The Dawson news. (Dawson, Ga.) 1889-current, 1915-06-29
DEFRAUD GOVERNMENT
OUT OF S27,OOO,OOO
STARTLING DISCLOSURES OF VIO-
LATIONS OF OLEOMARGARINE
MANUFACTURING LAW.
5000 FRAUDS IN TWO YEARS

Some Committed in 1902 Uncovered.
Sold 200, 900, 900 Pounds of Prod
uct as UncOlOred OleOmargarine,
and in Many Instances as Butter.
WASHINGTON, D. Glow viola
tors of the oleomargarine law have
defrauded the government out of at
least $27,OOO,O00 due in stamps and
special taxes was revealed tonight by
Secretary McAdoo in statement bas-
ed on a preliminary report by Com
missioner Osborn of the internal rev.
enue bureau.
Frauds committed as long ago as
1902, Immediately after the enact
ment of the law, have been uncov-
cred.
Unpaid taxes aggregating 1851 200
have been recovered and deposited
in the treasury with the prospect of
further large collections. Forty
two violators of the law have been
convicted since the first of January
and twenty-nine of these have been
given prison sentences. Fines ag-
gregating $148,00O have been assess
ed, in addition to the recoveries act
ually made, and the announcement
declares that while fraudulent prac-
tees of this sort probably have been
checked the Investigation will be con-
tinued and every law breaker
brought to justice.
CoIOred OleOmargarine.
The announcement shows that since
1902 more than 2OO,OOO,OO0 pounds
of coIored oleomargarine have been
manufactured and fraudulently sold
as uncOlored.
ut is believed" it says, chat a
great proportion of this product
reached consumers as butter This
amount represents more than twice
the average yearly consumption of
! both colored and uncolored oleoma-
garine by the people of the United
States since the present law went into
effect.
Approximately one hundred and
eighty-five million pounds of this
| 200, 100000 pounds were sold by ole
omargarine manufacturers to dealers
as uncolored oleomargarine, and then
in many cases sold to the ultimate
consumer as butter. The remaining
100000 pounds were made by
butter manufacturers and sold as
butter without the payment of any
tax.
THE law imposes a tax of 10 cents
a pound on colored oleomargarine,
and one-quarter of cent a pound on
the uncolored product. In perpetrat-
ing these frauds the oleomargarine
manufacturers have paid only the
one-quarter cent when they should
have paid ten cents, or in the case OF
butter manufacturers who sold the
product as butter no tax was paiA at
all. Whether the tax on eolore6 ole
omargarine IS too high is no concern
of the treasury in connection with its
duty to enforce the law"
5000 Frauds in Two Years.
The announcement says that 5000
frauds have been detected in two
years and that total collections from
1912 to 1913 were s9,628,665, while
in 1914 md 1915 $8,O41,O4O was
collected.
Violators of the law resorted to in
genious schemes to avoid payment OF
the tax. In many instances they
purchased palm oil with which to col
or their product, imported it to their
factories by circuit6ps routes and
used it with other ingredients to
mask it from detection. Butter man
ufacturers compounded "ladle but
ter" with oleomargarine OIL colorins
the resulting product and putting it
on the market as butter.
One Concern Owes Millions.
while there was a total of APP
proximately s27,OO0,OO0 in taxes due
| to the government from the larger
offenders, :" continues the announce
ment, only s4,65O,OO0 was collected
within the assessa'bIe period of two
years fixed by the statutes, the re-
naming taxes being unassessable and
recoverable only by suit. Steps will
1 be taken to recover this balance.