Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1909-07-24

New 1OIk, july SS.-J uotiNS
Laughlin. of the. appellate division u
the supreme, court in this city has CIV
en- an opinion in which he asserts that
men formerly connected with the Corn
Products Co. with the assistance CT
Influential men in New Jersey, de-
frauded. the state of New Jersey OF
$29, 01s.27 of franchise taxes by max
ing false af1idavits in relation to stock
Of subsidiary. companies. That the
state officials in New Jersey were
ccgnlzant OF the asserted fraud and
rejected overtures for a compromise
settlement is shown by a statement
issued yesterday by, Robert McCarter,
former, attorney general He said that
a New YORK lawyer who said he rep
resented the new managers of the Corn
Products Co. went to him when Stokes
was governor of New Jersey That
lawyer told him, he said, that the naw
managers of the Corn Products Co,
had reason to believe that New Jersey
had been defrauded of thousands of
dollars in 1908. 1904 and 1905, by false
aff1davits as to the amount Of out
standing stock of subsidiary companies
which had been reported to the state
board of assessors. He suggested a
settlement by paying part of the
amount. McCarter demanded all or
nothing. ,...
McCarter said the story told by the
New York lawyer involved George W.
Berdine, former prosecutor of Mid
dlesex county. and Secretary Mcguire
of the state board Of, assessors as hav-
ing been instrumental in bringing
about the fraudulent reductions. Both
men asserted their Innocence.
The scheme worked. it is asserted
was to falsify the annual reports af-
fecting the subsidiary companies by
excluding from the amounts Of out
standing stocks of those companies
those parts of the stock owned by the
Corn Products Co Representation was
made. it is asserted, that that stock
had been Cancelled. Justice McLaugh-
lin asserts in mis- opinion. however, that
the stock of subsidiary companies. own
ed by. a holding corporation and issued
and outstanding, is as much subject
to tax as is stock held by any other
owner.
Commenting upon the methods by
which the tax reductions were obtain
ed. Justice Mclaughlin says they We're
tainted with the "grossest misrepre
sentation. fraud and perjury" He,awas
brought into the case through a suit
brought here by David McCal1um of
New Brunswick to recover what he
asserts was to have been his compen-
sation for assisting in obtaining the
reductions. Opinion is expressed by
Tuc OF hof
still may sue for and collect the amount
of which it has been defrauded. II an
investigation lis made. it Is suggested,
former member Of the state board of
assessors also may be involved In the
scandal.
McCarter said the New York lawyer
told him the new managers of the
Corn Products Co. could not pay the
full amount of which New Jersey had
been defrauded, but had made up a
sort OF conscience fund amounting to
several Thousand dollars, which they
were willing to pay.
''Thcy wanted to satisfy their con-
science" McCarter said, land at the
same time to insure themselves against
any stigma being placed against the
who no longer were connected with IT,
McCarter said he made full report
at once to Governor Stokes Berdine
and Mcguire also were sent for. Both
denied the charges made against them
decided the State could
not compromise on a fraud, and that
1t must have all the money due. Nc
Carter sent word to that effect to the
New York lawyer and no reply was
received. The money never was paid
The former. attvrney general was ask
ed why the state did not go ahead and
collect the money and punish those
VINO had participated in the fraud.
He said the state board Of assessors
had regularly confirmed the reductions
Another cause for non action was in
that the New Brunswick
man had sued the Corn Products Co !
for fees in bringing about the reduc-
tions. McCarren and the governor de-
cided that perhaps the conscience fund
offer was made to protect the company
by It's acceptance. against the McCul-
lum sGit. Nothing was done either by |
the governor or the attorney general |
sBerdine said yesterday that this year /
he had made a full report to McCarter |
before he retired. and to Governor For. /
last March He asked Governor Fort. |
he said, for an interview. SO he might |
tell him all the facts. and received no
reply: Governor Fort said he had no
Of having received such a
letter. Berdine insists that. as soon
as he learned that the New York men
who had employed him to represent !
them in getting the reduction applica- |
ton before the State Board OF Asses |