National Republican. (Washington City (D.C.)) 1872-1888, 1874-06-23

which they could cheat-because the prices of
the ordinary kind of tin-plate were as staple as
gold eagles would have been IL imported by
that hrm-ln every instance they had double
invoice from the manufacturer, and that those
specially large sizes Of tin were not purchased
BY Phelps, Dodge s. Co. or Phelps, James d
Co. in open market at all, but were manufac-
tured for those firms, which are one and the
same firm; and that in every instance, when
they swore they had bought these articles In
open market, they swore falsely, and knew
1t, because they knew the article was
manufactured to order for their firm, and
they should have sworn to the cost price of the
manufactured article, which he found each
time had been In the possession of the firm
before the oath was made, and It was higher
cost than the invoice price to which they made
oath. So that they and those whom they en-
ployed had been guilty of deliberate and corrupt
perjury every day in the year aud every year
of our Lord for the five during which the law
allowed the officer to look back. And he found
the evidence of that In this: That every one of
these custom-house invoices, of which they had
duplicates in the books of the firm, had thin
paper copy of the true manufacturers cost
pasted over 1t, in order that the firm might
know how to sell at proper price the goods
which they had undervslued so as to smuggle
them by false invoices into the country.
Under these circumstances the special agent
reported to the Secretary Of the Treasury the
facts. Mr.. VIM. E. Dodge employed four law
yers-Mr. Abram Wakemau, o former sur
veyor of the port of New York, and learned
lawyer in revenue law; Mr.. Henry E. Knox,
candidate for supreme judge Of New York;
Judge Fullerton, the foremost criminal lawyer
in the city of New York; with gentleman
who had been Attorney General of the United
s ates, as consulting counsel; and those law
yers, after examining his case carefully for six
weeks, advised him three times to once offer to
pay the value of every falsified invoice article;
which falsiied invoice articles amounted TO
more than a quarter of million of dollars
s271 900, to get released from these frauds, and
Mr.. VIM. z! Dodge and his partners, after fun
consultation, agreed to that proposition, nay,
ardently desired It, and made a written state
ment to the Secretary of the Treasury that on
account of certain irregularities" which had
been found In their business, they were willing
to pay s27l 900 to compromise q suit which
the district attorney In the mean time had, at
their request, brought against them for q mil
lion dollars, or less than two thirds of the
whole amount of their tainted or fraudulent
invoices. That suit was brought In that form
at the request of the counsel of Dodge, after
the compromise had been agreed upon, in order
that when that compromise should be accepted
IL might cover every claim for penalties against
Phelps, Dodge & Co.
When the letter offering to pay that great
sum came to the Secretary Of the Treasury,
George s. Boutwell,, he wrote back In sub
stance-all of which will be found In the testi-
mony-"I cannot accept this compromise. /
will not be put in the position which that offer
will put me, Of being 8 blaekmailer. Either
you have committed fraud or you have not
committed fraud If you have not committed
fraud, you should not pay the Government
tvfII cOnsidar ha ouaaffou of com
promise, but / cannot compromise under your
statement that you are guilty of Irregularities
only" Thereupon that offer was modified by
Phelps, Dodge & Co, affer consultation with
their four eminent counsel, who advised their
client to plead guilty to a suit charging them
with importing goods to million dollars In
value by false invoices and fraudulen. ap-
pliances; and thereupon Phelps, Dodge & Co.
sent an offer of compromise admitting their
guilt individually and collectively, and renew
ing their offer to pay the s271 900; and while
the Secretary of the Treasury was considering
It they withdrew the offer.
Meantime, the matter had got into the news
papers,; the Christian Association, of which
Mr.. William Z. Dodge was burning and
shining light, began to inquire what manner of
man Is this who makes long sermons by day
and prayers by night in the temples while bis
partners in business are aeeumulating his
profits by daily and hourly periuries and frauds
upon the Government And William E. Dodge
wrote, as the testimony shows, to George 3.
Boutwell,, and said to him In substance, "I
withdraw my offer of compromise" He ex-
pected the Secretary TO answer 20 that, 81 can
not permit the withdrawal, as the matter Is
closed" Then Dodge would doubtless have
gone away and said, 1.-THE compromise was IN
adyertently made, and when went to with
draw 1t the Secretary took snap judgment
prttf he viii fslf al
ghtforwardness, wrote in substance: Every
well; II you think you are not guilty withdraw
your compromise and 90 to jury So the
compromise was withdrawn. Thereupon Dodge
consults again with his four lawyers; aud after
nearly two weeks delay he renews the offer
and the money is paid. In order to break his
fall he says to the Secretary; 1.-THE Govern
ment officers think that ought not to with
draw the compromise, they having once accept
ed il am bound to carry It out.6 What was
the manly and honorable and Straightforward
answer to that of the Secretary Of the Treas
ury7 It was: "Mr. Dodge, If your action In
renewing the proposition has been influenced
by this representation, you will have an oppor-
tunity to consider the subject anew and take such
course as you may think proper before final
action by this Department" Finding no sub
terfuge would avail, Mr.. William E. Dodge,
with his four lawyers behind him after weeks
attempts at evasion as have described, DELHI
eratsly put on file written statement admit
ting that his firm were guilty Of the charges In
suit; that BY these false and fraudulent in
voices the revenue had been defrauded and
paid S271 900 in expistion of that guilt. And
vet we are told "all merchants are honest"
and Phelps, Dodge & Co. are the very princes
of merchants. Nay, Mr.. William E.. Dodge
claims he comes here before your committee,
as understand, as president of the Chamber
of Commerce of the city of New York, as the
exemplar of the merchant, as dealer in hard
ware ties up his goods and puts . specimen
pair of shears on the outside, so that we may
know the quality of the cutting instruments
inside without opening the package
To show you that cannot be mistaken as to
the viciousness Of the legislation proposed by
the committee in this matter, II have caused to
be prepared and viii send to the Clerk to be
appended TO the record . table showing how
frauds on the revenue have grown up aud how
those penalties are to their detection
and punishment. 1t appears that IN 1792 the
whole amount of forfeitures, fines and penal
ties derived from the frauds of the merchants
Of that period was Sis; in l797, SEQ: In 1873.
ss; and In 1873 1t was 81, 261 ,175.
. THE detailed tabular Statement Il omitted. I
is anything more needed to prove that the
dishonest importer, with his false invoices,
his branch on the other side 70 undervalue his
goods, his false appliances to deceive the Gus
toms officers, has quite driven the honest mer-
chants out Of the business and len it IN hands
such as thesef i irff se5 ) - .sfll s f5arr
|, Men Of the HOUSE Of Representatives, n Is
to shield such Is these that We bave voted to
take OF the penalties imposed upon defrauders
Of the revenue BY false invoices and smuggling
Importers Let me not be misunderstood! This
experiment must be tried before the people VIII
understsnd how greatly they are dsfrauded
and wronged. do not oppose It's trial. LII
had Intended TO have done 80 should have
begun my opposition earlier. The result viii
be that you win find great diminution OF
your revenues In the coming year. You win
Be called upon to pass laws 70 raise more rev
snue at the next session; and have no doubt