The morning call., 1892-04-07
IN REVENUE CIRCLES.
What May Result From the Sc.
cret Service Investigation.
Possibility That Two Prominent Officials
Will Be Deposed fer Cause-Grand Jury
Indictments limited At.
There wore whisperings around the Fed

branches Of the customs department The
intimation is that as result of the investi-
CATION made by the secret service agents
who have been in this city for several weeks
looking into reports of revenue frauds.
two officials who hold high positions will be
deposed and may be held within the con-
fines Of the State by virtue of presenta-
ton by the Grand Jury; that an ex-official
will be arrested to-day or tomorrow for
participation in frauds against the Govern
ment, and that indictments will be pre-
sented against certain citizens in and out O
this city.
One Of the matters which has been the
subject Of Investigation was the importa-
ton Of fine dress goods and another tobacco,
and among those who have been engaged i'm
the work was Agent Mccoy of New York,
who investigated what is known in Custom
house circles as the "Sumatra leaf filler
case" prior to the report of the Board of
General Appraisers.
The story of the Sum atra tobacco-filler
frauds is best told in the language of the
Board of General ADpra isers In its report
on the Liebes Brothers Il Co.'s appeal.
The "peculiarties" and unique features"
referred to in 1t. are now like handw riting
on the wall. declaring some ones doom.
HISTORY OF THE CASE.
The history of the importation by Liebes
Brothers " Co.. entry, appraiSement by
Appraiser Leavy, increased assess ment by
Collector Phelps aud review on appeal by
the Board of General Appraisers, is as
follows:
"On September l6 last there arrived by
the Southern Pacific AIS bales of Sumatra
unstemmed leaf tobacco. Or these LAG bales
were Immediately entered as 'Sumatra
filler, and on the 23d Appraiser Leayy
nd hot ne ~ of h.a c5e
ing duty Of 30 cents a pound. The imp0r-
tatlon of Sumatra leaf as nllers had never
been done before and caused a general pro-
lest on the part of several tobacconists.
This resulted in REORGANIZATION by APP
praiser Leayy, who made a report % Col
leetOr Phelps that the 146 bales contained
leaf tobacco, unstemmed, suitable for cigar
wrappers Collector Phelps then assessed
duty of So pound
In the meantime the importers entered
the remaining 332 bales as filters, and they
had been assessed at 80 cents pound. The
Collector also imposed the increased duty on
the second lot. The importers then ap-
pealed to the Board Of General Appraisers
and samples from each bale were sent by
Collector Phelps and Appraiser Leavy. Two
hearings were given by the board to the
Sumatra case, at which the samples were
examined by many experts.
TIE SAMPLES.
1.-TWO of these, both of whom are tobacco
examiners 10 New York City. testified that
| the samples OF the tlrst-eutered lot were not
| lit for wrappers, and that as taken from the
| bales they could not have been suitable fer
| such use. This evidence was coTrobOrated
| by two New York importers of Sumatra
| tobacco, who selected samples from 81 bales
which, they said. are never suitable for
| wrappers owing TO the shortness OF the leaf.
| AS to the other 80 bales of the same lot
| they expressed doubt
| I'VE" tho decision continues find that
o hr1-. ell
| pers, and the claim that they are dutiable
| at 80 cents Is hereby sustained. We find
| that in the $50 bales Al contain NO tobacco
| suitable for cigar wrappers. The proteStas
| o the fl bales is sustained. As to the go
| remaining, the assessment OF 81 pound
| duty by the Collector is hereby affirmed"
| SO much for the figures in the revelation.
The report then ends in this remarkable
| language, which was signed by General A D.
praisers }. b. Wilkinson Jr., George Ii.
| Sharpe and Wilbur +. Lunt:
The decision in this case rests as to
| fact 1t would be irrelevant to the
| decision TO touch upon the peculiarities Of
| the case or TO inquire into the designs Of the
| importers. But under the provisions Of the
| act imposing upon us the responsibility of
securing uniformity in classification At the
several ports, It becomes our duty TO call
attention TO several unique features in the
prese mt case. SO that customs officers may
realize that In passing upon similar impor-
tatiOns, should any occur, 1t is incum bent
upon them 10 exercise the greatest vigilance
and most careful scrutiny.
INvoICED AT HAMBURG.
1.-The lac bales were invoieed at Hamburg
The invoices were made out in United
States currency, at 80 It's per pound
American, and the sum total converted into
marks.
The 332 bales were invciced per kIlogram
in francs or marks, as calculated In this
Office, as follows:
pound.
From Bremeu-2o bales at 80 cents per pound,
% baies al 90 cents Der pound. 20 bales at 62
cents per pound, rs bales at 30 cents per pound.
'The lot of I46 bales was, in fact, as
claimed by the importers, interior filler to-
bacco. More than so per cent of the lot of
332 bales as good wrapper tobacco. So il
IS not singular that the invoice for the in
fefior tobacco was made out at price so
IN ach higher than that of the better grades.
Mr.. Liebes claimed that the tobacco was
imported for filters and binders. All other
witnesses testified that they had never
known OF any Sumatra tobacco. except cut
tngs from wrappers. being used as filters,
and there was no testimony TO the effect that
such tobacco IS or ever has been used as
binders. Several tobaccG-dealers stated
that the price of filler tobacco in this coun-
try equal or superior to the best Sumatra
filler Is from To 30 cents pound. 1t ap-
pears, therefore. incredible that Sumatra
tobacco should be imported for any such
purpose.
REGULARITY.
I'm the entry of the tobacco there Is also a
popularity open 10 unfayOrabe criticism.
The importation of AIS bales arrived in San
Francisco September IT, Prompt entry was
made OF lot of purely filler tobacco. When
this was returned by the Appraiser as filler
tobacco the remaining $50 bales containing
more than 80 per Cent OF wrappers, were en-
tered as filters.
THE board Is OF the opinion that no Su-
matra tobacco is imported IN good faith as
hllers, and every bale Of such tobacco SO en-
tered should be rigidlY scrutinized."
Such Is the Official report of the only large
tobacco fraud made public, and il is not
hard 20 read between the lines the dissatis-
faction OF the Government at the state Of
affairs and the promise that they would
soon be investigated.
San Francisco, from every point Of view,
Is an important port, and always as much so
to the smuggler and dishonest importer as
to the honest merchant who strives. rather
by industry and tact than by subterfuge. to
make his competency. The opium trade has
always been fruitful source of fraud. and
latteriy the established merchants have
taken a hand la their separate lines.
0Besides those of Neuberger, Reiss & Co.,
their next-door neighbors, Steinberger e.
Kalisher, attempted to carry on extensive
frauds and by false invoices too To do this
1t was necessary to have at least one Gov
eminent officer employed in the Customs
service, In collision with them. This was
one whose arrest. il was stated. will
be made to-day or t0-morrow-for the
Investigating agents have promised the