.. Will
liam Il. Dodge was burning and shining light,
began 10 inquire what manner of man is this VINO
makes long sermons by day and prayers by night
In the temples, while his partners IN business are
accumuating his profits by daily and hourly PERU
RES and frauds upon the government And VIII
Lam Z. Dodge wrote, as the testimony shows, to
George ;. Boutwell, and said to him in substance,
81 withdraw my offer OF compromise" He ex-
pected the Secretary to answer that, 81 cannot
permit the withdrawal, as the matter is cosed.'
Then Dodge would doubtless have gone away
and SAID, "The compromise was inadvertently
made, and when went to withdraw it the Sec
Rotary took a snap-judgment upon me-" But the
Secretary, with his usual straightiorwardness,
wrote In substance very well; II you think you
to jury" SO the compromise was withdrawn.
Thereupon Dodge consults again with his -FOUR
LAWYERS, and alter nearly two weeks delay he re-
break his fall he says to the Secretary 1.-The gov
eminent officers think that ought MOTTO withdraw
10 ysy Hncs e
and honorable and straightforward answer to that
OF the Secretary OF the Treasury 1t was-"Mr.
Dodge II your action In renewing the proposition
has been Influenced by this representation you will
have an opportunity to consider the subject anew
and take such course as you may think proper be-
lore final action By this department. Finding no
suoterfuge would avail, MI. Wiliiam r. Dodge, with
mis- four lawyers behind him. after weeks OF such
consultation and such shirts and such attempts at
evasion as | have described deliberately put on
file written statement admitting that his firm
guilty OF the charges In suit; That by these
false ana fraudulent invoices the revenue has been
guilt. And yet We are told ''aIl merchants are
honest" and Phelps, Dodge CO. are the very
claims he comes here before your committee, as
understand. as President OF the Chamber OF CON-
MERGE or the city OF New lOrk, as the eXenDlaf O1
the merchant. as a dealer IN hardware. ties up his
goods anG puts a specimen PAIR OF shears ON the
outside, that we may know the quality OF the
cutting instrument inside without opening the
package.
THE GROWTH OF REVENUE FRAUDS.
To show you that cannot be mistaken in this
matter, have caused to be prepared and Will
send to the Clerk TO be appended TO the record. a
table showing how frauds the revenue nave
grown up, and how necessary these penalties are
to their detection and punishment. IL appears
that in 1872 the whole amount OF forfeitures, mes
and penalties derived from the frauds OF tue mer
chants Of that period was S1ls; IN 1891, 1920; in
1898, IS, ana In 1873, 1T was ST., 26l,I75.
STATEMENT CUSTOMS
FROM FINES. PENALTIES foRFEITURzs FROM MARCH T.
1889, so, 1873.
Fines Penal Per
tics ard for- rent
Fears Customs FIXTURES age
1871 ..................... $3.50 Az % $3l1 %
I've. 3A+Dlg Q u6W