The sun. [volume] (New York [N.Y.]) 1833-1916, 1909-05-01

was entitled is a tale OF attempts ~ brioe
Government inspectors and OF various
eypedients resorted 70 in order to keep
the matter from becoming known. which
led Mr.. StinsoD in his summing up OF the
case to refer To II az one of most gigantic
commercial frauds aver unearthea
Stretching back over 80 many years.
there was absolutely 10 way in which
the Government could arrive at the exact
amount 1t had lost, no way to tell wha'
loss In weight had resulted from the use
ef the differeBt deyices;rescrtci to in these
at ii after a careful examination OF the
company's books AMI the books Of the
Custom House md after It's Owl expert
Inents with the scales, using these same
devices. The statue of limitations pre-
vented it from demanding n forfeiture
Of The amount OF short weight sugar
prior to 1905. but it could recover unpaid
duties back, as far as it could prove such
practices had been invoked to cheat
the Government. And the amount the
Government's experts practically guessed
at, as tbs amount OF these duties running
back almost to 1891 is the amount the
company paid on Thursday.
The company, which both tho Federal
Government and the City of New York
have been after for what they both have
alleged to be a plain case OF theft, has
been far and away the biggest revenue
y on Uncle Sans books. just as it
has been one Of the biggest, consumers
Of city water. Leaving out the cheating
tits alleged to have done in the case of
the Government, it has been turning
over regularly into the Governments
qqrcrs something between $40. 900. 900
and $50 .000,0 900 every year; since 1901
the parent company has paid about $780,
systematic smuggler of sugar all the
ghiie that II was paying these enormous
aims in duties did not become known
Until the fall Of 1907, according to the
testimony piled up by. the Government
yhen it finally brought the company
Into court a few months ago.
sAnd 1t became known only then through
Information taken to the Treasury Depart
dent in Washington by a former EN-,
pfoyee Of the company named Richard
Vhalley. who turned up with a tale there
Which sent the special Treasury agents
dit scurrying for the facts, and it was
the facts that they got that led the COM
Iany to settle up
Pin six years. according to the evidence
Thought out in the District Court. 3D.
dl0,000 pounds of sugar, on which the
duty Is q little more than a cent and a
half a pound. were landed on the Will
iAtnsburg docks on which no duty was
dver paid. This is the characterization
qtthe plan as given in court by Assistant
District Attorney Denison.
At was a deliberate and intentional and
fraudulent scheme carried out with COM
plete persistence for the whole period at
that time. the company with its eyes open
taking advantage of 1t, and an intentional
fraudulent scheme from start to finish.
cation Of intelligence to discover various
means by which 1t could be done.
It'was the same Whalley who first in
formed the Government OF what was going
on who gave the evidence as to schemes
invented since 1894 to cheat the. Govern
ment In weighing sugar. Some had to do
with fixing the mechanism of the scales.
One plan had been to throw water on
the scale Just before the sugar was brought
on 30 to make the allowance for the weight
Of tie scale bigger, the water evaporating
by the time the sugar came on. Another
was tho running In of lighter trucks than
those that had bean weighed.
But the best scheme of oil was the one
the Government agents discovered for
themselves. discovered in operation in
the seventeen scale houses on which
sug.r was being weighed from one of the
loading as they watched. This was the
little steel spring run through q hole at
enc end of tire scale and manipulated
by the company's checker sitting by
TIE Government weigher and entering
with him the weight OF the sugar as II was
TClltQ Gil tue bCSiICS. ~ tnCt NlQCcICu
on the trucks, each supposed to have
approximately 1000 pounds Of sugar.
this m1n dropped his left hand casually
by lis side until il touched this spring,
hidden by a cleat. Its inner end ran over
q joint in the mechanism. That exertod
force upon the levers n made the scale
bedm drop just 80 much, Sometimes.
depending a little on the amount of the
push, 1t meant thirteen less pounds regis.
tered than was the real weight OF the
sugc.r. sometimes fifteen. sometimes six
teen. Seventeen men sitting at the seven
teen scales worked these little springs.
In the course OF his testimony Wnalley
seid that once after engineering the
cheating device for a long time as a
checker for the company he had gone to
Supt. Spitzor and kicked. whe.eupon the
latter had said;
Now, look here, Dick you know
the Government weighers arc pretty
70 get ours. You know the truck will take
up sugar and the scales will take up sugar
and we've got. TO get something Give
the ball a roll.'
Pretty soon after making his kick
Whalley got an inside job n a raise
the scale.
Richard Parr, the special Treasury
agent, who under Whalley's guidance,
watched the weighing and discovered
the steel spring, testified that the same
superintenlc at had tried to get him to
-fx it."
sHe said,' Parr testified. "th1t if /
would report the scale out of order that
i could name my own price, that he would
hand me the money and no n would
know anything bout it, The company,
on its side, tried to show that II thcre
had been any such device ii was n plant"
on the part of those who had els covered
1t, and Splitter denied most of the testi-
mony Of tho Governments witnesses.
Nevertheless the jury found for the Gov
eminent.
1t was brought ont in this, perhaps
the most important customs case ever
tried by the Government, that all the
those from whom the company was buy
ing the sugar werc getting credit for
its iuii weight. In other words, there
hadcb esn no attemp: on the part Of the
company, Or any on in its employ, to
CHI o.. tho man who was selling IL raw
suf q. and pay him for any loss amount Of
euEa" that he hal put on the snip, Right
afl.r the Government weighers weighed
the su gar. checked up by the company's
men sitting beside them, it was wheeled
over to scales not twenty feet AVA and
weighed again under the ipc"vision
OF 40 'calei city weighnrs, nj n llcen5c1
by the city for that putpose- There y as
30 netimes a d~iferelcs of more than
tweaty tons en a cargo between tho two
One way that the Government arrived
Mt the amount IL decided that the sugar
trust had defrauded il of was by n com
parison Of tho accounts of the sellers Of