The Bemidji daily pioneer. [volume] (Bemidji, Minn.) 1904-1971, 1913-07-31
.OLEo. CHARGE NAY
CAUSE SENSATION
w. E. Cox Charges Beef Trust Or
It's Subsidiaries Escaped Grim
inal Prosecution
EvADED PAYING FULL TAXES
Former Administration Accepted
Compromise As It's Last Act
March Fourth
EvADED PAYING FULL TAXES
BY Congressman Clyde H. Tavenner


Washington, July 31--A charge
that the great olemargerine COM
panies, most of them subsidiaries of
the beef trust, escaped criminal pro
|secution and evaded payment of
$1,0O0,OO0 internal revenue taxes
due in 1922 by offering COM
promise of 100000, which was ac-
cepted by the Taft admini stration as
one of it's last executive acts, has
been made on the floor of the House
by Representative W. 3. Cox of In
diana, and is causing sensation in
Washington. ~
The oleo law which was passed for
the protection of the American far
mer, provided only nominal inter-
nal revenue tax of Ia cent pound
on white (uncolored) oleo, but a tax
of 0 cents per pound when the pro-
duct is artificially colored so that it
can pass for butter in appearance.
After the law was passed the man
ufacturers searched the world for a
natural product which could proper
ly go into the manufacture of oleo
and which could give it the yellow
color. 1t was argued that if some
wholesome oil, having yellow COL
or could be found, the oleo in which
such oil was an ingredient, couln not
be termed artificially colored within
the meaning of the law and would
legally escape the 10 cent tax.
Yellow oils from sesame, mustard
seed, peanuts, soy beans and other
vegetables were experimental with,
but either the cost of producing
these oils were too great to be COM
smercially practicable, Or else the fla
vor- Of the o1eo was Altered.
Finally Louisville firm discover
ed a process of blowing sulphur fumes
through boiling cottonseed oil and
afterwards refining the sulphur
from the oil. This left a yellow oil
in which even chemical. tests would
sometimes fail to detect sulphur.
Oleo made from this oil was sub
mitted to the Treasury department
for an opinion on the validity of its
use as naturally colored OIL The
government analysis failed to de-
tect artificial coloring, but the man
ufacturers were warned that if sub
sequent tests detected coloring, they
would be subject to the 10 cent tax.
The manufacturers nevertheless
during 1911 and 1912 put out this
oleo paying only IA cents per pound
tax on it. Later the Bureau of Ami.
NAL Industry analysed samples OF
this oleo and found them to contain
|sulphur as a coloring matter On
this evidence the Treasury Depart.
ment demanded to see the books OF
the oleo companies, and found that
on the sulphur oleo already sold
there was due the government ST..
246,628.62 in taxes at 10 cents a
pound.
The manufacturers offered to set.
tie for $101,10O. At this point the
House Committee On Expenditures in
the Treasury dept. Of which Mr.. Co,
was chairman, made an investiga
ton. It's report recommended that
the compromise be reached. This re-
port was made on February rs
1918, and copies sent to Secretary O
the Treasury MacVeagh. 4
+ According to Mr.. Cox, the attor.
neys for the cleo manufacturers
when they heard the House report
got busy putting pressure on Mac
Veagh, to accept the compromise.
| s'At 1885 o'clock on the mornin,
of the 4th of last March one of tn,
last acts performed by Secretar,
MacVeagh was to accept the com
promise. !" said Mr.. Cox. Gle render
ed that decision, exempting then
from paying s1,000.000, in the fac,
of the law and in the face of tn
! solemn facts in the CASE
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