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THE DUTY SCALES AND THE CITY WEIGHER'S STEELYARDS
On the platform scales at the left the sugar was weighed for the payment of duties. On the steelyards
at the right, perhaps twenty feet away, the sugar was weighed again immediately by representatives
of the seller to determine how much sugar the Company should pay for. The results of these two

weighings were recorded by employees of the Company in the "pink books," illustrated on page 34 silk petticoat or a bag of sugar, and are forfeiture of about $137,000, the value of caught at it, the Government takes the the sugar on which duty was not paid in watch or the gloves or the petticoat or the selected cargoes.

In this connection, the sugar. Or if you contrive to bring in too, the Government asked for less than a box of cigars or part of a cargo of sugar it might legally have claimed, for, in the without paying the duty, and the fraud is words of the presiding judge, “ Under discovered after the cigars are smoked or the law the entire sugar in any cargo_in the sugar has gone into the melting-pot any package—might be forfeited in case of and lost its identity, you must pay to the proof that there was any fraud used in Government the value of the cigars or the respect to any of the sugar in that package sugar. And you

the duty as well. by which less duties were paid than The forfeiture of the article or its value is a. should have been paid.” The purpose of penalty for the fraud ; it does not take the the Government in making this a test case, place of a restitution of the unpaid duties. demanding only the most moderate penal

The action was merely a test case. It ties, was not to punish adequately the covered only sixty-eight cargoes of sugar Sugar Company, not to make the punishimported since the end of 1905, for the ment fit the crime. What would a great statute of limitations on frauds of this corporation like the Sugar Company care character bars action after three years. for the forfeiture of an insignificant sum From all the cargoes brought in during like $134,000, or of any sum which a jury those two years the Government selected, might be likely to award ? Raising the in order to make its case impregnable, only price of sugar for a few days would make those on which the average difference of it good. The purpose was to establish weight on each draft was about the the fact of the frauds, to fix the frauds same as the difference on the two drafts

upon the Company, to establish the prinweighed on November 20 when the fraud ciple that such frauds can be penalized, to was discovered. The case called for the lay the foundation for the return of the

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unpaid duties, and, above all, to secure the finding of the seventeen holes, one in deterrent effect upon similar frauds of the every scale on the docks, and the observed popular contempt which exposure of such result when the three drafts of

sugar petty cheating would inevitably arouse. were reweighed just before the spring It may be said in passing that this last found—one draft weighed origipurpose, from the standpoint of public nally while the special agent was in the morality the most important of all, was scale-house showing no change on largely nullified, as has already been said weighal, the two others, weighed originally in The Outlook, by the unexplained unan- before his presence was discovered, showimity with which the New York daily press, ing an increase of fourteen and eighteen after giving the case considerable space pounds respectively. That evidence up to a certain point, thereafter ignored it showed how the fraud was accomplished. and its dramatic incidents.

Other evidence indicating that the stealThe case

for the Government was ing had been systematic and long conprosecuted by the Federal Attorney for tinued was soon forthcoming. the District, Mr. Henry L. Stimson, with The Refining Company buys sugar in the able co-operation of Assistant District two ways, on

“ invoice weight” and on Attorneys Denison and Buckner and sev- “ landed weight.”

In the first case the eral of their junior associates. The Com- Company pays for the amount of sugar pany's case was under the personal charge shown on the consular invoice representof Mr. John E. Parsons, for years the gen- ing the weight of the sugar ascertained at eral counsel of the Sugar Company, with the place of shipment. In the case of Mr. John B. Stanchfield as the trial attorney. landed weight cargoes, the amount paid for The trial lasted a month. The jury was out is the weight taken on the refinery dock one hour, bringing in then a verdict for the as the cargo is unloaded.

For the purentire penalty the Government asked for. pose of ascertaining this landed weight,

the sugar is weighed again, just after it The starting-point of the Government's has been weighed by the Government case was the discovery of the spring, the officers, by what are known as city weigh

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DIAGRAM SHOWING THE WEIGHING OF THE CARGO OF THE STRATHYRE The jagged line represents the variations in the weights of the drafts of sugar in the cargo'of the Strathyre, the ship which was being unloaded when the frauds were discovered. The weights ran below the black line which represents one thousand pounds until the discovery on the 20th of November On the instant of the discovery (the very draft on which the discovery was made) the line jumps up well above the thousand pound mark and stays there for the rest of the cargo. The short time, on November 18th, when the line ran above the thousand pound mark, though the discovery had then been made, was at a time when the Deputy Surveyor of the Port was on the dock making an investigation into some alleged irregularities

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These men (who have, despite their weight has been found by the Government name, no real connection with the city) weighers (and checked, you must not forrepresent the sellers of the sugar. They get, by the Company checker), the purchase use great steelyard scales, and do their weight is ascertained by the city weighers. work within twenty feet of the Govern- This weighing is also checked by an ment weighers. Immediately, then (cer- employee of the Company. Both checktainly within five minutes), after the dutyers, the one in the scale-house and the one,

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A PAIR OF THE PINK BOOKS Two photographs of the same set of books. In the one above is shown the book containing the duty weight, in the one below the book containing the purchase weight. The hand above points out the duty weight-2,256,138 pounds: the hand below, the purchase weight, 2,301,508 pounds. (Note that the number of bags is the same in both books.) In other words, on this cargo the Sugar Refining Company paid for 40,000 pounds of sugar on w ch it paid uo duty. And the figures showing this discrepancy were recorded by the Company's employees in these books, which were then pasted back to back and preserved in the Company's office on the docks

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twenty feet away, beside the steelyards, frauding the Government, or, if the duty record the weight of each draft in weights were correct, the Company on little pink book. When a cargo of sugar cargo after cargo was paying for fifty, a has been landed, weighed twice, and hundred, even two hundred thousand passed along into the refinery, each of the pounds of sugar which it never got. Was Company's checkers adds up the weights the Company so careless that it either of the thousands of drafts as recorded did not know

did not know of these discrepancies, or, by him and puts down the total in knowing them, did not care that it was his pink book. The two books represent- paying for sugar which it did not receive ?, ing the same cargo are then pasted to. Perhaps. But it was so careful in other gether back to back and filed in the office particulars that dock, scales, deck, and of the Company's dock superintendent. hold were scrupulously swept to save the One book shows the amount of sugar in last particle of scattered sugar, and the that cargo on which the Company paid sweepings delivered to the refinery. On duty to the Government; the second book one cargo where the pink books showed a (pasted back to back with the other, for difference of nearly twenty-five thousand easy reference, one would naturally sup- pounds between duty weight and purpose) shows the amount of sugar for which chase weight, 473 pounds of sweepings, the Company paid the seller. A handful a large percentage of which was plain of these books, which I have examined at dirt, were collected and accounted for. random, show in bold figures these interesting facts :

The differences between duty weights On May 18, 1907, the steamship Egda and purchase weights shown in the pink brought in a cargo of sugar on which the books were found also in other records. Company paid duty on 2,774,832 pounds; The Government attorneys had tables prebut it paid, to the seller of the sugar, pared covering shipments from Decemfor 2,799,116 pounds—24,000 pounds or ber, 1901 (the date of organization of the 12 tons more.

particular corporation which was being On July 7, 1907, on the cargo of the sued, the American Sugar Refining Comsteamer Olinda the Company paid duty on pany of New York), to November, 1908, 3,174,180 pounds, while it paid the seller for and showing in parallel columns duty 3,216,832 pounds, or over 20 tons more. weights, purchase weights, the difference

On March 14, 1907, the Bound Brook · between the two for the whole ship-load landed a cargo of sugar on which the duty and on each draft when the duty weights weight was 3,169,022 pounds, while the were greater, and the same differences purchase weight was 3,216,080, an in- when the purchase weights were greater. crease of nearly 24 tons.

Separate tables were made for landed Other sets of the pink books show dif- weight cargoes and invoice weight carferences as high as 200,000 pounds. goes. The figures for the duty weights

In the pink books the Company had, were taken from the Custom-House reccarefully preserved, and so joined together ords, those for the purchase weights from as to make comparison almost inevitable, the sellers' books, verified at a later date two sets of figures showing such astonish- by the books of the Refining Company ing discrepancies as these, and indicating itself. A few of the figures taken from one of two things : Either the duty weights the middle of the landed weight tables are were too low and the Company was de- shown in Table I.

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:

Date of
Entry.

Duty
Weight.

Purchase
Weight.

Duty Weight Greater

than Purchase Weight. ' Difference on Difference on Whole Cargo. Each Draft.

Duty Weight Less
than Purchase Weight:
Difference on Difference on
Whole Cargo. Each Draft.

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1903 March 23

25 ". 27

27
30

3,405,560
2,908,691
1,255,447
1,484,188
2,024,205

3,504,112
2,973,063
1,278,437
1,509,098
2,065,810

98,484
64,227
12,040
23,504
41,207

20 11 15 18

TABLE I

Do you see how the fourth and fifth ury Department, and that during several
columns, where the differences would ap- months, which he verified from a “ dairy"
pear if the weights found by the Govern- which he had kept, he was on the docks
ment officers were larger than those found several days each week investigating
by the city weighers, are wholly blank ? alleged irregularities. The three days
This blank runs almost unbroken through shown above were among those set down
the entire tables. But if this uniformity in his “ dairy.” On other occasions when
were too complete, perhaps it might seem to it was shown that special Government
prove too much. Fortunately, there are ex- officials had made visits to the docks, the
ceptions, which, taken with their logical ex- same shifting of the differences was to be
planation, give to the tables an overwhelm- found. Evidently the manipulators of the
ing significance. One such entry showed springs were not taking any chances when
the duty weight 475 pounds greater than they knew Government officials were
the purchase weight, an average difference present. The shifting in these cases is
on each draft of 4-10 of a pound. But significant, but even more conclusive is

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this entry consisted of sugar packed in what happened after the eventful No-
hogsheads instead of bags. Now, the vember 20. What the table shows before
regulations require that the duty weight and after that date may be seen in Table
of sugar so packed shall be stamped on III. When the fraud was discovered and
the hogshead with a branding-iron as it the spring taken away, the Company was
leaves the scales. If the hogsheads were deprived of its privilege of having a
weighed falsely, comparison with the city checker in the scale-house. And from
weigher's figures would be inevitable. that moment the differences between duty
This condition exists in the tables when- weight and purchase weight have been
ever hogsheads were weighed. There were small, first on one side, then on the other.
other exceptions, as is shown in Table II. From the end of 1901 down to No-
See how the differences are in favor of the vember 20, 1907, the differences averaged
Government weigher for three shipments 13 pounds to the draft, and always,
(but with a very small average on each excepti as has been already explained,
draft) and then go back to their usual against the Government. But after
place in other columns. Now for the November 20 the differences averaged
explanation. At the trial, one Stanislaus half a pound to the draft, and, with few
Wodzicki testified that in 1906 and 1907 exceptions, in favor of the Government,
he was a special employee of the Treas- Those differences, moreover, are just

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