Omaha daily bee., 1909-05-22


Of the sugar received at this refinery was
weighed on five Of the scales. and Il is
worthy OF note that the holes In the posts
in those scale-houses were very much more
worn than those in the other houses.
Seventeen scale houses there are. and by
the same token seventeen holes Hence
the federal attorneys designation Of the
case. The Case OF the Seventeen Holes
against the American Sugar Refining com-
rany Of New York.
A Test Case,
The action was merely a test case. II
covered only slxty-eight carsoes OF sugar
imported since the end of 1906, for the
statute Of limitations on frauds Of this
character bars action after three years.
From all the cargoes brought in during
those two years the government selected.
in order to make its case im~pregnable, only
those on which the average difference OF
weight on each draft was about the same
as the difference on the two drafts weighed
on November 20. when the fraud was dis
covered. The case called for the forfeiture
Of about slS4.OOo. the value of the sugar on
which duty was not paid In the selected
cargoes. In this connection, too, the gov
ernmente asked for less then II might le-
gally have claimed, for. in the words Of
the presiding Judge. Under the law the
entire sugar In any cargo-in any pack
age-might be forfeited in case Of proof
that there was any fraud used in respect
to any OF the sugar in that package by
which less duties we're paid than should
Eave been paid" The purpose of the gov
eminent in making this a test case, de-
manding only the most moderate penalties.
uroa n IN panfeh aa.a.,uNoI. l. go
company, not to make the punishment fit
the crime. What would a great corpora
ton like the sugar company care for the
forfeiture of an insignificant sum like $134.-
W.. or OF any sum which a Jury might be
likely to award? Raising the price Of sugar
for a few days would make 1t good. The
purpose was to establish the fact Of the
frauds. to Tx the frauds upon the COM
pany, to establish the principle that such
frauds can be penalized, to lay the foun-
dalton for the return OF the unpaid duties,
and. above ali, to seclre the deterrent
effect.
The starting point Of the government
case was the discovery of the spring. the
finding OF the seventeen holes. one in every
scale on the docks, and the observed result
when the three drafts of sugar were re-
weighed just before the spring was found
lie draft weighed originally while the
5. ecial agent was in the scale-house show
ing no change on reweishal, tho two others,
weighed originally before his presence was
discovered, showing an increase of four
teen to eighteen pounds. respectively. That
evidence showed how the fraud was ac-
complished. Other evidence indicating that
the stealing had been systematic and long
continued was soon forthcoming.
The American Sugar Refining company
(the parent company is a 500, 900, 900 CORPORA
ton organized in New Jersey. 1t Is popu-
larly known as the Sugar trust. It pro-
duces, according to the best estimates,
about one-half OF the refined sugar used
in the United States. Its relation to the
American Sugar Refining company of New
York Is that the New York company holds
the title to the property in that state. but
the stock of the latter is owned and it's
business is done by the New Jersey COM
pany, all payments are made from the gen
eral treasury of the New Jersey company,
and the interests of the two are identical.
SO. while in fact 1t is the New York COM
pany which was %nominally the defendant
In his case, It is not beside the mark to
say that the Sugar trust itself wal the real
defendant.
The case OF the seventeen holes revealed
that the sugar company had been for at
least the greater part OF a decade engaged
in smuggling sugar by the daily use of a
fraudulent device. In the six years from
1901 to 1901 100000 pounds of sugar were
struggled. on which the unpaid duties
amounted to near 81. 1000. Since the trial
the government attorneys nave notified the
sugar company that the government also
claims that It was defrauded Of duties on
shipments OF sugar reaching as far back as
1897, and both at the Brooklyn refi-eries
and at the refineries in Jersey City.