davidaulloa/AmericanStories huggingface dataset:
The Washington herald., 1914-02-15
The Sugar Trust Frauds.

1t the advice of my secretary. William
Loeb jr, afterward head of the New York Custom
House that the action was taken which started the
uncoverng of the frauds perpetrated by the Sugar
Trust and other companies in connection with the inn
porting of sugar Loeb had from time to time told me
that he was sure that there fraud in connection
with the mportaons by the Sugar Trust through the
New York Custom House. Finally, some time toward
the end of 1904 he informed me that Richard Parr
a sampler at the New York appraisers stores (whose
duties took him almost continually on TIE docks in
connection with the sampling of merchandise), had
called him. and had stated that in his belief the
sugar companies defrauding the government in
the matter of weights and bad stated that if he could
be made investigating officer of the Treasury De-
partinent he confident that he could show there
was wrongdoing Parr had been former schoolfel-
low of Loeb in Albany and Loeb believed him to be
loyal honest and efficient. He thereupon laid the
before and advised the appointment of Parr
special employe of the Treasury Department, for
the specific purpose of investigating the alleged sugar
frauds.
| instructed the Treasury Department accordingly,
and informed that there vacancy in the
force OF special employees but that Parr would be given
the first place that opened up Early in the spring OF
1905 Parr to Loeb again. and said that he had
received additional information about the sugar frauds,
and was anxious TO begin the investigation. Loeb
again discussed the matter with me- and notified the
Treasury Department to appoint Parr immediately On
juno 1905. he received his appointment, ard
signed the port of Boston for the purpose of gaining
some experience investigating officer. During
the month he was transferred the Maine district
with headquarters at Portland where he remained
til March, 1907. During his service i'll Maine he
covered extensive wool smuggling frauds At the
clusion of the wool he appealed to Loeb to have
him transferred to New York. that he might under
take the investigation OF the sugar underweighing
frauds. ! called the attention OF Secretary Cor
elyou personally to the matter. that he would be
able keep a check any subord:natcs who might
try interfere with Parr. for the conspiracy evil
IDENTITY widespread the wealth of the offenders great
and the corruption in the service farreaching-
moreover. always happens with respectable" Of
tenders, there many good who sincerely
disbelieved in the possibility OF corruption the part
of men of such high financial standing. Parr
signed TO New York early in March, 1907. and at
began active investigation of the conditions exist
ing on the sugar docks.
The Washington herald., 1914-02-15
The Panic in New York.

l intimately acquainted with the situation IN
New York. The word panic" means fear, unreason-
ing fear 20 stop panic is necessary to restore
fdence; and at the the so-caed Morgan inter
ests the only interests which retained full hold
the confidence of the people OF New York-not only
the business people but the immense of men and
women who owned small investments or had small
ings in the banks and trust companies. Mr.. Morgan
and his associates of fighting hard to pre-
vent the loss of confidence and the panic dsrust from
increasing to such degree to bring any other big
financial institutions down; for this would probably
have been followed by general, and very likely a
world -wide, crash. The Knckerbocker Trust Com
pany had already failed, and mad begun on, or
were threatened regards. two other big trust
panies.
These companies the fighting line.
and it the interest of everybody to straghten
them, in order that the situation nigh, be saved 1t
was matter of general knowledge and belief that
they, the individuals prominent in Them held the
securities OF the Tennessee Coal and Iron Company,
which securities had market value and were useless
source of strength in the emergency. The-Steci
Corporation securities. the contrary. mmed-
ately marketable their great value being known and
admitted all The world-as the event showed The
proposal OF Messrs. Prick and Gary was that the Steel
Corporation should acquire the Tennessee Coal
and Iron Company and thereby substitute among the
assets of the threatened institutions (Which by the
way they did not me) securities great and
immediate value for securities which at the moment
were OF no value
The Washington herald., 1914-02-15
The Tennessee Coal Company Matter.

During these days both the Secretary of the Treas
Ny AID L personally were in hourly communication
S:ih lew York, following every change in the situa-
tor and trying TO anticipate every DEVELOPMENT 1t
was the obvious duty of the administration to take
every step possible prevent appalling disaster bv
s1e-.'lg the spread of the panic before il grew so
that othing could check If. And events moved with
such peed that it necessary 10 decide and TO act
OH inc instant, each successive crisis arose if the
decision and action to accomplish anything The
Secretary OF the Treasury took various actions some
on his own initiative, some by my direction
Late one evening l informed that two repre
sentatives of the Steel Corporation wished 70 sec me
carly the following morning. the precise object not
beng named Next morning, while at breakfast was
informed that Messrs. Prick and Gary were waiting
at the Office. went over and as the Attorney
General Mr. Bonapartc, had not yet arrived from Bal
tImore where he Rad been passing the night | sent
message asking the Secretary of State Mr. Root who
was also lawyer to join us which he did Before
the close of the interview and in the presence of the
three gentlemen named, dictated note to Mr.. Bona
parte setting forth exactly what Messrs. Prick and
Gary had proposed, and exactly what had answered
so that there might be no possibility of misunder-
standing This note was published in a Senate docu
ment while Was still President 1t runs as follows:
The White House
Washington, November g. 1907.
Judge E. H. Gary and Mr.. H. c. Frick on behalf
OF the Steel Corporation, have just called upon me
lhey state that there certain business firm (the
name OF which have not been told but which is of
real Importance in New York business crcies) which
VII undoubtedly fail this week if help is not given
among its assets are majority of the securities of
the Tennessee Coal Company Application has been
urgently made to the Steel Corporation to purchase
this stock as the only means of avoiding failure
Judge Gary and Mr.. Prick informed me that as mere
business transaction they do to purchase the
stock; that under ordinary circumstances they would
not consider purchasing the stock because but little
beneht will come to the Steel Corporation from the
purchase; that they aware that the purchase will
pc used as handle for attack upon them on the
ground that they are striving monopoly of
the business and prevent competition-no that this
would represent what could honestly be said but what
might reckessly and untruthfuIly be said
They further informed me that, as matter of
TACT the policy of the company has been to decline to
The Washington herald., 1914-02-15
The Panic Stopped; Business Helped.

The action cmphaticaly for the general good
1t offered the only chance for arrcstng the panic and
it did arrest the panic. 1 answered Messrs Prick and
Gary, forth in the letter quoted above, to the
effect that did deem it my duty to interfere that
IS forbid the action which more Than anything else
in actual fact saved the situation The result justified
my judgment The panic was stopped, public comb
dence in the solvency of the threatened institution
being at restored
Business vitality helped by what did The
benefit not only for the moment. 1t was perma-
nent. Particularly was this the case in the South
Three four years afterward ! visited Birmingham
Every man / met, without exception, who was conf
petep to testify, informed voluntarily that the re-
suits of the action taken had been of the utmost ben
eft TO Birmingham and therefore Alabama, the in
dustry having pr,ted extraordinary degree, not
only from the standpoint of the business but from the
standpoint of the community large and OF the wage
workers. by the change in ownership. The results OF
the action took were beneficial from every standpoint,
and the action ITSELF at the time when it taken,
vitality necessary the welfare of the people OF
the United States
The Washington herald., 1914-02-15
The Little Steel Spring.

This terminated in the discovery OF steel spring
in Brooklyn, November 90 1907, which enabled us to
uncover what were probably the colossal frauds
ever perpetrated in the service From the be-
ginning OF his active work in the investigation of the
sugar frauds in March, 1907 to March 4, 1900 Parr
from time to time personally reported Loeb the
White House the progress OF his Investigations and
Loeb in his turn kept me personally advised On ono
occasion there was an attempt made shunt Parr off
the investigation and substitute another agent of the
Treasury who was suspected of having relations
with the sugar companies under investigation; but
Parr reported the facts to Loeb sent for Secretary
Cortelyou and Secretary Cortelyou promptly took
charge of the matter himself putting Parr back on
the investigation.
During the investigation Parr subjected to all
sorts of harassments. including attempt to bride
him. by Splitter the dock superintendent of the Have
meyer & Elder Refinery. for which Splitter was con-
victed and served in prison. Brzezinsk, spe-
cal agent, who assisting Parr, was convicted of
perjury and also served term in prison, he having
changed his testimony in the trial OF Splitter Tor the
attempted bribery of Parr, from that which he gave
before the grand jury For his extraordinary ser
vices in connection with this investigation Parr
granted award Of 100000 by the Treasury Depart
ment.
District Attorney Stimson, of New York, assisted
by Denison Frankfurter Wise and other employees of
the Department of Justice took charge o. the case,
and carried on both civil and criminal proceedings.
The trial in the action against the Sugar TRUST for the
recovery of duties on the cargo of sugar which
being sent the scales the time Of the discovery
of the steel spring BY Parr was begun in 1905 judy
The Washington herald., 1914-02-15

scandalous abuses shown exist in the great packing
houses in Chicago and elsewhere There was curl
Gus result of this law. similar to what occurred in
nection with the law providing for effective railway
regulation The big beef men bitterly opposed the
law just the big railway men opposed the Hepburn
act Yet three or four years after these laws had been
put on the statute books every honest man, both in
the beef business and the railway business came TO
the conclusion that they worked good and not harm
to the decent business concerns They hurt only those
who were not acting they should have acted. The
law providing for the inspection of packing honsc and
the pure food and drugs act, were also extremely i'm
portant; and the way in which they were admins
tered was even more important. 1t would be hard
oycrsate the value of the service rendered in all
these cases by srch Cabinet officers Moody and
Bonaparte and their outside assistants of the stamp
of Frank Kellogg.
1t would be useless to enumerate all the suits
brought Some of Them have already touched upon.
Others such the suits against the Hartman railway
corporations. which successful, and which had
been rendered absolutely necessary by the grossly i'm
proper action of the corporations concerned offered
special points of interest The Sugar Trust proceed
ings, however. may be mentioned showing just the
kind Of thing thar done and the kind OF obstacle
encountered and in prosecutions of this
character
The Washington herald., 1914-02-15
Instant Action Needed.

1t was necessary for me to decide the instant.
before the Stock Exchange opened for the situation
New York was such that any hour might be vital and
failure to act for hour might make all subse-
quent effort to act utterly useless From the best in
formation at my disposal, believed (what was actual
y the facD that the addition of the Tennessee Coal
and Iron property would only increase the proportion
OF the Steel Companys holdings by about per cent
making them about 6e per cent instead of about IS
The Washington herald., 1914-02-15
big Stick" Methods Of Dealing with
Corporations with Square Deal in
Compensation Col Roosevelt As
serts that If the Necessity Exists the
Interstate Commerce Commission
Should Not Hesitate to Raise Rail
road Rates.

~HANKS to the Hepburn law and 10 the way in
which the Interstate Commerce Commission
was backed by the administrator n, the commits
sion under men ike Prouy, Lane, and Clark, became
4 n, st powerful force for good Some Of the good
sat we had accomplished undone after the close
q administration by the unfortunate law creating
c, nnerce Court; but the major part or the I'M
mems. advantage we had made remained. There was
ors point on which insisted and upon which it is
recrs ;ary always to insist The commission cannot
90 ornament good unless it does justice TO the cor
rc-alons precisely exacts justice from them The
puoEc the shippers the stock and bond holders, and
the employees all have their rights, and none should
e allowed unfair privileges the expense OF the 9TH
ss Stock-watering and swindling of any kind should
OF course, not only be stopped but punished when,
heggc,er, road is managed fairly and honestly, and
,yhcr it renders real aud needed service then the
government must see that it is not burdened to
max it impossible 10 run it at profit. There is
r wise legislation necessary for the safety of the
pupEc or-lke xorkmen's compensation-necessary to
me weilbeing of the employe which nevertheless i'm
roses such burden the road that tie burden
d Stributed between the general public and the
poration or there will be dividends In such a case
t may be the highest duty of the commission raise
rates: and the commission when satisfied that the
necessity exists in order do justice the of
a., road should no more hesitate to raise rates. than
uatsr other circumstances to lower them.
50 much for the big stick" in dealing with the
eerporations when they wrong Now for a
ssm?lc of the square deal.
The Washington herald., 1914-02-15
On the Brink of Calamity.

in the fall of 1907 there were severe business dis
iJI5a1ces and financial stringency, eliminating in
panic which arose in New York and spread over the
country. The damage actually done was great and
The damage threatened incacuabe. Thanks large
> 70 the action of the government, the panic was
stopped before instead of being merely serious bust
cajlu'ty, disaster fraught with untold misery and
Voc } all people. For several days the nation
ueIahied on the brink of such calamity of such a
,.,y7e-gr
The Washington herald., 1914-02-15
IAHfN z possible AlIOD|00 GQp,4pl f

per cent OF the total value in the country; an addition
which by itself, in my judgment (concurrcd in, not
only by the Attorney General but by every competent
lawyer), worked change in the legal status of the
Steel Corporation. The dminution in the percentage
of holdings. and production has gone on steadily, and
the percentage is about 10 per cent less than it
was ten wears ago
The Washington herald., 1914-02-15

acquire more than 70 per of the steel properties
and that this purpose has been persevered in for
eral years past with the object of preventing these
cusations and matter of fact their proportion OF
steel properties has slightly decreased that il is
below this 20 per cent, and the acquisition of the
property in question will raise It above 90 per cent
But they feel that IT is immensely to their interest," as
TO the interest of every responsible business man. to
Try to prevent panic and general industrial! smash-up
transaction, which they would not otherwise go into
because it seems the opinion of those best fitted to
press judgment in New York that il will be an inn
portant factor in preventing break that might be
ruinous; and that this has been urged upon them by
the combination of the most responsible bankers IN
New York who thus engaged in endeavoring
10 the situation But they asserted that they did
not wish do this il stated that it ought not to be
done. i answered that while of courss could not
advise them to take the action proposed, fet It no
public duty of mine to interpose any objections
Sincerely yours,
(Sisned) THEODORE ROOSEVELT.
Hon. Charles ]. Bonaparte,
Attorney General.
Mr.. Bonaparte received this note in about an hour,
and that same morning he came over, acknowledged
its receipt, and said that my was the only
proper answer that could have been made having re-
gard both to the law and the needs of the situation
He stated that the legal situation had been in no way
changed and that no sufficient ground existed for
prosecution of the Steel Corporation. But / acted
purely my owl initiative and the responsibility for
the act was solely mine
The Washington herald., 1914-02-15
Criminal Convictions.

In the case Of the chief offender the American
Sugar Refining Company (the Sugar Trust, criminal
prosecutions were carried on against every living
whose position such that he would naturally know
about the fraud. All of them indicted and the
biggest and responsible ones were convicted The
evidence showed that the president of the company
Henry o. Havemeyer, virtually the entire COM
pany, and responsible for all the details of the
management. He died weeks after the fraud was
discovered, just proceedings being begun.
Next to him in importance was the secretary and
treasurer, Charles R. Heike who was convicted Var-
other officials and employees of the trust and vari-
Gus government employees indicted, and most of
them convicted Ernest w. Gerbracht, the superin-
tendent of one of the reneres. convicted but his
sentence, committed to short Jail imprisonment.
because he became government witness and greatly
assisted the government in the suits
The Washington herald., 1914-02-15
Meat Inspection and Pure Food.

There were many other things that we did in con-
nection with corporations One OF the important
was the passage OF the meat inspection law because of
The Washington herald., 1914-02-15
COMMITTED Sentences.

Hcikes sentence was committed so As to excuse
him from going the penitentiary: Just as the peni-
tertiary sentence OF Morse the big New York banker
who convicted OF gross fraud and msapplication
OF funds, committed. Both combinations were
granted long after left Office In each case the COM
mutation granted because as was stated OF the
prisoners age and state OF health In Morses case
the President originally refused the request saving
that Morse had exhibited fraudulent and criminal dis
regard of the trust imposed upon him. that 'he was
entirely interruptions the methods he adopted
and that he seemed at times to be absolutely heart
less with regard to the consequences Others and he
showed great shrewdness in obtaining large sums OF
money from the bank without adequate security and
without making himself personally liable therefor"
The two cases may be considered in connection with
the announcement in the public press that on May H.
1915 the President committed the sentence of Lewis
y Banks. who was serving a very long-tcrm penten-
tiary sentence for attack on girl in the Indian
lerritory; tho reason for the communication which is
set forth in the press being that Banks is in poor
health.
1t is no easy Jrattcr balance The claims OF JUS
tice and mercy in such In these three cases Of
all OF which | had personal cognizance disagreed
radically with the views my took and with
the views which many respectable men took who in
these and similar cases both while in Office and
atterward, urged show to ask others to show
clernency 1t then seemed to me- and it now seems 10
me, that such clemency is from the larger standpoint
Il gross wrong to the men and women OF the country
One OF the former special assistants of the district
attorney, Mr. w. Cleveland Runyon, in commenting
bitterly on the release of Heikc and Morse on ac-
count OF their health. pointed out that their health ap-
parently became good when they themselvcs be-
came free men, and added:
The Communication of these sentences amounts to a
direct interference with the administration OF Justice
by the courts Heike got $4,000 salary and has
escaped his imprisonment but what about the six SIS
week checkers, who were sent to JAIL one OF them
man of more than sixty? 1t is cases like this that
create discomfort and anarchy They make it seem
plain that there is law for the rich and another
for the poor man, and for one will protest.
The Washington herald., 1914-02-15
Mental and Moral Observation"

In dealing with Heike the individual Cor Morse or
any other individually, it necessary emphasize the
social aspects of his case. The moral of the Heike
case, has been well said is how easy it is for
man in modern corporate organization to drift into
wrongdoing" The moral restraints are loosened in
the of like Heikc by the insulation of him.
self from the sordid details of crime through indus
trially coerced intervening agents. Prof Ross has
made the penetrating observation that distance dis-
fects dividends also weakens individual RESPONSE
bity, particularly the part of the very managers
of large business who should feel it most acuely One
of the officers of the Department OF Justice who con-
Quoted the suit and who inclined the side of mercy
in the matter nevertheless writes "Heike is beau.
tiful illustration of mental and moral observation in
the business life OF otherwise valuable member of
society. Heike had ample share in the guidance
of the affairs of the American Sugar Company and
apt to have foreshortened picture of his re-
sponsiby, because he operated from the easy coign
Of vantage of executive remoteness 1t is difficult to
to what extent he did directly indirectly profit
by the sordd practices of his company Blu: the social
damage of individual in his position may be Just as
deep, whether merely the zest of the game or hard
cash be his dominant motive"
published by special arrangement with the Ont
look of which Theodore Roosevelt contributing
editor; through the Mcclure Newspaper syndicate
rights reserved including rights translation
next tnstallment viii appear In Sundays Herad
The Washington herald., 1914-02-15
On the Brink Of Calamity IN 1907-In-
slant Action, the Panic Stopped, Bus;-
ness Helped-The Tennessee Coal
and Iron Case and What Came Of 1t.
Former President Says He Acted
Properly in Matter Meat Inspection
and Pure Food Laws

ment was rendered against the defendants March
5, 1907 tn day after left office.
Over 100000 were recovered and paid back into
the United States Treasury by the sugar companies
which had perpeirated the various forms of fraud.
These frauds unearthed by Parr, LoeD Stimson,
Frankfurter, and the other mentioned and their
associates, and it to them that the people owed
the retunding of the huge of money mentioned.
We had already secured heavy fines from the Sugar
Trust and from various big railways and private in
dividuals, such as Edwin Earle for unlawful rebates