Semi-weekly interior journal. [volume] (Stanford, Ky.) 1881-1905, 1891-05-15

w" trust fOcketed the thpoftefs
Money-A Very shady Transaction Fun,
Exposed.
Mr.. lredell Mcares, formerly deputy
collector Of customs at Wilmington, n.
C., has given description of the Jute
drawback frauds by which the govern
ment was robbed OF $2i2 900 by the Jute
Bagging trust The law in force up to
last October allowed drawback of 90
PER cent. Ot IL now 90 ION articles man
ufactured Of materials imported. on
which duties have been paid.
There are manufacturers in the United
States, IN various lines of trade, largely
dependent upon foreign raw material to
supply the needs OF their business, aud
where they take the product of their fac
tories, made entirely Of imported duty
paid material, and export 1t 10 foreign
markets, or where the purchasers of
their product, who thereby indirectly
pay the duty upon the raw material. ex.
port the manufactured article TO foreign
countries, 1t would seem that the statute
operates justly IN refunding the duty
Jute is now on the free list by the
Mckinley law. but 1t is of interest still
60 recall these jute drawback frauds TO
show what steals are possible IN our Gus
toms system
The person entitled TO a drawback Is
the exporter, aud he alone. When the
manufacturer sold the bagging he made
the buyer pay him the duty on the lutte
and clearly he had no further claim upon
anybody for "a refund Of the duty The
cotton plantsT bought the baggug with
---rse duty added 10 the price, and the cot
ton itself sold with thg. duty added The
exporting merchant was the last in the
line Of American purchasers TO pay the
duty, and II any body was 10 receive the
refund of duty from the government he
was evidently the man Hence the law
provides that the exporter shall produce
the certificate from the collector OF the
port where the duty was originally paid
that "the exporter shall produce the
sworn affidavit OF the proprietor and
foreman Of the mandatory at which
the article was manufactured.
The law never contemplated that the
importer Of the raw material should re-
ceive the refund OF duty unless he were
also the exporter 81 the manufactured
article Likewise. the law makes no pro-
vision for refund OF duty to the manu-
facturcr unless he himself exports his
product The law recognizes the priuci-
pie that when goods made Of foreign raw
materials are sold, the seller makes back
all that had been paid in duties
Now, ia the juta bagging referred TO
there was tho groSsest fraud When, in
1888, Il was determined 10 extend the
drawback provision 90 jute bagging the
determination was not generally made
public. Mr. Meares SAYS:
The decision OF the department 10
this effect was made by letter to the
collector OF customs az New York,
dated ~ Washington. Nov, IL. 1883. and
signed by the assistant secretary OF the
treasury Copies Of this letter were IN
closed IA communications separately
sent 10 each Office for the guidance Of
collectors az smaller ports. The lett,r
does not appear, however, in the bound
volume of synopsis OF treasury decisions
for the year l~S3 4, Is the custom OF the
department 10 issue in printed circular
form for gratuljous distribution instruc-
tons OF this kind.
Why was this not published in the
monthly and yearly editions Of instruc-
tons and decisions: II may have been
Intentionally withheld from too much
public notice. In any event, II served
well the manufacturers purposes IL Is
not charged that they instigatcd the let
ter above quoted aud had notice OF II
quietly forwarded To the several ports
by some one friendly 10 their scheme
aud having some power over the matter
in the department at W ashingtou, iu-
stead Of publishing IT widespread, but it
Is mentioned ~ one OF the condolences
which so nicely tit in with the suspicious
payment of the drawback claims dis
cussed Had the intention of the de
+ partment TO allow Jute bagging to be-
come subject 10 drawback duty been
given out publicly exporters would have
Immediately sought their rights in the
premises, having notice Of the law and
regulations, but the manufacturers
would have been disturbed in their quiet
progress in collecting It"
As this ruling of the department was
not properly pubIsued, Tue cAHolltls vi
cotton were not aware that refund
Of duty would be made; but in some
way the United States Bagging Manu-
facturers association or jute bagging
trust got the information, and
the members OF this trust went
quietly to work to gobble mp what
belonged to the cotton exporters The
members OF the trust, being import
ers, could produce evidence that they
imported at certain times and in certain
quantities the raw material, and as man
ufacturers they could furnish the re-
quired affidayits a. To when and where
this pile was made into bagging, but
how could they identify this raw ma
terial in the exports? They could not
but they made bluff at it, Mr. Meares
writes:
With this evidence in hand, which
nominslly but substantially met the re-
quirements of the regulations to produce
evidence of import and manufacture Of