The Houston daily post. [volume] (Houston, Tex.) 1886-1903, 1899-08-28
AN EVASION OF THE LAW
Requiring Revenue Sale on Contracts
for Future Deliveries.
Mr. PITTS CALLS ATTENTION TO IT
In Letter To the Secretary OF the
Treasury Wherein He Also Asks
for Certain Information.

Hillsboro. Texas, August 26---The fol-
lowing letter to the secretary of the
United states treasury presents some re-
markable facts and calls for Information
that will doubtless disclose Wholesale
evasion Of the war revenue law. and the
possible connivance of departments
charged with its enforcement. The au-
thor OF the letter, Hon. John ID. Pitts.
representative of Hin county in the TWEEN
contends that market gambling in agri-
cultural products is a blighting curse to
the country, and that It is the offspring
and pet of the republican party.
The following Is the text of the letter:
To the Secretary of the United States
Treasury, Washington, ID. c.
Hllsboro, Texas, August 26--Dear Sir:
From special to the New York Times OF
august "a from Washington, d. c., you
are credited with the statement that you
thought II would not be necessary TO
sell bonds to provide money with which
TO maintain the army and that 1t was
the treasury departments opinion that
The income from customs IN internal
mand."
The fact that the appropriation OF an
amount equal to S6,500000 per month to
maintain the army has been exceeded In
the last two fiscal months by an eNpen-
diture of more than $S0,000,000 for that
purpose is considered circumstance thnt
prevented you from stating positively that
no bonds would be issued At all events
the contingency renders the enforcement
- hn luN YNatt tor AE
inquiry.
Without discussing the purpose OF the
administration TO recognize and legaiae
market gambling by placing Federal
revenue tax upon 1t, l desire to submit
the following statement and solicit an an
swer to the following questions for the
purpose OF showing that the administra-
ton has knowingly permitted the New
York Cotton Exchange to gamble and
speculate In Southern products in open
evasion OF the law,
In schedule "a" of the war revenue
law is the following clause: Upon each
sale, agreement of sale, or agreement to
sell, any products, or merchandise at any
exchange beard of trade, or other similar
place, either for present or future delV
cry" etc, the revenue law provides
stamp tax and penalty for the inten-
tional violation Of the law at n fine of not
Imprisonment for not more than six
months, OF both, at the discretion of the
court
This law was intended to reach DO
pressed futures contracts in the cotton and
grain markets, which form the basis OF
bucket shop operations and the bunco
system of market gambling.
The New York Cotton Exchange sells
In New York alone more than 50,000,000
f,.t,,
tracts annually and proportlonate amount
in their market gambling exchanges and
bucket shops OF the South. Before the
revenue law went into effect the leading
daiiies OF the United States published the
daily sales OF actual cotton and of futures
contracts, but after the law went into ef-
feet the reports OF the sales of futures
contracts We're dropped out of the market
reports as published In the daily papers
OF Texas and other States of the Union.
The purpose of the New York exchange
in ceaslng to make reports of the daily
sales Of such contracts was so evident that
n letter from this city was addressed to
leading daily In Texas asking why they
had stopped reporting the daily sales OF
futures contracts. and the following reply
was received August IS, 1898; "The daily
sales are not reported by the cotton ex-
changes. The action is 10 avoid the in
ternal revenue tax. AS Mt present UNDER
stood. exchanges protect their members
by not keeping or making record of
sales, as the record would be the basis
of a tax"
That letter states the fact plainly and
candidly. II is corroborated by the further
fact that for more than year the report
OF the sales of these contracts have been
omitted--omitted in order that the sub
terfuge of the law and its execution might
escape notice. II was not omitted to mis-
lead the departments, for the sales OF fu-
lures contracts are matters of record in
banks, bucket shops and exchanges, and
wherever margins are deposited and COM
plete reports could have been demanded
and obtained from the New York Cotton
Exchange.
In connection with these circumstances
indicating as they do an effort at evasion
of the tax, / desire to ask that you have
the kindness to furnish me with:
J. A statement of the amount of reve-
nue. collected, since June -, 1893, on cot
ton futures contracts.
2. What method has been adopted 20
determine whether contracts for the Gale
OF cotton futures have been stamped or
not.
8. Has any report been made by or pro-
cured from the New York Cotton Exchange
or any OF its members, stating the amount
OF contracts executed or agreements 10
sell products or merchandise for future
delivery. IL SO please give tho number OF
such contracts and the kind and value OF
commodities contracted for.
4. Please state any other facts In pos
session OF the department showing that
the New York Cotton Exchange has not
eyaded the payment OF the war revenue
tax on cotton futures contracts
Trusting that | may be favored with an
early reply, yhaye Ns honor to subscribe
myself. Very respectfully,
John ID. Pitts.