The Portland daily press., 1875-11-12
WASHINGTON

The sngg Fort md Witkewslsi Frauds
WASHINGTON, Nov. 11.-A commission to in
vestigate the alleged swindles in the Sugg Fort
and Witkowski cases has been appointed.
Report Of he Commissioner of Internal
Revenue.
The annual report of the Commissioner of
Internal Revenue says that the British people
paid under their excise laws for the year end
ing 3lst of March last, taxes amounting to
l83962. 756. 56 gold, against $l10, 545 1G IS
currency. A statement is given showing re-
ceipts under the act of March 3, 1875, up to
and inclusive of june so, 1876 from the differ
ent articles subject to increased tax, which
were distilled spirits, cigars, cigarettes and
manufactured tobacco, showing o total tax re-
turned of S., 2O3, 1855. The number of distil-
leries registered DUNG the year ending June 3d.
1876 were 4736, and the number of stills ope.
rated 460S. Of the number operated 656 were
grain dstilleries, seven were molasses and 1916
fruit distilleries
The Commissioner says that public attention
has been often called within the past few months
to extensive frauds committed in certain locali-
ties upon the revenue by distllers and rectifiers
of distilled spirits He gives an account of the
check, guards and projections against fraud es-
tablished by law, Of the manner in which
whiskey frauds so called, lately exposed, were
perpetrated, of the extent Of these frauds and
of those checks recently established to prevent
recurrence OF the same, and suggests legisla-
ton necessary to insure fuller collection in
the future OF taxes upon distilled spirits. With
regard to additional legislation required to en-
force the honest collection of taxes on distilled
spirits, the Commissioner says: 81 give it as
my opinion that the only law necessary is one
that shall make the requirements as stringent
and the penalties for defrauding the govern
ment as severe in case of the rectifer as they
now are in case OF the distiler. The rectifer
should be required to give bond in ah amount
equal to the tax represented by all the spirits.
he can possibly rectify each month. The house
and tract of land upon which the establish
ment is located should be forfeited to the Unit.
ed States In case of fraud. He should not be
allowed to handle any spirits at his rectifying
house except those he purchaes for rectification
and sells under rectifiers stamps. Under the
~ days must elapse before the discovery could
be made and the guilt fixed. AS the appara-
tus in rectifying house capable of refining
quantity of spirits upon which the tax would
amount to 100000 month may not be worth
more than $4,000, it will be readily seen that
under the present law which only forfelts the
apparatus and spirits owned by him at the time
OF seizure, rectifier may aid in defraudng the
government of 100000 and forfeit only SlO,.
600, and by Ascending to foreign country he
also to suggest that the law now in force in re-
gard to returns to be made by rectlfiers is SO
indefinite that some legislation is needed to
enforce the regulations of the Commissioner.
also think that it would be better If rectifiers,
distillers and Wholesale liquor dealers were re-
quired to make transcripts of their books
monthly, instead of this labor being performed
by local officers, as it is at present. 1t would
also relieve the officers Of an immense amount
of labor, and would accomplish the more i'm
portant result of preventing the destruction of
books by parties about to be detected in fraud.
There would then be sworn CODY in this office
that would always be admissible evidence in
the courts against the guilty parties. | am fin.
ally OF the opinion that the present large tax
upon distilled spirits can be collected with but
small loss. This opinion is based upon the fact
that every storekeeper, guager and employe
who are connected with the distilleries where
fraud is perpetrated becomes a.pensioner upon
the distiller. If, therefore, distllers be kept
of money gained by fraud is not sufficient to
pay large corps of officers and workmen in
necessary collision with them to consummate
the fraud, they would, as matter of policy be
honest.
As an indication of the extent of the frauds
above described, have the honor to report that
documentary evidence is in possession of this
office which has warranted the seizure of "a
distiIeries and 81 rechfy,ng houses, aud impli-
Gated over fifty United States gaugers and store
keepers. This evidence also shows the issue
between July 1, 1874, and May 1, 1875. Of fraud
ulent spirits by the duplication Of 10000 pack
ages, probably 200, 900 proof gallons, and by
the aid OF false gauging to the additional amount
OF 100000 proof gallons This, of course. is
but portion Of the fraud actually committed,
but in itself indicates the loss of tax to the
government in ten months to an amount not
less than 81, 650,00O."
The tax returned upon distilled spirits was
81 779,779 So.
The receipts from all sources relating to fer
Eented liquors for the fiscal year are $0.144,
004, decrease of $160,675 as compared with
1874. The number of breweries manufacture
ing fermented liquors are 2724. The Commits
sioner expresses full confidence in the stamp
system for the collection Of revenue. The
number of cases compromised during the year
were IA, and the amount received BY compro-
mise $l56,576 A recommendation is made
that deserving gaugers receive 81 per day, and
in some instances that the Office of gauger and
will be saved in expenses.
Total receipts from tobacco $37, 300, 46l, an
increase over 1874 of $406,58 and an increase
over any previous fiscal year of S., 9l7 ,15S The
snuff from Sept: l, 1862, to June 80, 1875, was
$3.50, 219. The total amount collected on
cigars, cheroots and cigaretts fer the same
time was $Gl ,233, 506. 1t is expected that dur
ing the current year the assessment of the tax
on tobacco will be largely increased. While
81, 23O, OO3, an increase over the previous year
of $3,44 1856. The quantity of distilled spirits
in warehouses July l, 1874, was II, 755 1863 gall
Ions, distilled spirits produced during the year,
OVoco,1lO Sououo, tOedl3 6O,OoO,oJf SdllO0S. 10.
tai withdrawn, 65.34l, 14l; leaving in bond
June 30, 1875, Is, 367, 253 gallons. Spirits re-
moved from warehouses for export for the year
ending June 30, 1874, was 4,O6O,1O6 gallons.
while only 567 All gallons was thus removed
during the last fiscal year. The quantity of
tobacco removed for expectation in bond with
out paying taxes was 9,179,315 pounds, a de-
crease of 1921 81 POUNDS.
The Commissioner says that the force of
agents is inadequate and recommends the pas
GO of a n IN ~ hnr i1p H.
further that the consolidation of the collection
districts can be made without affecting the
revenue. and that the plan of gauging whole.
sale liquor dealers packages by o. s.. gauger
can be dispensed with, and simple system of
checks by stamps be substituted, which will
prevent over issue.
He recommends making violation of the
law in relation to friction matches criminal
offence punished by. imprisonment and fine.
He also desires that the internal revenue AGENTS
be Empowered to demand and obtain the inspec-
ton of books and papers Of distillers, rectifers
brewers, wholesale liquor dealers and manufac-
turers OF tobacco, snuff and cigars. The COM
missioner quotes the decision Of the Supreme
ing vested in the United States no subsequent
act of transfer coupled with the payment BY an
innocenC party could divest the United States
after its title with the remark that such a rule
is inconsistent with justice or sound policy, and
therefore should be abrogated. The commits.
sioner estimates the collection the present fiscal
year from all sources of internal revene at S122.-
O00, 900.
The net amounts of receipts from all sources
of internal revenue during the last fiscal wear
in the several states is given as follows:
Alabama. ......................S 111,816 Al
Arizona. Observation-Disclosures. 10.206 O6
Arkansas ........"... ,...... 1888 80
Cahfornia. ......,".. ........ 1885 10
Colorado. ..........."....... 70,531 SO
Connecticut. ............."... 622225 80
Dakota. ACKNOWLEDGEMENTS. 10 040 18
DelaWare. ...........,....... 360,331 03
District OF Columbia. .......... 111,027 81
Florida. Observation-Disclosures. 1851 81
Georgia. Observation-Disclosures. 387,154 IL
Idaho. OBSERVATION-DISCLOSURES. 1896 20