New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1913-03-10
NO FRAUDS IN O[EO
CASES, MAcvEACH SAYS
Retiring Secretary of Treasury
Asserts Offences Were Un-
Willingly Committed.
EXPLAINS HIS RULING
Government Got by Compro-
mise All or More than Might
Have Been Collected
by Suit.

Chicago. March 9.-trdnklu Mac
Neagh. ex-Se>retary Of the Treasury
issued a s'at mcut to-day in which he
defended his ,~Ic in the olcomargarine
prosecutions which resulted III the gov
eTnmcnts acceptance Of $4,000 in settle
ment Of alleged frauds through which
the government it is claimed was de
frauded Of si.2c0.Wo Mr. MacNcdgh as
serted that there was no intentional
fraud and that the settlement was OH the
recommendation of the Bureau of In
tcIndl Revenue
These were not fraud cases ne said
No fraud was charged by the govern
ment 40 fraud was committed. and no
fraud therefore was compromised. There
are olcomarearine cases and oleomar-
Carinc cases. Those of which the public
has heard most are fraud cascs-cases IN
which the oleomarearine law was frauGu-
lcntly evaded The cases in question.
however, are not in that category.
The outline story of these cases * tins.
The manufacture of two kinds of cleo
margarine is permitted by law. one kind
max be ..rtiicillly colored. as butter and
cheese may. This kind must pay a lax
of 10 cents pound. The other and
usual kind is taxed at n quarter of cent
a pound and must not be artiiicially col
ored. 1t may be naturally colored by
the coors naturally IN its permitted in
gradients There Is constant effort 10
obtain natural color in the permitted In
gradients. This effort is. of course. an
entirely legitimate enterprise and within
the law.
1t happens that cottopseed oil Is one
of the chief ingredients of oleomargarine
and also that this oil in Its crude state
is colored In the process If refining cot
tonseed oil, however. for use In oleo-
margarine the color has been lost at
least in any process not too expensive TO
be commercially available.
Now. an Ohio chemist claims TO nave
invented a method that solves the proc
lem. ard an oil company in Louisville
not an oleomarcarine cOmpany-used this
invention. and in 1911 produced oil with
some color that was la med To- be- nd'u-
raj This oil Was Offered - o!cnmarsarln'
manufacturers.
The oleomarEarnc peOpi- brought the
oil 10 the attention Of he Bureau of In
tclnaI Revenue. The oil then was tested
by the chemical labOrdtofy Of he bureau.
bv the laboratories of the CieOnai Sarin"
manufacturers and 10y private ia"Ordt"-
rics |, also was tested Tor sulphur con
tinuously by the Bureau Of Animal In
dustry No one could find any aTuhoial
color.
Finally the manufacturers - "leondr-
garine connected WITH @hrf' cases became
apparently 50 certain "t The ''Iailty "'
this oil that they beg A. 10 use u Nltn Inc
knowledge of the Bureau az internal Ec'
enue but without the bureaus hnaI de
c.siOn.
The bureau meant still To Keep us mnd
omen. bu, was AT the end OF it, resources
Al the time The oil had thus been openly
used in larger OF smaller quantities Tor
some months when the bureau by new
chemical inquiries became satisfied mat
the oil. after all. was arthcially colorcd
by sulphur when this was announced al
manufacturers of oleOmargariue quit
using the oil
1t must he understood that manuiaci-
uTers of Oleomargarine were not manu-
facruiers of the oil. They were merely
purchasers 90 II and knew nothing about
IL which the government did not kno"
IL also should be- understood that IN"
government contention that the OIL II
artificially colored is disputed.
The amounts 81 these compromises.
aerregating sl23,0Jo were proposed 10y IN"
parties after the bureau had decided That
they could not be released from tax la
bility and it was found that these
amounts were all the g0NrfhlnenSs Cyl
dence would enable II To enforce, ana
probably more The offers were for That
reason accented