Evening star., 1934-01-16
$40,0)O,0DO SOUGHT
IN ALCOHOL SUITS
Great Secrecy Observed,
Agents Employing Code
in Phone Calls.
BY the Associated Press.


Prize money of around $40. 100000 to-
day was disclosed as the eventual goal
of Attorney General Cummings in a
series of diversion tax suits against big
corporations making alcohol.
/ With secrecy surrounding all its ad-
vance proceedings, the Department of
Justice was shown to be gathering in
the reins of proceedings normally made
known through district attorneys Offices
/ in various sections
A second open move in the campaign
was made yesterday when suit was pre-
pared for filing against the Glidden Co.
and the Forest City Paint & Varnish
Co in Cleveland for s2.197.329 for the
| alleged diversion of 343.332 proof gall
Ions of distilled spirits from industrial
to beverage purposes.
The first suit was started in Baltimore
Saturday against the United States In
duStr1al Alcohol Co. and the United
States Industrial Chemical Co. for
S8,140,514
Code Language Used.
Federal agents said the suits against
big corporations were the first of this
nature ever undertaken. So quietly has
the work been carried on that MANY of
the telephone conversations to various
parts of the country have been conduct
ed in code language
The Attorney General said the tax
suits may aggregate more than $40
100000 and will include several other
large corporations. Responsibility for
the diversion of alcohol from industrial
to beverage use. he asserted. will be
pinned down and made to carry the
liability for the taxes which the inter-
nal revenue laws provide"
The Justice Department said the tax
claim at Cleveland is the outgrowth of
three years investigation, which re-
suited In an indictment against the
Glldden Co in 1921 and the payment of
$4,000 fine.
The Government charged the Gid
den Co. did not manufacture the alco-
hol it used but purchased specially
denatured alcohol under a Government
permit and made a lacquer thinner
purportedly for legitimate use The
Forest City Paint and Varnish Co.
handled practically all of the sale of
this product the complaint said.
Statement on Prosecution.
The statement continued:
Investigations by Department of
Justice Agent Harvey L. Duncan re-
vealed there was no legitimate market
Tor this l9cquer thinner and that all
OF the product went to bootleg channels
through a series of cover houses which
had no legitimate use for the material
but reshipped it to cracking plants
where some of the denaturants were
| removed. and thence to illicit distillers
who undertook to remove the remain
ing oenaturants and supply the result
ing alcohol for beverage purposes to
the public
The Attorney General believes the
evidence gathered over the past three
years indicates there has been a very
large loss Of tax revenue justly due the
Government
Until the first part of 1927 the
Glidden Co. did not use any kind of
| alcohol which required a Government
permit. After the present case reached
the stage of criminal prosecution in
1890, the company ceased to use
specially denatured alcohol and sur
rendered its then existing permit In
this particular. the Glidden Co. differed
from all the other industrial alcohol
companies against whom suit is to be
brought. for all OF them manufactured
and used specially denatured alcohol
prior to 1927"