New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1915-05-26
BURKE ADMITS
TOBACCO GRAFT
In CANAL ZONE
Got $22,1S2 as Share in
Contracts to Bermuda
and Salas, He Says.
APPEARS FRIGHTENED
ON WITNESS STAND
Ex.Commissary Manager lden-
titles Profit Drafts OethalS
Tells of investigation.

lellS OF InFcSllSdtluI'
The trial Of the first case Of series
resulting from the governments inyes-
tigation Of the graft scandals iu i"e
Panama Canal Zone took scnsauohal
turn Yesterday before Judge " llI-
lam H. Hunt, in the United states DIS
trict Court, when John Burke, former
manager Of the commi5sary department
Of the canal zone, appeared as a Wiz
ness for the government burke is
co-dcfcndant with Jacob l.. Salas, now
on trial charged with br.bIng the man
aver Of the COMM -ary department 20
obtain tobacco contracts ON the
Isthmus.
Burke admitted on the witness stand
that he entered into an agreement with
Salas and Ricardo Bcrmudez, tobacco
merchants, early in 1908, whereby me
two merchants supplied something In
excess Of 5000 600" worth Of tobacco
for the use Of the Spanish laborcrs m
the Canal Zone. on which be received
one-third Of the profits. Frank !. Car
starphen. Assistant United States At
torney, introduced in evidence eleven
drafts, dating from June, 1905, 90 july
1918. and aggregating $22,ls2, when
amount Burke testiiie- he received aS
his share of the profits on the tobacco
contracts.
-Four other fms have been indicted
on the charge of brihrg Burke TO the
extent Of about $4,000 in all for con
tracts for supplies. The government
expects that Burke will appear as th.ir
witness in all these eases. which VT.
Carstarphen said yesterday he intend
cd 10 Try one after the other.
Goethals Closely Quizzed.
Major General George ". Goethals,
Governor of the Canal Zone, occupied
the witness stand for good part OF
the sessions yesterday. lie was qHtS-
toned closely By both dcs ass % the
situation which developed ID the '"h"I
Zone IN 1908. when the comm ar!
departments Of the Panama Railroad
and the Canal Zone were merged ~
him. He oSp.a. "a In detail now ms
department was developed, with Ialof
+. T. Wilson al It's head and Burfc
as manage. lie said that he first
heard Of Irregularities IN BuTke's con
duct early IN December, 1913, and or
dered an investigation into the CHARGES
which has continued 10 the present.
Evidently William Rand, ir, couuSe!
for the defendant, means TO contend
that there has been no actual fraud
against the government, as alleged, b"J
that the fraud. if any. was committed
against the Panama Railroad, a corpo-
rs-.on distinct from the government.
the exact status Of the Panama Rail
road in its relation 70 the government.
therefore. assumes an important bear
ing on the case for the defence.
The defence objected strongly TO the
admission of all the drafts IA evidence.
Burke's turning states evidence
came as surprise. lie is SNORT
thick-set. smooth shaver man, with a
rudy complexion and gray hair. lie
lives in Indianapolis. he was extreme
~ nervous while testifylng. HIS mem
DRY was weak in regard to conVerSa-
tions and details Of the TRANSACTIONS
when he received the drafts. and the
government was inclined TO credit TINS
attitude to his fear Of the men against
whom he testified and the powerful IN
terests they represent on the lsthmus.
In answer to the preliminary ques-
tons of the prosecutor he sand mat ne
had neither asked or been promised I'M
munity. and that he offered himself as
a witness freely and voluntarily. lie
first appointment IN the Canal Zone DID
February. 1908. and his transfer in 1905
as manager Of the "commIssary and
subsistence" department. including the
commissaly Of the Panama Railroad.
He said he first knew Sa.as on the
isthmus in 1907, and that he had q
conversation early in 1905 at the I'M
perial Hotel, at Colon, with Ricardo
Bermudez. who was also ind cIet.
Tobacco Contracts Made.
"The commissary department was in
the market for tobacco such as is used
by the Spanish laborers.' said the wiz
ness, "and BermudcZ told me he knew
where he could get that Kind. lie said
that he and Saias could get Il cheap,
and if ] would come in ON the arrange
ment ! would get one-third Of the
profits and they would get the other
two-thirds. ! consented 20 the ar
rangcmcnt. with the provision that as
long as they sold u as cheap as any
body else ! would purchase it,
Asked who BormudcZ meant when he
referred TO Salas. the witness said be
presumed he meant j. /. Sa.as'' The
prosecution introduced "a letter. dated
June ]. 1905, which the witness ideuti-
fed. from Burke 20 j. l.. Salas, in
which Burke said that DC accepted
your bid for 100 cases Of tobacco"
This letter was sent after his con
ycrsation with Bermudez early in 1908.
the witness testified. After that he
continued 20 make awards for the to
bAcco contracts TO February /. 1914, on
tn. basis OF fifteen cases fortuightly.
the supply being increased or de
creased as the needs demanded. until
Salas aad Bormudcz had furu he'd to
bacco in excess Of 5000 600 in value.
The first draft that Burke identified
was dated June 80, 1905. and was for
SI.5-4. drawn ON the International
banking Corporation, Of New York. TO
the order OF Spencer Trask & Co.. and
signed by the international Banking
Corporation, of Colon. The witness
said that he asked for and received this
draft from Bermudez, as he did the
other ten. He swore that these pay
mcnts represented his share Of the
profits ION the tobacco business" &C
cording to his arrangement with Sslas
and Bermudez.
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