Items of Interest

How violators of the oleomargarine law have defrauded the federal government out of at least twenty-seven million dollars, due in stamp and special taxes, is revealed by Secretary McAdoo in a statement based upon a preliminary report on a sweeping investigation conducted by Commissioner Osborne of the internal revenue bureau. Frauds committed as long ago as 1902, immediately after the enactment of the law, have been uncovered by the commissioner. Unpaid taxes, aggregating eight hundred and fifty-one thousand dollars, have been recovered and deposited in the treasury, "with the prospect of further very large collections." Forty-two violators of the law have been convicted since the first of January, and twenty-nine of these have been given prison sentences. Fines aggregating one hundred and forty-eight thousand dollars have been assessed, in addition to the recoveries actually made, and the announcement declares that while fraudulent practices of this sort probably have been checked, the investigation will be continued and "every law-breaker brought to justice."

The announcement shows that since 1902 more than two hundred million pounds of colored oleomargarine have been manufactured, and fraudulently sold as uncolored oleomargarine. The law imposes a tax of ten cents per pound on colored oleomargarine, and one quarter of a cent per pound on the uncolored product. In perpetrating these frauds, the oleomargarine manufacturers have paid only the one quarter cent, when they should have paid ten cents; in the case of butter manufacturers who sold the product as butter, no tax was paid, when the government should have received ten cents per pound.

Moral Courage
July 31, 1915

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