The daily gazette., 1877-04-17
THE CUSTOMS FRAUDS IN NEW
YORK

IRON the Chicago Inter Ocean ..t..-
1t is reported from Washington that
conspiracy has actually been discovered
for the wholesale undervaluation of silk
imported into this country at the port of
New York. A despatch says sit appears
that the Government is swindled at
an average of about thirty per
cent. of its duties on silks, and loses
about $15,000,000 annually. But the
most extraordinary feature of the discov-
cry is that A. T. Stewart & Co., who
have their own mills even in France, and
VINO have special facilities for buying
cheap" are not able to import their own
goods and lay honest duties and make
any profit. A. 7. Stewart & Co., on the
contrary, instead of importing their own
silks, do not import directly dellar's
worth, but buy every yard of silk they
sell, including their own make, from
large jobbiDg houses in New York, which
through the influence which Stewart &
Co do not understand, are able to sell
their own goods cheaper than that firm
can import them.
Messrs. Stewart Il Co. must be very
astute merchants not to understand the
"infuence" by which large jobbing house
es in New York are enabled to sell their
own (Stewart's) goods cheaper than they
(Stewart & Coz can import them. Think
OF it, all innocent people. Stewart 81 Co.
establish a silk factory in France, turn
out large quantities of broad silks, sell
them to jobbers in Frauce, those jobbers
export them 70 New York, selling or
consigning them to other jobbers there,
and then Stewart & Co. buy them back
again at less than the price at which they
could originally have imported them
di 'ectly from their own manufactory! 1t
is little strange that it has never occur
red TO Stewart & Co. that cheating the
Government out OF half the duties might
enable the .jobbers to buy their goods in
France and sell them back again in
America at profit.
Let us illustrate:-Stewart & Co.,
making piece of b Dad silk, forty-yards
in France at cost of$2 so per yard-$l00
They sell it TO A B at a profit of 10 per
cent.-forty yards at S2.75 $110. Alb
consigps the silk to his agent q d at New
York, invoiced it at slips per yard-$50.
If invoiced at cost the duty-e0 per cent
would be $66, making the total cost in
New York $176; but paying duty on less
than one-half its value the silk reaches
the agent at total cost of $40. He calls
upon Stewart in New York, and offers to
sell him the silk at the original cost price
at his (Stewart's) factory in FIance-$100
freight and duty added; duty, $50; total
S160. Thus Stewart has made two profits
$40 in France aud SIG in New York
$26, 26 per cent and the "large jobber''
has made $50, $40 in all of which S36 has
been extracted from the Government. 1t
is little strange that Stewart & Co. have
never thought of this. The merchants
of Chicago have known all about it, and
they have made no secret of the know
ledge. 1t is fact also that the Intre-
Ocean explained the modus operandi of
these frauds minutely, more than two
years ago and repeatedly called the at
tention of thethen Secretary of the Treas
ury to the fact that the customs revenues
were being stolen at the port ofNew York
at the rate of many million dollars per
anuum. Secretary Bristow had his at
tention called to these frauds. and he not
only failed TO expose and punish the Of
tenders, but he cut short an investigation
of the Navy Yard Custom House prose-
cuted by the Hon. Lorin Bledget which
exposed many of the frauds, and promised
to unearth many more of them. Two
years ago (next month) Mr.. Blodget,
General Appraiser at Philadelphia made
an elaborate report to Secretary Dristow,
charging from personal knowledge, derived
by months stay at New YORK, that the
frauds being perpetrated there by under
valution were enormous. But that report
was suppressed, and Mr.. Blodget was not
allowed to resume his investigations.
Early in June, 1875, the New York
Graphic interviewed Mr.. Iselin, of the
firm of Richard Iselin & Co., large rib
bon-importing house Mr.. Iselin preten-
ded to be shocked at the extent of the
frauds by uodervaluation,w which he knew
to exist.