1 COLUMBIA LIBRARIES OFFSITE AVERY FINE ARTS RESTRICTED SENATE. ( Ex. Doc. AR01413317 | \ No . 123. LETTER FROM HJ THE SECRETARY OF THE TREASURY, TRANSMITTING, In response to Senate resolution of February 14, 1889. copies of testimony relative to fraud's in New York custom-house. February 20, 1889.— Referred to the Select Committee to Examine the Condition of the Civil Service and ordered to he printed. Treasury Department, February 19, 1889. Sir : In compliance with the resolution elated the 14th instant, wherein I was directed to furnish to the Senate copies of all the sworn testimony in regard to alleged frauds and undervaluations in the New York cus- tom-house, taken by Special Agent Byrne, and submitted with his re- port dated November 1, 1887, I have the honor to transmit herewith copies of the papers referred to. Respectfully, yours, Httoh S. Thompson, Acting Secretary. Hon. John J. Ingalls, President of the Senate pro tempore. EXHIBITS. Exhibit 99. Thomas S. Tice, assistant appraiser, 8th division, heing duly sworn, makes the fol- lowing statement: I have been assistant appraiser of the 8th division, relating to sugars, since March 8, 1887. As a part of my presumed duties I, upon one occasion near the end of the month of March, detailed, or rather changed, the places of three sugar samplers, who had already been assigned to certain districts by Mr. Bowne, an examiner under me, to other districts, when in a couple of days after I had made the change of detail, Mr. Mc- Mullen, the appraiser of the port, notified me in writing that I must replace the men on the districts assigned to them by Mr. Bowne. This official notification I took home, as I did not consider my desk a safe place to keep it, it having only an ordinary lock and key, and I desire to keep that notification for my own protection. By this letter I understood that I was relieved from any authority and had no right to make details of samples to sugar-sampling districts. I have this notice from the ap- praiser in my possession still and will let you see it, but will not let you make a copy of it or retain it in your possession without the order of my superior, recognizing at the same time that Special Officer T. Aubrey Byrne and Special Agent H. A. Moore are conducting this investigation by authority and direction of the hon. Secretary of the SEYMOUR DURST i 2 FRAUDS IN NEW YORK CUSTOM-TTOUSE. Treasury, but think if it included the delivery to them of- official papers or documents he would have so uoted it in his communicattion addressed to officers and employes dated July 1st, 1887. Mr. James Burt visited the sugar division, in the office, and requested to see Exam- iner Remsen in my presence, and I said certainly. Whereupon he was called in, and Mr. Burt said in substance that he understood Mr. Remsen had been before the sugar investigating committee, and was bound to secrecy, and that he did not want to ask him any improper questions, but he wished to ask him a question or questions, and he then asked him if he knew if anybody had said that he had more influence than any- body else at the appraiser's store, to which Mr. Remsen replied that he could not think of any. A day or two previous to this Mr. Burt was in the 8th division and in- quired of me if I knew Special Agent Moore, or whether he was an acquaintance of mine, and I replied that I had never seen him but twice. Mr. Burt visits the 8th division nearly every day. Mr. Dreyfous and other brokers sometimes send a clerk or messenger, but I have never known Mr. Burt to send any- body. I think Mr. Remsen, the sugar examiner, is an upright and conscientious officer. Mr. Remsen is next to me in authority, as I understand it, in the 8th division, and has sole charge of the sugar room. I believe all sugars are sampled by mark as they are laid out. Mr. McElwee, the examiner, sent me a note complaining of Jas. Ma- loney, the sampler, detailed to convey samples from docks to appraiser's store, stating that he was in the habit of permitting his son, who was not a sworn officer, to drive the wagon to the appraiser's store, he not accompanying them. Mr. Bowne, another examiner, later on, or about the same time, called my attention to the same fact, which I reported to the appraiser in writing, I think; and I there- upon ordered the practice stopped, and that under no circumstances should the samples be taken from the docks except in charge of a sworn officer. This order was given under authority of the appraiser. *I have received a letter from Verrinder & Callaghan, Wall street, N. Y., representing a number of sugar-houses, complaining that they did not get the sugar samples belonging to their firms that they were entitled to. I sent the letter to the appraiser, who directed me to investigate it. I then called in Mr. Jas. Dale, of the sugar-room, in charge of the returnable sam- ples, who informed me they were getting all they were entitled to, and I notified the appraiser that it seemed to be a question of veracity between Mr. Dale and the com- plainants. It has been the practice among officers and employes of the 8th division to hand Mr. Dale their vouchers to get their checks on the last day of the month. Mr. Trainer or Mr. Johnson mail notices of classification of sugar at close of business each day, except those that are called for, and I think Mr. Burt gets all of his notices by calling for them. I know of no violation of the regulations or irregularity in this pro- cedure. I do not consider it any annoyance to the employes of the 8th division by these visits of the sugar representatives. I .have never known but one re-test being asked for. I have never known Mr. Burt to be in the sugar-room, or heard if he has been there, and if he has it was without my consent. This statement will apply to all sugar brokers. I was informed by the firm of Smith and Shipper that they requested re-sample. The examiner refused re-sample on the ground that the original re-sample packages had been destroyed, and the request was refused solely on that account. I have never writ- ten an order permitting the removal or melting up of sample or re-sample packages. Samples classified by Dutch standard are not placed in glass bottles and sent to the custom-house. I know of no regulation permitting non-performance of this require- ment as per par. 32. I think that all importations of sugars at this port are reported upon the classification sheet. There is no reason, in my opinion, why any material errors should occur in those sheets. I do not know of any posting, public or otherwise, of damage allowances on sugars, as I have nothing to do with them. I have no knowledge of any regulation permitting or authorizing sugar importers to ask for re-test other than the custom I found prevailing in my division when I took charge. It is a common occurrence for merchants to ask for re-test. I make this statement in answer to interrogatories propounded to me. Thomas S. Tice. Sworn to and subscribed before me this 6th day of July, A. D. 1887. T. Aubrey Byene, Spl. Treasury Officer. *On page — lines marked 1 and 2 were changed with my authority and in my pres- ence.— T. S. Tice. [The sentence above referred to by Mr. Tice originally read as follows : " I have received a letter from certain representatives of a number of sugar-houses complaining that they did not get the sugar samples belonging to their firms that they were entitled to."— Printer.] AV^RV ■ "" 0V, \~ ' V" OURSJ FRAUDS IN NEW YORK CUSTOM-HOUSE. 3 Thos. S. Tice, asst. appraiser of the 8th division, makes the following statement this 7th day of July, 1887: I have carefully read the sugar sampling regulations of 1883, 1884, 1885, and 1886 re- lating to sugar and failed to find any order of Department authorizing a re-test of a sam- ple when asked for by an importor or broker. In changing . the designation of a sampler on or about the latter part of March, 1887, for the next month, in which action I was overruled by an order from the appraiser, I was careful not to violate the regula- tion which requires that samplers shall not be on any given district longer than for one month. The name of the firm which has the right to obtain from the sugar- room at the appraiser's store, the residue of sugar samples of firms they represent is Verrinder & Callaghan, No. 101 Wall street, N. Y. On or about May 28th, 1887, a request was made in writing to my office from the own- ers of 5,600 bags of sugar at the refinery of Dick & Meyer asking that a re-sample be made of said cargo. Sugar Examiner B. D. C. Foskett was detailed by me, through Examiner Remsen, to re-sample the same. Examiner Foskett found that of the total number of re-sample bags stenciled . Do you know whether he has had any ownership in it since? — A. He has had no connection with it to my knowledge since. Q. Have you at any time sent or requested any of the employes in the laboratory to the laboratory of Sherer Bros.? — A. Yes, I have. Under what circumstances ? — A. The circumstances occurred about 2} years ago. I sent Mr. Landsman down to the laboratory in Front st., understanding he had a friend who wanted a situation, and understanding that my brother (who at that time was not in the service of the Government) wanted an assistant. I requested Mr. Landsman to go down and see him. Q. Did his friend answer the purpose? — A. My impression was that he did not. Q. Did you ever send any of the other employes of the laboratory to the laboratory of Sherer Bros.? — A. I have no recollection of having ever done so. Q. Have any of the U. S. samples been tested at that laboratory of Sherer Bros. ? — A. I have no recollection of any such matter. Now that you recall to mind the possibility of such an occurence of a dispute having arisen as to the correctness of a test and the pos- sibility of sending it down there with the view to ascertain if the result found there ac- cord with tbe result found here, I will have to retract what I previously said. What you say recalls to mind the possibility of such an occurrence. I also call to mind that if was with the consent and knowledge of the appraiser, not Appr. McMullen, but Appr. Ketchum. Q. Do you remember sending any of the examiners there to assist in the testing of general samples, not those which had occasioned a question as to the accuracy of the test? — A. Never by any possibility could I have done so. Q. When you sold out your interest and the interest of Sherer Bros, was transferred to Dr. Gideon E. Moore, did you make any reservations in the bill of sale? — A. I think not. I don't remember. Q. Have you a copy of the bill of sale ? — A. I presume I have. Q. Will you show me the bill of sale in the morning? — A. I think I must decline to do so. Q. On what ground? — A. I am prepared to state the reasons to the Secretary of the Treasury in writing. Q. Do you decline to state the reasons for declining to me? — A. I do. The request of the Secretary, dated July 1, 1887, was then handed to Dr. Sherer, by Special Officer Byrne, and he continued: A. I have not refused to give any promise. I do not regard the question you have asked me as having any connection whatever with the question of frauds or irregulari- ties in the sampling of sugar, and I am not at liberty to do what you ask because the interests of another party are involved in doing so. It is a bill of sale in which he is concerned as well as myself. I have no objection to state my reasons to that extent. Q. If the acts of officers of the Government while in the employ of the Government are always open to examining officers? — A. The act referred to was not an act while in the employ of the Government; a bill of sale of my private property before I entered the service is no bar to my official conduct subsequent to entering the service. Q. Have you ever explained this matter at the request of any officer of the Govern- ment? — A. The subject of my possible or supposed connection with the Front st. busi- ness and with the Turkish consulate has twice been a matter of investigation. Q. By whom ?^ A. The last time it was by Mr. McMullen, at the request of the Sec- retary of the Treasury. The first time it was at the request of Gen. Ketchum, by Col. Ayer. It has been twice reported upon to the Secretary of the Treasury, and once to the President of the U. S. Q. You sold your right, title, and interest by bill of sale; was the bill of sale re- FRAUDS IN NEW YORK CUSTOM-HOUSF. 31 Corded? — A. You must excuse me for declining to give any further information about that subject. Q. When you sold your interests of the firm of Sherer Eros., did you also give power of attorney to sigu the name of Sherer Bros.? — A. I have already answered in general terms what covers the entire subject. I decline to go further into the subject. Q. Is there any one at the present time who has the authority, under power of attor- ney, to sign the name of Sherer Bros, in connection with work done on sugar at the lab- oratory of Sherer Bros. ? — A. The same answer will cover that. Q. Do you decline to answer? — A. I decline to answer. Q. Where do you transact the business of your consulate? — A. The business is trans- acted by the clerk who represents me there. Q. Who is he? — A. His name is Mr. Burton Keys. Q. Is he a relative of yours? — A. He is a connection of my brother's by marriage. He is in charge of the laboratory at the present time. Q. Do the two offices connect? — A. I don't know. Q. Have you executed to him power of attorney to annex the seal of the consulate to official documents? — A. He has my authority. It does not require any power of attor- ney. The business of the Turkish consulate is extremely limited. It is confined to the routine work of affixing the seal i o clearances of vessels, &c, and it is a matter that very seldom requires my consideration at all. Official letters from the Turkish minis- ter are forwarded by M' . Keys, and he addresses them here. Q. Do Turks having official business visit you at the U. S. laboratory? — A. No, sir. It has happened on one or two occasions that indigent Turks have found their way here, much to my disgust. I have instructed the watchman to say that the office of the Turkish consul is at 122 Front st. Q. Have you ever sent for any officer connected with the laboratory to come and in- terpret for you? — A. I should say that would be hardly necessary. Q. Do you recall ever haying done so? — A. Yes; I think on more than one occasion. I have asked anybody in the laboratory who understood French. I understand it my self pretty well, but there have been letters on subjects with which I was not familiar, and where the phraseology was not clear I have a^ked the aid of any one who could give it —once of Mr. Landsman, once of Dr. Batkershaw, onceof Mr. Benjamin; anybody that I could get to help me. Q. Did you ever ask any of them to assist in interpreting from a Turk ? — A. There was nobody there that could. 1 should have done it without hesitation. Q. Do you derive any profit, emoluments, or benefits from the firm of Sherer Bros. ? — A. I do not. Q. Were you at one time engaged in the manufacture of bronze powder? — A. No, sir. At one time I invested some money in an enterprise of that sort. Q. Who constituted the firm ? — A. It was not a firm; it was a company. Q. Who was the president, treasurer, and secretary? — A. I must decline to answer any question in connection with that matter. I lost every dollar I put into it, and the subject is a painful one. It is a matter of business involving other people and myself, and I must decline to answer any questions in relation to it. * Q. Was action brought against you in a New York court for rental ot the building used for the manufacture of the powder? — A. Yes, I was made a party of the suit from the fact of having some money in it. Q. Who was the man that sued you ? — A. I must decline to answer. The suit was brought in a N. Y. court. I don't remember what court or what judge. I was called as a witness in that suit. I was ou the stand for about five minutes. I was called, and in reply to questions, I stated that I was Turkish consul at the port of New York, where- upon the judge dismissed the suit. I had made no plea of that sort whatever and was prepared to waive any possible right I had iu that connection. I was iuformed that I could not waive any rights I had. The judge said it was impossible for a suit to be brought against a foreign consul in that court. * The fact was brought out by my own attorney asking me my business. The plaintiff was informed that the proper way was to bring suit iu the U. S. court, which he never did. Q. Have you ever mentioned why ? — A. No. Q. Have you stated to certain of your associates that the reason was because the amount was less than $500? — A. I may have speculated on that, but I really don't know that the amount must be $500. Q. Do you recall what court the suit was brought? — A. No, sir. Q. Was the judge's name McAdam? — A. 1 think that sounds like it, and I think it probably was him. Q. What time was it brought? — A. About 2] years ago. I don't recall the date. Q. Are there any clauses in these regulations which, in your opinion, should be changed or modified in any particular? — A. Well, I should hardly think it worth while to sug- 32 frauds in new york custom-house. gest any alteration unless there was an alteration in the tariff. I think the Govern- ment gets all the duty it is entitled to. Q. Do any importers or brokers visit the laboratory? — A. No, sir. Q. Did Col. Burt? — A. He was once in the office of the laboratory for about five minutes. It was the only occasion. Q. Does Mr. Dreyfoss? — A. Never been there to my knowledge, and I only saw Col. Burt once. Col. Burt and I are on friendly relations, not intimate. Edward Sherer. Sworn and subscribed to before me this 30th day of July, A. D. 1887. T. Aubrey Byrne, Special Treasury Officer. Exhibit 105. New York, July 11, 1887. Charles H. Trainer, appointed sampler, and acting as clerk, states as follows: I first commenced my duties in the sugar division June 6, 1885. My duties are that of a general clerk in the office of the assistant appraiser of the 8th division. I make out the tabulated daily statements of the classifications of sugar. I never see or handle the certificates of tests from the laboratory. I have never seen Mr. Jas. Burt scrutinize the invoices or papers of any importers other than those he represents. I have never seen Mr. Burt in the sugar-room, nor have I seen him go there. I put the invoices of the firms that Mr. Burt represents in the invoice blotter, while the memorandums of other invoices of other importers I put underneath this book. As a general thing he looks in that book every day. This book always lays upon au unoccupied desk, and where other official papers are sometimes placed. Mr. Burt uses this desk when he visits the office, which is almost daily, and where he writes his requests for re-tests after perusal of his notices. It is the custom to retain Mr. Burt's invoices at his request, pending a request for re-test or re-sample, which custom I found in vogue from the time I went in the of- fice as clerk. He always asks for re-tests when he is dissatisfied with his classifications, and is always granted them. He writes his requests on the official headings of the appraiser's office, and has them sent to the examiner iu charge of the sugar-room, and sometimes he has requested the messenger to carry them into the sugar-room. Notices of all other im- portations of sugar — that is, the notices of classification — are put on my desk, while, as stated before, Mr. Burt's notices are put on the desk he usually occupies when visiting the 8th division. About three months ago Asst. Appr. Tice said he would like to know what changes were made from original test of au invoice, and I suggested pinning to the invoice the requests of the brokers for re-test and re-sample. This has since been done. I have seen employes of this building, and not employed in the 8th division, in the sugar- room. I write the tabular statements of sugar classified each day, about 3 o'clock in the afternoon. On the following morning I make out the exchange sheets for Boston and Phila. I write up the tabulated sheets from the invoice after the daily clas- sifications have been made; therefore these sheets show the correct classification. This I assert positively. I have charge of the returning of the invoices to the invoice bu- reau, and they are returned properly at the rate of about 25 per day as the classifica- tions are made, and if there is any detention of iuvoices it is not in the 8th division. The invoice of A. D. Hitch of 3,800 bags sugar per "Bella Rosa," May 21, '87, en- tered in warehouse, on which original test was made of 81.30, 80.20, 80.60, 81.50, 81.00; re-test on May 28, 81.30, 81.70, 81.50, 81.50; accepted test 81.00, and in which the importer is represented by Mr. Burt, was found between the leaves of the invoice blotter, and both Mr. Trainor, the clerk, and Examiner Remsen declare was mislaid and should have been returned June 1, last. The invoice blotter in which this was found was the book that Mr. Burt has the exclusive use of. I know as a matter of fact that Examiner Bowne details the samplers, and that Asst. Appraiser Tice does not. Chas. H. Trainer. Sworn and subscribed before me this 11th day of July, 1887. T. Aubrey Byrne, Spl. Treasury Officer. New York, July 28, 1887. C. H. Trainer, sampler, acting clerk in the 8th division, further states as follows: It has been the practice in our office in the 8th division under Asst. Appraiser Frank Hay, up to March 1st last (1887), to write the test of classifications of sugars on the " daily tabulated statement of classifications" (such as are exchanged between the FRAUDS IN NEW YORK CUSTOM-HOUSE. 33 ports of Boston and Philadelphia, as provided in par. 4, S. S. 0859), from the notices as mailed to importers, informing them of the classilication of their sugars. Since that time Asst. Appraiser Hay, about March 1st, instructed me to copy the clas- sification from the invoices as made up each day. The reason he gave for ordering this change of practice was " that changes might be made in the classification on subsequent tests, made at the requests of brokers and importers." This order was issued to remedy the cause of complaints made at Boston in regard to the errors in the tabulated statements of classifications as furnished from the appraiser's office at New York. Chas. H. Trainer. Sworn and subscribed to before me this 28th day of J uly, A. D. 1887. T. Aubrey Byrne, • Special Treasury Officer. Port of New York, Appraiser's Office, 402 Washington Street, July 11, 1887. T. Aubrey Byrine, l^sq., Special Agent U. S. Treasury: Sir: I desire to state in connection with my testimony, given this day, that the desk on which Mr. Burt writes his requests for tests and re-tests (styled as an unoccupied desk in the testimony) is situated in front of the one used by me, and placed in such a manner that no person using it can read whatever papers lay on my desk. The desk in question is used by a number of persons who have business to transact in the office of the 8th division. I have always understood that this desk and blotter (also referred to in testimony) was retained for the accommodation of any person who might desire to use them. "As to memorandums and other invoices placed beneath that blotter, ' ' 1 wish to say that these memorandums are not ones of invoices, such as cost, description ot merchandise, test of the same, &c, but simply memorandums in relation to information desired from importers by officers of the 8th div., such as location of vessel, possible time of discharging, &c. This information is intended for the U. S. samplers in order to facilitate their work and is of no benefit whatever to any other parties. "As to invoices being detained at the request of Mr. Burt (pending a re-test and re-sample): " These invoices are ones as to cargoes belonging to the importers whom he represents and no others. I make these ex- planations for the reason that my testimony as written would, on being read (by a per- son not understanding the circumstances), create an impression not in accordance with the facts, and I am ready and willing to make oath to the correctness of said explana- tions. Very respectfully, Chas. H. Trainer, 8th Division. U. S. Treasury Department, May 26, 1887. A. D. Hitch, ex Bella Rosa (upon 3,800 bags). Original tests: 81.30, 80.20, 80.60, 81.50, 81.00. Retest: 28th, 81.30, 81.70, 81.50, 81.50 (accepted test). (?) A. G. Remsen, Exr. Port of New York, Appraiser's Office, 402 Washington street, May 28, 1887. To the Appraiser : We are dissatisfied with your test of our 3,800 bags sugar per Bella Rosa and have to give notice that we desire to have these sugars re-tested and re-sampled. (No changes on re- test.) Very truly, yours, Havemeyers & Elder. Per J. R. S. Ex. 123 3 34 FRAUDS IN NEW YORK CUSTOM-HOUSE. — W 12258.] (Copy.) [73801. Consular invoice of 3.800 bags Brazil brown sugar, purchased by Henry Foster & Co. in April, '87; shipped at Parahyba for New York, per Brit, b'gtine Bella Itosa, Bow- den, master; consigned to the London & Brazilian Bank (ltd) by order and for account of whom it may concern. A. D. Hitch. (Written in red ink:) Not above No. 13, D. S.; test, 81.00; $1.64. 3,800 bags sugar, weighing net 285,000 kilos; cost, free on board, in- cluding all charges and comm. ex freight £2,289 14 11 Equivalent to a 21 2 exchange R. 25, 559, 950 E. & O. E. Pernambuco, 14 April, 1887. pp. Henry Foster & Co. I. Swift, Jr. [Custom-house stamp, May 21, '87.] [Ware-house, 6th div., May 21, '87.] (J. Burt, broker). (Written in red ink:) Sugar as noted. May 31, '87. Correct. — A. G. R. Exhibit 106. John A. Sherer, damage examiner 1st division U. S. appraiser's store (Asst. Appr. Moore in charge of division), duly sworn, declares as follows: Examined by Special Officer Byrne: ( x >. Have you been engaged in making damage allowances to-day ? — A. No, I can't say that I was. 1 have been examining to-day. Q. Where ? — A. At Woodruff's stores. Q. Have you made any previous examination of the damaged sugars? — A. Yes, sir. You have completed your examination of the damage sugars? — A. I can't say that 1 have. I shall probably see them again before I get through. < c >. You have already ascertained the result of the damage samples? — A. Yes. Q. And this slip that you now hand me is the result? — A. Yes. Q. You have ascertained that the polariscopic test of the damage sample is 80.30, the dry test is 80.31, the mark is 505B, moisture is 7.50 per ceut. This application for damage allowance covers the importation of Geo. Ropes, barque Jeosie Troup, from llo- ilo, date July 19th, 1887, landed from June 27th to July 13th, and embraces 3,500 bags, the marks beiug A., B., and C, landed at Woodruff's stores ? — A. Yes; the application was received by me on the 25th July. You next worked on it? — A. The day before yesterday — the 26th. Q. The day you drew your samples of damaged sugar? — A. Yes, to-day I drew the sample of sound sugar; I did not examine the vessel; when it is practicable I do so. It was not done in this case; it was already discharged when I saw the warrant. (,). Your work, so far as the ascertainment of damage is concerned, simply depends upon the ascertainment of the result of the dry test of the sound sugar? — A. I don't say altogether, because I expect to see this sugar again; I am not entirely satisfied about it. I almost always draw my own samples. Q. You were appointed damage examiner when? — A. I was appointed sugar examiner on 1st Jan'y, 1880, and I was assigned to my present position by order of Appraiser Butcher. My position has never changed since except that. I am a general damage examiner, not specially on sugar. I resigned in 1884. I think it was about July or August, 1884, and reappointed on the 1st Sept. Q. During that interim were you engaged in business? — A. Yes. 0. Where?— A. 122 Front St. Q. At whose place? — A. At Sherer Bros. ; the business was conducted under the name of Sherer Bros. Q. And during that interim you engaged in business there? — Yes. Q. Who was on charge of the business at 122 Front St. prior to your resignation ? — A. Mr. Wm. J. Rigney was in charge of the business there. Q. And when you took charge of the business was he still there? — A. No, sir; he made arrangements in another business for himself. FRAUDS IN NEW YORK CUSTOM-HOUSE. 35 Q. You stayed there for about how long ?— A. I suppose about 30 days. Q. And during that time you arranged and put another man in your stead ?— A. Yes, another man took charge of it. I sold out the business after I left there as soon as I could do so. Q. To whom did you sell the business?— A. I sold it at that time to a Mrs. C. B. Dix, a lady who had a son in the business. He was about 19 or 20 years of age. Q. What was he doing?— A. He was testing sugars. Q. Reading by polariscope ? — A. Yes. Q. You say this young man was using the polariscope and testing sugars?— A. Yes, sir. Q. W T ho else was employed there at the same time?— A. Mr. Keys and* Dr. Shreiber. Q. Who was in charge of the office ?— A. Mr. Keys. He was an employe of Mrs. Dix. Q. Was Dr. Shreiber? — A. He was doing other examination work there; he was not receiving any salary; he was doing his own work and receiving his own pay lor it. Q. Mr. Keys is a relative of yours?— A. He is a brother-in-law. Q. He is at present in charge of the laboratory there? — A. Yes, sir. Q. Who paid the employes at that time?— A. Mr. Keys. He paid them, I suppose, by money out of the collections. Q. Who at the present time is in charge of the firm's business?— A. Mr. Keys is still there, carrying on the business under the firm of Sherer Bros. Q. You always have your samples of damaged sugars tested in the laboratory? — A. Yes, sir. Q. Have you ever tested sugars at the laboratory of Sherer Bros. ? — A. I have. Q. What authority had you to test sugars there? — A. I had the authority of Appraiser Howard. Q. In writing? — A. No, sir; verbal permission to use that laboratory. Q. What men connected with the U. S. laboratory have assisted you in testing damage sugars at the laboratory of Sherer Bros. ? — A. No one has assisted me there. Q. Has Dr. Sherer ever tested sugars at the laboratory of Sherer Bros. ? — A. No, sir. Q. Have any of the employes of the laboratory ever tested sugar while you were there ? — A. No, sir. Q. Who constitutes the firm of Sherer Bros. ? — A. Sherer Bros, belongs to F.M. East- man. Q. Where does he reside? — A. At Roselin, L. I. Q. When did he purchase the interest of the firm of Sherer Bros. ? — A. In January, 1885. He purchased the interests from me at that time. However, I don't see how this is pertinent to the subject, Mr. Byrne. (Mr. Byrne reads Secty's instructions.) This has nothing whatever to do with any fraudulent transactions whatever, any more than it has to do with the man in the moon. I decline to answer anything further except to state in general terms that I have no connection with that business, and never had any connection with it since I was con- nected with the Government employ, either as manageror director. If you wish a voluntary statement, I state further that I go there with my damage samples, and do so at present, have done so very frequently. I have reserved the right to do that in the bill of sale, and it applies personally to me. I have no right to bring other people there, or to do anything else there, but I have re- served that right for the interests of the Government and the convenience of myself in doing my duty. Q. Have you a bill of sale of the interest of the firm to Mrs. Dix ? — A. I have. Q. You say you made reservation of certain rights which you were to have in the lab- oratory ? — A. Yes, sir. Q. Did you make this reservation when you made your sale to Mrs. Dix ? — A. I be- lieve I did. Q. When the business came back into your possession you then sold it again to Mr. Eastman? — A. 1 transferred it to Mr. Eastman immediately. Q. In that interim you were out of the service? — A. I was not altogether. Q. Then there was a portion of the time that you did own the business while employed in the U. S. service? — A. There was no portion of that time at all, because when one gave it up I transferred it to the other. Mrs. Dix owned the business until Mr. Eastman took charge of it, and she owned it for about three months. When she took it I immediately returned to the U. S. service. She kept it till Mr. Eastman took it. I made the arrangement with Mr. Eastman; the business reverted to me for the purposes of transfer only. Q. Will you put me in possession of the original transfers to Mr. Eastman and to Mrs. Dix? — A. No, sir; I can not do that, because that relates to their business. I would not do it without their consent. Q. Are those bills of sale recorded? — A. They are not matters of record. t*>. Were you interested, directly or indirectly, with the manufacture of bronze pow- / 36 FRAUDS IN NEW YORK CUSTOM-HOUSE. dei ? — A. Yes, sir; I was interested in the company organized for the manufacture of bronze powder. How has that got anything to do with sugar? 1 have no objection lo telling you I was interested in the manufacture of bronze powder, but I was out of the service. I had some money in it which I unfortunately lost. Q. Who was a partner with you in the manulacture of bronze powder? — A. I had no partner; it was a company, a stock company. Q. Who were the presdt., trear., and frecty. ? — A. The officers never succeeded in being elected. I took the management of it for a short time. Mr. Jas. H. Ruggles succeeded me. He is a Brooklyn man. Q. Was Mr. Eastman interested with you? — A. No, sir. Q. You manufactured the bronze powder? — A. We never manufactured any at all. Q. Did you not open a place for manufacturing it? — A. We bought our factory; we put our money in the factory, and it was intended for the manufacture of bronze powder, but none was made. Q. Was Dr. Sherer interested? — A. Dr. Sherer put in a small amount of money at my instigation, which he lost; very much less than a thousand dollars. Q. The business did not prove a success ? — A. No. ( t ). There was a claim made for the rental of the building? — A. Yes, sir; I see you have got it all. I paid the rent because I was liable for it. Q. To whom? — A. I had a verbal lease to the first of May, '86, and of course I had to pay the rent up to that time, and did so ; but they claimed a month's rent which I refused to pay. They sued me, but I don't remember what occurred; beyond this I decline to make any further statement. It is something that is not pertinent to the frauds in sugar. I say that we invested some money in that business and lost it. I invested when I was out of the service of the Government, and what I did was only to try and recover it. < t >. In what court was the action brought against you? — A. It was in a New York court. I don't remember what court, and I answered the suit with my brother. Q. What was the result of the suit ? — A. It was thrown out on some technicality. Q. What was the technicality? — A. That is a personal matter and I decline to answer. Q. As an officer deputized by the Secretary to examine all officers and employes con- nected with the appraiser's store into their acts as officers while acting under instruc- tions, I repeat my question. What was the technicality which threw out the suit from the New York court where you and Dr. Edward Sherer were sued for rental of a build- ing in which bronze powder was manufactured by you during 1885 and 1886? — A. That is a matter which you will have to ask Dr. Edward Sherer about. I decline to answer; it is personal to him. Q. Why is it personal to him? — A. I had nothing .to do with that. Q. Then the suit was not brought against you? — A. Yes, it was brought against me. Q. Why did Dr. Edward Sherer answer the suit ? — A. It was brought against both of us. Q. Then you both engaged in the manufacture ? — A. It was because he had money invested. Q. Did you make any of that powder and sell it? — A. No, sir, Q. Did you not offer for sale that bronze powder on Long Island? — A. No, sir. Q. Was not some of that powder brought and shown to officers in the laboratory? — A. Not that I know of. Q. Mr. Sherer, as an officer of the appraiser store, who according to your statement was engaged in a commercial transaction during the time that you were serving the Government in the capacity of a damage examiner of sugar, I ask you to give me fully all the facts connected with the closing of the said action against you for rental of a building in which yourself and Dr. Edward Sherer had been engaged in making bronze powder, the reason why the suit was thrown out and the facts connected with it, in order that I can transmit the same to the Hon. Secty. of the Treasury. — A. As the question which you have asked is not at all pertinent to the subject in which you have examined me I decline to answer. Q. Have you ever tested damage sugars at the office of Sherer Bros, at night? — A. No, sir. Q. Have any of the officers of the U. S. laboratory assisted you in testing damaged sugars at the laboratory of Sherer Bros. ? — A. No, sir. Q. Have you any interest, direct or indirect, in the business of Sherer Bros., 122 Front st., New York city? — A. I have none. Q. Do you realize therefrom any emoluments or benefits? — A. You just asked me that question. Q. One refers to money, the other refers to privileges? — A. I have the privilege of ex- amining my damage sugars there. Q. Have you no other privileges there nor interest? — A. I own some apparatus, some chemical apparatus there. Q. Not included in the bill of sale ? — A. Yes, sir. FRAUDS IN NEW YORK CUSTOM-HOUSE. 37 Q. Will you give me or show me the original bills of sale? — A. No, sir; I can't do that without the consent of the other parties. I don't think it is pertinent to the case. Q. In the bill of sale or transfer as made, does that give the power to sign the name of Sherer Bros. ? — A. It does. Q. In all cases ?— A. Yes. Q. Did you execute a power of attorney to that effect? — A. No, sir. Q. Was Dr. Gideon E. Moore ever employed at that laboratory ? — A. Never employed; he owned the business at one time. Q. Who is the Turkish consul at this port? — A. I believe my brother, Edward Sherer, is; his office is at 122 Front st. Q. How does it stand relatively to the laboratory of the firm of Sherer Bros.? — A. I can not answer any questions in regard to my brother in connection with the Turkish consulate; he can, no doubt, answer them satisfactorily himself. Q. Is there a room connected with the laboratory of Sherer Bros., 122 Front st., that is not used for laboratory purposes?— A. No; there is a room there that is used by both. It is used in common by the Turkish consul and the people of the laboratory. I was there to-day. I took my sugar there. Q. Did you have this test of sugar made there? — A. No, sir; it was made here in the Government laboratory; that is the only certificate that I received from the laboratory. Q. Was it handed to you in person ? — A. It was given to me by Mr. Flowers. Q. Are certificates of damage sugar made out on such slips of paper? — A. Usually, yes; inclosed in such envelopes and addressed to me. Q. You never have the polarization of damage samples made out upon forms prepared and furnished by the Department ? — A. No, sir. Q. Who has signed that memoranda? — A. "B." up there stands for Ball. Q. Does not Mr. Ball always make the tests of damage sugar? — A. No, sir. Q. Invariably? — A. No, sir. Q. Usually? — A. I don't know who does it. I know he does it sometimes. Q. Has he not been detailed by Dr. Sherer ? — A. I don't know, sir. Q. Then this slip is the only memorandum you have of the polarization of damage samples at the laboratory? — A. The only one. They are on record in the laboratory. Q. The regulations require that the classification of damage sugar when made shall be noted on tabulated sheets at the close of each business day ? — A. Yes. Q. Is that paragraph of the regulations complied with ? — A. I don't know, sir. Q. You know that the result of damage allowances is not posted upon the classified sheets? — A. I don't know that. Q. Did you ever see them ?— A. No, I never saw them. Q. Did you ever give to the clerks in the eighth division information as to the classi- fication of damage sugar ? — A. No, sir. Q. Is this regulation No. 50 complied with ? — A. I don't know that it is. I don't know anything about it. I have read the paragraph. I understand that it refers to the collec- tor. I never had occasion to notice whether it was carried out or not. When my re- turns are made I never see them any more. They are made in the authorized way to the asst. appr. of my division, who signs them ; they pass out of my hands with that. Q. You always sign the damage warrants when you are here? — A. Every one that I myself make. Q. Does any one else sign these warrants? — A. Not my papers. Q. And you as damage examiner alone sign the documents? — A. As a rule I am the only one. I am recognized as the damage sugar examiner. Q. Is it competent for the ass't appraiser to assign any one to this work. — A. It is. Q. The regulation requires that in so far as practicable, you examine the vessel and see its condition when claim is made for damage? — A. I do that whenever practicable. Q. When and what vessel did you last examine? — A. I can not tell ju3t now. I don't remember any particular vessel. In about one instance in ten. When I see a vessel discharging on which there is damaged sugar, I go on board the vessel and ex- amine her, anticipating a warrant for damage, which usually occurs. Q. Who are the damage brokers who make a speciality of damaged goods ? — A. I don't know. Q. Who are the most prominent damage brokers that you most often come in contact with ? — A. I don't come in contact with any of them on sugar. Q. Do you know Mr. Kippen, and is he a damage broker? — A. Yes. Q. Do you know Mr. Jones, and is he a damage broker ? — A. Yes. Q. What is the rate damage brokers usually get on sugar? — A. I don't know any- thing about it. Q. Does Mr. Jones live in your town? — A. No, sir; not now, he did once, I believe. Q. Do damage brokers come to the office of Sherer Bros.? — A. No, sir. I want to say that I never saw any one on Government business at that office. Q. Does Mr. Joseph Drey foos call at the office of Sherer Bros? — A. I don't remember. « 38 ' FRAUDS IN NEW YORK CUSTOM-HOUSE. Q. Where is his office? — A. Cor. of Pine and Front I think. I don't remember the number. Q. Is that where his office is at the present time? — A. I believe so. Q. Don't you know that, as a fact, Mr. Dreyfoos is in the same building as that of the office Sherer Bros.? — A. No, sir; I do not. Q. Do sugar brokers hand you their sugars down town to be tested? — A. No, sir. Q. Have you not tested sugars after office hours at the office of Sherer Bros.? — A. No, sir. Q. How long does it take a damage warrant to pass through its various evolutions from the time that you receive it until it is returned to the custom-house? — A. That depends upon how long it takes me to get the return from the laboratory, and how long it takes me to get all the facts I want relative to damage — sometimes a few days; some- times a couple of weeks. If there is any reason for delay I don't return the warrant until everything is satisfactory — generally within two weeks. Q. Do you send your sugar to the laboratory? — A. I generally take them up, and sometimes send them by messenger. Q. Who do you hand them to there? — A. Anybody that happens to be there. Q. Do you state whose sugar it is when you take it there ? — A. No, sir. Q. Do you remember seeing me there ? — A. I do, sir. Q. Whose sugar was it you had that day ? — A. I don't know. Q. Did you tell Dr. Sherer whose sugar it was ? — A. No, sir. (Mr. Byrne makes the statement that on the day referred to by Mr. Sherer when he handed damaged sugars to Dr. Sherer for test, he stated to Dr. Sherer whose sugar it was, and that he would supply the name. ) Mr. Sherer then said, I desire to state under oath that that is false.) How long usually is it before you get the return from the laboratory ? — A. Gener- ally three or four days. Q. You did not know that I was an officer when you saw me that day? — A. No, sir; not at the time. Q. How do you know damage samples? — A. I know by the appearance of the package. t}. Are the packages stencilled? — A. No. Q. What is the object in waiving the stencilling? — A. Because the importer makes a statement that the goods are intended for consumption, and are not going out of the port, when the collector then waives stencilling. Q. If the bags of damaged samples are stencilled "damaged," then those goods can not be sold as sound, can they? — A. I should think it would be difficult to do so. It would be detrimental to them. Q. Do you ever find any sound sugar in the damaged packages ? — A. Yes. Q. Did you find some sound bags mixed with damaged bags? — A. Yes. Q. Who lays out the damaged packages ? — A. Generally the store-keepers; I mean the warehousemen. (,). You don't see the damage packages until you are sent to draw your samples? — A. I don't see them without a warrant to go there, or except I happen to be there at the time. (Paragraphs 43 to 17 inclusive were then read, and Mr. Sherer stated that it is use- less to read them as he knew them all by heart, as he assisted in framing them. ) Q. Have you ever seen any tables made up in this form, in which result of a damage sugar sample is made out? — A. None but that; there are none furnished by the Depart- ment. Q. What do you understand was the object in the framing of par. 47? — A. To give the examiner information how to go to work to make out his damage allowance. Q. Who assisted or made out the original clauses relating to damage in the sampling regulations of 1883? — A, I had a good deal to do with it. Q. Who did you talk them over with? — A. Col. Ayer. Q. Who else was present with you? — A. I don't remember that any one else was. Q. Was Col. Burt present? — A. No, sir. Q. Did you ever see him in company with Col. Ayer while talking about and framing the regulations? — A. No, sir. Q. Do you know Col. J as. Burt? — A. Yes, sir. Q. He is a sugar broker, is he not ? — A. He represents several importers of sugars, I believe. Q. Does he visit the laboratory at the appraiser's store ? — A. Not that I know of. I never saw him there, but have seen him in the hall. I don't think I ever saw him in the damage division. Q. Did you ever see him in the appraiser's room? — A. No, sir. Q. What is meant by commercial damage ? — A. Damage where mat and bag sugars are stained and wet without being intrinsically damaged ; where the sugar is damaged FRAUDS IN NEW YORK CUSTOM-HOUSE. 39 in color; that is, would not sell for sound sugar, although not damaged; as we express it, " degraded in color." Q. Does that apply to any other goods ? — A. No, sir. Q. Who coined the term commercial damage? — A. I don't know. Q. Did not you really frame this paragraph 48 ? — A. It was my idea and I suggested it, if I did not frame it. Q. In its application to other commodities it may mean the covering? — A. Yes. Q. But from the context of this paragraph, it means thesugar itself, does it? — Yes, sir. Q. What is the average damage on steam-ship centrifugal cargoes of sugar? — A. Very little; excepting bags, there is seldom any damage on sugars conveyed on steamers — prob- ably less than one per cent. Q. On what kind of sugar is the heaviest damage ? — A. On East India sugars usually, viz, Philippine Island sugars. Q. Do damage brokers visit the wharves? — A. I have seen Jones and Kippen on the wharves, but they never come where I am. Q. Do you reside in Flatbush ? — A. Yes, sir. (On the margin.) Page 24(17) with corrections and additions annexed hereunto. Jno. A. Sheeer. Sworn to and subscribed before me this 12th day of Aug., 1887. T. Aubrey Byrne, Special Treasury Officer. (17) New York, Aug. 12, 1887. I desire the following changes made in my testimony hereunto annexed, to wit: (1) Page 1. Answer to question four (4): Strike out word " probably." (2) I said in addition, the sugars were not in condition to examine properly. (3) Page 1. Answer to question 5: Yes, of the sample taken at that time. (4) Page 5. Answer 7: Verbal authority instead of verbal "permission." (5) Page 6. Answer 4: Strikeout all preceding "F. M. Hastman." (6) Page 6. Fourth line from bottom: "To put up," interlined. (7) Page 7. Sixth line from bottom : Strike out " altogether. " (8) Page 18. Thirteenth line from bottom: "That he ever did, to be added." (9) Page 21. Middle clause ( ), add: "As I assisted in framing them." Jno. A. Sherer. Sworn and subscribed to before me this 12th day of Aug. , A. D. 1887. T. Aubrey Byrne, Spl. Treasury Officer. Aug. 12, 1887. Upon referring to my stenographic notes I find as follows: Change No. 1, as above, the word probably was used by the witness, and the words alluded to in change No. 2 were not used by the witness. Change No. 3 is not correct, as he answered only "yes." Change No. 4 is not correct, as he used the term ' ;t verbal permission." Change No. 5 is not correct, as he used the words in evidence preceding F. M. East- man. Change No. 6 is not correct, as he said, " I go there with my damaged samples." Change No. 7 is not correct, as he said, "I was not altogether; no." Change No. 8 is not correct, as he said, " I don't remember." Change No. 9 is correct. r i his last change is the only one made by the witness which is borne out by reference to my notes. H. W. Kerr. Stenographer. Sworn to and subscribed before me this 12th day of Aug., 1887. T. Aubrey Byrne, Spl. Treas. Officer. New York, July 29, 1887. I, T. Aubrey Byrne, special Treasury officer, having duly sworn Damage Examiner John A. Sherer, previous to taking the testimony of said officer, said testimony with questions and answers being hereunto annexed, certify that it is substantially correct in every particular, and the reason of its not being signed by theofficer under examination, Mr. John Sherer, arises from the fact that the asst. appraiser of the damage division stated he was suddenly called away from the city by the serious illness of his child, and S. Ex. 3 61 40 FRAUDS IN NEW YORK CUSTOM-HOUSE. would not return for several days. This statement was taken yesterday, the 28th in- stant, about 4 o'clock p. m. ; the testimony being ready for signature this morning, the 29th instant. T. Aubrey Byrne, Special Treasury Officer. I hereby certify that the transcription of the testimony of Mr. John Sherer, above re- ferred to, is a correct copy from my stenographic notes. H. W. Kerr, Stenographer. Exhibit 106J. Aug. 12th, 1887. (Add to John A. Sherer's testimony.) At my request Damage Sugar Examiner Jno. A. Sherer met me at the custom-house. His evidence was presented to him ibr approval and signature. He made some nine changes in the testimony, thereby qualifying certain statements that he had made. Upon reference to the stenographer's notes, I find that the changes were not properly made, inasmuch as the statements made in that testimony were a transcription of the notes taken by the stenographer at the time the evidence was given. Mr. Sherer referred to the statement made by me, that he had given the name of the importing firm whose sugar he had handed to Dr. Sherer at the time that I was present in the laboratory engaged in conversation with Dr. Sherer, the chief chemist there. He asked me to give him the name of the firm whom he said the damaged sugars be- longed to. I stated that I would give the name to the Secty. of the Treasury. He said that he knew that I had said that he, John Sherer, had given the name of the owner of the damaged sugar to his brother, Dr. Sherer, for Dr. Baker, chemist in the general laboratory, had told him that at that time (last fall) I remarked to him in substance the above fact, which was not a fact, inasmuch as he did not«name the importer to Dr. Ed- ward Sherer. In connection with his interest in the manufacture of bronze powder, he said that he had engaged himself in that business at a time when he was out of the Govermt. employ and that while he was engaged in that business he was not an officer connected with the customs service. That although the suit for rental of the building used by the bronze powder manu- facturing firm was not brought until early in 1886 his connection with the firm was a year prior to that time, viz, in 1885. That no goods were made and sold or offered for sale. That he still is unable to re- member the court in which the suit was brought, neither did he remember the name of the judge before whom it was tried. He refused to state the name of the party who brought the suit; he said that his memory failed him in regard to the matter, as it was a disagreeable subject to him, and that I had no right to enter upon it again at the investigation. T. Aubrey Byrne, Special Treasury Officer. Exhibit 107. New York, July 14, 1887. Robert Rigney, examiner in laboratory, states as follows: I was appointed July 12th, '83, as examiner. My specific duties are the polarization of sugar samples. There are other polariscopists in the laboratory, among them Mr. Theodore G. Morse; he does not read any tubes, for what reason I do not know. Occa- sionally Ernest J. Chapman reads the tube; he is a messenger; he simply puts his ini- tials to his certificates of tests. Capt. Flowers, sampler, acting clerk, has made tests, more formerly than at the present. There are only two standard quartz plates in the laboratory belonging to the Government, that I know of, which read 99.1 and 96. Dr. Sherer, chief chemist, has stated to me that the value of the 99.1 quartz plate was cor- rect. I think he told me he had it tested by Dr. Moore. I never heard of a certificate having been given by Dr. Moore certifying as to the correctness of the marked value of the 99.1 quartz plate. The tube which usually carries the 99.1 quartz plate is labelled 99.1, so marked, I think, by Mr. Abbott, an examiner in our laboratory. Dr. Shere. • FRAUDS IN NEW YORK CUSTOM-HOUSE. 41 has told me that I had examined the quartz plate that had been sent to Boston, but I have no recollection of it. I have seen Dr. Sherer in conversation occasionally, but not recently, or within a year, with Sugar Broker Burt, in the passageways of the public store. I was at one time, immediately prior to my appointment as examiner in the labora- tory of the appraiser's store, in the employ of Sherer Bros., 122 Front st., this city. I do not know who constituted the firm of Sherer Bros. I received my check - for salary from Mr. John Sherer, which were signed either by John Sherer or Sherer Bros. I think they were drawn on the Marine Bank, recently failed. At the time 1 left there my brother, W. J. Rigney, and a boy were also employed. I have seen Mr. John Sherer there frequently, and Dr. Sherer there once. I believe Dr. Sherer was and is Turkish consul, and the Turkish consul's office was immediately adjoining the labora- tory of Sherer Bros., and connected by a door. He walked into the laboratory of the firm one day from the consul's office, talked with me a few minutes, and walked out. I assisted Mr. John Sherer in testing any samples of sugar that he brought in, but do not know if they were damaged samples or not. I think Mr. Burton Keyes is em- ployed by Sherer Bros, at their place, 122 Front st., and that he is a relative of Mr. John Sherer. I do not know that Mr. John Sherer or Dr. Edward Sherer are members . of the firm of Sherer Bros. I understood about three years ago that Dr. Gideon E. Moore was in charge of the business of the firm of Sherer Bros. I wish to qualify that by saying that he was the owner of the business. About a year ago I heard that Dr. Sherer was interested in the manufacture of bronze powder. I have heard it stated that Jas. S. Dale, of the 8th division, loans money to employes and receiving a bonus for the consideration. If a doubt arises in the mind of myself as a polariscopist when reading the test of a sample, when one-tenth of one per cent, (one-tenth of one degree) will change the clas- sification for duty, I take the lower classification. I have heard the remark made in the laboratory when sugars came in late or to be re-tested that I suppose this is some of Burt's sugar." From my experience as a polariscopist I freely state that I do not consider C. P. sugar as reliable when testing my polariscope as the quartz plate, which I consider more relia- ble than a sugar solution. Boneblack used in clarifying sugar solution will influence the solution to a greater or less -extent, and will lower the reading. Robert Rigney. Sworn and subscribed before me this 15th day of July, A. D. 1887. T. Aubrey Byrne, Sj)I. Treasury Officer. July 15th, 1887. Robert Rigney, continued. Mr. T. A. Byrne: Dear Sir: I desire to amend my testimony so as to show the time referred to in the paragraph commencing on line 12, page 2, and to state that the transaction referred to was in 1882, Also, in that portion of the testimony on page 2 which states that Dr. Sherer walked into the laboratory of the firm of Sherer Bros, from the consul's office. I think he came in from the passage-way of the building. Robert Rigney. Sworn and subscribed before me this 15th day July, A. D. 1887. T. Aubrey Byrne, Spl. Treasury Officer. July 15, 1887. Robert Rigney, continued: To-day S. F. Ball, employed in the laboratory polarizing sugars, asked me one ques- tion in regard to my examination in this investigation, which I refused to answer. We had other conversation on the subject of the investigation in general. I can't recall what the question was relating to this investigation that Mr. Ball asked me this morn- ing. Robert Rigney. Sworn to and subscribed before me this 15th day of July, A. D. 1887. T. Aubrey Byrne, Special Treasury Officer. ♦Erasure of s made only by witness ichecks). 42 FRAUDS IN NEW YORK CUSTOM-HOUSE. Exhibit 108. New York, July 15, 1887. Theo. G. Morse, examiner in laboratory, states as follows: I was originally appointed as messenger and detailed as clerk in second division Not. 1st, 1880. 1 was transferred to sugar laboratory Mar. 25, '84, and became an examiner about one year later. In October or November of 1886 Examiner Abbott, who was in charge of the laboratory during the absence of Dr. Sherer, informed me that I would not be allowed hereafter to read the sugar solutions in the polariscope as formerly, and that some one else would read them after I had fully prepared the solutions for reading. To this I demurred, and asked his authority, to which he replied that it was by Dr. Sherer's direction. Since then I have not read the polariscope. 1 know Jas. S. Dale, an employe" who carries messages and sugar samples between the sugar room and laboratory. I have heard that he loaned money to employes, and that he charged different rates to different persons. I have also heard that he charged very high rates in some instances. I think I have heard that he charges as high as ten per cent, a month. I have borrowed money of him, and think I paid him at the rate of either 5 or 10 per cent, a month. I have never visited the laboratory of Sherer Brothers except on one occasion, when, as I was leaving the laboratory of the Government about a year ago, Dr. Sherer asked me if I would take a note to his brother John, the damage sugar examiner, to No. 122 Front st. , which I did, and left the note with the young man in attendance who had charge of the office. In adjusting my polariscope I have used a quartz plate marked 96. I have seen another quartz plate marked 99. 1 ; although I have never used it. This is the one gen- erally used by Mr. Abbott. Dr. Sherer generally uses the one marked 96, although he uses the 99.1 sometimes. I have never seen any other quartz plates in use in the labo- ratory, other than those two mentioned, to the best of my recollection. I have known Ernest J. Chapman to read the polariscope for sugar classifications. Capt. Flowers is a polariscopist, but is detailed as clerk. Mr. Crumbie occasionally makes classifications by polariscope. I consider him a first-class reader. In reading sugar solutions by polariscope and where the difference of one-tenth would change the classification for duty in favor of the importer, we have been instructed by Dr. Sherer to give this benefit to the importer, and am under the impression that he stated that such action was by order of the Secretary. From my knowledge of matters in the laboratory, I believe this allowance to be the general rule. 1 have expressed in the laboratory occasionally my dislike of Sugar Broker Burt. I believe that Mr. Jas! F>urt and Dr. Sherer are friendly. A very common remark in the laboratory is, when we are worked after hours and tests and re-tests are asked for, that " I suppose these are some of Burt's sugars." A general impression prevails in the lab- oratory that Sugar Broker Burt receives more consideration in the laboratory than any other representative of sugar importers. Sometimes serial numbers of sugar samples coming to the laboratory on the cans con- taining sugar samples do not run consecutively, thus the number will jump, for instance, in one day from 3554 to 3558, and the missing numbers will come to the laboratory from the sugar- room the next day or in the next lot arriving. It is the custom in the labora- tory for Examiners Abbott and Landsmann, Ball, Rigney, and myself, to take the sugars out of the sample boxes, weigh and prepare them for the polariscope, the serial num- ber on the sample box being copied on slips prepared for the purpose, so that each oper- ator sees the sugar before it enters into solution, and their familiarity of the quality of the sugar is in their minds when they test it in the polariscope. From conversation overheard by me at times in the laboratory, I am of the opinion that a great deal of opposition exists towards this investigation. Dr. Sherer often vists the sugar-room, and explains certain sugar matters to Mr. Ram- sen, the examiner. Dr. Sherer is the Turkish consul. Turks have sometimes visited Dr. Sherer in the laboratory and transacted business with him. Theodore G. Morse. Sworn to subscribed before me this 15th day of July, A. D. 1887. T. Aubrey Byrne, Special Treasury Officer. New York, July 20, 1887. Theodore G. Morse, sugar examiner, U. S. laboratory, states as follows: Yesterday while on duty in the laboratory, and when Mr. Byrne's request for a quartz- plate was made known by the messenger, Patrick Doonan, Dr. Sherer not being pres- FRAUDS IN NEW YORK CUSTOM-HOUSE. 43 ent at the time, Examiner Abbott being in charge, inquiry was made as to where said quartz-plate was, and one examiner said, "Smiley, why don't you get it?" Smiley said I haven't got it, and the other examiners came over where Mr. Smiley was at work. After a lapse of some few minutes the messenger said, "Well, shall I go down and report that they can't have it? " when some one spoke up and said, "Well, hold on; we'll get it," and it was produced and handed to the messenger. I have particularly noticed Examiner Landsmann taking some part of his polariscope out at the close of the day's business — which is not only unusual, but has never hap- pened before to my knowledge, the presumption being that in case the laboratory might be visited by yourselves, that you would be powerless to use or read his polariscope. Further than this, the quartz-rjlates have always heretofore remained on the polari- scope's stands, but last night the quartz-plates were removed from their usual place, and, to the best of my knowledge, were deposited with the appraiser. From my observation in the laboratory, pending this investigation, I am convinced that every possible obstacle is being thrown in your way by the employes in the labor- atory, with a view to hinder and obstruct and possibly defeat the object of the investi- gation. I state further in this connection, that certain conversations which I have over- heard making light of the investigation, and their continued confidential talks as soon as any one of them returned from vour examination room, simply confirms me in the belief that you are not being fairly dealt with as investigating officers. The sugar ex- aminers in the laboratory above referred to are Abbott, Landsmann, Ball, and Rigney. Theo. G. Morse. Sworn to and subscribed before me this 20th day of July, A. D. 1887. T. Aubrey Byrne, Svecial Treasury Officer. Exhibit 109. New York, July 11, 1887. Alaric C. Morgan, acting messenger 8th division, states as follows: My duties are those of a messenger, but as a matter of fact I am performing clerical work. Mr. Dale seems to be, and I have understood is, sup't of openers and packers under Mr. Ramsen, in the sugar-room. I assist Mr. Trainer in making out the daily classification sheets, or rather, the copy that goes to Philadelphia. I do not see the invoices. He never allowed me to make out those that went to Boston. I use great care in making these copies from Mr. Traiuer's sheet. The unoccupied desk in the clerk's room of the ass't appraiser of the 8th division is principally used by Sugar Broker Burt when he visits the office, and he comes there daily. When he arrives he requests some one of us to go to the sugar- room adjoining and see if his notifications of tests are ready for him. If they are they are brought out to him. He then examines them, makes his notes, compares them with his own tests, and then makes his requests for re-tests and re-samples. He also looks at the invoice blotter, which I suppose contains the sugar invoices. I never saw any other importer look at this book. I never saw any one enjoy the same facilities in the division that is accorded Mr. Burt. It is tacitly understood among the employes of the 8th division that Sugar Broker Burt has powerful influence, which he can exert through his brother, the naval officer. Mr. Dreyfoos makes requests for re-tests daily. I heard Mr. Burt, in talking with Asst. Appraiser Tice, say that the tests hung up there exposed to view, and every one would show that those of Havemeyer & Elder were higher than any one else's, and that no favoritism had been shown him, and that any one that said so said what was false. This was about the time you were expected here to make this investigation. I have seen Mr. Burt and Mr. Trainer in conversation occasionally, and I should judge that it was private. Mr. Trainer used to always go in the sugar-room and get Mr. Burt's tests as soon as he arrived, aud was attentive to him; sometimes I have gone. For the past month Mr. Trainer has not been so attentive to Mr. Burt, and I said to him: "Oh ! you are not quite as polite to Mr. Burt as you were, andare shoving himoff on to me, are you?" but he made no reply. And I have noticed that since this investigation commenced, Mr. Trainer has not been so attentive to Mr. Burt as he has been heretofore, while I have been more attentive to him, from the fact that when Iwould see that Mr. Trainer would not go into the sugar-room after his tests I would do so. The impression forced upon my mind from surrounding circumstances is that Sugar Broker Burt could generally have his requests granted. I have heard Mr. Burt say 44 FRAUDS IN NEW YORK CUSTOM-HOUSE. sometimes that he was in no hurry for an invoice to be written up, but I did not know what particular invoices he referred to. Alaric Cecil Morgan. Sworn to and subscribed to before me this 11 day of July, A. D. 1887. T. Aubrey Byrne, Special Treasury Officer. N. Y., July 12, 1887. I have heard Examiner Bowne and Sugar Broker Burt in loud controversy occasionally in regard to disagreements of tests, and have seen them almost directly afterwards in apparently close conversation together in the hall-way. The impression might naturally be left on the occupants of the ass't appraiser's office that the loud tone used by them was for effect and unnecessary. Alartc Cecil Morgan. Sworn and subscribed to before me this 12 day of July, A. D. 1887. T. Aubrey Byrne, Special Treasury Officer. Exhibit 110. New York, July 15, 1887. Gottpield Landsmann, examiner and polariscopist in laboratory, stated as follows: I am 30 years of age; arrived in this country 5 years ago, in-1882. I am naturalized as a citizen of the United States. Entered the laboratory in 1883, through the interpo- sition of Sp'l Ag't Ayer and Dr. Sherer. I obtained my knowledge in testing sugars in Austria. I tested 4 years by polariscope there, using Scheibler's polariscope. Mr. Abbott is in charge of the laboratory in absence of Dr. Sherer. My original sal- ary was $1,200 per annum, and was advanced to $1,800 about 8 mos. ago, as was alsp Mr. Rigney. I occasionally test my polariscope by the quartz plate. As a rule it does not vary. I generally use the quartz plate mounted and marked 96°. There is another quartz plate in the laboratory marked 99°. 1. That is all the quartz plates we have in the laboratory. I have heard that the 99°. 1 quartz plate is not in the laboratory now. I have heard that Mr. Dale, a messenger, loans money to the employes. I heard Mr. Morse once remark that Dale had got much interest out of him. About two or three years ago I went to Dr. Sherer's down-town laboratory, in Front st., to try and get a friend of mine a position in Dr. Sherer's laboratory, as I heard he wanted a man. I took my friend down to their office and found Mr. John Sherer there. I introduced him to Dr. Sherer at the U. S. laboratory, and he told me to take him down town to his office there. The young man did not get the position, as Dr. Sherer told me lie had engaged Dr. Shreiber. I knew Dr. Shreiber, and he remained in Dr. Sherer's employ about half a year. I do not know that Robt. Rigney kept his position in Dr. Sherer's laboratory a very long time. I know that Rob't Rigney's. brother, who is a chemist on Wall st. to-day, was employed in the laboratory of Dr. Sherer, Front st. G. Landsmann. Sworn to and subscribed before me this 15th day of July, A. D. 1887. T. Aubrey Byrne, Special Treasury Officer. July 18, 1887. Messengers Smiley and Cole mix the sample sugars, breaking up lumps, &c, in a mortar, under my supervision; then I weigh out the proper quantities (13,024 gr.). I make«this into a solution, pour it into a tube, and place the tube in my polariscope. Examiner Abbott and myself usually work together, and as we always fill a duplicate tube, he reads one and I the other. If, for instance, I read my solution 95°. 1 and he reads his 95°. 3, then 95°. 1 is the proper test for classification, because it is the lower of the two tests, and because the two tests do not disagree more than 3-10 (three-tenths) of one per cent. If I am perfectly satisfied that the sugar tests 95°. 1, then I report it 95°. 1. As two polariscopists always read together on the same sample, if one of us reads lower than the other, then according to the regulation the lower of the tests is accepted as "the test for classification," providing that the variance bet wean the two (2) tests does not exceed 3-1 0th of one per cent. When I am testing sugar one-tenth (1-10) of a degree is of just as much importance to FRAUDS IN NEW YORK CUSTOM-HOUSE. 45 me as nine-tenths (9-10ths) would be. In other words, according to the indications on the scale, of ray polariscope, so I report the test. I know of no such thing in my work as favoring the importer; I never allow a doubt in my mind to exist as to whether l-10th of a degree should go on or off. If my partner (polariscopist) should persist in reading 3-10ths low, then the test for classification would be lowered, but, if such should be the case, I would take pains to ascertain the cause of his low reading or my high reading. In clarifying sugar solutions with bone-black, high centrifugal sugars would be more affected than low-grade sugars, but it is only used for low-grade sugars. If the color of the solution with some sugars is too dark, I could not obtain a proper test without bone-black. It is necessary to use subacetate of lead with great care when clarifying sugar solu- tions, for according to the kind of sugar being tested, the lead would influence the test either up or down. I know I have never seen a sugar broker or importer in the sugar laboratory. I never saw Brokers Burt or Dreyfous in the laboratory. I have no speaking acquaintance with Broker Burt. One day I saw Mr. Burt in the hallway; I asked who he was, and was informed. I know that Mr. Burt is Havemeyer's broker. I was told that Dr. Sherer is the Turkish consul. I have seen Dr. Sherer in conver- sation with dilferent persons, foreigners, in the office of the laboratory. Since last October (1886) Mr. Ball, sampler, has been making the comparative tests of sugar in the "dry substance" exchanged between New York, Phila., San Francisco, Portland, and Boston; prior to that time, all of us in the laboratory assisted in making these tests. As a rule, the tests of sugar made at New York and Philadelphia most nearly agree. Requests for "verifications" and "re-tests" from the sugar-room are sent to the lab- oratory; they are received by Dr. Sherer and Messrs. Abbott, Rigney, Ball, and myself and Morse also do the work. Mr. Ball, sampler, but acting polariscopist, attends to the testing of damaged sugars. Alfred Flowers, an attache of the laboratory, assists sometimes in preparing the sugar solutions for testing. I consider the use of "C. P. (chemically pure) sugar " a correct one in ascertaining the true value of a quartz plate. It is my custom every second or third day to use the 96° standard quartz plate, to see if my polariscope is in proper adjustment, and my instrument very rarely changes; but if I should find that it is too high, by two-tenths (2-10ths) for instance, I deduct 2-10ths from all my readings that day, and if too low, I add to my readings. I have heard the employes in the laboratory say, when sugars came in to be tested just about 3.30 o'clock in the p. m. that " this must be some of Burt's sugars," but I am satisfied that the men make this remark in jest. In busy times we test about 100 sam- ples per day. G. Landsmann. Sworn and subscribed to before me this 18th day July, 1887. T. Aubrey Byrne, SpL Treaswy Officer. New York, July 30, 1887. G. Landsmann, examiner, further states as follows: I was born in Prague, Austria, in 1857, came to the United States (declines to make any statement relative to the matter of his arrival in this country or as to his naturali- zation papers). Q. Are you a naturalized citizen of the United States? — A. If you will prove to me that you are authorized to make this examination by order of the Secretary of the Treas- ury, I am ready to answer. Q. Did you read the letter handed to you dated July 1st, addressed to the officers and employes, by the Secretary of the Treasury, and handed you now for identifica- tion? — A. Yes, sir. I still decline to answer the question as to whether I am a naturalized citizen of the United States or not. Q. Did you not promise to bring [me your naturalization papers this morning ? — A. Yes, sir. (}. Why do you now refuse, and with whom did you consult in regard to it? — A. I reconsidered it. I asked this morning the advice of Dr. Sherer and of Appraiser Mc- Mullen, if in case you asked me for my naturalization papers, what I should do, and they told me to follow my own judgment. 46 FRAUDS IN NEW YORK CUSTOM-HOUSE. Q. On what ground did you refuse to furnish your naturalization paper ? — A. On the ground of the Secretary's letter referred to. G. Landsmann. Sworn and subscribed to before me this 30th day of July, A. D. 1887. T. Aubrey Byrne, Special Treasury Officer. Exhibit 111. New York, July 22, 1887. William C. Jacobs, examiner 8th division, states as follows: I was originally appointed as messenger in the sugar division about 11 years ago, and made examiner in July, 1885, previous to which time I had been acting as clerk in the sugar-room, having passed civil service and appointed to a $1,200 clerkship. In my ca- pacity as clerk I had charge of the test-book and invoice blotters. I received the in- voices from Col. Osborne, late chief clerk of the 8th division. It olten occurred that in- voices were detained in the sugar-room when requests for re-tests and re-samples were made by sugar brokers; sometimes we detained them on our own responsibility when we thought the test was too low. I received oftentimes these requests from brokers for the re-tests of certain marks when they were dissatisfied with the classification. I can not find any authority in the Treasury sugar sampling regulations for granting re- tests of sugars on request of importers or their brokers. I never saw Sugar Broker Burt in the sugar-room but once. I did convey notices and messages from the sugar-room to the asst. appraiser's room, and carried back requests for re-tests when handed to me by the asst. appraiser or his clerk. I have also carried such requests to the sugar-room when handed me by brok- ers. I have heard (when there was a telephone connection in the asst. appraiser's room with the central main office connection) telephone messages from sugar brokers asking for a re-test of a certain mark, stating at the same time that their request had been mailed for same. I then notified the asst. appraiser or examiner in charge of the message. I think I have received certificates from the laboratory of "verifications," ? nd I shall try and produce them. In noting ' ' re-tests " on a certificate of verification is a clerical error. I think brokers have asked for verifications, and they have been granted no doubt, as I see no reason why they should not be. Sometimes, at the request of Exam- iner Remsen, and when I was clerk, I wrote in the test-book the classifications in red ink, and called them off to Examiner Remsen while he put them on the invoice. 1 sometimes carried sugar samples to the sugar-room. I have carried test reports from the laboratory to the sugar-room. Sometimes, when I am at work in the sugar- room, I receive telephone messages from the examiners on their districts asking if certain car- goes on which re-samples had been called if we were through with them, as the houses, meaning the refineries, wished to melt the sugars, or the warehouses wished to store the goods. I then made inquiries of Mr. Remsen, and notified the inquirer that if the re- sample had been taken the sugars could be melted. The importers sometimes withdraw their requests for re-samples, and thereupon we have ordered the re-sample off, unless we feel the Government has not received its just dues. Written requests for re-tests were, when I was clerk, always filed away, and undoubtedly some of them were lost. I spoke to Mr. Hay about keeping these written requests, and he said to keep them, and thought this was a good idea. Once, as well as I can remember, the fact was brought to my attention by Examiner Bowen that certain samplers used their sponge too wet, and that it must be stopped. Oftentimes hogsheads of sugar are sampled by merchants' samplers before U. S. samples are taken. Sometimes we used to put letters instead of serial numbers on sample cans sent to U. S. laboratory for test, the letters representing the general cargo of sugar while the serial numbers represented the sample packages. This was done for comparison. Sometimes when I have gone to draw samples from re-sample packages, such re-sample being ordered by the importer or broker, I have found them melted up. William C. Jacobs, V- S. Examiner. Sworn and subscribed before me this 22d day of July, 1887. T. Aubrey Byrne, Special Treasury Officer, FRAUDS IN NEW YORK CUSTOM-HOUSE. 47 Exhibit 112. New York, July 26, 1887. P. A. Hepburn, examiner, states as follows: I was appointed examiner in the 8th division, Aug. 1, 1885. I have not found anything in my experience as an examiner that might be properly termed designedly irregular. I am particular to see that my samplers wring their sponges dry before using them on the trier, and I am constantly watching that thing. Examiner Bowne once called my attention to samples that had the appearance of having too much water used upon the samples. 1 have never had my attention called to the finding of a fraudulent stencil-plate, al- though I understand there was one such found. I have repeatedly protested as to the maimer in which sample packages were laid out preparatory to sampling, and have had the matter corrected. Sometimes I have instructed my samplers to break down the pile and take out certain sample packages and verify the mark. Sometimes I find that nier- chaut or brokers' samplers have drawn samples from the same packages that U. S. sam- ples are to be drawn from, but before they have been laid out by the weigher. Sometimes I have insisted that the refinery people shall lay out Iloilo, Cebu, and Manila sugars, mark by mark, when found, although the collector's permit to land such sugars has indicated no mark. By insisting upon this, the Government receives its proper revenue. And in all such cases, when attention has been called to it, the rem- edy has willingly resulted. Samplers carry keys to the sample-boxes as well as the examiners. The same keys open the district office doors; we have a different key entirely to open our closets in the district offices. In the morning I give the sampler the key to the closet door; which is always returned to me before night. I never heard it proved as a fact that sample-closets had been tampered with, although I knew the closets were especially examined as to their security, and the locks changed, I think, three times within the last two years. I think the Government receives all the duties it is entitled to upon sugars. Peter A. Hepburn. Sworn to and subscribed before me this 26 day of July, A. D. 1887. T. Aubrey Byrne, Special Treasury Officer. Exhibit 113. New York, 21st July, 1887. Benjamin H. Hinds, special agent, examined under oath, said: I was appointed by Secty. Manning, to the appraiser's store about Novr. 15, 1885. I act in a dual capacity, reporting at the same time to Appraiser McMullen, and making my reports to the Secty. of the Treasury through the div. of special agent. The bulk of my work is acting under orders of Appraiser McMullen. I have dictated letters for Mr. MeM alien when he would tell me what he wanted to say, giving me the idea. I have not dictated or had anything to do with any answer that came to you in answer to letters addressed to Mr. McMullen. I may have seen them, but I know I have not dictated or written any answers that came to you from him. No irregularities in sugar at this port have ever been brought to my notice. Furthermore, I never had any reason to suspect that any existed; if they have, it is something that I have no knowledge or suspicion of. I have seen two men around here that I was told were sugar brokers; one man I don't know and one I do know. I don't know as I ever saw Broker Dreyfoos in the office of the appraiser. Since your performance here I asked who is this man Dreyfoos. I have seen Broker Burt two or three times a week around the building. I have seen him a good many times in the appraiser's office. It is not within my knowledge that he makes daily calls upon the appraiser. He comes in like anybody else. I never heard him talk about sugar. I presume he attends to that in the 8th division. I never saw a letter in the appraiser's office signed by the collector of the port of Bos- ton, endorsed by the collector in New York, in reference to the investigation in sugar. I suppose I talked to the appraiser relative to this investigation a hundred times, but I uever had a conference with him as to what would be advisable to say. I have not written a letter nor received one from Mr. Martin in six months. I address my official reports to the Sec't'y of the Treasury. 48 FRAUDS IN NEW YORK CUSTOM-HOUSE. I have never heard a word of what you have been doing through any departmental source. I never saw Mr. Martin in Baltimore in my life. I was not there on the 2nd of July. I have not been in Baltimore, except to pass through it, in five years. On the 1st of July I was in Philadelphia; I went in the morning and came back in the evening. I had no conference with Mr. Tingle about this investigation further than some remark about the investigation going on here; I don't remember what it was. I don't think I talked sugar matters with Special Agt. Tingle in this world, fori don't know anything about them, and I don't believe he does. Irregularities in sugar matters have been brought to my notice by the appraiser. I remember to have been twice, perhaps three times, at the customs house: The first time was when Examiner Bowne and Mr. Examiner McElwee had got into a snarl in Jersey City over the laying out of samples of bag sugar. I think about a lot of bag sugar they could not get the bass laid out in proper shape; at any rate, they were not satis- fied in the manner in which the weigher had given them the samples. They claimed that the weighers had given them the samples from one part of the cargo and did not heed the marks. For instance, if they required 120 bags, so many of one mark, so many of another, they were given 120 bags irrespective of any marks, and they were not satisfied to sample it in that way, and refused, and they came here and re- ported to Mr. McMullen, and he directed me to go down and see the authorities at the custom-house. I reported the matter first to Mr. Trellow, and went and saw Mr. Blatchford, and Mr. McElwee and Mr. Bowne was with me. The result of which was that Mr. Blatchford gave some orders; it is a year and a half ago. I did not consider the matter of sufficient importance to report to the Department, for it was a matter for the surveyor to attend to and not the Dept., and it was attended to, and the result was satisfactory to Mr. McElwee and Mr. Bowne. They told me so; I forget which one. Mr. Bowne told me in substance that it was satisfactory. Q. (By Mr. Byrne.) Yon consider, then, that your duties as special agent here con- nected with the appraiser's store is to take up a matter — [interrupted]. — A. You are investigating sugar and I ha\e been answering your questions and I don't care whether they satisfy you or not. If you have been sent here to investigate me show me your authority and I will answer you. I will answer your questions as to sugar, but whether I do this or don't, I don't think it is your business. Q. I ask you whether in the discharge of your duty — [interrupted]. — A. You must consider that a person who has been for 18 years in the customs is not going to take a rebuke from a man who is not an officer at all. I report to the appraiser the result of any investigation I make into sugar irregularities, hut do not feel that I am bound to make a record of them to the Department unless they are of sufficient consequence to go to the Department; but if there were any gross abuses here I should feel it my duty to report them. I have never had any knowledge of fraudulent stencil-plates. 1 do not feel that my duties are entirely subordinate to the appraiser. As I said, I am acting in a dual capacity. When the appraiser has work to do I do it; when the Department has work to do I do it. It I knew that the regulations relating to sampling and appraising of sugars was being violated I would at once report it to the appraiser or to the Department. I should feel it my duty, in the first place, to endeavor to correct it. Failing in that, I sliould feel it my duty, in the first place, to endeavor to correct it. Failing in that, I should feel it my duty to report to the Secty. of the Treasury, provided that it was a violation that involved any principle or amounted to a violation of the regulations. I can conceive things in the regulations that are non-essential, that were started on some misconception, that have been found to be utterly useless and worse than useless, and that perhaps had been dropped by common consent all round. I am speaking gen- erally now. I say that the violation or neglect to enforce any regulation that had any meaning or value to it I should consider a subject to engage my attention at once, and would so notify the Department. On the subject of the sampling and testing of -sugars I have perhaps less knowledge than I have about any other branch of the custom serv- ice, for the reason that it is in the hands of specialists, and they have a set of regula- tions to go by which are peculiarly marked out for that branch of the service, and ap- plied to no other. I have no doubt but that Philadelphia and New York" test by po- lariscope sugar lower than Boston. I suppose brokers come here to attend to their business. The Sect'y of the Treasury ordered shortly after the promulgation of these regulations that the classification of sugar instead of being' posted at the custom-house should be posted at the appraiser 1 s store or office, which I consider a public place, as any man that has any legitimate business in any part of this building can have a pass to go there; and my opinion is that the regulation is carried out when the daily indication of the classi- fication of sugar is made in the asst. appraiser's office. I am aware that there is a regulation which requires that classifications of sugar shall FRAUDS IN NEW YORK CUSTOM-HOUSE. 49 be exchanged between certain ports. It has never been brought to my notice that they were not. The foregoing report of my testimony is substantially correct. B. H. Hinds, Spl. Af/t. I, Henry W. Kerr, being sworn, certify that this is a correct transcription of my stenographic notes of the conversation. Dated at New York, 22d July, 1887. Henry W. Kerr, Stenographer. Sworn and subscribed to before me this 22d day July, A. D. 1867. T. Aubrey Byrne, Special Treasury Officer. Treasury Department, Office of the Secretary, Washington, D. C, Oct. 30, 1885. B. H. Hinds, Esq., Special Agent, appraisei-'s stores, New York, iV. Y.: Sir: From and after the 1st proximo your official station will be the appraiser's stores, New York City. Your reports will be made directly to the Department. Very respectfully, D. Manning, Secretary. Treasury Department, Office of the Secretary, Washington, 1). C, Deer. 9, 1885. B. H. Hinds, esq., Special Agent, New York, N. Y.: Sir: Referring to Department's letter to you of the 30th of October last, in which jour official station at the appraiser's stores, New York City, was authorized, you are hereby directed to report for duty to Lewis McMullen, the appraiser. Respectfully, yours, D. Manning, Secretary. Exhibit 114. July 6, 1887. F. W. Howard, under oath, states: I have been connected with the appraiser's store since May, 1885, as private secretary to the appraiser. I decline to answer as to what influence was brought to bear to secure my appointment, other than that I was appointed to my position by Mr. McMullen. I am in a remote degree related to the wife of Mr. Jas. Burt by marriage. I do not know that Mr. Jas. Burt had anything to do with my appointment. Mr. Jas. Burt has not been in the private room adjoining that of the appraiser more than three times to my knowledge since I have been there. I have seen him in conversation with the appraiser. I have never seen a sugar invoice. I have never seen a laboratory certificate of polari- zation. Have not the slightest idea what business brings Mr. Jas. Burt to the apprais- er's office. I have been in the laboratory on official business. I have had conversation with officials relative to the pending investigation in a casual way only. They were Stenographer Bassett, Chief Clerk Kose, the appraiser [2], and Special Agent Hinds. [3] I have upon one occasion written an official letter for the appraiser's signature, which was dictated by Special Agent Hinds, and have [4] also occasionally heard Special Agent Hinds dictate letters to Stenographer Bassett for the appraiser's signature. 1 am a member of the board of civil-service examiners for this district — the customs district of New York — and my only knowledge of matters relating to sugars is that gained in the questions put to applicants for position in civil-service examinations. 1 do not know to what you refer when you speak of a serial number in connection with sugar. I do not know what sugar-importing (inns Mr. Jas. Burt represents. I have known him to speak to for fifteen years. Mr. Burt's wife is a cousin of my wife. Mr. S. Seabiny Guion, the examiner in the ninth division, is a brother-in-law of Mr. Jas. Burt. I con- sider myself an occasional visitor at Mr. Burt's house, although I call but very seldom, S. Ex. 123 4 50 FRAUDS IN NEW YORK CUSTOM-HOUSE. and have never talked business with him there or elsewhere. It was in my room that the appraiser asked Mr. Moore to show him his authority for assisting Mr. Byrne in the sugar investigation. My opinion, as I had formed it prior to my examination, was that this investigation was being carried on in a high-handed manner, although 1 havehad but little conversation with any one on the [5] subject. The lines numbered 1,2, 3, 4, and 5, in the margin were erased and interlined before I signed this statement. Changes made as follows: In No. l,one word erased; in No. 2, three words erased; in No. 3, one word erased in three words interlined; inNo. 4, one word erased and one word interlined; in No. 5, live words erased. F. W. Howard. Sworn and subscribed to before me this Gth day of July, A. D. 1887. T. Aubrey Byrne, Spl. Treasury Officer. New York, July 6, 1887. I, F. W. Howard, private secretary to the appraiser of the port of New York, upon being duly sworn by Special Officer Byrne, and having read the clause in the Secretary's letter of July 1st addressed to officers and employes of the appraiser's store, refuse to make any promises whatever, as I desiie to retain my freedom of speech. F. W. Howard. H. A. Moore, Special Agent. Witness : T. Aubrey Byrne, Sped. Treaty Officer. New York ; July 8, 1887. Mr. Howard, upon being asked by Mr. Byrne whether or not any officer of customs or employe connected with the U. S. appraiser's store or custom-house in New York City has approached him or asked him any questions relative to his examination before him on the Oth instant relating to sugar matters, says he thinks it an improper ques- tion, and one that Mr. Byrne has no right to ask. and refuses to answer. F. W. Howard. Within five minutes of Mr. Howard leaving the examination room, Spl. Agt. Moore visited the appraiser's office to request the attendance of' Mr. Tice. The appraiser was talking in a confidential manner with Mr. Howard in a corner of the room, Special Agents Tingle and Hines being seated in the same room. H. A. Moore. July 6, 1887. Exhibit 115. New York, July 13, 1887. Alfred Flowers, sampler, detailed as clerk, and also engaged upon the polarization of sugars, states as follows: I was appointed in 1879. I am employed in the laboratory, and visit the sugar- room almost daily. 1 transmit messages from the laboratory to the 8th division some- times, and have returned at times with requests for re-tests and verifications of sugars already tested. I have seen Mr. Burt in the sugar-room of the 8th division many times, up to within a few months, when the newspapers had something to say about the Burt inlluence at the appraiser's store. 1 have not seen him there since. 1 have seen him in the laboratory a few times in conversation with Mr. Sherer. I know that Dr. Sherer, Special Agent Ayer, and Mr. James Burt are quite intimate. Dr. Sherei has re- marked to me quite often that he had just seen Burt, who said we were reading sugars too high. I told him, Sherer, that I guessed he would have to stand it. The effect of Mr. Burt's remark upon Dr. Sherer, as evidenced by observation, was that Dr. Sherer was afraid of Mr. Burt, either through his influence or that he might lose his patronage at his, Dr. Sherer's, place down town at No. 122 Front st., where he runs a sugar laboratory for testing sugar for the trade. This laboratory is run, as I have been told, by a relative of his, but I believe that the profits of the business are shared by Dr. Sherer, the chemist, and his brother, John A., who is damage examiner of sugar at the appraiser's store. FRAUDS IN NEW YORK CUSTOM-HOUSE. 51 I am led to the opinion from the fact that under Secretary's Folger's administration of Ihe Treasury Department, the man who managed their business, Mr. Wm. Kigney, de- manded to be taken into partnership with them, which they refused. Kigney then leit them and started a laboratory of his own at 109 Wall st., thus compelling John A. Sherer to resign his position at the appraiser's store as damage examiner in order to look after their private business at their laboratory, No. 122 Front st. After about two months he managed to get the firm's business in hand, and placed an employe there to represent them, alter which he was again appointed damage examiner at the appraiser's store at an increase of salary by Appraiser Ketchum, which position he now occupies. I have deposited with the People's Bank, corner Cabal and Thompson streets, this city, at various times other than the last or first of the month, sums of money to the credit of Dr. Edward Sherer as high as five hundred dollars at a time, amounting to within the past year and a half to about seven thousand dollars. As his salary is about $2,500 per year it would only amount in a year and a half to about $3,700. Aside from this ac- count he and his brother John had an account in the Marine National Bank, which failed a couple of years ago, wherein they lost close to five or six thousand dollars, as he told me. From these facts I am led to believe that his down-town laboratory renders him a handsome income, and the natural presumption being that on account of his position as chief chemist at the appraiser's store they, the importers, would, for obvious reasons, patronize the firm of Sherer Brothers. Damaged sugars have been tested by Examiner Sherer at their down-town place of business. Chemists Gottfried, Laudsmann, and Kobt. Kigney, employed in the U. S. laboratory, have informed me that after office hours they have, at the request of Dr. Sherer himself, gone to the laboratory of Sherer Bros., at No. 122 Front st. , and assisted in testing merchants' sugars for the firm. I told them they had better be careful or they might be discharged, which, I think, caused them to stop it, or at least 1 was never informed by them of their continuance of the practice. Dr. Sherer once told me that Sugar Broker Burt requested him not to allow Chemist Abbott to test his sugars. This request was complied with for about ten days, and we were consequently overworked, while Abbott had nothing to do. I have often seen Mr. Burt and Dr. Sherer in close conversation in the hallways of the appraiser's store. Dr. Sherer is the Turkish consul, and Turks come to the laboratory to attend to busi- ness with him, and it has been one of my duties to make pen-and-ink copies of letters for Dr. Sherer relating to the business of his consulate. Recently Dr. Sherer was sued in the city court of New York for rent of a building which he had hired in Brooklyn for the manufacture of "bronze powder," and lor de- fense took advantage of the fact of his being Turkish consul to prevent collection of the debt. Dr. Sherer informed me of this himself, and also informed me that his brother, John Sherer, and another man was interested with him in the manufacture of this " bronze powder." I have seen and examined some of this powder in the office of the laboratory, as shown to me by Dr. Sherer, who told me he made it and sold it. Mr. Pratt, I think, of Koslyn, L. I., was the partner in the concern. Mr. Morse, a polariscopist in the laboratory, is not allowed at the present time to read polaiiscope by order of Dr. Sherer. I know that Mr. Morris's eye-sight is as good as that of any employe in the laboratory, and as fully capable to read the polariscope as any one there. As'the clerk of the laboratory, and being in a position to observe closely, I am fully convinced that every effort has been and will be made to obstruct the course of the pend- ing investigation and the intimidation of the employes of the laboratory. Alfeed Flowers. Sworn and subscribed to before me this 13th day of July, A. D. 1887. T. Aubrey Byrne, Special Treasury Officer. New York, July 15, 1887. Alfred Flowers, further examined: Yesterday I returned to the laboratory after leaving the investigation-room, and as I was passing in I saw Dr. Baker and Dr. Sherer in conversation, and heard Dr. Sherer say as I passed that 1 would not last longer than this investigation, as I should then be dis- charged. I said nothing and passed on. To-day I saw Sugar Broker Burt with his head out of the window in the passage way adjoining your investigation-room, trying to look into your room, and it seemed to me 52 FRAUDS IN NEW YORK CUSTOM-HOUSE. he was trying either to overhear anything that might he said in your room or trying to see who was there. His action was noticeable. Alfred Flowers. Sworn to and subscribed to before me this 15th day of July, A.D. 1887. T. Aubrey Byrne, Spl. Treasury Officer. Port of New York, Appraiser's Office, 402 Washington st., July 18, 1887. Alfred Flowers, continued: About the time Dr. Moore tested the 99.4 quartz plate I saw it in its mounting in the laboratory. Since then I have not seen it till the 16th instant. I have examined the edges of the tube (its mounting) and find that it shows signs of having been in daily use for two or three years. This use has not been at this United States laboratory. Alfred Flowers. Sworn and subscribed before me this 18th day of July. T. Aubrey Byrne, Spl. Treasury Offieer. Exhibit 116. New York, July 25, 1887. John Howard Wainwright, examined. In U. S. laboratory, Dr. Battershall's division. On Saturday I was in Dr. Sherer's office, when he requested me, in case I was called belbre you, to repeat a conversation previously held between us relative to this investi- gation, but I can not now remember its particulars. I have seen Turks, or persons whom 1 took to be Turks, in the laboratory, and upon one occasion 1 was called upon by some one from the laboratory to act as interpreter and to inform Dr. Sherer of his desires, and which did not relate in any way to U. S. Government business. On Saturday last, while in conversation with Dr. Sherer upon the subject of this in- vestigation, he made the remark that you (Mr. Byrne) and Special Agent Moore were a couple of damn scoundrels or words to that effect. This remark was made so that Act- ing Clerk Flowers could hear it, and so that others might have heard it. J. H. Wainwright. Sworn to and subscribed before me this 25th day of July, A. D. 1887. T. Aubrey Byrne, Special Treasury Officer. New York, July 25, 1887. Alfred Flowers, clerk in U. S. laboratory, states as follows: On Saturday last Dr. Sherer had aconversation with Examiner Wainwright in Dr. She- rer's office, and where my desk is located. In the course of their conversation I heard Dr. Sherer say to Mr. Wainwright that you (Mr. Byrne) and Special Agent Moore were a couple of damn scoundrels. Alfred Flowers. Sworn to and subscribed before me this 25th day of July, A. D. 1887. T. Aubrey Byrne, Special Treasury Officer. New York, July 28, 1887. Byron D. C. Foskett, examined, 8th division, states as follows: I was appointed examiner of sugars in July, 1885. As to Far. 3, I sometimes find that the sample packages are not properly laid out, the cause of which is attributed to the operations of merchant samplers and others. Under these circumstances the U. S. samplers can not draw their samples properly. As to Par. 7, I have never seen Sugar Damage Examiner Sherer making examination of sugar or cargo, but have seen him in warehouses and refineries making inquiries in re- gard to same. I never detailed a sampler to draw samples for examkier of damaged sugar, Mr. John Sherer. As to Par. 9, the trier has to be inserted in the package several times as a rule before sufficient sugar is drawn to fill the sample box. FRAUDS IN NEW YORK CUSTOM-HOUSE. 53 As to Par. 10, samplers and examiner carry keys to the sample chests; sometimes 1 send a memorandum instead of a letter of transmittal when I have not Department form at hand. As to Par. 11, in reference to red plugs, it is not enforced at this port. As to Art. 13, I do not find that sugars in bags, hogsheads, and other packages are al- ways properly laid out mark by mark, necessitating the breaking down of piles of sam- ples in order that the samples may be properly drawn and entailing an unnecessary amount of labor and delay in the sampling. Oftentimes Iloils, Cebus, and Manila sugars are permitted, on collector's order, to be weighed as without mark, although marks are in the cargo, necessitating the obtaining on the part of the appraiser's department in formation from the importers relative thereto, in order that classification can be properly made. I oftentimes find damaged sugars in the piles of samples. As to Par. 15, it is not complied with. Sometimes samples are placed in such dark places that a lantern is necessary to marks and,stencilling. Sometimes we find samples in sample piles that are not stencilled " U. S. sample." Sometimes I found low grade and high grade sugars mixed in the sample piles as of the same mark. As to Par. 17, sometimes we have sent into the appraiser's store samples in paper, large tin boxes being not available. As to Par. 19, this paragraph is not complied with. As to Par. 24, 1 permit the useof a damp sponge, outof which no water can be squeezed. I do not remember the day that you accompanied me to theHavemeyer & Elder refinery, and that Sampler Flocken was using a sopping wet sponge on his trier while engaged in sampling. I did not know that you were a Government officer at that time. As to Par. 26, this paragraph is not altogether complied with. As to paragraph 27, I never heard or knew of this paragraph and section of the Re- vised Statutes being enforced. As to paragraph 28, I have sometimes found on directing my samplers to draw sam- ples from sample and re-sample packages, that they have been melted up. This has happened where re-sampling has been ordered by the 8th division. I have sometimes, when on duty at the refineries been asked by the refinery people to telephone to the 8th division and inquire whether it was necessary to hold certain sam- ples and re-samples any longer in order that they might be melted up, and permission has been telephoned to me from the 8th division that they could be melted up. I succeeded Examiner Davis in charge of district No. 5 some months ago, and upon in- quiring for the key of the sample-closet, I was informed that Sampler Twamley had lost said key by accident overboard. I made no further inquiry in the matter, and do not know that any other official inquiry was made relative thereto. My attention was brought to the fact that certain samples of sugar were too wet, and was cautioned by Examiner Bownein relation thereto, although the occasion of the wet samples was not on my district. I consider Examiner McElwee as an able and competent examiner, and a mau of un- impeachable character. When I was on duty in the 8th division, I have frequently seen Broker Burt in the office of said division, and on one occasion saw him in the. sugar-room talking with Ex- aminer Remsen. There was no sugar-crushing machine on exhibition that day in the sugar- room. I am familiar with the sugar-sampling regulations, and in them I have never seen any authority for granting re-tests on the request of importers or sugar brokers. When sugars that Broker Dreyfoos is interested in are being sampled, he or his sampler, John Hetherington, are generally around. Dreyfoos is quite prone to make suggestions in regard to the sampling of his sugar. He often has conversations with the samplers, the nature of which I don't know. Sometimes he talks with them in my presence. I would not call the place in the assistant appraiser's division, where the classifica- tion sheets of sugar are posted, a public place. I never saw a public statement of dam- age allowance since I have been examined. Byron D. C. Foskett. The sugar- room of the 8th division was my headquarters from June 15 to July 15th, instant; during that time I have frequently seen Clerk Trainer copying from the in- voices, alter classification had been noted on the invoices by the examiner, the said classific ations on the daily tabulated statement of classifications. Previous to the time above mentioned, as I was informed by Examiner Bowne, it was the custom to copy such classification and laboratory tests from other records than the invoices themselves. Byron D. C. Foskett. Sworn and subscribed to before me this 28th day of July, A. D. 1887. T. Aubrey Byrne, Special Treasury Officer, 54 FRAUDS IN NEW YORK CUSTOM-HOUSE. New York, July 29, 1887. Byron D. C. Foskett examined, further states in reference to his testimony of yes- terday, July 28, wherein he stated that he saw Sugar Broker Burt in the sugar-room, as follows: I remember the occasion of his presence there distinctly, as he was having an argu- ment with Examiner Remsen in regard to certain clayed sugars, he, Burt, contending that the lumps in said sugar should be taken out before the sample was sent to the lab- oratory, and that only free sugar should be sent, while Examiner Remsen held that the sugar should all be mixed up together. B. D. C. Foskett. Sworn and subscribed to before me this 29th day of July, A. D. 1887. T. Aubrey Byrne, Special Treasury Officer. Exhibit 117. New York, July 26, 1887. W. D. Davis, examined, sugar division, states as follows: • I was originally appointed in the sugar division as sampler in 1878, promoted to ex- aminer in 1880 at $1,800, promoted in 1885 to $2,000, and promoted to $2,200 in 1886. The only irregularities that I know of in connection with the importation of sugars at this port, is in relation to stenciling. I have directed samplers to draw samples from re-sample packages, and wc found that the re-sample packages had been melted up or delivered. This applies to hogsheads. Sometimes at refineries when samplers have gone to draw samples from re-sample bags, and mats that have found that the said re-sample packages have been melted up. I can't explain why this was done. I have sometimes found that low grade sample packages were mixed with high grade sample packages in the same mark, and vice versa. I have also sometimes found that the merchant samplers had sometimes drawn their samples before the U. S. samplers had reached them. I believe there is an order issued by Secretary Folger, which modified Art. 19 of the sugar sampling regulations of 1883, under which merchant samplers were permitted to sample, sample, and re-sample packages before the Government samplers had drawn their samples. I can not produce such an order. I know of no violation of art. 17 of the regulations for sugar sampling, which require that samples in the case of mats shall be made upon the wharves, each mark being kept separate and the samples labelled in large sample boxes "provided for the purpose." I do not know of any mat samples being sent to the appraiser's store in paper, sample tins being always used. I have found sample bags where t/he stencil mark could not be seen by the sampler, but were found by tearing the piles down. There have been in- stances where sample packages were not placed " easily accessible for sampling," as called for in article 15 of said regulations. 1 have often sent my samplers to take sam- ples in places where the light of a lantern was necessary to distinguish the marks. So far as I am aware the sugar examiners and samplers of the 8th (sugar) division do not draw samples from damaged packages for the damage examiner of sugars to pass upon. I have seen the damage examiner of sugars draw his own samples. I can not say that I ever saw the damage examiner draw sound samples from a cargo, neither have I ever seen men under his direction draw such sam pies. I do not know what is meant by commer- cial damage. I have sometimes found sample packages (hogsheads) which gave evidence that they were not in sampling order, but who disturbed them I do not know. I have also sometimes found the scoring of the hogsheads improperly done. Paragraph 3 of the sugar-sampling regulations is not always complied with. I have reported to my superior officer that paragraph 4 had not been complied with. Relating to paragraph 9 it requires more than one trier full to fill a box. In some in- stances paragraph 10 is not complied with; as for instance, in the absence of the printed form, viz, letter of transmittal, a memorandum being made to serve the purpose. Par- agraph 11, requiring use of red plugs, is not complied with, and has not been for over a year. As to paragraph 14 I do not know that its requirements are being complied with. As to paragraph 15 I do not know that its requirements are being carried out, but to the best of my knowledge and belief they are. Sometimes samplers have to carry lanterns to distinguish marks and whether the sten- cil "U. S. sample" has been put upon the packages. Sometimes I have had to order the sample packages broken down in order that the sampler could see that the packages were stencilled sample packages. Sample packages generally are placed accessible for sampling. I would not consider it detrimental to the interests of the Government to FRAUDS IN NEW YORK CUSTOM-HOUSE. 55 have sample packages placed in close proximity to steam pipes. I do not consider it would take any more time, care, or labor to get the samplesfrom packages so placed if they did not lay thero long. Sometimes we have found sample packages removed from where they were originally placed, and then found them in some other place in the refinery. In relation to article 16 I have had the sample packages relaid out so that the samples could be taken from the middle of the packages. I have never known of general samples from mats being made upon the wharves in other than sample- boxes, paper never being used to send samples to the appraiser's store. In reference to paragraph 19, see bottom of first page in- my testimony. I know of no paragraph authorizing the use of sponges other than paragraph No. 24. I do not permit my samplers to use a sponge so wet that the water can be wrung from it, but we are permitted to use a damp sponge, as per construction of paragraph 24. I have seen certain instances where samplers have used too much water in their sponges to clean their triers, and have ordered them not to do so, and informed them at thes me time that it would not show a normal sample and would be detrimental to the interests of the Government. •This applies in a general sense to new samplers. I have advised Isaac W. Cole and Charles A. Fox, who are a couple of new samplers. Relative to art. 26, I have found that cargoes of Iloilo, Cebar, and Manila sugars have sometimes not been laid out mark by mark, requiring the general sampling of each in- dividual mark. Relative to paragraph 27 and section 2882 of the Revised Statutes, I have never known or heard of any attempt on the part of a customs or inspection officer to seize a cargo of sugar for violation of such paragraph and section. Relative to paragraph 28 1 know of no violation. In cases of re-test, pending re-sample, I have heard at the refineries telephonic re- quests to the sugar-room of the 8th division asking permission for refiners to melt up sample packages in cases where they had withdrawn their requests for re-sample. Per- mission was given from the sugar-room to melt up the samples when they had withdrawn their requests for re-sample. I have received such telephonic messages from Examiner Remsen. As to whether or not, in my opinion, Asst. Appraiser Tice is competent to make a proper detail of samplers for duty on the different districts is not for me to decide. I do not consider that there are any samplers at present employed who are unfit for their busi- ness and can not be trusted. I have seen Examiner of Sugars John Sherer, the damage examiner, drawing samples and otherwise examining a cargo of sugar after it had been discharged. I have never seen him make "an examination of the vessel and of the sugar during its discharge," as called for in paragraph 43 of the sampling regulations. I could not tell, without ex- amination, whether the cargo was damaged or sound. W. D. Davis. Sworn to and subscribed before me this 27th day of July, A. D. 1887. T. Aubrey Byrne, Special Treasury Officer. Exhibit 118. Dr. Jesse Battershaw, demist, U. S. laboratory, states as follows: I know quite a number of leading chemists in the sugar trade. I know the firm of Sherer Brothers, and I think it is composed of Dr. Sherer and his brother and a Mr. Kingney, who was associated with them. I have not visited their laboratory since I became connected with the Government. I have been at 122 Front st. I have seen men that I supposed were Turks come to the laboratory. I think that in testing sugar, a commodity which pays the largest amount of duty, the operators on the polariscope should be trained and practical chemists in order that the interests of the Government be protected. I believe that first-class chemists should be employed to determine the value of sugar. I believe the Government entitled to the best ability that can be had, and in that way the interests of the Government and revenue are protected. I have heard that Messenger Dale did loan money. [Note. — Dr. Battershaw made this statement under oath; but, immediately leaving on his vacation, was not here to sign after transcription was made by stenographer.] T. Aubrey Byrne, Special Treamru Officer. July 23, 1887. S. Ex. 3 62 56 FliAUDS IN NEW YORK CUSTOM-HOUSE, Exhibit 119. John F. Davis, examined, connected with the laboratory at the U. S. appraiser's stores, states as follows: Within the last three years I have not tested any sugars by polariscepe. I am called upon sometimes to prepare the tubes for testing in cases of drawback, and never other- wise. I have heard that Dr. Sherer was interested in the manufacture of bronze powder. I saw in a newspaper over a year ago a statement that Dr. Edward Sherer was sued in a court, and that the suit was thrown out, as the judge claimed no jurisdiction on ac- count of Dr. Sherer being nominally a Turkish subject. I have seen men who were said to be Turks visit the laboratory, and suppose they came to see Dr. Sherer as Turkish consul. I have heard that there is a firm of chemists down town known as Sherer Bros. I know Mr. Jas. Dale, of the sugar division, and have borrowed money of him, but never paid him any bonus. I have heard that he does loan money to employes, but not within a year. I have also heard that he charged a bonus. As a" chemist, I state that in order to thoroughly and properly mix sugars some other means in addition to the mortar and pestle should be used; and this is particularly so when so*little time is used in the mixing of sugar samples for test. John F. Davis. Sworn to and subscribed before me this 19th day of July, A. D. 1887. T. Aubrey Byrne, Special Treasury Officer. Exhibit 120. William D. Crumbie, employe in laboratory, addressing Mr. Byrne, who was about to administer an oath, said: Unless you are a notary public I object, and unless the questions and answers are to be taken down by a stenographer. I think it is only proper they should be so. After being satisfied on these points, and the oath administered to him, said: If asked the question I would very naturally say I belonged to the laboratory division. I have tested sugars at the port of New Haven, and still continue to do so. I made my last test there on the 16th day of June, I think. 1 go up there by request of the collector at New Haven to the appraiser, which is trans- mitted to me. The collector at that port telegraphs for an examiner of sugar; that tel- egram is approved and sent to me by the appraiser as my warrant. So far as I know the methods adopted in the sampling and testing of sugars at other ports is the same as at this port. I know of no difference in the use of the polariscope at the port of Philadelphia and this port. When I put my tube containing the liquified sugar into the polariscope I read ou the scale a certain determination, and note that determination as the correct reading or correct value of that sugar if the polariscope is adjusted properly. I al ways test my polariscope with the quartz plate. I have used refined sugar. I have a quartz plate down there now. It was there when I went. I know it is correct, as I tested it with refined sugar. I am certain' that my polariscope is properly adjusted after I receive the quartz plate. I think I have received a quartz plate from the chemist in charge here to test my polariscope. I am not certain, but I think I took one down there with me. The laboratory furnished me with that plate. I think I told you I took it. I am not positive whether I took it out there or not. I tested my polariscope a few weeks ago. I used the high plate. I think it is 81. I leave that plate there. I think there is a quartz plate in this laboratory now that is valued at 99.1. It is not actually mounted — in a short tube, I think — only a temporary mounting. I don't recollect ever having used it out of its mounting. It is a fact that the quartz plate is not permanently mounted. I could not testify to seeing it out of its mounting. Of course, never having seen it out of its mounting, I don't know whether it is marked or not. The mark which indicates its value is, I think, on the tube ou a piece of paper pasted around the tube. I will swear that I don't think I have ever seen the quartz plate with a mark of its value scratched on its edge, or ever heard any conversation in regard to it. No one has ac< ess to the laboratory who is not connected with the appraiser's store in the general meaning of the term, but there are people who come in there through passes. It is a presumption on my part. I presume the watchman takes up the passes, It is the custom to ask any one coming up the stairs their business, FRAUDS IN NEW YORK CUSTOM-HOUSE. 57 and they have to state it to Captain Flowers. He is the clerk in the laboratory office. Dr. Sherer is regarded as the chief of the laboratory, so far as our position is concerned and attendance and disposition of the men. Captain Flowers in a sense might be called the watchman. I don't think that I ever saw representatives of any importing firm in the laboratory when sugars were being tested. I am not acquainted with a single one of them. If I do know them I don't know their names. I do not know a Mr. H , Mr. Jones, or Mr. Drayfoos by name. I may know them by sight. I can't say positively that I know a Mr. Burt. I know a man that I think is Mr. Burt. I saw him walking on this floor; I saw him once going out of the building and once coming in; I passed him. I never saw him in the laboratory nor in any passage way leading to the laboratory; and I think I can say positively I don't think that I ever saw him with Dr. Shearer. I don't think I have ever seen Mr. Burt except these two times. I may have seen him before; but, not knowing who he was, it would have no effect upon me. He is rather a large man, and I think has a grey moustache, dresses plainly, and rather plain-going in appearance. I have heard that Mr. Burt has pretty good influence in the building and is well sur- rounded with friends; I have heard nothing more than rumor in that connection ; I have heard nothing positively. I presume that the ] umoijj^ came from the fact that he is a relative of the naval officers, and perhaps what influence he has wo^^ld come through his brother. A man might naturally feel that Mr. Burt could help him through his brother's in- fluence; the avera? 3 man would feel better to have Mr. Burt's friendship than other- wise. I don't know V at his presence here is of daily occurrence; I have heard that he has been here; I have seen it in the newspapers that he has been here. I have seen this man twice; I have no doubt on my mind but the man I saw is Mr. Burt. I don't know that it has been brought directly to my notice that Mr. Burt has very strong influence at the appraiser's store — more than I have stated — that his brother is quite a prominent official, and would naturally have more or less influence. I could not say what the result would be if a man secured the enmity of Mr. Burt; I merely say, as regards myself, I would rather feel friendly towards people who are well connected politically than I would with enmity, because everything has got to move smoothly, and it is satisfactory to a man to have friends. I have never heard any conversation to the effect that to be the friend of Mr. Burt is to be secure in your place. I have never heard of any one being removed because he was not his friend. I have never heard that Mr. Burt had access to all of the rooms where sugar is treated. I recollect that you (Mr. Byrne) once said so when we talked together. Mr. Byrne reads his notes re. 23rd December, '86. U A man might have it in his power to tamper with sugar on the docks, more especially where the samples are drawn. If a sample has been tampered with before I get it, I can't tell. If a wet trier were used I would not be anything the wiser. So as to obtain a low classification it might be possible to select samples from hogs- heads, so that it might be possible for a polariscopist, instead of reporting its true read- ing, to report loweror higher. That is, that the polariscopist can report a lower or higher reading than the actual reading of his instrument. In cases of variation I would take the test for classification, of the two, that would read the nearest. In cases where the test would be 94.3 and the second 94.4 and the third 94.5? I would not have made a third test in that case; I would take the lower of the three. If the first test was 94.4, and the second 94.7, and the third 94.3? I would not have made a third test in that case, since 94.3 would have been within the regulations. In that case 94.3 would be the test. There is not always a variation of three-tenths. Our instructions are to take the lowest of the two tests; except when I see that a third test is required, then we take the test of the two that agree the nearest. I don't say that for the quartz-plate three-tenths can come off legitimately from a test of sugar without any trouble, I don't think that three- tenths would come off. I would interpret regulation 48 as meaning not more than three-tenths could come off. I am not willing to admit that three-tenths can be very easily dropped off determinations by the polariscope. The idea is, where two tests are made, one 92 and the other 92.3, the regulations say we should take the lower. In that case I would feel perfectly safe in taking the lower, but I do not mean that we could take off three-tenths from the classification and say nothing about it. A re-test requires a new sample. If we lost the laboratory test of the sugar it would simply mean another test. I have seen notices occasionally, in which verifications of certain numbers were desired. They were simply little notices 1 ' please verify so and so, " I think very often there was 58 FRAUDS IN NEW YORK CUSTOM-HOUSE. do signature. They were some times directed to Dr. Sherer, and some times without any direction at all. I have supposed that was caused by possibty some doubt in the minds of the gentlemen of the 8th division regarding the actual test. I have seen these slips. I don't recollect seeing a signature, although I think I have too. It was ex-Assistant Appraiser Frank Hays, I think. I can't say the actual number of such requests. Some one connected with the actual work told me that there were twenty in a day. I can't recollect about that time who told me; whoever it was would speak of it as a matter of course, and without any desire to tell me. A verification means so much more work for the people who are testing. I do not know why sugars are imported at New Haven rather than New York. The only way that I can account for it is simply that there is considerable molasses brought in on the vessel and the molasses are sent right out into consumption to the immediate store- keepers in the town, and the sugar coming in that way would partly cover it up. I can not recollect the actual number of hoesheads landed at New Haven under the new rate in a cargo, but I don't believe it would run over 150 or 160 hogsheads on an average. It might run considerably above that. I would not like to limit it. I had no talk with the appraiser before seeing you; I have not seen him for some time, I think since the 10th June. He has not talked to me in regard to the sugar in- vestigation, except when you first came here, then he spoke of it. He had verv little to say about it. Whatever little talking there was I presume 1 did it. I think that Mr. Hinds came in while we w<*e there; he did not conduct what talking there was; there was very little of it, hardly enough to say that there was anything about it. I mentioned the tact that I had seen you, and that was all. I told him that iu a general way. I was impressed with the idea that he did not take very kindly to you. He had nothing to say about my talking with you that I recollect, but I recollect that he said that his office was always open for a proper investigation. I don't know that he stated that this was an improper method of conducting an investigation. I don't know that he even intimated it. I am only giving the impression. I don't think he stated to me or gave me to understand that if you were to question me it was to be done in his pres- ence. I don't recollect so stating to you — not in that way, at any rate. (To Mr. Moore :) A week or forty-eight hours after that interview with Mr. Byrne, if he had put those questions to me, I would certainly answer them, as he told me that he meant to submit a lot of questions and he showed me what authority he had. Mr. Byrne. Did you not inform me on the 23rd of December, '80, when I said to you, ''Did you tell the appraiser that you saw me?" You answered "I did," "for I want my superior olficer to know that I am being questioned, and I think the proper way in which your inquiries should be made is through the appraiser, who said he was willing to afford you every facility if you have the authority," did you say that to me? Well, not exactly in those words; at that time I had not received your official com- munication. I don't recollect the appraiser saying to me that all conversations with you should be had in his presence. I don't think he gave me so to understand. I did not know so. I don't recollect having that impression and expressing it about, when I stated that I did not wish to talk anything about frauds in the matter of sugar or in regard to the use of decolorizing materials and the treatment of sugar by the polariscope. I recollect say- ing that I was willing to give you all the information I could. I do not know of any fraudulent practice at the present time in the treatment of sugar, nor within the past three years, nor within the past seven years. I have been here since 1883. I have heard of practices in the past — that is, that they would color sugar — but that was before I came here. I never recollect ever making the remarks "that it was about time that the frauds in sugar should be cut out," "as bad as a cancer," &c. I never said that Mr. Burt was at the head of the sugar ring or eon- nected with it, or that there was a ring,, or that I had any information to lead the Gov- ernment to discover that there was a sugar ring. I know Colonel Ayers. I saw him frequently in the laboratory in conversatioD with Dr. Sherer. He came io quite often, and I thought nothing of it. I did not know that he was the special agent to look after sugar. I was under the impression that he had considerable to do with it. I saw nothing strange in his presence. Special agents often came in. I could not say that any of them devoted such special attention to the labora- tory as Col. Ayer. I suppose Col. Ayer was there a little more than the rest, but I never paid any special attention to it. He was an officer of the Department, and 1 would not pay any attention to it. I don't recollect seeing him there with Mr. Burt. I don't know that General Bierne was engaged upon the investigation of sugar. I don't know what he came into the office for; sometimes it was for one thing and some- times another. I heard him speaking to Dr. Battershall about various chemical things. I don't recollect any particular case now. ^Sometimes special agents come in there and have a chat. I have seen Colonel Ayers and Dr. Sherer talking together on several oc- casions, FRAUDS IN NEW YORK CUSTOM-HOUSE. 59 I do not recollect having seen them together outside of the building except possibly at the entrance, but never away from it. I never saw them coming in or going away to- gether. I do not know who drew the regulations. I think Dr. Sherer had a hand in it, and I have heard that Col. Ayer had. I do not know, nor never heard that Mr. Burt had. I don't recollect hearing that any other sugarman had a hand in it. I do not know that any differences exists in the classifications of sugar between New York and Philadelphia. I have never heard much about whether New York pays a higher or lower average duty on sugar than Philadelphia. I saw Dr. Sherer to-day. He gave me no instructions. He did not suggest to me to demand stenographic notes. He said a day or two ago that he felt that a stenographer ought to be provided and I said at the time that I thought so too. To Mr. Moore: He did not suggest to me to demand Mr. Byrne's authority. If you had asked me any questions I would not have hesitated to answer you. I don't know what put it into my head to question Mr. Byrne's authority. I think Dr. Sherer spoke about demanding Mr. Byrne's authority, and suggested stenographic notes. I don't know whether I spoke of it myself or not. I think I did. The reason I spoke about being put on oath was to make the thing legal all through. I don't know that demanding the authority and stenographic notes was talked over. I got the impression that Dr. Sherer was going to ask lor a stenographer. In fact he said so, and I suppose it might be construed that he so advised every other person. My reason for demanding the stenographic notes was that I could see if I was correctly reported. I did not see the letter that Dr. Sherer sent to the appraiser with regard to the ste- nographer. I saw a letter from the appraiser to Dr. Sherer in which he said that you had come prepared to hold an investigation. It was addressed to Dr. Sherer. I think there were some sort of instructions in it. I read the letter from the appraiser to Dr. Sherer which stated that Mr. Byrne and Special Agent Moore were to make an investigation into the importation of sugar at the port of New York. I simply read it over generally and saw what it was. I consider myself an employe directly or indirectly upon sugar matters. There was no suggestion in the letter sent by the appraiser to Dr. Sherer as to the scope of the investigation that you might make, further than to sampling, testing, and classification of sugars. When Dr. Sherer showed me the letter he simply said it was a notice he had received. I don't recollect that he said he was going to do anything at that time; since that time he said that he was going to ask for a stenographer, or had asked for one. I think that was when the question of a stenographer first came up. I have no knowledge of mat- ters that would be of information to % the Secretary and explain to him how the service might be improved at this port so far as relates to sugar. I have thought sometimes that the regulation calling for over 25 per cent, out of the packages is not sufficient in many cases. I don't know whether it would be practicable to make a larger sample, but it seems to me that a larger sample would be better. I had always supposed the sampling of sugar was conducted in this way: A vessel arriving at the port with a cargo would have a certain number of packages under a certain mark, and it seems to me it would be better to have a larger sample than 25 per cent. ; I should suppose that 100 per cent, would be better. It seems to me that a sample from each hogshead would be better. It would be fairer to the importer and to the Government. The sample of sugar we get, we know nothing outside of that sample. If that sample is a true one so much better for the Government and so much the better for the importer. But if it should not be a true one the Government is bound to be defrauded or the im- porter is bound to be defrauded. No one had any talk with me connected with this department except Mr. Hinds, and that was when I met him in the appraiser's office, and he thought at that time that you had not the necessary authority — about the time that I saw you. about the 20th of De- cember, I think. That was all there was about it; he simply questioned your authority. What he said before the appraiser amounted simply to his saying that he didn't think you had any authority. I think I told him I had seen your written authorization, and I think he said that he had not seen it, and the impression on my mind was that inas- much as he had not seen it that I had better not talk with Mr. Byrne about — in other words, he might have doubted your statement. When I told him I had seen the state- ment of the Secretary authorizing the investigation I think he questioned it. I have no knowledge of Mr. Byrne being shadowed by anybody connected with the appraiser's office, nor did I hear of it. This is the first I heard of it. I have heard that you were at the custom-house and was working an investigation 60 FfcAUDS In ttav yo&r custom-house. there, and that you seemed to be doing a great deal of writing and going over the rec- ords. Dr. Sherer, I think, told me. It may have been that 1 asked him whether you were still working or had got through. I had a conversation with him relative to your work. On several occasions he talked to me about the sugar investigation. I saw Dr. Sherer within a day or two alter the day 1 walked down town with you, and, as I told you that day, I intimated, after you asked me to say nothing about it, that I did not propose to keep quiet, and I told the appraiser, and I think he saw Dr. Sherer, and to the best of my recollection there was nothing .said about it lor some time; but eveu to this day 1 have never told them everything; 1 did not ques.ion the wisdom, but I gave my word to Mr. Byrne that 1 would not. After the appraiser men- tioned the matter I thought there was no reason for my reticence; the subject has been mentioned several times between us. I have no statement that I wish to make, only this, that at the beginning of this in- vestigation I had no intention of being discourteous to any person. I saw a letter bearing upon the matter of employes engaged in the sampling and testing and classification of sugars at the appraiser's store, in the hands of Dr. Sherer. 1 know Mr. Flowers. 1 think that he ranks as a sampler. He is employed in doing the clerk work at the laboratory. I believe that a Mr. Bowne is a superintendent of samplers. I don't know Seymour. 1 know J. F. Davis, his duties are examiner; he is engaged on opiums. I don't think he has any connection with sugars since 1883. 1 think I heard him say he was a sampler several years ago. That is J. F. Davis. While I am not at the present time engaged on sugar, I have been in the past, and likely to be at any time. It is a recognized fact in the laboratory here that the polariscopic tests at Boston have been higher than at this port. I think there is an impression here that Mr. Leary reads his polariscope too high at tunes on his comparative tests. I think it is attributed more to incompetency than to fraud. I have taken the same sample of sugar, aud in the percentage of water there ought to be a closer agreement than there is. I think that the impression prevails that New York is right and Boston is wrong as regards the use of the polariscope. , I know Jas. G. Dale; he belongs to the eighth division; he is in the habit of loaning money; my impression about his rates of interest is that he is not over modest; I could not say the amount he charges is bonus or interest. I don't know whether Dr. Baker read the polariscope in the laboratory. I don't think he ever stated that the polariscope is wrong; that he read it different from what it was set. I think he has read a quartz plate, but what his reading was I don't know. Wm. D. Crumbie. Sworn and subscribed to before me this 7th day of July, A. D. 1887. T. Aubrey Byrne, 9 Special Treasury Officer. Witness to above. H. A. Moore, Special Agent. Wm. D. Crumbte, an employe of the U. S. laboratory, again called before me on this 7th day of July, A. 1). 1887, makes the fallowing statement: That on leaving the examination room when I first appeared before you, aud upon my return to the laboratory, Dr. Sherer, the chief chemist, asked me if I had been sworn, and when I replied in the affirmative, he laughed, and 1 told him and Capt. Flowers, who was present, that 1 could say nothing on the subject, as I was under oath. Wm. D. Crumbie. Sworn aud subscribed to before me this 7th day of July, A. D. 1887. T. Aubrey Byrne, Special Treasury Officer. Witness to the above. . H. A. Moore, Special Agent. FRAUDS IN NEW YORK CUSTOM-HOUSE. Gl Exhibit 121. July 18, 1887. Ernest J. Chapman, messenger to the laboratory, under oath declares as follows: I originally entered the service at the Varick-street laboratory, on or about August, 1880, as office boy to Dr. Sherer, chemist in charge. About Nov., 1883, I was appointed messenger to the present laboratory at a compensation of $840 per annum. I was removed in July, 1885, by Appraiser McMullen, so far as I know for political reasons. I was reappointed messenger in October, 1885, at same salary — $840 per an- num, and this position I hold to-day. My assignment is to assist Dr. Baker, who has immediate charge of the classification of aualines, wools, dye-stuffs, etc. I am 22 years of age. I have picked up my knowledge of chemistry in the U. S. laboratory. I sometimes take the place of a polariscopist who may be absent, and under direc- tion of Dr. Sherer I test sugars; he or Examiner Abbott supervises my work. The last time I tested sugars for any continuous period was during the absence of Examiner Morse for two weeks and thereabouts; this was during the present month (July, 1887), when Mr. Examiner Morse was absent on his vacation. At odd times I am called by Dr. Sherer to take the place of any absentee in the sugar laboratory. I do not know how to adjust a polariscope. 1 do not know how to use a quartz plate. The polariscope that I use is always adjusted for me by the chemist in charge. I weigh and otherwise prepare sugar solutions. When I am not employed in the sugar laboratory I am engaged on Dr. Baker's work. Sometimes, in the absence of Capt. Flower's clerk of the laboratory, I make out sugar certificates of polarizations. I have carried these certificates to the sugar-room. When I am testing sugars I always work in duplicate — with another polariscopist. Dr. Sherer or Examiner Abbott invariably verify my readings when they do not cor- respond within three-tenths of one degree of the reading of the duplicate. The rule of the laboratory is that if one reading showed 89.9 and the duplicate read 90.1, then, in my opinion, the 89.9 would he accepted as the test for classification as per regulation, because the variance did not exceed (3) three-tenths. I know that requests for "re-tests " and "verifications " are often sent to the labora- tory. I do not know Mr. Dreyfous by name; neither do I know that he is a sugar broker. I never saw Broker Burt in the laboratory; I do uot know what sugar firm or refinery he represents; I have seen the man I think is Broker Burt in the appraiser's store, but when I can not remember. I have seenSpl. Agent Ayer often talking with Dr. Sherer when he was stationed here in New York. I know Mr. James Dale, employe 8th div. ; he brings sugar samples and requests for re-tests to the laboratory from the sugar-room. 1 have heard from my associates in the laboratory that Mr. Dale loans money to the employes; I never heard that he charged any specific rate of interest; I have heard of his taking compensation for making loans; I have heard that he has, in some instances, taken pretty stiff rates. I think, in one instance, Dr. Sherer told me that Dale had got from him a pretty stiff rate; I could not say that no one else had informed me to the same effect. I have carried word or messages to 122 Front street, Sherer Bros', laboratory, from Dr. Sherer; I could not tell the word or messages I took; I can not swear that I was or was not at the laboratory of Sherer Bros., 122 Front street, this city, inside of two years. I know that William liisney was at one time employed at the laboratory of Sherer Bros. I never heard that Dr. Sherer was at any time making a bronze powder. I knew that Dr. Sherer was Turkish consul, and as far as I know he is at the present time. I do not remember seeing any Turks call upon Dr. Sherer at the laboratory since last winter, but prior to that time, at long intervals, one or two did call upon him. As a general rule, certificates of tests of sugars made are sent to the sugar room on the same day; otherwise they would be sent in the first thing the next morning. I sometimes make deposits for Dr. Sherer at the People's Bank, corner Canal and Thompson streets, this city. When requests for re-tests are sent to the laboratory they are written on slips; i. e., " Please verify the following, 3541, 3442, 3543, etc., etc.," these being the numbers on the samples tested that day or a few days before. Some- times these requests have been signed by Examiner Remsen. I do not remember whether all the requests are signed. Ernest J. Chapman. Sworn and subscribed before me this 18th day July, 1887. T. Aubrey Byrne, Spl. Treasury Officer* 62 FRAUDS IN NEW YORK CUSTOM-HOUSE. Exhibit 124. New York, July 13, 1887. Henry J. Abbott, sugar chemist in laboratory, states as follows: In 1878 I was aware of irregularities in the matter of colored sugars, and was employed by the Government to help prevent and detect the same. Since the polariscope has been in use by me, which has been for live years previous io the Jaw authorizing its use, I used it to detect the strength of sugars which had been colored down to evade Dutch standard classification. I am not a graduated chemist, but have been taught the use of the polariscope by a chemist. In case a sample tested 96.1 and then again tested 96.6 a re test would be necessary, and supposing there-test now necessary should be 96.4, then the test 96.4 would be taken. The rule of the laboratory is duplicate tests required by regulation, and more tests are made in cases of disagreement. We use the three-tenth latitude by regulation par. 35 in reporting our tests. Some- times tests read over, repeat themselves thus, 89.1, 89.1, but I would not swear by that one-tenth. They very often repeat themselves as 88 2, 88.2, but the variance in read- ing between the first and second reading would be more often three-tenths up or down. This relates to the reading of tests and re-tests, and applies to low-grade sugars par- ticularly. The reason of this is that these low-grade sugars mixed for the tube have a peculiar color, which influences the solution. We have no method of removing that color, hence tests vary sometimes in the reading from 3 to 5 tenths of a degree. Centrif- ugal sugars tested do not vary more than from 1 to 2 tenths, so that one-tenth or two- tenths of a degree, when reading a solution of centrifugal sugar, is an important factor in determining the rate of duty to be assessed. I will not swear by one-tenth as to accuracy. The color of the solution, to my eye, should be an orange-green, in order to read my po- lariscope most accurately. A dark yellow color of solution is hard to read. All chemists have different colors which suits their eye best to read by. I am in charge of the lab- oratory when Dr. Sherer is not there, which occasionally occurs. Employes of the 8th division who visit the laboratory are Examiner Remsen, Messenger Dale, Examiner Bowne, and the laborers in the sugar- room who bring the samples up. Mr. Dale usually brings the requests for re- tests, and sometimes the samplers and examiners visit the lab- oratory. I do not know of a case where any outsider has visited any one in the laboratory. Mr. Frankenstein does not and has not been in the laboratory in two years to my knowl- edge. There have been a few cases where men of Turkish nationality have called to see Dr. Sherer at the laboratory. Dr. Sherer used to be Turkish consul, but I do not know whether he is at present. I have seen Mr. Jas. Burt, sugar broker, in the laboratory with Spl. Agt. Ayer some time ago, but do not recollect seeing him since. I know that the sugar regulations were drawn up by Spl. Agt. Ayer, assisted by Dr. Sherer, and I also assisted. I have no doubt but that Mr. Jas. Burt had something to say to Spl. Agt. Ayer about the drawing up of the regulations. I have heard them in conversation about them. Mr. Burt liked to have his oar in, and I think he always does have more or less to say about sugar matters, when he can. I found him upon one occasion some time ago, when the laboratory was located on Hudson street, perusing surreptitiously in the laboratory my official letter- book, at the time I was working on colored sugars in which he was interested. While I am not exactly prepared to say he read anything in it, it was where he could, and not in the place where I left it the night before, thereupon we had some very sharp words. I have seen Mr. Burt and Dr. Sherer occasionally in conversation in the hallways of the building. In my judgment probably 10 per cent, of the samples that come to the laboratory are verifications of tests already made. These requests for verification come from Examiner Remsen, but would not be made by him unless requested to do so by the sugar importers or their brokers. I do not know what the percentage of work is arising from re-tests, as they come to the laboratory as original samples, but we sometimes think we recognize the sugar that we have passed on but an hour or two before, and a com- mon remark in the labratory in such cases is, " I suppose this is some of Burt's sugar," as we all understand that he is never satisfied, and makes determined effort to get as low test as possible. I have occasionally visited the sugar-room, and I think it would be a good plan to have the sample cans washed and dried in a separate room, free from moisture. I bought my Scheibler polariscope in 1879. At that time I tested it with C. P. sugar, and found its scale to be correct from 50 to 100. I daily read my quartz plate in my in- strument, to see that nothing has thrown the same out of adjustment and to test theac- curacy of my eye. We have in our laboratory two ouartz-plates marked 96 and 99£. My instrument to- FRAUDS IN NEW YORK CUSTOM-HOUSE. G3 day is four-tenths low to my eye, so that I add four-tenths to every reading of a test to- day. One of these quartz-plates (the 91).]) was tested by Dr. Gideon E. Moore, by means unknown to me, and the correctness of its value certified to by him, as J have heard, al- though I have never seen the certificate. I understood Dr. Sherer to say that he had the certificate. I have never seen any mark which indicated the value of this quartz- plate, except on a piece of paper pasted on the tube, written by some one in the labo- ratory, or perhaps by Dr. Sherer himself. The reason of my instrument being four- tenths low to-day was because some one had evidently tampered with it after I left the office yesterday. Mr. Cole and Mr. Smiley, messengers in the laboratory, do the breaking up of the samples and mixing them before they go to the scales. Each reader of a polar iscope, except Mr. Morse, reads his own polar iscope. The latter is unable to do so, presumably from defective eyesight. H. J. Abbott. Sworn and subscribed to before me this 13 day of July, A. D. 1887. T. Audrey Byrne, Special Treasury Officer. New Yoek, July 26, 1887. H. J. Abbott, sugar examiner and polariscopist, further states as follows: I think that after my examination before you I remarked to Dr. Sherer or somebody else that I did not like the idea of the answers being taken down without the questions, and that I considered it an unfair way of doing. I was dissatisfied with myself forsign- ing my evidence without the questions. At this examination 1 have heard Mr. Byrne state that it was by the direction of the Hon. Secretary of the Treasury that the questions were not to be incorporated in the testimony; but I only have Mr. Byrne's statement for the fact, and I still think that the questions should be incorporated with the answers, as I do not consider it a fair way of doing. I consider that I have been courteously treated by you gentlemen. H. J. Abbott. Sworn to and subscribed before me this 2Gth day of July, A. D. 1887. T. Aubrey By t rne, Sjjecial Treasury Officer. Exhibit 125. Stephen V/. Bassett, stenographer to appraiser, states as follows: I am stenographer to the appraiser. I have read the Secretary's orders under date of July 1st, addressed "to any officer or employ 6 at the appraiser's store, New York." I have subscribed to the oath. I recognize the orders of the Secretary; but Mr. McMullen is my chief, and I am also responsible to him. I don't know whether I will answer that question just now at all (to observe silence); I have already said that the letter of the Seeretary there is binding, and that 1 understood that part of it, and appreciate it. Of touise 1 say that I am not going to do anything tli at is against the orders of the Secretary. If the appraiser should ask me anything in regard to this examination 1 think I would tell him. I want to state that the appiaiser would never ask any such questions; the appraiser does not go round asking questions of what has occurred or anything of that kind. Of course I would not keep anything from the appraiser. I want to state that after reading the fe( retary's letter again, that I simply wish to state that I shall be governed by that letter, that is all. I write the letters of the appraiser. The appraiser dictates a great many letters. I decline to answer whether or not he invariably dictates his own letters. The three letters bearing date 15th July were dictated to me by the appraiser, and addressed to Mr. T. Aubrey Byrr.e. There ate letters sometimes dictated by Special Agent Hindes for the appraiser's signature. Where there are things of that kind done, it is done by direction of the appraiser, and he directs what shall be said; he directs Mr. Hindes what to say. 64 FRAUDS IN NEW YORK CUSTOM-HOUSE. Now and then there is a letter written by Mr. Hinds where the appraiser has a thou- sand other things to do; the letter is written as he directed, then it is signed. I don't remember whether any letters have been returned to me disapproved by the appraiser. I refer to such letters as were dictated by Special Agent Hinds. I can not say who dic- tated the letter addressed to you (Mr. Byrne) under date of June 27th, but I think the appraiser dictated that letter. In everything pertaining to this examination I think the appraiser has dictated the letters, so far as those I have written. Special Agent Iliuds has never been present when any letters addressed to you by the appraiser have been taken by me stenographically. I take orders from no man except the appraiser. I have written letters from Mr. Hindes' dictation. I do know Col. James Burt when I see him. I have heard that he is a sugar-broker. I have seen him in the appraiser's office. I have seen Col. Burt probably two or three times. Probably I have seen Mr. Burt sitting at the desk with the appraiser. I have never written a letter dictated jointly by the appraiser and Mr. Burt. I am sorry to say I was stenographer to Appraiser Ketchum. I am sorry that I ever knew him, or ever saw him. My relations with the appraiser are official, and everything that the appraiser does is done (*) openly and overboard, so that there is no necessity for having any relations of a confidential or secret character. I want to say that the Secretary's orders or request shall be strictly obeyed; at the same time Mr. McMullen is my chief and that I know Mr. McMullen would not come to me and ask me what has occurred in this room or what I testified. If he does come, then I will let you know. There is no intention on my part, and I have no desire to violate the Secretary's orders. The change made in the last line of page three is made at my request. [The word "done," marked with (*) was originally "dictated." — Printer.] S. W. Bassett. Sworn and subscribed before me this 20th day of July, 1887. T. Aubrey Byrne, Spl. Treasury Officer. Stenographer Bassett came deliberately into the examination-room without knock- ing, and pending the examination of Examiner Remsen and Jacobs, and in the presence of those gentlemen, Special Agent H. A. Moore, Clerk Ormiston, Stenographer Kerr, and myself, and in a loud, discourteous, and ungentlemanly manner made the following statement, without any preliminary remark or request that he would like to disturb the investigation momentarily: " I want you to change that statement that I made and put in the questions as you made them, and my replies, as the way you have it is not a fair statement." I asked him to make his statement so that the stenographer could take it, and he said "that was all there was." Special Agent Moore then said, " Mr. Bassett, this is hardly a fair way to present your statement to the Commission." To which he replied to this effect, "that he did not propose to be bulldozed." He was told that his remarks would be presented to the Secretary of the Treasury, and he said that he did not care, or words to that effect. T. Aubrey Byrne, Spl. Treasury Officer. The above is a true statement. H. A. Moore, Special Agent. H. W. Kerr, Stenographer. Robert McGregor Ormiston. A. G. Remsen, Sugar Examiner. Mr. William C. Jacobs refuses to sign. U. S. Appraiser's Store, New York, July 22, 1887. I FRAUDS IN NEW YORK CUSTOM-HOUSE. 65 Exhibit 126. New Yoek, July 12, 1887. Geoege M. Anderson, opener and packer, detailed as clerk, states as follows: My especial duties are to receive the sugar invoices from the invoice bureau before classification has been made. I enter them on my invoice book as follows: Name of im- porter, vessel, invoice No., entry No. When I enter upon the sampler's slip the name of importer, name of vessel, number of packages, kind of sugar, dock where vessel is, and marks and numbers, which' go to the sugar-room. As soon as classification has been made, the invoices are returned to me to be sent to the invoice bureau, whereupon I make the proper records in my book. Sometimes Mr. Johnson and Mr. Trainer have come to me to obtain from my books information as to invoices at the request of the sugar brokers. Mr. Trainer and Mr. Johnson, usually came to me when inquiries were to be made for Mr. Burt's invoices. There were less inquiries made of me for information as to Mr. Burt's invoices from the fact that his work is pretty well kept up by Mr. Trainer and Mr. Johnson. Mr. Drey- foos usually obtains his information through them also. Information for Mr. Burt, rela- tive to imporations of sugar, memorandums, classification, etc., are left in the invoice blotter for Mr. Burt's inspection. Mr. Burt visits the division nearly every day. In- formation for other brokers such as tests, classifications, etc. , are sometimes laid on Mr. Trainer's desk for the information of other brokers. Occasionally I have heard Mr. Burt and Examiner Bowne wrangling in a loud tone of voice about their tests when Mr. Hay was ass' t appraiser. I have understood that Mr. Dale loaned money to an employe. Classification can not be posted at the close of busi- ness each day. By the rule of the appraiser, invoices can not remain in a division longer than 7 days, except by returning the number of the invoice to the invoice bureau. Brok- ers desiring to hold back their invoices attach thereto written request for re-test or re- sample. This detains them. Geo. M. Andeeson. Sworn to and subscribed before me this 11 day of July, A. D. 1887. T. Aubeey Byene, Special Treasury Officer. Exhibit 127. Philo Cole, messenger in the laboratory, states as follows: I was appointed as a damage examiner in 1877; discontinued about 1880; in 1883 as messenger in the 5th division. I was removed in July, 1885, and re-appointed as mes- senger in July, 1885. Since my last appointment I have been employed all the time mixing sugars for tests in the laboratory. My duty consists of cleansing the tubes containing sugar solutions for tests, as also mixing the sugars for the weighers as they come in. I think that I have heard them say in the laboratory that that man (pointing him out) was Col. Burt. I have very seldom seen him there. I have been told that he represented Have- myer and Elder. When the sugar samples come up from the laboratory they come in tin sample boxes, the serial number of the sample is pasted on the side of the can, the contents are dumped upon the table, from this into a mortar and carefully ground up, reducing the lumps to grains. Sometimes we find particles of wood and gravel and coal and pieces of ra veilings. These are always carefully removed so that the sugar is in a clean state, as clean as eye and careful manipulation can make it. Sometimes the lumps are dry and hard, and sometimes the lumps are moist. Some- times the sugar comes very wet; it sometimes comes very soddy, heavy, and particu- larly moist; sometimes it has the appearance of being very footy. I will not say that these very moist sugar samples have been made so, but still they would have the ap- pearance. I have never reported the fact of the sugar being particularly moist. Dr. Sherer, chief of the laboratory, superintends my work. I take all orders from him. When Dr. Sherer is not in the laboratory Examiner Abbott is in charge. Dr. Sherer is occasionally away from the laboratory. This particularly moist sugar always necessarily entails a very low test. As I have been a damage examiner these sugars that are brought up to me are not damaged sugars. If I had realized that they were damaged sugars I would have im- mediately reported that fact. S. Ex. 123- — 5 66 FRAUDS IN NEW YORK CUSTOM-HOUSE. I have frequently seen samples returned to the laboratory for re-tests, the identity of •which I have felt perfectly satisfied of, and Mr. Smiley and myself would often remark that "this is the sugar that we had a little while ago." They sent them back twice. . I may have heard the remark made that when sugars have been sent up often for re- tests, and the work has come in late in the afternoon when we were about to close our day's work, that these sugar samples are some of "Burt's sugars." Sampler Ball does not test the damaged sugars, and prepares the same. Damaged sugars are brought into the laboratory in papers by John Sherer, damage examiner, and put one side; then Sampler Ball mixes and tests them, and when Ball is away I think same have been tested by Mr. Crumbie. I have have heard that there was a firm called Sherer Brothers in this city. I have heard that they were chemists. I never visited their laboratory. I have seen foreigners visit the sugar laboratory and call upon Dr. Sherer. Sometimes I have taken invoices from the laboratory to Mr. Remsen. I know the difference between a certificate of polarization and an invoice, and am familiar enough with customs business to know an invoice when I see it. Sometimes, six times a month, I have carried invoices from the laboratory. This invoice which you hand me is similar to those that are carried by me from the laboratory to the sugar-room, though they are always folded up and I don't see the inside; still, from my knowledge of customs mat- ters, I know that they are invoices. I can't state positively whether the papers that I have carried to the sugar-room were invoices or certificates of polarization. I know Mr. Dale, of the 8th division. I have heard something or other about Mr. Dale and money transactions. Philo. Cole was born 1808 or 1816— "don't know which." Philo. Cole. Sworn and subscribed to before me this 19th day of July, A. D. 1887. T. Aubrey Byrne, Special Treasury Officer. Exhibit 128. New York, July 11, 1887. Jas. S. Dale, opener and packer in the 8th division, states as follows: I have been employed in the 8th division in one capacity and another for the past 13 years, the principal part of that time being connected with sugar work. I have no knowledge whatever of any irregular practices in the importation or treatment of sugars for duty. I sometimes carry the samples of sugar for test from the sugar-room to the laboratory, but I have never carried any message from a sugar broker to the chief chemist in the laboratory. I know of no employe at the appraiser's store who has had or at the present time has any interest whatever in the residue of sugar from the sugar samples, and I have never had interest in the same. I have never received a dollar from any one for any sugar that may have left the appraiser's store, directly or indirectly. It is my gen- eral duty to take charge of the refuse sugar samples, which I generally do before 9 o'clock in the morning and after 4 o'clock in the afternoon, as I have not time to attend to them between office hours, my duties consisting of looking after the store goods, such as confectionery, glucose, etc., and in assisting in the making up of samples for the laboratory with the other employes of the division who are under Examiner Eemsen, as, for instance, the examiners and samplers on the city district No. 1, when not other- wise employed. Thos. D. Tate and Robt. Cunningham are the only ones who are steadily engaged in the sugar-room in making up samples for the laboratory. Thos. D. Johnson keeps the test-book and performs other clerical work in the sugar-room. I generally deliver the samples in the laboratory to Mr. Philo Cole or Jas. Smiley, employes in the laboratory. I have never informed any employe of the laboratory whose samples I was delivering and never was asked. Some of the employes connected with sugar matters asked me if I refused to take the oath of secrecy. I informed them that I refused to take the oath. I know Barney Philips, but I have not seen him within a year. I have had no conver- sation with Sugar Broker Jas. Burt relative to this investigation. My official duties keep me always actively employed during office hours. When I desire to absent myself from the division I invariably ask permission of the appraiser, and get it. For the past two years I have been absent but one day. I don't think I have been absent any por- tions of a day for the past 18 months. I have loaned money to the employes of the appraiser's store. I charge no interest or bonus. I have seldom received any compen- sation for making loans. In some cases where I have been put to the trouble of getting the money from a friend who had money in bank I have charged equivalent to the in- terest for the accommodation. I may have taken some interest from some of my brother Deed, September — , 1886. Anna T. Dale, wife of James S. Dale, to Jaue M. Dncey; con., $7,000. Recorded September 1, 1880. Mortgage, $4,000. S. Ex. 123—50-2 FRAUDS IN NEW YORK CUSTOM-HOUSE. 67 officers, but I am not sure. I have no other source of iucorae outside of my salary, which is $3.00 per diem. I have lived carefully and within my income, and whatever my accumulations may be they have been derived through my salary. Appraiser McMullen has signed checks brought to him by me, belonging to other employes of the appraiser's store. I have no connection with business affairs outside of my duties as an employe of the Government. 1 am well enough acquainted at the sub-treasury to get employes' checkscashed for them. I own no real estate. I have bought no real estate since I have been in the service, and have bought none for any other person. I have sold no real estate to any officer or em- ploye of the Government. I reside at 635 Walton ave., N. Y. City. I never sold a piece of property to Mr. .Tas. Doucey, superintendent of openers and packers. My wife owns some property on Walton ave. She sold a piece of property to Mr. Doucey, and also a piece to Mr. Peter Twamley, a sampler, also another to Mr. Geo. K. Gilbert, a sam- pler, i do not know that she has sold any to any other employes of the Govern- ment. My wife has acquired during the last two years seven building lots on Walton ave., New York City. My wife built four houses on four of the lots. The total value of the property might be considered at a fair estimate to be valued at about $25,000. My wife has been engaged in no business since I have been an employe of the Govern- ment. There is no particular difference in the value of the four houses. I have built houses in former times, but failed in business in 1873 or 1874. I did not assume any active direction in their erection- my wife and a friend, who was a builder, directed their construction. I never visit the location during business hours. In regard to the complaint of Verrinder & Callahan, that they were not receiv- ing all the sugar samples that they were entitled to, I have to say that I reported to the asst. appraiser that they had received all they were entitled to. I have never seen Mr. Jas. Burt, sugar broker, in the sugar-room, neither do I recollect of seeing Mr. Dreyfoos there. I have no knowledge of any changing of sample packages of sugar at the Mat- thersou & Wtigher Sugar Refinery Works, Jersey City, neither do 1 recollect of making a statement to any one that I had such knowledge. I know of no irregularites whereby tests are lowered, but I am of the opinion that the tests can be lowered by sampling in wet weather or moistdays, or by the use of water on triers or the taking of the sample from low-grade sugar, and other causes. And I am of the opinion, from nine or ten years experience in the sugar-room, that the inter- ests of the revenue would be better protected by washing the tin cans in which samples are placed for transmittal to the laboratory in an entirely separate room from the sugar-room in which the samples are mixed and prepared for the chemist, and lor the following reasons: That the moisture and dampness arising from the hot water used in washing the cans influences and moistens the atmosphere of the room, Avhieh moisture would naturally be absorbed by the sugars, as nothing to my mind takes up moisture as quick as sugar, which is awell-recognizadfact, and thus lowering the test for classification. Another advantage would be, that it would relieve the opportunity of any dishonest person to manipulate samples with water, if the cans were washed in another room. Either Mr. Trainer or Mr. Johnson, clerks in the 8th division, receive applications from sugar importers and brokers for re-tests. I think I have known cases where two re-tests have been made of sugar samples. J. S. Dale. Sworn and subscribed to before me this 11th day of July, A. D. 1887. T. Aubrey Byrne, SjMcial Treasury Officer. Exhibit 129. New York, July 25, 1887. Robert Cunningham, opener and packer, detailed in sugar-room to wash cans: About 18 months to two years ago Broker Burt, with Asst. Appr. Hay, Mr. Dale, and I thmk Dr. Sherer, were in the sugar-room examining a sugar-crushing machiue. This machine, I think, was approved by Special Agent Ayer. Mr. Hay said it was a n'ue piece of machinery. Broker Burt strongly disapproved of it. It has not since been used. The machine is now in the sugar-room. Sometimes I carry notes to Dr. Sherer from the sugar-room. These notes ask for a re-test of a certain serial number. If Dr. Sherer is not there I give them to Mr. Abbott. I often hear a remark in the sugar-room like the following: "The Colonel (meaning Broker Burt) has come. Anything for the Colonel? " Robert Cunningham. Sworn and subscribed before me this 25th day of July, A. D. 1887. T. Aubrey Byrne, Special Treasury Offieer, 68 ^FRAUDS IN NEW YORK CUSTOM-HOUSE. Exhibit 130. New York, July 25, 1887. Isaac W. Cole, sampler, 8th division, states as follows: I was originally appointed opener and packer in 1884; dismissed by Appr. McMullen without charges in 1885; passed civil-service examination and on eligible list; appointed sampler in June, 1885. While I was originally opener and packer, I was detailed as clerk in invoice bureau. I know of no irregularities in the sampling, testing, or appraisement of sugars than oc- casionally arises from the fact that the sample packages are not always properly laid out mark by mark, and thereby endangering the collection of the proper duty. I heard of one case where the examiner, Mr. Bowne, called our attention to some samples that he considered too wet. I have been warned with other samplers not to use a wet sponge. Merchant samplers are in advance of us in drawing their samples. When sent to draw re-samples, I have sometimes found the packages melted up. I have sometimes found various grades of sugars, mixed in a certain mark, and if we were not alert, the Gov- ernment revenue would be defrauded. The outside men, meaning the examiners and samplers, take their orders from Ex- aminer Bowne, as a general thing. We are sometimes compelled to use a lantern in the refineries in order to distinguish the sample packages, their marks, and to ascertain whether they have been stencilled, llsilo, Cebu, and Manila sugars are rarely laid out mark by mark, thus imperilling the interests of the Government as far as revenue is concerned, unless we are careful in our sampling. I have sometimes drawn No. 1 sugar from an llsilo cargo, which was laid out as No. 3 sample; this I have often seen. We samplers are compelled to carefully watch the quality of this kind of sugar when we draw samples, in order that the Government may obtain its proper revenue. 1 have heard it stated that llsilo sugars have been permitted to be discharged, no marks indicated, and yet the weigher enters upon his return weights for marks, explana- tory information being probably obtained from the importer. Isaac W. Cole. Sworn and subscribed to before me this 25 day of July, A. D. 1887. T. Aubrey Byrne, Special Treasury Officer. Exhibit 131. Patrick H. Doonan, messenger in laboratory, under oath, states: I carry the sugar reports from the laboratory to the sugar room. I have sometimes carried messages from Captain Flowers to Mr. Remsen, to prepare ceitain sugar for comparative tests. I have sometimes carried up, at the request of Clerk Johnston, who keeps the test- book in the sugar- room, requests for re-test like this sample which you show me, but they are folded up in note fashion. Mr. Johnston asks me to hand them to Dr. Sherer; about a half a dozen times this occurred. Sometimes I carry little memorandum notes from the laboratory to the sugar- room. I used to see Broker Burt coming up and down stairs in the building; I have seen him very often; so often that it was an occurrence that did not impress itself upon me, look- ing after the interests of the firms that he represents and getting his sugar passed, &c. I have met Mr. Remsen going up into the laboratory very often. ■* * * * # ,• * * The first time I saw Dr. Sherer in his office after making the above statement he asked me how I came out in the examination, and if I was very much disfigured. Patrick H. Doonan. Sworn to and subscribed before me this 25th day of July, A. D. 1887. T. Aubrey Byrne, Special Treasury Officer. FRAUDS IN NEW YORK CUSTOM-HOUSE. 69 Exhibit 13?.- New York, July 26, 1887. Nercholas I. Flocken, sampler, 8th division, states as follows: I was originally appointed opener and packer in 1885, and made sampler in May, '86. I use a damp sponge to clean my trier, although I am furnished with crocus cloth to clean the same. I mean by a damp sponge that which water can not be wrung from it. I do not use a sopping wet sponge. I do not use a sponge out of which water would run upon the floor if squeezed on my trier. My attention was called by Examiner Bowne, when I was first made sampler, to certain sugar samples which had the appearance of too much water being used in drawing them. He informed us that it was irregular, and that the men were liable to be discharged upon the district upon which it occurred. On the day in last November when you were upon the dock watching the sampling of sugars at the Havemeyer & Elder refinery I do not remember that I used a sopping wet sponge. I remember of sampling a row of hogsheads that day in your presence. I did not know on that day that you were a Government officer. No one ever positively in- structed me to use hot water in the sponge. I remember being accompanied by you to the Brooklyn refinery. Broker Dreyfoos may have also been present, but I do not remem- ber it. I do not remember of any conversation with him that day while sampling. Broker Dreyfoos or his sampler are sometimes about when sugars represented by them are being sampled. In sampling mat packages I always try to get the sample from the centre. I never heard of the finding of fraudulent stencil-plates. I have always found sugar samples properly laid out mark by mark; I have always found Iloilo, Cebu, and Manila sugars mark by mark. I have found occasionally in mat samples one or two samples of high or low grade sugars which did not belong in the file where they were, and consequently were not taken by me as a sample. I have been ordered by the exaniiners to go through the cargo and see whether the sugar of a certain mark in the cargo corresponded with the sugar representing that mark in the sample pile. I have neverfound any difference. Almost daily we have to sample in the dark in the warehouses, necessitating the use of a lantern. I have been on the refinery district but once or twice since I was appointed in May, '86, always being detailed elsewhere. I have known occasions where the weigher did not lay out the full complement of samples. I have never in my experience seen the merchant samplers, except in the case of hogs- heads, draw their samples before we do, but it is almost invariably that they draw their samples from hogsheads' ahead of the U. S. samplers. I do not remember ever seeing bag samples which had been sampled by merchant samplers before us, and mats never. We always make up samples in tin boxes, and do not remember of ever putting any up in paper. I know Jno. Hetherington, the sampler for Broker Dreyfoos. He generally informs us when his cargoes are ready. I have worked on other cargoes while he was working on the dock or in the store. I have talked with him on all subjects of conversation other than sugar matters. I should judge Mr. Hetherington to be a communicative sort of person. I have been in the sampling office at the refinery, when permission has been received by telephone from the 8th division to melt up certain re-sample sugars asked for by the refinery people. I have never gone to draw samples from re-sample packages and found them melted up. It is with greater difficulty samples are drawn from hogs- heads tiered two high than if only placed one tier high. N. J. Flocken. I have signed each page of my evidence simply to make it certain that it is what I testify to. N. J. Flocken. Sworn to and subscribed before me this 26 day of July, A. D. 1887. T. Aubrey Byrne, Special Treasury Officer. Exhibit 133. New York, July 12, 1887. Archibald B. Freeborn, sampler, 8th division, states as follows: I entered the sugar division as sampler about 1877, and have been in it nearly ever since. 70 FRAUDS IN NEW YORK CUSTOM-HOUSE. I donotknow of any irregularities in the importations of sugar relating to the sampling, testing, and classification of the same. I always draw my samples of sugar according to the regulations. I do use a wet sponge. A sampler could lower the test of a sample by using too much water on his trier. Tests of samples can also be lowered by drawing the sample from the Iboty portions of the packages; also by drawing low grade or moist, sweaty portions of bags. I have heard it spoken of once or twice that water was care- lessly used in drawing samples. I do not know of any sampler that has been repri- manded for using too much water. I remember an instance at the Havemeyer & Elder refinery where I called the atten- tion of the examiner to the appearance of moisture in the sample hogsheads, and showed to Asst. Appraiser Hay samples of about 20 hogsheads indicating moisture. I do not know what action he took. A similar case transpired at Robinson's stores a couple of years ago, when I called the attention of Examiner W. D. Davis to the mat- ter. What action he took in the matter I do not know. Sample bags are always laid out mark by mark, except where marks can not be distinguished, when special orders are given. Jn the case of hogsheads no attention, is paid to the separation of hogsheads mark by mark. I have heard of some instances where sample packages were not sten- cilled up by the weigher, but stencilled in the warehouse alter the sugar was stored by some parties unknown. All samplers carry keys to the wooden chest containing sam- ples. As a rule sample cans are provided for the samples; when not available paper is used. Merchants' samples have been taken from sample packages before the U. S. samplers had taken theirs. Mr. Dreyfous is generally on the dock when his sugar samples are being taken at any of the refineries. Mr. Dreyfous's man, John Hetherington, draws his samples immediately after us. He has drawn samples before theU. S. samplers have drawn theirs, and has at times drawn them at the same time. Jim Vale, Burt's sam- pler, draws his samples before we get there. The heavy months for samplers' work are April, May, and June, when more than one-half of the yearly importations arrive. Gen- eral samples are drawn from the cargo when a doubt arises as to the accuracy of the U. S. sample packages. This occurs about once a month. I have refused to sample pack- ages where they were not properly laid out mark by mark. It is impossible on district No. 2 for one examiner to personally supervise the sampling in busy seasons. We do not use the red plugs. I think they were discontinued under orders from Spe- cial Agent Ayer. At the Havemeyer & Elder refinery, which is in district No. 2, the sample packages are at times trucked way into the refining house where steam-pipes are in close proximity, and where the U. S. sample packages should not be placed, and some- times from 21 to 28 hours elapse before the samples are drawn, thus giving opportunity lor the moisture to penetrate the sugars and lower the test. When the U. S. samplers visit this refinery to take their samples we always find that some one other than a Gov- ernment sampler has preceded us and taken samples from the packages, which is clearly in violation of the regulations. It is a recognized fact that the samplers are compelled to work harder and longer than on any other district, and this particularly relates to the Havemeyer & Elder refinery, of which Mr. Jas. Burt is the representative at the appraiser's store. We would not be called upon by our examiners to commence sampling a cargo on any other district after 3.30 o'clock p. m., while we have been called upon as late as 4.30 p. m. to begin sampling a new cargo for Havemeyer & Elder. The inspectors, whose duty it is in discharging a cargo to see that it is unloaded prop- erly and laid out mark by mark, and also to designate the place where the sample and re-sample packages shall be laid, do not perform this duty, thereby causing great incon- venience and delay in the sampling of the sugars. We sometimes find amongst the sample packages damaged sugars, and if samples are drawn from these damaged packages the tests of the sample would be lowered for duty. Generally one "trier" full of sugar drawn from a sample package will fill a sample can, if sugar be free centrifugals, but invariably we have to draw three or more, and what does not go in the can is spilled upon the ground. The locks on the sample closets on the docks have been changed several times, for the reason, as I understand, that irresponsible and improper persons had keys to the closets. The present sampling regulations are good enough if they were carried out. Our tries have very little chance to get rusty, from the fact of their constant use. The practice of tiering up hogsheads two tiers high for the accommodation of the refiners should be by all means discontinued, as it is contrary to regulations and samples can not be fairly drawn. I am often asked by the refinery employes to call up the examiner at the appraiser's store and ascertain if they can melt up sample packages. This I do and receive favora- ble reply direct from the sugar-room by telephone. Owing to this practice the Govern- FRAUDS IN NEW YORK CUSTOM-HOUSE. 71 ment is unable to draw a re-sample in case it should he required, and is contrary to reg- ulation. A. B. Freeborn. Sworn to and subscribed before me this 13 day of July, A. D. 1887. T. Aubrey Byrne, Special Treaty Officer, Exhibit 134. New York, July 26, 1887. Geo. K. Gilbert, sampler, states as follows: I was originally apptd opener and packer in 1881 or 1882, aftd made sampler in Oc- tober, 1885.^ I know of no irregularities in connection with sugar matters at this port. I use a damp sponge. In one or two instances Examiner Bowne stated that somebody was using too much water on his sponge and warned us against the practice, and showed us one lot of samples affected thereby. I have assisted in grading cargoes of sugar where the marks were so indistinct that the sample packages could not be laid out properly by the marks. Sometimes we have been compelled to reject certain sample packages because they were manifestly of a dif- ferent grade than the mark should contain. I have sometimes had to sample packages in refineries and warehouses by use of a lantern. I have also sometimes found that when I had gone to draw my samples merchant samplers had been there before me. Sometimes we have been compelled to sample sugars at the refineries in wet weather, but under shelter. I have sometimes been or- dered to draw samples from re-sample packages, and upon inquiry found them (the original and re-sample packages) melted up. I knew Broker Dreyfoos, and met Col. Burt once or twice. I know Jno. Hetherington and Jas. Vale, their samplers; they are sometimes working the same time we are. Early this spring I bought a house from Mrs. Jas. Dale, value $7,000, well mortgaged. The original transaction was made with Mr. Dale and his wife, and an attorney then completed it. The mortgages referred to above are held by other parties than Mr. Dale; Mrs. Dale holding a second mortgage on the property. While at work in the sugar-room I have twice carried samples to the laboratory. The last time I was at work on Havemeyer & Elder's refinery district, which was last month, I do not recall making but very few re-samples; I should think not more than ene or two. Geo. K. Gilbert, Sampler, Sworn to and subscribed before me this 26th day of July, A. D. 1887. T. Aubrey Byrne, Spl. Treasy. Officer. I Exhibit 135. New York, July 11, 1887. Thos. D. Johnson, clerk and verifer, 8th division sugar-room, states as follows: My particular duties are to keep the test-book. When the certificates of tests arrive in the sugar-room from the laboratory I transcribe the chemist's reports to the test-book. I enter all of the certificates in my test- book; the only other person entering them is Mr. Remsen, the examiner. I see ia the test-books columns ruled under the heading of po- lariscopic tests, columns ruled and numbered 1, 2, 3, and 4, whieh, I presume, was intended for the purpose of filling in with the different tests made of the one sample. Only column No. 4 is used, in which I put the test for classification as indicated on the certificate from the laboratory. This custom I found in vogue when I entered upon my duties. Examiner Remsen always entered under the head of column 1 ' Tests taken as basis for classification, " the classification of the sugar, which are identically the same figures that I write in. S. Ex. 3 63 72 FRAUDS IN NEW YORK CUSTOM-HOUSE. The laboratory certificates are filed away ooce a month. There is more danger in losing a laboratory certificate than there is losing the test-book. I know of no other record of tests than those made in this test-book. I have seen Examiner Remsen point- ing out to Dr. Sherer errors in the laboratory certificates of tests. Dr. Sherer frequently visits the sugar-room and has conferences together. I have seen Mr. Abbott, of the laboratory, also in the sugar-room. I have seen Damage Examiner Sherer also in the sugar- room. Capt. Flowers, the clerk in the laboratory, makes out these certificates and brings them to me in the sugar-room. P. Doonan also does messenger work be- tween the laboratory and sugar-room, as does also Mr. Morgan, of the 8th division. I was messenger in the second (sugar) division when Mr. Jas. Burt was assistant ap- praiser of that division. I succeeded Jacobs, the clerk and verifier, in his duties Nov. '85. I don't think I have been in the laboratory over twice since my appointment. Messengers from the sugar division almost daily visit the sugar- room with requests for re- tests from importers or their brokers. Brokers Burt and Dreyfoos make the most frequent requests for se- tests, as they represent the most sugar importers. These re- quests are brought to me. I pin the request to the invoice, after noting the request for re- test of the mark on the test-book, as for example: under date of Dec. 24, '86, Bay State Sugar Refining Company, represented by Broker Dreyfoos, Ex. "California" from Magdeburg, entered Dec 21. Invoice No. 12371; there were the following pack- ages: 500 bags beet sugar, marked " G 666;" 500 bags " B 406;" 500 bags " 406 B;" 500 bags ' ' B 406 C ' ' — Examiner Remsen. No. of samples, 455, 456, 457, 458, serial numbers to laboratory Dec. 24. Chemist report dated Dec. 24; tests 93.70, 94.0, 94.0, 94.30. Request was made by Broker Dreyfoos for re-test on Dec. 28, on mark " B 406 C," 500 bags, which was granted, the original test being 94.30, while the re-test brought the classification to 94.0, thus losing to the Government one lull degree for duty ( T f ^ cent per pound). Requests are usually made when the fractional part of the degree is small; thus 91.1, 91.2, 91.3, and 91.4. I never saw Mr. Burt in the sugar-room, nor Mr. Dreyfoos, or any other broker, al- though I have been in the sugar-room nearly two years in charge of the test-book. I have heard it spoken of that Mr. Dale loans money. Thos. D. Johnston. Sworn and subecribed to before me this 11 day of July, A.D. 1887. T. Aubrey Byrne, Special Treasury Officer. [N. Y. Cat. No. 1118. — Certificate of polariscopic test of sugar.] Sugar return, showing polariscope test, under Department circular No. 62, May 22, 1883. TJ. S. Laboratoby, Appraiser's Office, New York, July 1, 1887. Labora- tory No. 2630 2631 2632 2633 2634 2635 2636 2637 2638 2639 1st test. 90-R 88.3 87.5 85 53 89.3 93.9 95.9 88.7 89 2d test. 90-B 88.5 87.8 85.31 89-88.7 94 96 88.7 88.7 3d test. 88.6 Test for classifi- cation. 90 88.3 87.5 85 53 88.6 93.9 95.9 88.7 88.7 Labora- tory No. 2640 2641 2642 2643 2644 2645 2646 2647 2648 2649 1st test. 94 94.5 95.4 88.9 87.9 89 88.3 88.7 88.8 89.3 2d test. 94 94-94. 95. 89 88 89. 89 88.8 89.3 3d test. 94 Test for classifi- cation. 94 94 95.4 88.9 87.9 89 88.3 88.7 88.8 89.3 Robert Rigney, T. F. B. Approved : Edward Sherer, Chemist in Charge, FRAUDS IN NEW YORK CUSTOM-HOUSE. 73 [N. Y. Cat. No. 1118. — Certificate of polariscopic test of sugar.] Sugar return, showing polariscope test, under Department circular No. 62, May 22, 1888. U. S. Laboratory, Appraiser's Office, New York, July 1, 1887. tory No. 1st test. 2d test. 2612 79A 79L 2613 83.8 83.9 2615 83 82.7 2616 85.3 85 2619 81 81 2620 83.6 83.3 2621 83.8 83.7 2622 83.3 83 2623 76.7 77 3d test. Test for classifi- cation. 79 83.8 82.70 85 81 83.3 83.7 83 76.7 Labora- tory No. 2624 2590 2614 2018 2625 2626 mil 2628 2029 1st test. 88.5 76 81.7 82.7 88.3 88.3 88.4 88.7 88.7 2d test. 88.8 75 81.4 83 88.6 88.5 88.7 89 89 3d test. 75.7 Test for classifi- cation. 88.5 75.7 81.40 82.7 88.5 88.3 88.4 88.7 88.7 Approved : Edward Sherer, Chemist in Charge. H. J. Abbott. G. Land.smann. Exhibit 136. New York, July 25, '87. Frederick Leimbach, sampler, 8th division, states as follows: It is a rare case that we find sugar packages not properly laid out. Sometimes we do find them not properly laid out, and this we know from the quality of the sugar as we draw our samples, and if we are not careful the Government will not receive its proper revenue. I use a moist sponge with only a very little water in it. Examiner Bowne once called attention of the samplers to samples of sugar which he showed us as having been drawn on another district, and said there was too much water used on that sugar and warned us to be very careful about wetting our sponges. This occurred last fall. Sometimes we are compelled to sample sugars in the refineries and warehouses, where a lantern is nec- essary to distinguish marks and stencilling of the sample packages. I always deliver the key of my sample-boxes to the examiner every night. I sometimes find that the merchant samplers have drawn their samples from the sam- ple packages before we draw ours. I know John Hetherington and Jim Vale by sight, samplers for broker Burt and Dreyfoos. I have been sent to draw re-samples and found the packages melted up. I have heard permission given to refiners, over the telephone from the 8th division, to melt up certain sugars. It has happened that Iloila, Cebu, and Manila sugars have not been laid out, mark by mark, so that we had to depend upon the look of the sugar to tell whether it was a high grade No. 1 or a low grade No. 3. The weighing of these sugars, mark by mark, has often been done when no marks have been indicated on the permit. Sometimes when I am on duty in the sugar- room I carry samples to the laboratory. I do not know of any of the sugar-sampling regulations that are not being enforced. F. Leimbacit, U. S. Sampler. Sworn and subscribed to before me this 25th day of July, A. D. 1887. T. Aubrey Byrne, Special Treasury Officer. * Exhibit 137. Adam G. Mundy, sampler, examined under oath, states: I was appointed Feb'y 17th, 1879. I have been a sampler ever since. Frank May was asst. appr. at that time. I know nothing about irregularities in the sugar division. I don't know of any sam- pler or employe of the Government in the sugar division ever being paid, directly or in- directly, for manipulating sugar; nor have I heard of samplers receiving gratuities. I have never known of samplers or examiners arranging sample packages so that the low-grade sample packages will be on the outside of the sample files. 74 FRAUDS IN NEW YORK CUSTOM-HOUSE. On my oath I know of nothing which, to my mind, is an irregularity relating to th« sampling of sugar. I use a sponge, one very slightly damp. I have never used a wet sponge. The only person I had to speak to about it was the late Jno. Farren (sampler). I have a key to the sample-boxes, but not one to the sample closets. I found a fraudulent stencil-plate up at Harbeck'saud gave it to Examiner McElwee last month. I did not cut any of the bags to get a piece of the bagging which showed the stencil mark on the bag. I did not make any comparisons. I paid no attention to the matter after finding it and giving it to Mr. McElwee. I was under Mr. Dreyfous (who is now a sugar broker) when he was an examiner for about a month. He is usually present on the wharves when his sugar is being treated. I have seen his sampler, John Hetherington, on the docks. I have known merchant samplers to have drawn their samples from sample packages before we got there. I met Mr. McElwee last evening and he told me all about this investigation. He did not suggest or advise me to do anything, for I would not listen to him. He told me that if I had any knowledge I had better tell it to you, and lor that reason I considered him under the inliueuce of liquor; I got disgusted with him. li the asst. appr., Mr. Tice, should ask me todoanything, and Examiner Bowne told me not to do it, I should obey my superior officer, Mr. Tice. If Examiner Bowne detailed me to a certain dist. and Asst. Appr. Tice detailed me to another. I should obey Mr. Tice. I am always provided with plenty of lanterns and would not sample' in the dark. I can sample hogsheads that are tiered two high as well as on the ground. I never knew of the report that was made by Sampler Gill, and which was investi- gated, as regards fraudulent transactions in sugar sampling. I reside at 374 10th st. , So. Brooklyn. I never heard of certain keys of the sample boxes being lost, nor of any key of any closet that was found; nor did I find any closet that had been broken into. I have been present in the district office when the examiner has gone to the telephone and called up the sugar-room and inquired what a certain sample tested, and also ask if certain sugars could be melted up, and the answer has been returned that they could. I have heard such conversations. No samples were ever brought round and shown to me by Examiner Bowne. I never visited the office of sugar brokers on Saturday afternoons. There is an order in the office prohibiting samplers from visiting the offices of sugar brokers. I don't know where the office of James Burt, sugar broker, is; it is in Pine st., but its whereabouts I don'tiknow. 1 never visited the office of Jos. Dreyfous. I never had a conversation about this in- vestigation with Messrs. Freeborne and Twamley, nor did I ever say that a man had everything to lose and nothing to gain by telling the truth in regard to frauds in sugar. I do not know how low classifications in sugar are effected. I do not know what would lower the classification of sugar. It strikes me that I have heard of samp 1 ers going to a refinery to make a re-sample and finding that the re-sample packages had been melted up. I have objected to sampling because the samples had not been laid out properly; that is because I could not see the U. S. mark on them. I don't know whether they were stencilled behind, as I did not consider it part of my duty to pull them down. 1 do not understand that the late Sampler Seymour had learned of irregularities in sampling sugar, nor do I know why he was asked to resign. I can not say that the wagons conveying the samples to the appraiser's store were always accompanied by a sworn officer, for I think there have been times when they were not. Jimmy Maloney's son, who is not a sworn officer, has sometimes driven a sample wagon. I have called the attention of my examiner to packages that looked like damaged sugar, but have refused to sample them. I have never been in the sugar-room when re- quests from the Havemyer & Elder refinery have been sent up or by telephone inquir- i ng as to certain tests of sugars. 4 I do not know that it is the custom for brokers to ask for re-tests. It is supposed that Maloney & Kelly own their wagons. I never heard that they were presents to them. The Government furnishes us with crocus and oil to keep our triers clean. Adam G. Munday, U. S. Sampler. Sworn and subscribed to before me this 25th day of July, A. D. 1887. T. Aubrey Byene, Special Treasury Officer, FRAUDS IN NEW YORK CUSTOM-HOUSE. 75 Exhibit 138. New York, July 25, 1887. Thomas G. MacQuaide, sampler: I was originally appointed sampler in 1875. My salary was $1,000 a year, and in- creased to $1,200, 1877. I was once called before Special Agent Chamberlin to state what I knew relative to how sugar was sampled, and as to what I knew about Samplers Knoblock, Nugent, and Watson. I told him I knew nothing of these men. I do not know of any irregularities in the sampling of sugar at the present time. Of this I am positive. 1 do use a moist sponge. If it was too wet it would spoil the sugar in the box, and from what I have been told, I think it would lower the test. I have been re- peatedly warned not to use the sponge too wet, and have been shown sample cans of sugar which had too much water in them. I have found sugars of another mark mixed with the mark that I have been sampling. I have found sample packages of low-grade sugars in the piles of high-grade sugars. We oftentimes find low-grade sugars mixed with high-grade sugars and vice versa (evidently by mistake). Sometimes we sample in dark places, which necessitates the use of a lantern to see the marks, and to see also whether "U. S. sample" is stencilled on the bags or mats. About a year ago, or a little over, I discovored irregularities in the laying out of packages for sampling at Congress st. stores, and called the attention of Mr. McElwee, who was then a sampler, to it, and he called Examiner Davis' atten- tion to it. If it had not been discovered the Government might have lost some duty on the cargo. I found that the sample packages did not run as good as the main part of the cargo. I have had a key of the sample closets, under Mr. Bowne's orders, and was directed to go around and examine the closets and see if they were all in good order. I found them in good order. A long time ago, some years back, locks had been changed by the Government on the sample -closets. I do not know the reason why. Sometimes the merchant samplers draw their samples from sample packages before the U. S. samplers draw theirs. I often see Jim Vale, Broker Burt's sampler, and John Hetherington, Broker Dreyfoos' sampler, sampling on the sugar districts. We often work alongside of each other. I have never received any inducement to draw samples favorable to an importer from any person. Examiner McElwee has told me frequently that he believed that money was being paid by importers to influence sampling. I believe that ex-Sampler and Examiner Gill was an honest and faithful official, and any statement that he would make I would believe to be true. I never knew of any investigations being made by any special agents rela- tive to inequalities in sugars. I am of the opinion that Havemyer & Elder and the Brooklyn Refining Company also import the highest grades of sugars at this port. Thos. G. MacQuaide. Common sense teaches me to sign each sheet of this affidavit. Thos. G. MacQuaide. Sworn and subscribed to before me this 25th day of July, A. D. 1887. T. Aubrey Byrne, Special Treasury Officer. Exhibit 139. N. Y., July 28, 1887. Luke F. McDermott, sampler, states as follows: I was appointed sampler about April, 1886. My attention has been called to certain samples which Examiner Bowne said water had been used in the sampling, and remarked that if it occurred again he would call the attention of the appraiser to it. I do not know on what district the water was used in the samples referred to by Mr. Bowne. I have been sent lots and lots of times to draw samples, when I have found the origi- nal samples melted up. I consider Examiner McElwee one of the ablest, if not the ablest, examiner of sugars in the 8th division — a man of excellent character and general integrity. Every sugges- tion that he has made looking to reform in the methods of sampling and examining sugars has been frowned down by the majority of his associate officers. I think if the Secretary desired an honest opinion as to matters connected with the 8th division, that Examiner McElwee would give it if called upon. When I was a messenger and acting clerk in the 8th division Sugar Broker Burt used to come in, practically, every day. A soon as he came he would always send one of the 76 FRAUDS IN NEW YORK CUSTOM HOUSE. officials in the office into the sugar-room for Examiner Remsen; the clerks hardly ever waited to be sent, but would go right inside and say, *! The colonel is here." It was Broker Burt's invariable custom to look over the invoice blotter and select out such invoices as he wished sent down to the invoice bureau, and those that he did not wish sent down, although the sugar noted in the invoice had been tested, he would put back in the blotter, and would tell Mr. Remsen "to hold them." Upon nearly every occasion that Broker Burt visited the sugar-room while Mr. Hay was asst. appraiser, and while I was employed there as clerk, Mr. Hay would go out into the main hallway with Broker Burt and hold private conversations with him of ten or fitteen minutes' duration. Luke P. McDermott. Sworn to and subscribed before me this 28 day of July, A. D. 1887. T. Aubrey Byrne, Special Treaty Officer. Exhibit CO. « Office of Special Agent Treasury Department, 402 Washington street, New York, June 28, 1887. Henry William Kerr, a stenographer, residing at 226 Atlantic avenue, Brooklyn, and employed by Mr. T. Aubrey Byrne to take notes pending an investigation of sugar matters at the port of New York, upon oath, solemnly swears that he will in no manner and to no person divulge or speak of anything that transpires during any of the confer- ences at which he may be present or a part, other than to Special Agent H. A. Moore or T. Aubrey Byrne, under any circumstances whatsoever; and also swears that if he is ap- proached in any manner by any person on the subject he will immediately make known such fact to T. Aubrey Byrne or Special Agent Moore. Henry Wm. Kerr. Sworn and subscribed to before me, this 28th day of June, A. D. 1887. H. A. Moore, Special Agent. Asst. Appr. Moore, first div. (damage), states as follows: That the statements of damage allowances, when made, are posted at the custom- house. The damage warrant is approved by me after the damage examiner has ascer- tained the per cent, of damage which is to be allowed upon certain marks of sugar. The samplers of the 8th div. draw the damaged sugar samples for the damage exam- iner. The sugar is then brought to the U. S. laboratory, at the appraiser's store, there submitted to polariscope tests, and the per cent, of damage is ascertained. I will sub- mit to you, if I can find one, a printed statement which covers the notation of the polari- scope tests of the damage samples with the damage examiner's certificate. If there be such printed slip on which the per cent, of damage allowances is noted, I suppose it is attached to the damage warrants. I have never seen one, but probably it is done. The ascertainment of the per cent, of damage by polariscope is, according to regula- tion, done at the laboratory, at the appraiser's' store. I never heard of its being done elsewhere, not being in accordance with regulations, of course. Sometimes two ex- aminers sign the damage warrant. If the examiner is a man ot experience he alone signs the certificate, but it is always approved by me. It has never been brought to my attention that excessive damage has been allowed on sugar. I have heard of no claims being made for "commercial damage" other than to the goods, viz, to the coverings, not to the contents. I know Mr. Kippen, damage broker. I think that he makes a specialty of damage broking. I know Wm. Jones; he likewise makes a specialty of damage broking. I think both of those men attend exclusively to damage goods of any kind. This is a true transcription of my stenographic notes. H. W. Kerr, Stenographer. A true statement as made in my presence. H. A. Moore, Special Agent. FRAUDS IN NEW YORK CUSTOM-HOUSE. 77 Assistant Appraiser Moore, of the damage division, declines to sign this statement, as the questions are not incorporated and that this is a garbled and unintelligible statement. The above is a true and stenographic transcript of the statement made by Assistant Appraiser Moore. T. Aubrey Byene. Assistant Appraiser Moore entered the examination room, interrupting the proceedings, when Examiner W. D. Davis was under examination, and stated that he would not sign the statement, as it was in a garbled and unintelligible condition; that the questions were not incorporated, and although informed that it was at the special request of the Secretary that the questions should not be incorporated in the statements of the gentle- men called, he still refused to sign and laid the statement down upon the desk. His manner was discourteous, and evidenced to me a very disturbed condition of mind. T. Aubrey Byrne, Spegial Treasury Officer. Exhibit 140. Office of Special Agent Treasury Department, 402 Washington .$/., July 15, 1887. Mr. T. A. Byrne: Sir: In reply to an inquiry made to Mr. Johnson this morning regarding a certain sample of sugar, mark not verbally specified, he said in substance that it had gone to the laboratory yesterday afternoon and had not yet returned. An examination of his test-book, made directly after above statement (11. 3C), showed that every sample sent to the laboratory on the 14th of July was reported on by the chemist on the same day. An examination of same book and at same time showed that many samples had been sent to the laboratory and reported on already (11.30 a. m.). One cargo, as imported by Skeddy, Minford& Co., on the Thaclara, had eight different marks, all tested and reported, yet there was one mark K, the sample of which had not been received (mark K not included among the eight). Inquiry being made for said mark to Mr. Bowne through telephone. Havemeyer & Elder had a cargo of sugar taken from the Santiago, sent to the laboratory on July 11th, '85, samples 3236, 3237, 3238, 3239, day of month not given as to report being made. A re- test of the same sugar was made on the 13th of July, which lowered the classification of two of the marks, at least four cents per cwt. Respectfully, Robert Macgregor Ormiston, Statistician on Sugar. Sworn and subscribed before me this 15th day July, 1887. T. Aubrey Byrne, Spl. Treasury Officer. R. M. Ormiston states as follows: I have just returned from the sugar-room and Examiner Remsen informs me that when brokers ask for re-tests of certain sugars, and when the re-test is not lower than the original test for classification, the original test for classification is taken as the test for duty. Robert Macgregor Ormiston. Sworn and subscribed to before me this 27 day of July, A. D. 1887. T. Aubrey Byrne, Special Treaty Officer. Exhibit 141. James O'Donnell, sampler 8th division, examined on oath, says: I was originally appointed a sampler in Aug., 1885. I have no knowledge, direct or indirect, of any fraudulent or irregular practices in the method of sampling, testing, or appraising sugars at this port. I have never heard, nor do 1 know, of any person who received a present or compen- sation from any sugar importer, or the representative of any sugar importer or broker, FRAUDS IN NEW YORK CUSTOM-HOUSE. or an employe of any sugar importer or broker, of compensation in money, or a promise of money, for drawing samples so as to secure low classification. John Hethington is Broker Dreyfoos' sampler, and I believe they call Mr. Burt's man Jimmy Vail. John Hetherington never offered me money, nor have I received money from any per- son for drawing samples in any shape or form or promise. No person has ever tried to influence nie in my work. I use a moist sponge; it is necessary that thereshould be a certain amount of moisture. I have sometimes found pretty low grade sugars mixed with high grade. There is a dif- ference in sugar that may belong to the same mark, and yet vary in grades. I carry a key of the sample boxes, but not of the sample closets. It strikes me that I heard Mr. McElwee say something of a sample-closet key that was found. I have occasionally heard requests made by telephone from the sugar districts to the sugar-room, but we do not pay much attention to the telephone. I state positively that 1 have no knowledge, direct or indirect, of any fraudulent or irregular methods in the manner of sampling sugars. James O'Donnell, U. S. Sampler. Sworn to and subscribed before me this 26th day of July, 1887. T. Aubrey Byrne, Special Treasury Officer. Exhibit 142. N New York, July 25, 1887. Patrick T. Rahl, messenger and acting sampler: I was appointed in 1 885. I know of no irregularities in the sampling of sugars. I use a moist sponge. Merchant samplers do not draw their samples from sample pack- ages before the TJ. S. sampler draws his. I sometimes, in refineries and warehouses, have to use lanterns to distinguish marks and see whether the packages have been sten- ciled. I have somtinies found in piles of samples, representing a certain mark, low grade and high grade sugars, mixed, but we draw the attention of the examiner to the fact. 1 know John Hetherington, merchant sampler, and Jim Vale, a merchant sampler. These men always wait until we are through before they draw their samples; that is, when they are there. I know Broker Dreyfoos by sight. I have heard him ask an ex- aminer to telephone Mr. Remsen and inquire whether a test of certain sugars had been made, and permission has been granted to melt up certain sugars. I have been sent to draw samples from re-sample packages at the refineries and found that they had been melted up. I always find Iloilo, Cebu, and Manila sugars laid out mark by mark. The regulation requiring the use of red plugs is not enforced. Havemeyer & Elder receive the highest grade sugars coming to this port. Patrick T. Rahl. Sworn to and subscribed before me this 25 day of July, A. D. 1887. T. Aubrey Byrne, Special Treasury Officer. Exhibit 143. New York, July 19, 1887. James Smiley, messenger, laboratory, states as follows: I was first appointed in January, 1885. My duties have been those of mixing the sugar samples sent from the sugar-room to the sugar laboratory. I break the lumps with a mortar and pestle, and pulverize the sugar, then return it to the cans for the weighers. The serial number of the sample is pasted on the side of the can, I never disturb the number, and never act upon but one can ata time. Oftentimes I find large lumps in the sample cans. These may be as a general thing hard and dry, still some may be moist. I often find particles of impurities in the samples, like bits of coal, wood, gravel, gunnycloth, and ravellings. These I eliminate from the sample with great care, so that when I have finished preparing the sample for the weigher the sugar FKAUDS IN NEW YORK CUSTOM-HOUSE. 79 is in as perfect condition as I can make it; and my eyesight is good, so that I feel free to state that the sample is properly prepared for the weigher. From my experience*. I can tell from a glance centrifugal, Pernambuco, and other grades of sugars. Sometimes I receive from the sugar-room sugar samples that some- times are pretty moist. I have never called the attention of Dr. Sherer to this fact, but I think I have mentioned it to other polariscopists in the laboratory. 1 have mentioned it to Messenger Cole, my associate sugar-mixer, "that this sugar is moist," and he has mentioned the same tact to me on certain samples. These sugars were not damaged sugars. While I had no knowledge that these samples had been tampered with, yet I know from my experience in the sugar-mixing that these samples would test very low on account of this moisture. I have known a certain sample to be sent back from the sugar- room of the 8th divis- ion four times for re-test, and 1 know that it was the same sample each time, and I have heard the remark made at these times, when re-tests and late work was asked lor, that " these samples must be some of so-and-so's sugars;" Burt's and other importers' sug- ars. Dr. Sherer has general supervision of my work of mixing sugars and gives me general directions as how to mix the sugar. 1 have heard it stated that Mr. Dale loaned money to employes. Mr. Dale sometimes visits the laboratory several times a day. I have heard of the firm of Sherer Bros., sugar-testers, down-town, but I never visited their place. Occasionally I am sent to the sugar-room of the 8th division by Dr. Sherer, or Mr. Flowers, his clerk. Mr. Philo Cole, messenger, is my only assistant in mixing sugars. James Smiley. Sworn and subscribed before me this 19th July, 1887. T. Aubrey Byrne, Spl. Treasury Officer. Exhibit 144. N. Y., July 25, 1887. Peter Twamley, sampler, 8th division, states as follows: In 1887 I was appointed opener and packer, and assigned to the damage division. In April, 1879, I went into the sugar division as sampler. The only irregularity I know of at this port in the importation of sugar is that some- times sample packages are not properly laid out mark by mark as required by the reg- ulations. I have frequently called the attention of the examiner to this fact. I have iound very often bags not stencilled "U. S. sample " laid out for us by the store- keeper after the weighers are through. I have refused to sample these packages. I have often seen samples laid out which did not represent the proper proportion of the mark of the cargo. Then when we would make complaint the storehousemen would quickly produce bags which they claimed were the sample packages. We oftentimes find packages of sugar in the sample piles which are not stencilled *' U. S. sample." I have several times before sampling, upon my suspicions being aroused, looked for fraudulent stencil plates. I have found low-grade sugars mixed with high-grade sugars of the same mark; I mean by this, they are laid out to represent this mark. When I see an unusual number of them I call the examiners' attention to it. This I have done several times. Sometimes I find that merchant samplers have drawn their samples from the U. S. sample packages before we reach them. I use a moist sponge. I have repeatedly been warned not to use my sponge too wet. I do not know what effect water would have on testing the sugar. I never was found in a storehouse sampling sugar with a sopping-wet sponge. Mr. Examiner Bowne, one day, showed me two or three samples in which water had been immoderately used, and remarked that they might have been damaged bags. I have keys to the sample boxes. Sometimes the examiner gives me the key to the sam- ple closets, but not outside of business hours. I did lose a key of a sample closet, as I threw it to an examiner at his request. It fell overboard. I knew at one time that all the sample closets were examined and made more secure. I have often been ordered to accompany the wagon containing the samples from the dock to the appraiser's store, when the owner of the wagon, who is a sworn officer, is not there to accompany it. I signed for my wife an agreement for the purchase of a house from Jas. Dale, price $7,000, situated on Walton ave., $3,000 cash paid, balance on mortgage. I have heard of Jas. Dale loaning money to employes. According to my judgment Havemeyer & Elder import and buy the largest quantities of the highest grade sugars that come to this port. I make this statement from my knowledge as a sampler of the different grades of sugars. I have sometimes been sent to make re-sample of the sample bags, and found them melted up. This always occurs on 80 FRAUDS IN NEW YORK CUSTOM-HOUSE. the refinery districts. Sometimes in the refineries, I have been called upon to sample packages in the dark, necessitating the use of a lantern to find the sample packages and marks. I only know two sugar brokers at this port. They are Burt and Dreyfoos. Also know their samplers, Jas. Vail and John Hetherington. Broker Dreyfoos or his man Hether- iugton is generally present when sugars represented by them are being examined. Sometimes 1 am ordered by Examiner Remsen to visit an importer's office to find out the marks or location of a cargo. I have been told that years ago there was a sugar ring, and that samplers made money out of it, but to the best of my knowledge the ring does not existat this time. Peter Twamley. Sworn to and subscribed before me this 25 day of July, A. D. 1887. T. Aubrey Byrne, Special Treats' y Officer. Exhibit 145. Objecting to take oath to secrecy. R. E. Bowne. — Examiner R. E. Bowne said: " I object. I do not refuse to be sworn as far as anything connected with the sampling, testing, or appraising of imported sugars; but so far as muzzling myself, I do most emphatically. I am prepared to go on with anything connected with the business of the Department, but I refuse to preserve se- crecy. I don't think anybody but a grand jury can " Jas. S. Dale. — Messenger Jas. Dale said: "No, sir; I shall not take any such oath." Edw. Sherer. — Chief Chemist Edward Sherer said: " I draw the line there " (as to secrecy). I am ready to testify; but as to secrecy, I must decline. I refuse to be sworn to secrecy. ' ' W. D. Crttmbie. — Examiner W. D. Crumbie said: "If you are not a notary I refuse to be sworn; I object also unless questions and answers are to be included. I want to see your authority." A. G. RE3ISEN. — Examiner A. G. Remsen said: " It is tacitly understood and arranged that objections were to be made to the manner of procedure in this investigation." The above are statements made, to me, by the above witnesses, when they appeared before me to be examined. T. Aubrey Byrne, SpL Treas'y Officer. N. Y., June 28, 1887. Exhibit 146. June 10th, 1887. Edward S. Fowler, late ass't appr. damage division, at present attorney at law, No. 55 Liberty St., New York, states: I was ass't appr. in charge of the damage div. for some years, and was suspended April 31st, 1885, on the recommendation of Appr. McMullen. The *' sugar ring" is a most powerful organization, and its personnel embraces James Burt, chief, representing Havemyer & Elder, Swift & Co., Butler McDonald & Co., nud one or two other firms; Special Ag'ts Tingle, Tieheuor, Hinds, Supervising Special Ag't Martin, Naval Officer Burt, Deputy Naval Officer Comstock, and Spec'l Ag't Ayer, now on duty on the Pacific coast, on the one hand, and Jas. Dreyfoos, representing some eighteen or twenty sugar-importing firms, Clerk Rose, and a few other minor officers, as aides, on the other side. In my opinion, this is the personnel of the "sugar ring." For a long time Burt and Dreyfoos were at war, but on account of the latter knowing too much he was let alone to work his way, which he has done. Burt pulls his men — employes of the Government — by his political and personal prestige, backed by that of his brother supported by the special agents. There is not a man in the sugar div. but who either owes his present position, his ad- vancement in office, his increase in salary, and his retention in office directly to the in- fluence of James Burt, and not one of these men would dare for an instant to do any- thing contrary to his desires. FRAUDS IN NEW YORK CUSTOM-HOUSE, 81 Appr. McMullen owes his advancement from examiner of hardware and cutlery to the appraisership directly to the pleading made in his behalf by Naval Officer Burt, hacked and co-operated in by Abraham S. Hewitt, of Cooper, Hewitt & Co., hardware dealers. 1 understand it was represented to the President that Mr. McMullen was from his long years of training as examiner eminently fitted for the position of appr., and because he was known to be a Democrat, serving under Republican administration, was held back when he deserved advancement, and that inasmuch as the administration had changed it was nothing more than right, and according to the spirit of civil-service re- form, that he should be advanced to the appraisership. I understand that he acknowledges his present position to Burt's influence; therefore he is quite willing to do Burt's bidding without question; of course, he believes that James Burt is a very high-toned gentleman. Of the men Burt uses to obtain low classifications of his sugars are Abraham Remsen, who owes all he is from his first position to his present position to James Burt; for in 1867 when James Burt was in charge of the 7th avenue armory, in charge of quarter- master's supplies, he made Abe Remsen asst. storekeeper; then he had him put in the U. S. service in 1869 as a sampler, when he, Burt, went in as asst. app'r, then he ad- vanced him. And Burt, through his influence with Asst. App'r Hay, has kept Remsen in his position ever since. It was a notorious fact that Asst. App'r Hay was Burt's tool. Second. Robt. E. Bowne was put in the sugar div. March 4th, 1870, as an opener and packer, and was advanced to supt. of samplers through Burt's influence; he practically does Burt's bidding. Third. W. H. Townsend was for a time in my division (damage), but Burt had him advanced to examiner in the 8th div. (May, '83). Fourth. During all the time that Hay was asst. appr. he was Burt's tool absolutely, he was originally put into his position by him and kept there. At one time he was at the custom-house under Naval Officer Burt, then transferred to the appr. 's store at Jim Burt's request. Fifth. When Mr. McMullen was made appr. Burt had his brother-in-law, S. C. Guyon, made examiner of hardware in his (McMullen's) place. Sixth. Appr. McMullen's private secretary is a relative of James Burt, and, of course, does Burt's bidding, as Burt is his patron, and Appr. McMullen firmly believes in Bnrt. Seventh. James Dale who mixes sugar in the sugar-room before it goes to the laboratory is another tool of Burt's, and perhaps he is responsible for more crookedness in the work of testing sugar than any other man, for through his manipulations the samples can be so mixed as to cause a test to go up or down, and being assisted by knowing whose sugars certain serial numbers represent, he can give the right hint to the chemist in the sugar laboratory, so that tests can be made favorable to importers. James Dale is quite a wealthy man; he has most of the sugar samples (the residue of the sugar samples) to sell for himself, and out of these he makes a snug sum yearly; be- sides this he is quite a money-lender, loaning money to the employes at the appr's store at usurious rates of interest. He does not allow it to appear as though he made the loans, but invariably says he can get the money for the borrower, who must pay for the trouble he is put to in getting the loan for him. App'r McMullen must be knowing to this, for he generally sees to it that Dale's dues are paid by not letting the men who borrow get their money before they square accounts with Dale. Dale has been making for years as much as $5, 000. 00 annually; he has been buying real estate in the annex district, but most of it is in his wife's name. I recently ran across several of his real estate purchases when I was looking up some deeds in that section for clients of mine. Eighth. Edward Sherer, chief chemist in the U. S. laboratory, is clay in Mr. Burt's hands and does his bidding; the same could be said of nearly everyone else in the labo- ratory; all are in Mr. Burt's hands and dare not cross him for they know too well his power. Ninth. The teamsters who drive the sample wagons are in Burt's debt for retention in office, and they are always ready to do him favors. Tenth. John Sherer, damage examiner, I think is an honest man. Eleventh. A member of a sugar-importing house not long ago told me he was com- pelled to pay Burt to fix his classifiations or he would not be able to do business and keep even with other importers. Twelfth. The samplers have a way of squirting water into a sample whereby the classi- fication is lowered. Thirteenth. Broker Dreyfoos pulls his men at the appraiser's store by paying them, while Burt uses his political influence over them. I will guaranty that if five new samplers were to be selected every one would owe S. Ex. 123 6 82 FRAUDS IN NEW YORK CUSTOM-HOUSE. their selection to James Burt, who would tell Appr. McMullen just which he should select. Theo. Havemeyer, of the firm of Havemeyer & Elder, paid |40,000 into the Republican campaign fund during the Blaine-Cleveland campaign. James Burt was outwardly a strong Blaine man, while his brother, the naval officer, was working for Mr. Cleveland, so that in any event the "sugar ring" was secure whichever party came into power. You can read, if you please, this piece of paper. "I will not read it to you." The slip of paper handed me (T. A. Byrne) read as follows: F. Maher, asst. bk'keeper for Havemyer & Elder, residing at No. 143 Woodbine st. , bet. Centre and Evergreen aves. , Brooklyn, states to J. P "that Naval Officer Bart receives $12,000 per year from Havemyer & Elder." You can look this matter up if you like, but it would take clever work, I can assure you of that. I don't say that this is true; I show it to you for what it may be worth. Your movements are known, and have been ever since you were at work, and "the ring" don't fear you or the results of your work. With a fearless, honest lawyer in Appraiser McMullen's place, the ring and existing combinations in various trades would be broken up; take, for instance, silks, gloves, drugs, aniline dyes, linens, and hardware. I have evidence and affidavits of rascality of the "sugar ring," but I will not show the affidavits to you, for I am satisfied that nothing that you can do can break up the "ring" so long as Appr. McMullen remains in office. If he was suspended I would cOme for- ward with my evidence: till then I am dumb. The sugar-damage brokers are Jones and Kippin, and through them large damaged allowances are secured. The allowance of 5 per cent, commercial damage is a fraud. Steam cargoes of sugar have no damage as a general thing. Burt don't claim damage on his cargoes. He is too smart for that. He and Broker Dreyfoos are on good terms now. I understand New York has swallowed the sugar-trade, and I understand Boston mer- chants are making serious objection; about time they did. See me again, and I will put you in accord with certain men who will tell you of facts. The above is a faithful transcription of my notes made of his conversation and state- ments. T. Aubrey Byrne, Special Treasury Officer. Exhibit 149. April 5th, 1887. John A. Lydecker, broker, Beaver st., N. Y. City, states as follows: I was for three years special deputy collector at this port. I have had considerable business with Naval Officer Burt. I have always believed in the integrity of the naval officer, and never placed any cre- dence upon current rumors against him; but a certain transaction occurred which very materially altered my opinion. I will frankly state that my statement must be taken with this allowance, that I have a prejudice against Naval Officer Burt at the present time. Our differences arose subsequent to an occurrence which I will narrate. Shortly after James Burt, his brother, the then asst. appr. of the sugar div. at the appr's store, resigned, James Burt came to my office at the custom-house and asked me, y as special deputy collector, to allow the reliquidation of an entry of a certain large cargo of sugar which, through misapprehension, he had classified wrongly as one of the last of his official acts. The classification, he said, had been made at too high a rate. I think the importing firm in question was Fabric and Chauncey. James Burt said to me that the classification was too high by considerable, and that if I did not object he would have a re-liquidation made, intimating that the naval pffice was agreeable to the re-liqui- dation. I supposed the ten days allowed by regulation had not elapsed from the date of the liquidation, and gave an answer equivalent to assent. I ordered up the entry and invoice and looked over them, finding to my surprise that more than thirty days had elapsed from the date of the liquidation, consequently I did not send the papers back to the appr. A day or two after James Burt again called and wanted to know why the papers had not been sent to the appr. I told him of the date and the time that had elapsed, and told him to communicate his desires to the Secy, of the Treasury, who would, if the statement of facts warranted, order a re-liquidation. He demurred and urged me to allow the re-liquidation. I refused, and he left quite incensed. The next day Col. Silas Burt, the naval officer, came to me and said, "You did not oblige James in the / FRAUDS IN NEW YORK CUSTOM-HOUSE. 83 matter of re-liquidating that cargo of sugar." I said, "No," explaining my reasons. He, the naval officer, then took it upon himself to argue the point, showing me and stating to me that his office was quite willing that the re-liquidation should be made, as that evidently a great mistake had occurred in the classification, whicu would entail quite a loss to the importer. as well as an injustice, and that James had made a great error aud he wanted to have it set right. I told him the only way was to send the matter to the Secy, of the Treasury. He was quite put out, and for a long time showed it in his manner to me. A short time alter, this occurrence above narrated, James Burt met me and said, 41 You have knocked me out of quite a little money by not allowing that entry to be re-liqui- dated." These were his words in substance. I do think the naval officer supports his brother James in all his work as sugar broker at the appraiser's store, for shortly after Broker Burt resigned his position as asst. appr. he obtained the brokerage of a large number of sugar-importing houses of this city, though I can not cite you any particular cases to prove my statement. That there is truth in the current charge of manipulation at the appraiser's store in the passing of sugars at New York, and that James Burt controls the work with one other man named Joe Dreyfous, is borne out by the fact that Burt controls the importation aud classification of the majority of the sugars imported and entered at this port, I might almost say in this country. That the bulk of sugars should come to New York andpay duty here tends to prove that lower or more favorable classification can be obtained at this port than at any other ports. Again as Burt & Dreyfous are both ex-U. S. appraising officers and they control this work, the conclusion is a natural one aud a very good reason exists why they, the sugar men, should have these men, Burt & Dreyfous, attend to their appraisements. You ask me how could the naval officer assist in the underclassification of sugar. Well, it would be only necessary for one or two liquidating cler-ks of the naval office to suggest to the liquidating clerks at the custom-house to permit changes in liquidation to be made, for the importer is notified of the results which are obtained before the final liquidation is made on the entry; thus giving them opportunity to make objection through their broker, and by them to the naval officer. Suggestions from James Burt to his brother would without doubt be considered by the latter. The naval office is supposed to be a check upon the collector's office. I can not point out a case which could be accepted as evidence of direct connection between James and Silas Burt, the naval officer, which would prove the manipulation of sugar, but the fact exists in my mind, and I might truthfully say in the minds of those who are engaged in that trade in this city, that James Burt is valuable to the importers and refiners must be a fact, when his services are so necessary to them, and these services are mainly directed to the appraiser's store, for James Burt is never seen on the wharves or at the refineries when sugar is being unladen; his work is done at the appraiser's store. That sugar is satisfactorily handled by these men is noted from the few protests and appeals made. The whole scheme is viewed with apparent satisfaction by the outside sugar trade (I mean the trade in Boston and Phila. ) who, noticing the great advantage New York sugarmen possess, have ordered their sugars to be landed and pay duty at New York. I say that, taking all these things into consideration, in the absence of direct evidence of overt acts on the part of James Burt and Joe Dreyfous and the silent and sub rosa co-operation of the naval officer, are sufficient to the minds of fair men to show that the charges currently made are true. Another thing which is noteworthy is the laxity on the part of customs officers in handling sugar samples. These samples go out of the care of Government officers; they are laid up in closets within easy reach of the refining people. Why should sugar go to the refineries wharves? Weak human nature at two or three dollars a day succumbs and eyes are closed to manipulations, especially when a little thing amounts to so much in saving money to sugar importers. Let the sugar go to the Government stores as other goods, thus the Government weigher and higher officers would scrutinize everything and chances for fraud would be lessened by the presence of these men. A larger force of inspectors should be on the spot and not leave the vessels when the unloading of sugars is taking place or the sampling of sugars. Dreyfous and Burt are now on good terms; at one time they had a quarrel and did not speak to each other. I believe this quarrel has been forgotten. I believe App'r McMullen is an honest man, but he allows Broker Burt to hoodwink him completely. The position of Burt's brother and the power the naval officer wields is his lever. There is not an officer at the port but who wants to stand high with Naral Officer Burt, and by doing favors for James Burt they are assured of their standing with the naval officer." Mr. Lydecker was unable to give me the date of the occurrence referred t« when the 84 FRAUDS IN NEW YORK CUSTOM-HOUSE. firm of Fabric & Chauncey imported the sugar in question, but by taking the date of the resignation of James Burt as ass't app'r of the 8th div. I was able, by a long and care- ful search of the records of 1874, to find the importation in question; the facts relating thereto are hereunto annexed. In this search I was greatly aided by Chief Clerk Prince statistical div. N. Y. custom-house. « The above is a correct transcription of my notes. T. Aubrey Byrne, * Special Treasury Officer. Exhibit 175. [N. Y. Cat. No. 1118^. — Certificate of polariscopic test of sugar.] Sugar return, showing polariscopic lest, under Department Circular No. 62, May 22, 1883. TJ. S. Laboratory, Appraiser's Office, New York, June 24, 1885. Labora- tory No. A B C I> E 1st test. 82 82 81.8 82.3 82 2d test. 82.3 82 82 82 82 3d test. Test for classifi- cation. 82 82 81.8 82 82 Labora- tory No. 1st test. 2d test. 3d test. Test for classifi- cation. Approved : Edward Sherer, Chemist in Charge. H. J. Abbott. W. H. Townsend. [N . Y. Cat. No. ]118j. — Certificate of polariscopic test of sugar.] Sugar return, showing polariscope test, under Department Circular No. 62, May 22, 1883. TJ. S. Laboratory, Appraiser's Office, New York, June 22, 1885. Labora- tory No. 1st test. 2nd test. 3d t est. Test for classifi- cation. Labora- tory No. 1st test. 2d test. 3d test. Test for classifi- cation. P 96.9 96.8 96.8 96.9 96.9 87.3 88.0 84.0 96.9 96.5 96.6 96.6 96.8 87.0 88.3 84.8 96.9 96.5 96.6 96.6 96.8 87.0 88.0 83.8 W H Y Z 294«J 2'.)50 2951 Approved : Edward Sherer, Chemist in Charge. Robert Riqney. G. Landsmann. FRAUDS IN NEW YORK CUSTOM HOUSE. 85 [N. Y. Cat. 1118 j. — Certificate 01 polariscopic test of sugar.] Sugar return, showing polariscopic test, under Department Circular No. 62, May 22, 1883. U. S. Laboratory, Appraiser's Office. N*w York, June 16th, 1885. a — Labora- tory No. 1st test. 2d test. 3d test. Test for classifi- cation. Labora- tory No. 1st test. 2d test. 3d test. Test for classifi- cation. 2597 89.5 89.8 89.5 X. 85.8 85.7 85.' 2598 86 85.9 85.9 2599 91 91.2 91 2600 87.4 87.7 87.4 2601 86.8 87 86.8 2602 85.6 85.8 85.6 2603 86.3 90 86.5 86.3 2604 87.7 88.8 87.7 • H. J. Abbott. Wm. H. Townsend. Approved: Edward Sherer. Chemist in Cluxrge. [N. Y. Cat. No. 1118£. — Certificate of polariscopic test of sugar.] Sugar return, showing polariscopic test, under Department circular No. 62, May 22, 1883. U. S. Laboratory, Appraiser's Office, New York, June 24, 1885. Labora- tory No. 1st test. 2d test. 3d test. Test for classifi- cation. Labora- tory No. 1st test. 2d test. 3d test. Test for classifi- cation. O 84.6 84.7 84.6 Edward Sherer, H. J. Abbott. Approved: Chemist in Charge. [N. Y. Cat. No. III85. — Certificate of polariscopic test of sugar.] Sugar return, showing polariscope test, under Department Circular No. 62, May 22, 1883. U. S. Laboratory, Appraiser's Office, New York, June 19, 1885. Labora- tory No. 1st test. 2d test. 3d test. Test for classifica- tion. Labora- tory No. 1st test. 2d test. 3d test. Test for classifica- tion. 2833 2834 2835 A O 86.5 52.6 45.4 82 85 86.6 82 85.2 86.5 52.6 45.4 82 85 Robert Rigney, G. Landsmann. Approved : Edward Sherer, Chemist in Charge. . 86 FRAUDS IN NEW YORK CUSTOM-HOUSE [N. Y. Cat. No. 1118j. — Certificate of polariscopic test of sugar.] Sugar return, showing polariscope test, under Department Circular No. 62, May 22, 1883. U. S. Laboratory. Appraiser's Office, New York, June 17, 1885. Labora- tory No. 1st test. 2d test. M. W. 13 75.7 76 2675 88.6 88.9 2676 87.3 87 2677 80.8 86.7 2678 89.6 89.5 2679 89.6 89.7 2680 88.7 88.5 2681 88.9 89.2 2682 88.9 89.6 2683 89.4 89.6 3d test. Test for classifica- tion. 75.70 88.60 87 86.70 89.50 89.60 88.50 89. 20 89.60 89.40 Labora- tory No. 2684 2685 2689 2690 2691 2696 2697 2698 2699 1st test. 88.4 87 82.8 96 84 95.7 87.9 83.5 85 2d test. 88.7 86.7 83 96 84.3 96 87.8 83.7 85.2 3d test. Test for classifica- tion. 88.40 86.70 82.80 96 84 95.70 87.80 83.50 85 G. Landsmann. S. F. Ball. Approved : Edward Sheeeb, Chemist in Charge. [N. Y. Cat. No. 11 18£. — Re-test certificate of polariscopic test of sugar.] Sugar return, showing polariscope test, under Department Circular No. 62, 31ay 22, 1883. U. S. Laboratory, Appraiser's Office, New York, June \lth, 1885. Labora- tory No. 1st test. 2d test. 3d test. 2513 2514 2515 Test for classifi- cation. 88.80 90.00 90.00 Labora- tory No. 1st test. 2d test. 3d test. Test for classifi- cation. G. Landsmann. S. F. Ball. Approved : Edward Sherer, Chemist in Charge. [N, Y. Cat. No. 1118. — Certificate of polariscopic test of sugar.] Sugar return, showing polariscope iest } under Department Circular No. 62, May 22, 1883. U. S. Laboratory, Appraiser's Office, New York, June 1, 1887. Labora- tory No. 1st test. 2d test. 3d test. Verified. 465 464 469 471 470 96.2 96.5 95 82.4 96.6 Test for classifi- ' cation. 96.2 96.5 95 82.4 96.6 i Labora- j tory No. 1st test. 2d test. 3d test. Test for classifi- cation. Approved : Edward Sherer, Chemist in Charge H. J. Abbott. Robert Rigney. G. Landsmann, FRAUDS IN NEW YORK CUSTOM-HOUSE. 87 [N. Y. Cat. No. 11181- — Certificate of polariscopic test of sugar.] Sugar return, showing polariscope test, under Department Circular No. 62, May 22, 1883. U. S. Laboratory, Appraiser's Office, New York, June 25, 1885. * Labora- tory No. 1st test. 2d test. 3d test. Test for classifi- cation. Labora- tory No. 1st test. 2d test. . % . 3d test. Test for classifi- cation. B. 84 83.7 83.7 3060 85.3 85 85 3061 85.8 86 85.8 3062 89.3 89.5 89.3 H. J. Abbott. Wm. H. Townsenb. Approved : Edward Sherer, Chemist in Charge. Exhibit 178. Port op New York, Appraiser's Office, 402 Washington St., New York, July 21st, 1887. Mr. Lewis McMullen, Appraiser of the Port, New York: Sir: I have respectfully to ask under what authority of. law or Department regula- tion sugar importers or their brokers are entitled to demand re-tests of their sugars after the original test for classification has been made in the absence of any evidence fur- nished by them showing that such classification was erroneous, and why said requests are complied with? I find that no written requests for re-tests and re-samples of sugars from sugar brokers are on file in the 8th division of the appraiser's store prior to March 1, 1885. Will you please inform me if written requests from sugar importers and their brokers were re- quired or made previous to that date, and if so, why they are noton file, and if destroyed, by whose authority ? Please furnish copy of official order permitting or directing their destruction. I have also to respectfully request that you will inform me by what authority of law, when in the classification of sugars at this port written or verbal requests are made by sugar brokers for re- tests and re-samples, and particularly in cases where as many as three and four tests of the same saiqple of sugar have been made and where the original or first test for classification was the lowest, said lowest test is invariably accepted by you as the test for classification without regard to the results ascertained by subsequent tests made in conformity with said written or verbal requests of the sugar brokers, and which, would advance the classification for duty, if considered ? Very respectfully, T. Aubrey Byrne, Special Treasury Officer. Exhibit 178 A. Port of New York, Appraiser's Office, 402 Washington st. t July 26th, 1887. Lewis McMullen, Esq., Appraiser: Sir: Referring to a letter from T. Aubrey Byrne, Special Treasury Officer, under date of the 21st instant, I have to report on the questions propounded, as follows: 1st Question. ' ' Under what authority of law or Department regulations sugar import- ers or their brokers are entitled to demand re- tests of their sugars after the original test for classification has been made, in the absence of any evidence furnished by them show- ing that such classification was erroneous; and why said requests are complied with? " Ans. Par. 33 (S. S. 5725) states that sugars not above No. 13 Dutch standard in color shall be selected by the experts in the examining room according to marks and from origi- S. Ex. 3 64 88 FRAUDS IN NEW YORK CUSTOM-HOUSE. nal samples of each mark, thoroughly mixed; a round, tin sample-box full, properly num- bered, shall, with as little delay as possible, be transmitted to the laboratory for polar- iscopic test. An additional sample, prepared in the same manner, shall be held in the examination room until the final classification is determined. The additional sample (2d) called for in the above paragraph is the one from which re-tests are always, made. This sample is intended lor, and is retained for, the purpose of correcting any error that might possibly occur in the test of the 1st sample. The experts of this division con- sider this as clearly in accordance with the spirit and intent of the aforesaid paragraph. We do not consider the final classification as determined until the return is made on the invoice preparatory to its being forwarded to the custom-house; prior to this action we consider it our duty to take such action, if requested to do so, as will verify the cor- rectness of the original test; if, in our opinion, the test of the original sample of a cargo of sugar shows a lower test than the sugar warrants, we have the right (and often exer- cise it) to test the retained sample, in the absence of any request from the importers for such action. Question No. 2. ' : I find that no written requests for re-tests and re-samples of sugars from sugar brokers are on file in the 8th division of the appraiser's office prior to March 1, 1885. Will you please inform me if written requests from sugar importers or their brokers were required or made previous to that date, and if so, why they are not on file, and if destroyed, by whose authority? Please furnish copy of official order permitting or directing their destruction." Ans. Requests for re- tests and re-samples from sugar importers and their brokers have been made from the time the act of March 3d, 1883 (Sc S. 5725), went into operation. We have no copy of official order permitting or directing their destruction. Bequests for re-tests and re-samples were, I am informed, considered by Frank Hay, my prede- cessor as asst. appraiser, as simply memoranda, and, after the return of an invoice to the custom-house and its final liquidation, could be considered as waste paper, of no conse- quence whatever, and were by bis instructions treated accordingly. The test-book was considered as ample and sufficient record, containing, as it does, full and complete account of all samples, re-samples, tests, re-tests, etc. Question No. 3. "I have also to respectfully request that you will inform me by what authority of law when in the classification of sugars at this port written or verbal re- quests are made by sugar brokers lor re-tests and re-samples, and particularly in cases where as many as three and four tests of the same sample of sugar have been made, and where the original or first test for classification was lowest, said lowest test is invariably accepted by you as the test for classification without regard to the results ascertained by subsequent tests made in couformity with said written or verbal requests of the sugar brokers, and which would advance the classification for duty, if considered." Ans. As to test accepted for classification I desire to state that it is a well-known and scientific fact that the 2d or retained sample will on account of the drying out (caused by evaporation of moisture) test higher than the original or first sample. If the test of the 1st sample is correct, long experience has shown that the 2d or retained sample will always show a somewhat higher test. It will be an act of injustice to hold the importers to the increase as shown in the test of a retained sample, especially so when in a great many instances, owing to the great amount of work on hand, several days intervene before a re- test can be procured. 1 f the test of a retained sample were to show a great variance between that and the original, the officers of this division would proceed to re-sample the entire cargo in accordance with (S. S. 5858) circulars of August 13, 1883. If on a re-sample a higher polariscopic test were to be shown than the original the importers would be obliged to accept the lat- ter test as a base for classification. Very respectfully, Thomas S. Ticb, Asst. Appraiser 8th Division. Exhibit 178 B. New Yoek, July 27, 1887. Asst. Appraiser T. S. Tice states as follows: This letter that you hand me, dated July 20, addressed to Appraiser McMullen by me as asst. appr., and by that officer referred to Mr. T. Aubrey Byrne, special Treasury officer, is in answer to your communication of the 21st instant addressed to him, was not compiled by me, neither did I make any suggestion or give any information whereby it was made up. I think I handed your letter requesting certain information, dated the 21st inst., above referred to, to Examiner Remsen, but it might have been to Clerk Trainer. Clerk Trainer wrote out theletter, but when he handed it to me I asked FRAUDS IN NEW YORK CUSTOM-HOUSE. 89 Win if he had shown it to Mr. Remsen, and if he, Mr. Remsen, was satisfied as to ita ( orrejtness, to which he replied that he was perfectly satisfied. I signed the letter offi- cially as prepared by Clerk Trainer and Examiner Remsen. Thomas S. Tice. Sworn to and subscribed before me this 27th day of July, A. D. 1887. T. Aubrey Byrne, Special Treasury Officer. Exhibit 178 0. New York, July 27, 1887. Examiner Remsen states as follows: The letter just shown me addressed to the appraiser by Ass't Appraiser Tice, under date of July 26, 1887, in reference to the law or authority permitting importers and brokers to demand re-tests of sugar classifications, etc., was compiled by Clerk Trainer, of the 8th division, and myself, and presented to Ass't Appraiser Tice for signature. A. G. Remsen, Ext. 8th Div. Sworn to and subscribed before me this 27th day of July, A. D. 1887. T. Aubrey Byrne, Soecial Treasury Officer. Exhibit 178 D. New York, July 27, 1887. CHAS. H. Trainer, sampler and acting clerk, 8th division, states as follows: I identify the letter handed me by yon, which is addressed to the appraiser of the port by Asst. Appraiser Tice, under date of the 26th instant, which letter was composed by Examiner Remsen and myself and written by me, and is a reply to yoar letter of the 21st instant addressed to the appraiser, relative to the law or authority permitting the granting of re-tests on demand of importers and their brokers, and ether matters per- taining thereto, said letter having been referred by the appraiser to the assistant ap- praiser for reply. Chas. H. Trainer. Sworn to and subscribed before me this 27th day of July, A. D. 1887. T. Aubrey Byrne, Special Treasury Officer. Exhibit 205. County, City, and State of New York, ss: This is to certify that I, Charles F. Taylor, of New York City, N. Y., did on Decem- ber 13th, 1886, receive from Mr. T. Aubrey Byrne three (3) samples of raw sugar, and was requested by him to take the same to Messrs. Sherer Bros. , chemists, 122 Front street, New York City, and to obtain ' i close tests ' ' by polariscope on the three samples. On the same day, at 4. 30 p. m. , I went to the laboratory of Messrs. Sherer Brothers, 122 Front street, but found that the chemists had gone for the day. At 9.40 a. m., Dec. 14th r '86, I again called at Sherer Bro.'s laboratory, and asked the young man who waited upon me to have Mr. Sherer make close tests on the three samples which I presented to him; this he promised should be done, requesting nie to call at 12 o'clock the same day for the results of the tests; he remarked that this was the first transaction they (Sherer Bros. ) had had with my employers, I having pre- viously informed him that I was in the employ of \V. H. Power, of the Produce Ex- change." At 11.57 a. m. the same day I called for the tests and received the "certificate of polarization" annexed and marked "A," which, when presented to me, was printed on the bottom "Sherer Brothers." I then paid him his charge for the work, three dollars ($3), and asked him for a receipt, which he gave, annexed and marked 44 B." He stamped both certificate and receipt with Sherer Bros.' office stamp. I asked him lo sign the receipt and certificate, at first he objected, but after a little pressing he signed 90 FRAUDS IN NEW YORK CUSTOM-HOUSE the name of tl Sherer Bros." to both. He gave me to understand that one of the Sherers had made the tests. I then took the samples of sugar and left the place. On or about December 27th, 1886, I again called at the laboratory of Sherer Bros, and ask the young man I had previously met there who had made the tests on the samples I had previously brought him. He recalled the circumstance, and said he would look the transaction up and see who did make those tests. After referring to his books he said that he made them, as "Mr. Sherer was away that day." I said, " Your 'name is Mr. Kese, is it not?" He answered, "Yes." I said, "I asked you for Mr. Sherer's tests on those samples, as there was to be arbitration on the results. ' ' He replied, ' ' Mr. Sherer is only here in the mornings. The rest of the day he is out appraising cargoes. " On January 5th, 1887, I called again at Sherer Bros.' laboratory, at 10.40 o'clock a. m. , and handed to the same man I had met there before two (2) samples of sugar, request- ing that Mr. Sherer personally make the tests. He said he would give the samples to Mr. Sherer when he came in, which would " be about noon or late in the afternoon." I said I would call about 4.30 p. m. I did not call until 10 o'clock the next day, Jan. 6th, and I asked for the samples which I left for Mr. Sherer to test. He said, 44 Mr. Sherer has not tested these samples, and if you want his personal test you must take them to the U. S. laboratory, Wash- ington street, where he may gife you his personal test," adding that "Sherer has no connection with this place." I made no reply, took the samples, and left, for he, Keese, was in rather a flurried state, showing evident feeling in the matter, as though I had doubted his word. I forgot to state that during my call at Sherer Bros.' place, on December 27th, '86, I said to him that I was informed that the usual price for testing was 75c. for each sample. He answered that 75c. per sample was the price for testing a large quantity, say, from 25 to 75 per week; for instance, such quantities as they received from Howells& Co. The reason I referred to the price was because he had charged me one dollar ($1 ) per sam- ple, which I paid with money given me by Mr. T. Aubrey Byrne for this purpose. The above is a true statement of the facts as they occurred; in testimony of which I affix my hand and seal this twelfth day of January, A. D. 1887. . Chas. F. Taylor. Sworn to before me this 12th day of January, 1887, by Chas. F. Taylor, to me per- sonally known and known to me to be the same person who executed the above instru- ments. • Theo. C. Kobre, Notary Public. Witness Dy me this day, Jan'y 12th, 1887. W. D. HOWDEN. Certf. filed in N. Y. County. A. SUGAR CERTIFICATE. [Sherer Brothers, analytical chemists, laboratory for sugar analysis, 122 Front street, Rooms 16 and 17.] New York, Dec. 14, 1886. Mr. W. H. Power: [T. A. B. We hereby certify that we hare examined the samples of "sugar" marked as below, and find them to contain as follows: (27017) Marks. 914 I'loilo,fr. S.andM.. 931 " " " 309 Centrif., W. and H Cane sugar per cent- age. 80.4 82.8 96.5 Sherer & Bros. Sherer Brothers, Analytical Chemists, F&AUDS IN NEW YORK CUSTOM-HOUSE. 91 B. New York, Dec. 14th, 1886. [T. A. B.] Mr. W. H. Power to Sherer Bros. , Dr. [Analytical and consulting chemists, 122 Front street, rooms 16 and 17.] For 3 Det cane sugar • 3.00 12, 14, '86. Paid. Sherer Bros. Exhibit 211, B'KL'N, Oct. 17, '87. Mr. T. Aubury Byrne: Dear Sir: The following are the answer to the question of yours of Sep. 28, '87: 1st. Not 86 North 1st street, but 06 and 68 North 1st, B'kl'n. 2nd. Sherrer Bros, leased the premises; John A. and Edward Sherrer. 3rd. The lease was made out for one year to the first of May, 1885. They did not pay April month and left their machinery on the premises until the first of June, 1885, when the mortgage was foreclosed by the A. C. Keeney estate. 4th. Sherrer Bros, commenced to pay rent June, 1884. March, 1885, was the last month they paid. The month of April was never paid. They left their machinery in the premises all the month of May, consequently holding possession all the months, and on the 1st, or after the mortgage was foreclosed. 5th. I brought a suit as my mother's agent for ($150) one hundred and fifty dollars, being two months' rent, for the months of April and May, 1885. We expected to collect for these two months, as they held possession. 6th. I had all the dealings with Sherrers; mostly with John A. Sherrer; I had very little to do with Edward, the Turkish consul. 7th. As 1 most always did the business with John A. Sherrer, I consequently recog- nized him as the principal; I don't remember of Edward Sherrer having paid rent to me personally or otherwise. 8th. The rent was paid monthly in advance; sometimes by John A. Sherrer, and at otfyer times it was sent down to me by an employe, mostly in a check signed Sherrer Bros., or John A. and Edward Shener. I of course have no checks, as I always had them turned into cash. 9th. The Sherrer Bros, commenced to manufacture about June, 1884, and closed Mar., 1885. 10th. I saw both John A. and Edward about the premises and judged they both gave orders one way or another towards the manufacture of the bronze powder. John A. Sherrer came most everyday; Edward did not come so often. They came at different times of the day. I think it was mostly in the morning; oftentimes twice a day. 11th. 1 have no card or printed matter of any kind; should I come across any will send it to you. 12th. I have seen the powder taken away, or I supposed it was such, as it was packed in boxes. I don't know of any firm whom they sold it to; had I known of this matter sooner I could have found out. Don't know what kind of a business they did, but they made a lot of powder. 13th. The A. C. Keenev estate held a chattel mortgage, which they foreclosed June, 1885. 14th. The bills were made out to Sherrer Bros. 15th. I understood Sherrer Bros, bought out the Manhattan Bronze Powder Co., and think they call it the Atlantic Bronze Powder Co. ; am not sure. 16th. I sued John A. and Edward Sherer. 17th. John A. Sherer makes a false statement when he says he paid April month, and as they held possession of the premises I sued for the two months; none of tin* has leeli paid. 18th. I called several times at the appraiser's office and saw both John A. and Edward in different offices. I considered both of them liable lor the rent, hen£ the suit ; hut as I stated before, John A . Sherer was the one I did the most business with. 92 FRAUDS IN NEW YORK CUSTOM-HOUSE. 19th. I also called several times at their office on Front street, New York. The rent of these premises was with steam-power, and was very cheap, considering the amount of power they used, and was a serious loss to my mother, she being a widow, and it was all she had to depend upon for a living and to pay her interest, taxes, etc., with. Trusting this will be satisfactory, I am, truly, yours, Benj. C. Waite. P. S. — Do you think there is any chance of getting this money ? Kindly let me know. Yours, &c, B. C. W. Exhibit 211J. Brooklyn, N. Y., Nov. 19, 1887. Mr. T. Aubrey Byrne, Special Treasury Officer: Sir: The following are the answers to the questions of your communication of Sep- tember 28th last: First. The location of the bronze powder factory operated by the Messrs. Sherer was at 66 and 68 North First street, Brooklyn, the ground lloor being occupied by me for my business. Second. Sherer Bros, leased the premises, viz, John A. and Edward Sherer. Third. The lease was made out for one year to the 1st of May, 1885. They did not pay the rent for April. 1885, and left their machinery on the premises until the 1st of June, 1885, when the mortgage was foreclosed by the A. C. Keeney estate. Fourth. Sherer Bros, began paying rent in June, 1884. March, 1885, was the last month's rent they paid, and as they did not pay the rent for April, and left their ma- chinery on the premises during the month of May (thus occupying the premises), they were indebted for two months' rent up to the time the mortgage was foreclosed. Fifth. I brought suit as my mother's agent lor $150, the amount of rent for the two months mentioned. Sixth. I had conducted air the business transactions with them as my mother's agent; mostly with John A. Sherer, and had very little to do with Edward Sherer. Seventh. As I most always transacted all business with John A. Sherer, I naturally recognized him as the principal. I do not remember that Edward Sherer ever paid me any rent personally or otherwise. Eighth. The rent was paid monthly in advance, sometimes by John A. Sherer, and at other times it was sent downstairs to me by an employe, mostly in a check signed Sherer Bros., or John A. and Edward Sherer. As 1 of course deposited the checks I have none in my possession. Ninth. Sherer Bros, commenced manufacturing about June, 1884, and closed March, 1885. Tenth. I saw both the Sherers about the premises, and judged from observation that they both had direction of the manufacture of the bronze powder. Eleventh. John A. Sherer was at the factory almost every day. Edward Sherer did not come so often. They came at different times of the day, but mostly in the mornings and sometimes twice a day. Twelfth. 1 saw the powder taken away, or I supposed it was such, as it was packed in boxe ?. Do not know to whom they sold it, but they shipped considerable. Thirteenth. The A. C. Keeney estate held a chattel mortgage on the fixtures and ma- chinery. Fourteenth". The bills for rent were made out to Sherer Bros. Fifteenth. I understood that Sherer Bros, bought out the Manhattan Bronze Powder Co., and think they called it the Atlantic Bronze Powder Co., but am not certain. Sixteenth. I entered suit against John A. and Edward Sherer. Seventeenth. John A. Sherer makes a false statement when he says he paid April rent. Eighteenth. I called several times at the appraiser's office, and saw both John A. and Edward Sherer in different offices. I considered both of them liable for the rent, hence the suit against both, but as stated before. 1 did most of the business with John A. Sherer. Nineteenth. I also called several times at the office of Sherer Bros., No. 122 Front St., New York, while endeavoring to collect this rent. Twentieth. The rent of the premises was with steam power and was very cheap, con- sidering the amount of power used, and was a serious loss to my mother, she being a FRAUDS IN NEW YORK CUSTOM-HOUSE. .93 Widow, and who is entirely dependent upon this income for her living, and also out of which she has interest, taxes, and insurance to pay. Benj. C. Waitk. Sworn and subscribed to before me this nineteenth day of November, A. D. 1887. Leon Hirsh, Notary Public, Kings Co., N. Y. The erasure and interpolation in question fourth, fifth line, were made before sign- ing. L. Hiksh, Notary Public. [In original copy the words " for which," after the words " two month's rent," were erased and "up to the time" substituted. — Printer. ] Statement 000. New York, July 29, 1887. Examiners McElwee, Foskett, and Samplers Freeborn and Flocken, having been detailed by Asst. Appraiser Tice, at the request of Special Treasury Officer Byrne, to take samples from certain so-called damage mats of Iloilo sugar, upon which appli- cation for damage had been made (see copy of same annexed), states as follows: Upon proceeding to Woodruff's stores, Brooklyn, where the cargo of the barque Josie Troop had been unloaded and stored, we made inquiry of the storekeeper (Roberts) as to the whereabouts of the alleged damage package of said cargo and their number. He informed us they were in stores L and P and numbered 3,350 mats, the damage being claimed on 3,500 mats or bags. (See copy of damage application.) On proceeding to said stores, accompanied by the said Government store-keeper above alluded to, he designated three separate piles, which had been laid out as damaged sugar, but not stencilled as such: by careful estimate of the three piles they aggre- gated in our judgment about 1,500 mats. In accordance with instructions of Special Treasury Officer Byrne, we proceeded to sample all mats or bags in these three piles, which showed also traces of previous sam- pling or cutting. The samples taken by us are herewith submitted. We found that only 19 mats of these three pile^ gave any evidence of being previously sampled or cut, and these 19 mats were confined exclusively to the two piles in store L. The mats, 19 in number, as mentioned, were identified by the Government store-keeper as those which had been sampled by Damage Examiner John Sherer previously. These samples had been drawn from the ends or "ears" of the mats, while the regulations require that all samples of sugars shall be drawn from the centre of the package as per paragraph 18. In this connection we would state that all samples of sugars drawn from bags or mats at the ends or ears, as above stated, must necessarily be of a lower grade than that which is drawn from the center of the package. We also consider that the requirements in paragraph 44, as to " care being exercised that the samples so taken fairly represented the proportion and degree of damage each grade in the different classes," in this instance has been ignored, for the reason that 19 mats, in our estimation, is in no sense a proper representation of the 3,350 mats upon which damage is claimed; neither do we consider it a fair estimation of the 1,500 mats of damaged packages as shown us by the store- keeper. The dock man who stored them away also pointed out these 1,500 mats to us as those which had been laid out from this cargo as damaged. We all, with the excep- tion of Sampler Flocken, saw marks "A," "B," and "C " in the damaged piles, which is clearly in violation of paragraphs 13 and 14. We proceeded to draw what in our estimation was a fair representation of 1,500 bags (so-called damaged bags), namely: 5 per cent, being 75 samples. In fact we drew 85 samples, taking them promiscuously from the three piles, and these are the samples which we hand you, which were sealed up by us last night and are intact this morning. These samples were drawn between 4.30 and 6.30 p. m. of yesterday, July 28th. The larger proportion of these 1,500 alleged damage mats were not, in our opinion, deserving of any consideration as being damaged. Examiners Foskett and McElwee herein sepa- rately state that upon careful examination they fail to find any damaged packages in the pile of store P, estimated to number 700 mats. Before closing this statement we would state in addition that from the 19 damaged mats, from which samples had been drawn by Damage Examiner Sherer as stated, we drew a sample from each one from as nearly the center as possible. Those samples we hand you, marked "A," No. 710. From the 5 per cent, of the 1,500 mats of the alleged 94 FRAUDS IN NEW YORK CUSTOM HOUSE. damaged sugar t aken promiscuously from the three piles we drew 85 samples. These we hand you, marked "B," No. 711. It is our opinion that the 19 sample mats represented by sample marked 4 \A" were the worst packages of the alleged 3,500 upon which damage is claimed, and these are damaged but very slightly. All the balance of the alleged damaged mats, represented by sample marked "B," does not show sugar upon which the importer is entitled to damage. Forthe information of the hon. Secretary of the Treasury we respectfully submit the following : First. As per importer's application for damage allowance on 3,500 bags, we are in- formed by the storekeeper that there was only 3^350 bags. Second. We find upon examination there are only about 1,500 bags. TJiird. That marks A, B, and C were promiscuously scattered in the alleged damage piles. Fourth. We found that but 19 bags had been sampled by the damage examiner as far as we could see, and these samples irregularly drawn from the ends of the package. Fifth. None of these alleged damage packages had been stencilled "Damaged." Sixth. We were informed by the U. S. storekeeper that these alleged damaged pack- ages had not been disturbed since the damage examiner had drawn his samples. Seventh. This being the fact, the samples, as drawn by the damage examiner, could not properly have been done. This statement has been made in reply to interrogatories propounded by Special Treas- ury Officer Byrne. We will further add, that from our experience and knowledge of the labor and diffi- culties surrounding and attending the sampling of sugars, that it would be to the best interests of the revenue in every particular that the sampling of damaged sugars should come under the jurisdiction of the asst. appraiser of the 8th division and be always performed by his officers; and that every package of sugar upon which damage is claimed should be sampled. With this exception, the sampling' regulations which apply to the sampling of sound sugars should apply to damaged sugars. We are further strongly of the opinion that any application for damage on sugars should be made by the importer or his representative within 24 hours after the comple- tion of the weighing of the cargo. Jno. Stuart McElwee, Examiner. Byron D. C. Fosket, Examiner. A. B. Freeborn, Sampler. N. Flocken, Sampler. Sworn and subscribed to before me this 29th day of July, A. D. 1887. T. Aubrey Byrne, Special Treasury Officer. Exhibit DD. New York, July 14, 1887. Samuel F. Ball, sampler, detailed as examiner, states as follows: My duties are confined to the polarization and testing of sugars. On June 10, '85, or thereabouts, I was appointed asopener and packer, and Oct. 13 was made a sampler. I was detailed when first appointed to the laboratory, and have been employed there ever since, and have acted in the capacity of an examiner ever since my first appointment. I am not allowed to officially sign the laboratory certificates of tests made by me from the fact, as I presume, that I am not officially an examiner. Theodore G. Moore, an ex- aminer, also reads the polariscope and signs the certificates of tests made by him. I first commenced to test sugars in the laboratory of Sherer Bros., chemists, 122 Front st., this city, about 1882 or 1883, and remained with them in their employ for about two years, when I went to the Brooklyu Sugar Refinery as chemist. I am 23 years of age. While in the employ of Sherer Bros. I acquired the practical knowledge of testing sugars, being instructed particularly and altogether by Mr. W. J. Rigney, chemist at the Messrs. Sherer Bros. I understood I was working for the firm of Sherer Brothers, and although I was in the employ of the said firm two years or thereabouts, I am unable to state whether Mr. Rigney was a member of the firm or an employe, although I was under his direction. I did not receive instruction of any kind, either from Dr. Edward Sherer or Mr. John Sherer, while I was in the employ of said Sherer Bros. I have never seen Dr. Edward Sherer in the office of Sherer Bros., at 122 Front st., while I was in their employ. He might have come in the place when I was out. I have seen Mr. John Sherer there occasionally. I believe he had damage samples which he brought to the laboratory of the firm in question and tested them there. I have assisted him in these tests. FRAUDS IN NEW YORK CUSTOM-HOUSE. 95 I did not read the polariscope on Mr. Jno. Sherer's test of damage samples, but I mixed the samples and assisted generally. He might appear at the laboratory there at any time of the day with the samples of damaged sugars. When we were crowded on work at Sherer Bros, 's laboratory we tested sugars at night. I can not swear that he has not tested damaged sugars at night. The office immediately adjoining the sugar labora- tory of Sherer Bros., at 122 Front street, is the office if the Turkish consul, and Dr. Ed- ward Sherer is the Turkish consul, and there is a door connecting the office of the labora- tory with that of the consulate, and as a matter of fact that door remains open unless there are visitors in the consulate, and it does not follow that the door would be closed when the visitors were there. I have never seen the Turkish consul in his office at any time. There was a bell attached to the outside door of the consulate, which we could always hear if any one entered the consul's office. If I were testing sugars at the polariscope no one could get into the consul's office unobserved by me, generally speaking. If my back was turned to the -consul's room then the bell would be the only indication of any entrance to the consul's room. I have done work in the consular office, stamping clearance papers, etc., for the Turkish consul. To the best of my knowledge and belief, Dr. Edward Sherer was at that time, and is at the present, the Turkish consul at the port of New York, although I do not wish to make affidavit to that effect. I have heard people call at the office and ask for the Turkish consul and presumed they meant Dr. Sherer, and referred them to Mr. W. J. Rigney, as Dr. Sherer did not visit the consulate, and I have never seen him in Sherer Bros. ' laboratory. For a time there was a man named Keyes also employed in Sherer Bros. ' laboratory, who was a relative of the Sherers. I will not state positively that I have not been in Sherer Bros.' laboratory during the past twelve months. About January 15th, last, I was in their laboratory and saw Burton Keyes there, the aforementioned relative, and a boy. Mr. Burton Keyes, I think, succeeded Mr. Rigney in the laboratory of Sherer Bros. I do not, and never did know who constitute the firm of Sherer Bros., "analyt- ical and consulting chemists." The analytical business of the firm in question while I was with them was principally the testing of sugars. I think I heard Mr. Rigney speak of the bronze powder that Dr. Sherer made. I never knew that Dr. Sherer was engaged in the manufacturer of bronze powder. I generally use Dr. Sherer's polariscope when I test sugars. We have no other quartz-plates in the laboratory, to my knowledge, other than one marked 96 and one marked 99.1. Another plate, however, marked 99.1-2, is, I be- lieve, in Boston, but I do not know that it came from this laboratory. I can not tell which of the two quartz plates, 96 or 99. 1, is the standard, as I use either. I have heard it stated that the 99. 1-2 plate is marked correctly, so Dr. Sherer has informed me. Mr. Rigney and I have been working together for the last ten days, and in that time we have made about five re- tests. If I were testing sugar for refineries, as I have in the past, and found a variance of two-tenths ( T 2 ff ) in the reading of the same solution, I would make a third reading. This is not done in the U. S. laboratory. If the reading in the laboratory is 95.9 and 96.1, the tubes are re-read, because they are not in the same classification. In explanation, if the second reading was maintained, both tubes reading 96.1, then the duty would be assessed at 97. If I read the sugar 96.5 and the second reading is 96.4, then there would be no question in my mind as to the value of the difference of one-tenth, because it' makes no difference in the classification for duty. When one-tenth of a degree will throw the classification for duty up one full degree, viz, t £q cents per pound, and it is y 1 ^ I let it stand as one-tenth, although it throws the duty ui) one full degree. The way I give the merchant the benefit of the doubt is, if a question arises in my mind whether a sugar polarizes for instance 95 or 95.1, I will set the test for classification at 95. I decline to answer as to whether Mr. Jas. S. Dale, an employe of the sugar room of the appraiser's store, loans money to other employes in the building, because I consider it an improper question. I also decline to answer whether or not I have borrowed money from Mr. Dale. I also decline to state whether I have heard any of the employes state that they had borrowed money of him. I subscribe to the oath for my month's pay before the end of the month and before the services have been performed by me. I understand this to be the custom here. I have never seen Sugar-Broker Burt in the laboratory. I have private reasons, which I do not propose to state, for saying that I am under no obligations, directly or indirectly, to Sugar-Broker Burt. I know Mr. Theo. G. Morse, an examiner in the laboratory, and consider him capable of polarizing sugar. He signs certificates of tests. S. F. Ball. Sworn to and subscribed before me this 14th day of July, A. D. 1887. T. Aubrey Byrne, Special Treasury Officer* 96 FRAUDS IN NEW YORK CUSTOM-tiOUSE. N. Y., July 15, 1887. Samuel F. Ball. Further examination: I have had no conversation with any one in the laboratory relative to my or their ex- amination on the sugar investigation since my first being sworn. S. F. Ball. Sworn and subscribed before me this 15th day of July, 1887. T. Aubrey Byrne, Spl. Treaty Officer. Diagram made of Sherer Bros. 9 laboratory and Turkish consul 1 s office, made by Sam 1 1 F. Ball, July 14, 1887. Consulate. Hall. O Laboratory. | | = Doors.