The Daily Ardmoreite. [volume] (Ardmore, Okla.) 1893-current, 1915-06-22

DEFRAUDED
Of MILLIONS
WoLAToRs OF THE oLEoMAR-
GERINE LAW HAVE OEFRAuoE0
FEDERAL GOVERNMENT OUT OF
AT LEAST $4,000

tors OF the oleomargarine law have de-
frauded the federal government out
of at least $4,000 900, due in stamp
and special taxes, was revealed to-
night by secretary McAdoo in state
ment based upon a preliminary report
on a sweeping investigation conducted
by commissioner Osborn OF the inter
nal revenue bureau.
Frauds committed as long ago as
1902, Immediately after the enactment
OF the law, have been uncovered by
the commissioner. He began his in
quiry some months ago and from time
TO time news of prosecutions has
reached the public, but until tonight
no inkling has been given OF the wide
scope OF the investigation or OF its
extraordinary results. Unpaid taxes ag-
gregating $4,000 have been recover
ed and deposited in the treasury with
the prospect of further large collec-
tions." Forty-two violators OF the
law have been convicted since the
first of January and twenty-nlne OF
these have been given prison SEN
tences. Fines agregating $14S,OOO have
been assessed in addition to the re-
coyeries actually made, and the an
nouncement declares that while fraud
ulent practices of this sort probably
have been checked, the investigation
will be continued, "and every law
breaker brought to justice"
Two Hundred Million Pounds Sold
The announcement shows that since
| 1902 more than 200,000,0OO pounds OF
colored oleomargarine have been man
ufa actured and fraudulently sold as un-
cOlored oleo.
1T is believed" it says, that a
great proportion of the product reach
ed consumers as butter. This amount
represents more than twice the aver
age yearly consumption of both color
ed and uncolored oleomargarine by
the people of the United States since
the present law went into effect.
approximately 1S5,OOO,OOO pounds
of this 2O0,0OO,OO0 pounds were sold
by oleomargarine manufacturers to
dealers as uncolored oleomargarine
and then in many cases sold to the ul
innate consumer as butter. The re
naming $1,000 900 pounds were made
bv butter manufacturers and sold as
butter without the payment of any
tax.
"The law imposes a tax of 1Oc a
pound on colored oleomargarine and
&C a pound on the uncolored product.
In perpetrating these frauds the oleo'
margarine manufacturers have paid
only the &c, when they should have
paid 10c, or, in the case of butter
manufacturers who sold the product as
butter, no tax was paid, when the gov
ernment should have received lOc a
mound. Whether the tax on colored
oleomargarine is too high, is no con-
Germ of the treasury department in con-
nection with its duty to enforce the
law"
The announcement says that 5000,
O0O frauds have been detected in two
years and that as a consequence OF
the activity of the internal revenue
bureau aided by the department OF
Justice, receipts under the oleomar'
garine law in 1914 and 1915, have
been "A per cent of the total collec'
tions since 1902. The total collec
tions from 1902 to 1913 were $9,62S,
665. while in 1914 and 1915, $3,041, ,O4O
was collected.
Violators of the law resorted to in
gerious schemes to avoid payment OF
tue tax. In many instances they pur
chased palm oil with which to color
their product, imported it to their fac
tories by circuitous routes and used il
with other ingredients to mask it from
detection. Butter manufacturers con
pounded "ladle" butter with oleomar
garine oil, coloring the resulting prod
uct and putting it on the market az
butter.
While there was a total of approx
mately $4,000 900 in taxes due thu
government from the larger offenders,
continues the announcement, only 81,
$50 900 was within the assessabl'
period of years fixed by the statute
the remaining taxes being unassessa
Bile and recoverable only by suit. Step
will be taken TO recover this balance
From one manufacturer alone it is be
lieved that the total collections ultt
mately will reach s1,15O,OOO. The re
coveries represent the seizure
plants, assessment of evaded take
and negotiations TO settle civil liabil
ty.