Burlington weekly free press. [volume] (Burlington, Vt.) 1866-1928, 1913-03-13
SETTLING
THE OLEO SUITS
MacVeagh Asserts That No In
territorial Frauds against the
Government Existed.

Chicago, March 9.--Franklin MacVeagh
former secretary OF the treasury, to-day
| issued statement in which he defended
| his rulings in the ofeomargarlne prosecu-
| tons which resulted in the governments
acceptance of $4,000 in settlement of
alleged frauds through which the govern
ment 1t is claimed was defrauded of 81
200 600
| Mr.. MacVeagh asserted that no inten-
tional fraud existed in cases and that
the settlement was on recommendation
of the bureau Of internal revenue.
LAS the oleomargarine compromise
cases have been more or less mlsunder-
stood" he said, IL am quite willing to
state the facts.
These were not fraud cases No fraud
was charged by the government No fraud
was committed and no fraud therefore
was compromised.
The outline of these cases IL this: The
manufacture OF two kind of oleomargarine
| is permitted by law. One kind may be
artificlally colored as butter and cheese
may be- This kind must pay tax of 10
cents a pound The other ana usual kind
is taxed at quarter of a cent a pound
and must not be artifcally colored. 1t
may be naturally colored by the colors
naturally in its permitted ingredients.
at happens that cottonseed oil is
one of the chief ingredients of cleo
margarine and also that this oil in
! its crude state is colorcd. In the pro-
cess of refining cottonseed oil. how
ever, for use in oleomarEarine the
color has been lost. Thus the manu-
| facturcrs arc searching for process
| of refining cottonseed oil by an eco
| nomiCal process without losing its
color
OHIO CHEMIST MADE TROUBLE.
Now an Ohio chemist claims to
have invented method that solves
the problem and an oil company in
Louisville, not an oleomargarine com
pany, used this invention and in 1911
produced oil with some color that was
| claimed to be natural. This oil was
| offered to oleomargarine manufac-
turers
"The oleomar garine people brought
, the oil to the attention of the bureau
of internal revene. The oil then was
tested by the chemical laboratory of
| the bureau. by the laboratories OF the
oleomargarine manufacturers and by
private lab oratories. 1t also was test
ed for sulphur continuously by the
bureau of animal industry. No one
could find any artificial color.
Finally the oleomargarine manufac-
! tuners connected with these Casese became
| apparently so certain of the legality of
| this oil that they began to use it with the
knowledge of he bureau of internal rev.
cnue but without the bureaus final deci-
| sion. Later the bureau by new chemical
| inquiries became satisfied that the oil
after all was artifcially colored by sui
phur. When this was announced. all
manufacturers of oleomargarine quit us
! ing the oil.
| 1T must be understood that manufac-
| turers of oleomarga rine were merely pur-
| chasers of the oil and knew nothing
about it which the government did not
| know. 1t IL also to be understood that
the government contention that the oil
/ was arhcially coored is disputed.
| The question between the oleomarga-
! rne manufacturers and the bureau of
| internal revenue was not one of fraud.
| 1t was a question of technical liability
ALL L. s. COULD RECOVER.
"The amounts OF these compromises.
! totalling $1,000. were proposed by the
parties after the bureau had decided that
J they could not be released from tax Ia
| bility, and it was found that these
| amounts were all the governments evil
| dence would enable it TO enforce, and
| probably more. The offers were for that
| reason accepted
THE reference to a much larger sum,
say million dollars. as an amount these
parties might have been compelled to
| 81 hn
claims. There never was a real million
| dollars in the bureaus mind.
THE case had been before the DEPART
inent for number of months 1t reach
ed me ready for approval in November
In December when was about to ap-
prove the settlements. learned that
Judge Lands In the federal court in Chi
cago purposed to take cognizance of the
! cases and refer them to grand fury.
Il withheld my signature purely in
formal Difference TO the court. I did not
finally act until it was evident that Con-
gross would not consider the report.
80, instead OF hurTying the decision.
] gave way both TO Congress and the
court. Finally acted, acted on my own
Judgment and upon the recommendation
OF an administration of the bureau OF in
| tcrnal revenue"
Judge Is. NJ. Lands of the federal dis
| trict court Is expected this week to in
struct the special grand Jury caused to
De summoned to reopen the investigat ton
| OF alleged oleomargarine frauds The ilrv
was impanelled some days ago and a
number of Witnesses have been sub
poenaed, including officers of a Louis
vile manufacturing cottonseed oil.