The Cheyenne daily leader. [volume] (Cheyenne, Wyo.) 1870-1884, 1882-04-13
THAT
Facts Concerning the Great Silk
Swindle.
New York and Boston Merchants Are
the Principal Losers.
The Hong KONG swIndIer. !.

boston, April 12.-The Journal to-
morrow morning will say concerning
the China frauds: The firm Of Vogel
Bros, Of Hong Kong, had succeeded
in making for itself quite a reputation
in the general trade between China and
America and Europe after cutting I'M
der the market, but preserving strict
integrity IN their dealings until within
a few months.
The first instance of sharp practice
brought against them is the e%xpedient
they adopted last year. On one or two
occasions they bought in a lump a ves-
sci and cargo and Immediately offered
to sell in New York the staple
goods the vessel contained ''at cost
and freight" Such offers. were of course
quickly snapped up and New York
merchants awaited the results of their
bargains, but, when the vessel arrived
they were called upon to pay as freight
a sum almost large enough to buy the
ship and certainly sufficient to bring the
cost of the goods up to the full market
rates. More recently the firm adopted
methods more rankly illegitimate.
Dealings in the Chinese trade are made
by means of letters of credit. The i'm
porter obtains a letter of credit from
some well known banking house. 1t is
sent TO Hong Kong and cashed by the
local bankers when accompanied by the
proper vouchers of shipment Of merch-
andise. The shippers thus receive pay
ment as soon as the goods are put on
board the vessels. Late in 1881 a
New York sugar refinery ordered, by
cable, from Vogel Bros, a cargo of SUI
gar. stating that a telegraphic letter of
credit would be sent as soon as the in
structions could reach its London
bankers to that effect. Vogel Bros.
Immediately shipped a a cargo of Chi
nese sugar of poorquality, it is stated, and
local banker paid the price of the cable
order with the bills of lading. Ten
days. later a telegraphic letter of tie
credit was received from London, where
upon Vogel Bros. Immediately shipped
a second cargo and successfully negoti-
ated the dead letter credit with another
Hong Kong banker. In the meantime
the telegraphic orders and bills of lad
ing were sent to London for collection,
and the bankers knowing that the cargo
had arrived cashed it, but by the next
steamer came the real letter of credit
which the banking house was obliged
to cash, it being genuine. The loss
therefore fell upon the banks, the con
signees refusing to accept the second
cargo. The next victims were Euro
pean silk merchants. English and
French silk trade with China Is large,
and the field for Vogel Bros. operations
was quite extensive. They received
orders for about sixteen thousand dol
lars worth of first grade silk. The pay
ment was received before the shipment
in all cases, the value of the goods be-
ing three hundred dollars per bale.
Within a short time the goods reached
LDelT u"eSJludJlOn. Inc DaleS were
found to be made up Of outside dressing
and fourth grade elk filled with shay
ings valued at about ten dollars per
case, the estimated loss to the English
and French merchants by this swindle
amounts to $500, 600. There is said to
have been trouble also over a large con-
signment of camphor which the Yogel
Bros. sent to a New York house, and
which resulted to quite a serious loss to
the importers. In the case of cargo of
hemp received on the Richard Robinson
and in which the firm Of Cyrus Wake
field & Co. Is one Of those principally
interested, the questions of placing
the loss is an open one between the I'm
porters and banker. If the letter Of
credit called for the delivery of the
hemp and the letter was cashed on the
delivery of the mating, it is claimed
that the bankers are responsible for
making the wrong payment.