The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1874-03-13
THE CUSTOM HOUSE SCANDAL.


Revenue Investigation Closed-District At
torney Bliss Admits the Intricacy and Ex-
cessive Severity Of the Laws-Summing
Up the Case Of the Merchants
WASHINGTON, March IL, 1874.
George Bliss, United States Attorney tor the
Southern District OF New York. addressed the
Committee on Ways and Means this morning. He
said he was, perhaps, the only Oficer OF the gov
eminent likely to be heard, as the Collector.
Naval Onicer and Surveyor at New York declined
to appear, only for the reason that II they came
here and expressed their opinions 1t would be said
they were BIASED by their personal interests. AS
TO facts, he could state more than all OF them COM
bined, owing to the nature OF the business en-
trusted to his hands, HIS own interest In moieties
was an indirect one, and, without going into
details, was comparatively small. The causes
OF complaint before the committee are
said to be In the law authorizing the
seizure OF books and papers and the outside
forcing OF merchants to make compromises. ana
incidental TO the question OF moetes all revOved
around the charge OF undue hardship to mer-
chants. These complaints came from organized
bodies and individuals. This was all that appeared
upon the surface; but behind all this there was
protect themselves from the consequences OF dis
covered FRAUDS, suits in relation to which were
now pending. In one OF these suits the parties
asked that there be q compromise on the single
item forfeited, but they were informed by
him that such compromise could not be
made under the law. The New York Cham
Der of Commerce and various boards Of trade
were here urging certain changes in the law.
Certain gentlemen were
CONSPICUOUS BY THEIR ABSENCE
You do not find Stewart, Claflin and other mer.
chants OF their standing complaining of hardship.
The reason these gentlemen were not here was
not because they were not invited, but because
they do not feel they suffering hardships under
the law. He knew that this was true of one.half
of the eminent merchants. Mr.. Bliss said the
Chamber of Commerce did not know what they
were talking about concerning the seizure OF books
and papers. There Is no such law as they
say there is, and certainly there was no
such practice as that to which they re-
ferred. The resolutions OF the Chamber were
got up by outside parties to serve their
personal interests. Mr.. Bliss then related the
procedure as to seizures Of books and papers, and
PARTICULARLY as to the preliminary proceedings.
He maintained the constltutiOnality OF the law
authorizing the seizure Of books and papers, out
suggested that there might be an amendment pro-
vidlng the separation OF the books proving frauds
from other books, and their examination by some
body IN the presence OF counsel, and other parties.
1t was true the revenue laws were intricate IN
many OF their features, but far as they show
wnat merchants should 90 on the entry OF goods,
they are perfectly clear. II the merchant enters
his goods at the market price which he pays there
is no penalty. 1t must be borne in MIND that to
subject the merchant to forfeiture there must be
THE INTENT TO DEFRAUD.
Mr.. Bliss remarked that the head OF Mr., Schultz
had been turned in the case OF his friend Harvey
Barnes Mr.. Bliss said Barnes knowingly entered
goods by false invoice and took the oath that it
was true and correct. Alter further statements,
Mr.. Bliss referred to the settlement Of the OF
or compulsion whatever Exercised. The transac.
tons rom beginning to end led every otflcer Of the
government to believe that the firm admitted
fraud on the part Of persons Tor whom they were
responsible. His predecessor as District Attorney,
Moan Davis, asked him to divide With MIN the lees
OF raud but Bliss could not now recall any dis.
tinct statement to that effect. Perhaps his lnfor-
nation was derived from the TACT that Mr.. Davis
thus sought to share IN the fees, from which he
did not suppose gentleman OF his standing
would seek share OF money exacted from mer.
chants for mere technical violation OF law. But
as Noah Davis had published a letter IN which ne
disclaimed that he said 1t was very bad case OF
fraud, he (Mr. ElSS) was bound to consider that
he was mistaken.
The committee took recess.
After Recess.
Colonel Bliss, on the reassembing OF the COM
mlttee, said mOeties had always certainly existed,
from the establishment OF the government to the
present time with the exception OF three or four
our ears that the effect OF the mOiety system was
to ruin the merchants, 1t was strange the mer.
mad ha mot sned NE
the modification Of the moiety system,
in the enforcement OF the revenue
laws. Among other arguments Mr.. Bliss quoted
from the evidence OF ex-Comm.ssiOner OF Internal
Revenue William orion, before the Senate Special
Committee on the New York Custom House, in
favor OF giving special awards for the detection OF
fro nho nm fhA Hn hso
opinion that whatever the committee may do and
however they may dispose OF the question OF giving
absolutely necessary that it should be given to
somebody, ana he believed 1t should be given to
some officer OF the COVE nment who is re-
sponsibe to authority, rather than to mere out
slders. With regard TO compromises, the practice
was for the District Attorney to transmit writ
the facts upon when he acts The Secretary does
not, however, always rally compromises. He be-
lleved that in no case had he recommended the
acceptance OF less sum than met the acquies-
cence OF the special Agent, but In several cases ne
refused TO recommend sums the special Agent
urged should be accepted as compromises.
THE FORFEITURE PENALTIES TOO SEVERE
As to FORGETTING the entire invoice when there is
defect IN part OF the cargo the penalty was too
severe. In other words, the entire invoice should
not be forfeited because oil the deficiency OF
gle item. When the value of the invoice forfeited
very large the entire value ought not to be
exacted. He saw no reason why the penalty
should not be reduced; but to condne the law to
the forfeiture Of single items would be inexpedi-
ent. 1t might be possible to make the amount Of
forfeiture certain number OF times more than the
amount OF money lost TO the government; put IL
this principle be adopted there ought to be slid
ing scale making the percentage on the smaller
articles greater than on the larger articles. The
only difficulty was that this would give additional
labor to the Court in determining the undervalua-
tons and delay The adjudication OF cases.
Mr.. Bliss was Intercepted by M. Wood, OF the
relative TO his duties in connection
with the seizures OF books and papers, and as TO
or settlements of cases. In revenue
cases he received lees OF two per cent, but In
other cases nothing. MIR. Bliss said a large pOr-
ton OF the attacks made on HIM and others were
from political sources. Mr.. WOOD inquired whether
the cOmplainants were not all members OF his
party. Mr.. Bliss said he did not know; there were
perhaps democrats among them.
Mr.. Bliss, referring to what was said by Mr..
Jayne, said he did not think there were in the New
YORK custom House any officers against whom
there was sufficient evidence to afilx the stigma
OF disgrace by dismissal. In further examination,
he SAID he did not think the law for the seizure or
books and papers could be safely changed.
Mr.. Foster. of the committee made inuuirv