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APPRAISERS, SPIES AND INFORMERS. 
 
 STATEMENT 
 
 OF 
 
 Mr. THOMAS BARBOUR, 
 
 President of the Paterson Board of Trade, 
 
 AND OF THE FIRM OF 
 
 Barbour Broth^ei^b^ 
 
 REPRINTED BY ORDER OP SPECIAL COMMITTEE 'ON REVENUE 
 
 REFORM, OF THE NEW-YORK CHAMBER OF COMMERCE, 
 
 FROM THE TRIBUNE OF MARCH 23, 1874. 
 
 PKES8 OF THE CHAMBER OF COMMERCE. 
 
 1874 
 
APPEAJSEES, SPIES AND INFOEMEES. 
 
 STATEMENT 
 
 OP 
 
 Mr, THOMAS BARBOUR, 
 
 President of the Paterson Board of Trade, 
 
 AND OF THE FIKM OF .* „ . . , 
 
 Barbour BRdTil:^^^^;;:;;; 
 
 01 i^w-foyfe. 
 
 EEPEINTED BY ORDER OF SPECIAL COMMITTEE ON REVENUE 
 
 REFORM, OF THE NEW-YORK CHAMBER OF COMMERCE, 
 
 FROM THE TRIBUNE OF MARCH 23, 1874. 
 
 PKBS8 OP THE CHAMBER OP COMMERCE, 
 1874 
 
^<r6 7sLo 
 
 •1 • • 
 
 ' .1 J* I •• • ••• 
 
 jrOHN W. AMBRMAK, PRINTKB, 
 No. 47 Cedar Street, N. Y. 
 
CORRESPONDENCE, 
 
 Chamber of Commerce of the State of New- York, 
 New- York, March 2Uh^ 1874. 
 
 Messrs. Barbour Brothers, 
 Gentlemen : 
 Our attention has been drawn to the statement of the difficulties 
 of your house with the special agent of the Tre^isury, and the Iqng, , , 
 series of annoyances and injustice to which you wefe'^ubj^cted.' ,'* f ' 
 
 Is the statement correct in all its details, p;nd icay wje^; t^scati^as^a > , 
 fair illustration of the danger of the moiety systenf?" Wscf,'\v«'wiii ;/' 
 print. 
 
 Respectfully yours, 
 
 (Signed,) Jackson S. Schultz, 
 Chairman Committee on Mevenue Reform. 
 
 Barbour Brothers, 134 Church-street, 
 New- York, 3farch 2Uh, 1874. 
 
 Jackson S. Schultz, Esq., 
 
 Chairman Committee of Revenue Reform^ 
 
 Chamber of Commerce^ Nexo- York :■ 
 Dear Sir : 
 
 We would not permit any statement to go before the public in- 
 relation to our house that we cannot verify to the fullest extent.. 
 We trust the history of our troubles and losses as reported may be 
 the means of aiding those who are making efforts towards obtaining 
 a remedy, and you are at perfect liberty to make what use you 
 please of the statement to that end. 
 
 Yours respectfully,. 
 
 (Signed,) Barbour Brothers. 
 
 678978 
 
MR. THOMAS BAIiBOUR'S STATEMENT 
 
 AN IMPORTANT BUSINESS BROKEN UP. 
 
 CUSTOM-HOUSE SPIES AND APPBAISEKS DKIVE A LARGE MANUFACTUB- 
 
 ING HOUSE OUT OF BUSINESS ONE OF COL. FBANK E. HOWE's 
 
 BAIDS — NO MONEY SECUBED, BUT THE BUSINESS DESTBOYED. 
 
 ; ,'A rema,v]^a;b?.,e;*Uistance of the evil effects of the present system of 
 informers and moieties iipon American industries is shown by the 
 ;c^s',e of the Barl^Q'ar, Flax Spinning Company, whose works are at 
 "Paterson, N. J. The jDarent establishment of this Company, that of 
 William Baeboue & Sons, is in Lisburn, Ireland, where their mills 
 'have been running since 1785. These now employ 2,000 workmen, 
 whose houses form a village in the neighborhood. Thomas Bae- 
 boue, a member of the firm of William Baeboue & Sons in Ire- 
 land, the President of the Barbour Flax Spinning Company, and the 
 senior member of the firm of Baeboue Beos. at No. 134 Church- 
 street in this city, has been established in business here over 20 
 years, and in that time his house has paid the Government over 
 $2,000,000 in duties, while it has always occupied a high position, 
 and never had the least dispute or difficulty with customs officials 
 till 1872, when, as the firm assert, Feank E. Howe's special revenue 
 bureau made a series of determined efforts to extort money from 
 the firm. 
 
 In 1864, when the duty was taken from flax machinery, the house 
 of William Baeboue & Sons determined to establish branch 
 works in Paterson. Extensive jDurchases of factories, tenement- 
 houses and water privileges were made. Flax machinery and 
 skilled labor were imported at great expense. Large numbers of 
 operatives were brought from Ireland, houses were provided for 
 them, steady work was furnished them, and the prosperity of the 
 city of Paterson was much increased by this enterprise. The manu- 
 
facture of shoe threads and of linen threads which are largely used 
 in various leather manufactures, was begun on a liberal scale in 
 mills called the Passaic Flax Thread Works, driven by water-power 
 and employing 450 hands. An extensive department was estab- 
 lished for the spooling of linen threads imported in the bundle, as 
 cotton for spooling is so extensively imported to this country. A 
 manufactory known as the Arkwright Mills, driven by steam power, 
 was also started by the Barbours for the manufacture of flax 
 twines and the coarser grades of goods for which American grown 
 flax is suitable. Yarns to supply this mill were imported from va- 
 rious manufacturers in Dundee, Leeds and elsewhere, and from the 
 parent house in Ireland. The business steadily increased from 1864 
 to 1872, the time of the customs troubles of the house, and the ex- 
 tension of the business by putting up a large new mill was begun. 
 This would have given remunerative employment to many hundred 
 operatives, and would have developed largely a new branch of in- 
 dustry in this country. The foundations of the new mill were laid, 
 and additional machinery was ordered from Ireland, but the revenue 
 oppression of 1872 checked the enterprise. The following statement 
 of the case is given by Thomas Barbour, who is President of the 
 Paterson Board of Trade, and one of the largest tax-payers in Pat- 
 erson : ^ 
 
 The first intimation we had of any trouble came from our cus- 
 tomers. We afterward learned that the special agent got his infor- 
 mation from a rival manufacturer, who had exerted himself to stir 
 up the revenue informers against us, and had made false statements 
 to them. I found afterward this man in close conference with W. 
 V. Alexander, who, under Col. Frank E. Howe, had cliarge of 
 the case against us. In order to hurt our trade this manufacturer 
 circulated reports of impending troubles with the authorities among 
 our patrons, and took pains to see that those reports should be 
 proved correct by the issue. A letter written by one of the largest 
 houses in Chicago to their buyer in New- York in the early part of 
 March, 1872, ran thus : 
 
 " Outside parties inform us that Barbour Brothers have had 
 difliculty with the Custom-House and cannot deliver thread; if so, 
 we must look elsewhere. If they cannot fill our orders this week, 
 you will send us a line of the," etc. 
 
 The steamship Italy, in port three days after the date of this let- 
 ter, brought us a shipment of goods which the authorities did not 
 
deliver as usual on the payment of duties, and they afterward re- 
 called goods previously received by the Abyssinia, on which duties 
 had been paid Feb. 13. Our shipments consisted of flax, which 
 paid a specific duty ; without our regular supplies of this flax it 
 was impossible to keep our machinery in motion. The supplies for 
 (Gur Arkwright Mills consisted of linen yarns, which paid, for the 
 most part, a specific duty. Neither the yarns nor the flax were 
 affected in any way by any assumed charges of undervaluation. 
 Our shipments of machinery were also kept back, together wath 
 our dye-stuffs, bleaching-stuffs, and supplies of foreign paper for 
 wrapping. 
 
 I ascertained that the charges on which these detentions were 
 based came from a department afterward known to me as the 
 Special Revenue Detective Bureau. There I was told that informa- 
 tion had been lodged which accused us of irregularities. The par- 
 ticulars of these allesjed irreojularities I could never find out from 
 any one, although I was busy up<m the matter more than six 
 months, and had a great number of interviews with a great many 
 officials. As the delays and embarrassments devised by the officials 
 absolutely prostrated my business for many months, I had nothing 
 else to do but to try to clear up the matter and get it settled. Our 
 troubles lasted fourteen months in all, and in that time I must have 
 had several hundred conversations with various officials. Some of 
 those men were often hard to find, particularly Frank E. Howe. 
 
 My first interview was with a person who styled himself Col. W. 
 V. Alexander, a remarkably bland, insinuating and dignified indi- 
 vidual, who asked me to be seated and to proceed to tell my story ; 
 at the same time a small-sized cat-like young man glided into the 
 room and placed himself in a corner behind me, where he -could 
 note down every syllable that might inadvertently fall from my lips. 
 
 A marked instance of the unfair and oppressive treatment to 
 which we were subjected, was the unreasonable advance made upon 
 the valuation of our finished goods ready for market, which was 
 beyond what was well known to be their actual value, or the value 
 of similar goods from other manufacturers at that time ; their valua- 
 tion had been already put at a higher rate than those set by large 
 competitors of ours. We protested, and a re-appraisement was 
 made before Judge IJogeboom, General Appraiser, George Chap- 
 man (firm Chapman, Smith & Britton) acting as merchants' ap- 
 praiser. After sji very long and careful investigation, in which every 
 number of our thread was analyzed, measured and weighed, and in 
 which every detail as to price was gone into with the utmost dili- 
 
gence, our invoices were sustained in every particular. Not a single 
 instance of undervaluation or irregularity was discovered. Delivery 
 of the detained goods was ordered, and on May 21, 1872, the last 
 package of goods was received by us. 
 
 With the advice of Deputy Collector Lydecker, we entered a 
 large number of invoices, which had accumulated during the time 
 when these proceedings were in progress, first asking him if our 
 troubles might be considered to be over. The following letter was 
 addressed to him, and a favorable reply was received : 
 
 New- York, May 15, 1872. 
 John R. Lydecker, Esq., 
 
 Deputy Collector, Port of New- York : 
 
 Dear Sir, — We have indirectly heard that it was the intention 
 of the appraisers to put up our invoices now iii port, but not yet 
 entered, disregarding the recent decision in our favor. Now we 
 would respectfully ask you to instruct us what to do in this matter; 
 the greatest injury arises from our works being partially stopped, 
 and to avoid this we want to get our goods through without any 
 unusual detention. Can we ask the Collector to allow us to add 
 on the advance which these highly intelligent appraisers conceive 
 should be the jDrice, contrary to all business usage and custom, and 
 let us " pay under protest " and then seek to recover the difference 
 in due course ? We are advised by a number of importers to do 
 this, and from the polite and prompt manner in which you extended 
 to us all the information you could in our recent case, we trust you 
 will give us the benefit of your advice now about goods not now 
 entered. Rather than submit to the annoyances and delays to 
 which we have been subjected, we would export the goods and 
 abandon the portion of our business to which these goods are 
 adapted. Our workers have been idle over two months, and our 
 trade has left us, finding out our inability to supply the goods. 
 
 We remain yours, respectfully, 
 
 Barbour Brothers. 
 
 The bulk of our importations for the Spring trade was comprised 
 in the invoices then entered. To our great astonishment we were 
 treated in the same way as before. We had supposed the matter 
 settled by the result of the long and thorough investigation just 
 concluded, but the invoices entered were immediately advanced, 
 although no new question entered into the case of these goods, and 
 although they were precisely similar in numbers and qualities, and 
 
in all the various grades precisely identical with those on which 
 judgment had been passed with so much care. The invoices en- 
 tered consisted of flax, of yarns, of threads ready for market, and 
 of threads in the bundle, ready for spooling. They were advanced 
 without reference to their contents. Thus flax was advanced ten per 
 cent, and detained for undervaluation, altho-ugh it paid a spe^sific 
 duty by the ton. Yarns were advanced for undervaluation, al- 
 though they paid a specific duty of five cents per pound. Our fin- 
 ished threads were advanced, although it was well known to every 
 merchant in the trade, that we did not get any advantage over the 
 trade or over the Government. 
 
 The proceedings were spun out at an enormous length. Judge 
 Blodget, the Appraiser-General of Philadelphia, was called into 
 the case, in the hope that he might give a decision adverse to the 
 firm. A merchant appraiser Avas selected, whose every action 
 showed a contemptible hostility to the firm whose interests he was 
 supposed to protect. The evidence was again gone over with the 
 utmost care ; every point which could possibly be raised was raised ; 
 every charge which it was possible to invent was included in the 
 charges against our house ; but the result reached after months of 
 delay was that the officials w^ere not able to sustain any of the false 
 positions which they had taken. But during this long series of 
 months our mills were idle, more or less, our working people were 
 thrown out of employment, our trade was interfered with, and our 
 customers were obliged to look elsewhere for regularity in supplies. 
 Any amount of security, in money or otherwise, to answer the re- 
 sult of the investigation, was repeatedly oflered, in order that our 
 property might be released and our mills enabled to run, but with- 
 out effect. Our firm in Ireland decided that it was time for them 
 to consider the safety of a large amount of capital invested in a 
 country where such proceedings could be permitted, and concluded, 
 as a matter of prudence, not to go on with the large manufactory 
 which had been begun, and turned in disgust from the development 
 of the linen thread business as a manufacturing interest in this 
 country. Our machinery was taken out of our works in Paterson 
 and reshipped to Ireland. 
 
 I spent weary months in efforts to press a settlement, demanding 
 justice and that only. I made repeated applications to various de- 
 partments — to those under Collector Arthuk, Col. Darling, F. E. 
 Howe and others, and came in contact with a great number of 
 officials. I sought relief by all legitimate means. I went to Wash- 
 ington and laid the case before Secretary Boutwell, but only got 
 
from liini the empty assurance, that if the facts were as I stated 
 immediate action should be taken in my case. No measures were 
 taken to push forward the matter. When the thieves who were 
 trying to phmder me thought I was sufficiently embarrassed by 
 their schemes, they tried to get me to compromise. At first they 
 said they would take $250,000. Afterward the sum was rapidly 
 reduced, till at length I was assured that I could settle it for $500. 
 My reply to them always was that they might be able to drive me 
 out of business and ruin me, but that they would never wring out 
 of me one cent as an acknowledgment of guilt on the part of our 
 house. I would die first. And I never have paid a cent. The 
 Philadelphia General Appraiser decided in our favor. The mer- 
 chants' appraiser, selected by our enemies, gave in a statement so 
 much at variance with the facts, and so grossly contrary to all the 
 evidence, that the Collector decided with Judge Blodget that we 
 were innocent and our invoices were correct. But this was not till 
 after our mills had been interrupted during fourteen months, our 
 operatives scattered, our assortment of goods broken up, our cus- 
 tomers discouraged and many turned away, and an amount of injury 
 done to our business which is simply incalculable. Besides, there 
 was the terrible anxiety, the injury to our feelings, and the efibrts 
 to damage our reputation, which fell upon the members of the house. 
 There was great injury to the prosperity of Paterson, and to the 
 country too, from the action of these thieving officials. Our house 
 would have invested $500,000 in the new works at Paterson, and 
 built up a new industry, which in time would have become very 
 extensive and exceedingly important. 
 
 There was not the slightest excuse for the terrible and outrageous 
 delay and the multiplied embarrassments in our case, for we gave 
 the officials every facility for examination into our business. We 
 submitted to them every book and paper which they desired to see, 
 without obliging them to get out a warrant for them. We invited 
 the officials to visit our works at Paterson, and Col. Alexander 
 with a Mr. Brush spent the day there. He was shown every detail 
 of the business, was given every means to get information, and 
 allowed to question our employes as much as he saw fit. It was 
 not, however, till this year that we received official information that 
 our invoices had been liquidated. The appraiser intentionally kept 
 back our papers. 
 
 In conclusion, Mr. Barbour said that the outrageous system which 
 rendered possible such wrongs as his house had suffiLjred would ruin 
 the importing trade of the country if continued. He had become 
 
10 
 
 so disgusted with a country which permitted such abuses that he 
 would have left it, giving up his interests here, if it had not been 
 for family ties. If such abuses go on, importers could not keep 
 books here. They would be obliged to have their warehouses 
 and accounts on the other side, and only keep offices here where 
 sales could be arranged. In blaming the officials for the treatment 
 his house had received, he desired to exonerate the Collector and 
 Deputy Collector, who had seemed at all times anxious to enable 
 his house to recover their property, and had appeared ready to fur- 
 nish all the facilities in their power to that end. They declared, 
 however, that in that matter their action was entirely controlled by 
 Howe's bureau, and they could do nothing to restore the property 
 till the labors of that bureau were closed. 
 
 MERCHANTS BANISHED BY GOYERNMENT SPIES. 
 
 ADDRESS OF MR. THOMAS BARBOUR, AT SPECIAL MEETING OF CHAMBER 
 OP COMMERCE OF THE STATE OF NEW- YORK, AT STEINWAY HALL, 
 25th march, 1874. 
 
 (Reprinted from the THbune of Marcli 26.) 
 
 Mr. President and Gentlemen : I am glad to see among this 
 large audience of importers and merchants many well known faces 
 as friends of our firm. I am glad to have an opportunity of meeting 
 them to-night to explain the reason which, for many a long month, I 
 was only able to give to their buyers that came into our warehouse, 
 the reason why we couldn't deliver our merchandise to them with 
 that same regularity and promptness with which we had done for 20 
 years before. [Applause.] I need hardly give you, gentlemen, the 
 story over again — the long list of wrongs and oppressions and out- 
 rages which our firm and our manufacturing interests have suffered 
 at the hands of these shielded harpies of the revenue law. [Ap- 
 plause.] That story, gentlemen, we have been induced during the 
 last week to place well before the public. I have been asked by 
 many friends and acquaintances if all that long statement (pub- 
 lished in the Tribune of March 23) was true ; and I say here before 
 you to-night in public, that every syllable of that statement is as 
 true as Gospel. [Applause.] And, moreover, we are in a position 
 to prove it. We had the misfortune, gentlemen, induced by the 
 
11 
 
 liberal laws of this country in taking off the duty on flax machinery^ 
 to come over here with our capital and our machinery and our 
 skilled operatives, and we made very large investments in the City 
 of Paterson ; ^vc erected workers' houses ; we erected factories and 
 we started our machinery, and for seven years we went on un- 
 interruptedly and developed what we considered a fair, legitimate 
 business enterprise. And last year I think our local taxes which 
 we were called upon to pay in Paterson amounted to eight thousand 
 seven hundred and odd dollars. I have already stated the Avay our 
 troubles commenced in the Revenue Department. We did not wait, 
 gentlemen, to have a warrant issued for the seizure of our books — 
 we carried them down into the Revenue Department. [Applause.] 
 We asked the officials to go carefully through them and see if in 
 all those long entries they could detect any error, clerical or other- 
 wise, on which to attach this charge of fraud. We asked these 
 officials up to our works ; showed them through every department ; 
 invited them to inspect the different ramifications of our business, 
 and see if they could substantiate any charges which they might 
 make against our firm. But it was of no avail. I have heard to- 
 night gentlemen recommend merchants to show what is known as 
 backbone and pluck ; but I question, gentlemen, after fourteen long 
 months experience with these revenue officers, these Custom-House 
 officials and these appraisers, if I would recommend any importing 
 firm to show either backbone or pluck. [Applause.] I think the 
 best thing that any firm can do when these polite individuals walk 
 into the store is to hand them over your cash-box and tell them to 
 help themselves. [Cheers.] It is much cheaper for any business firm 
 to pursue this course than to stand up and remonstrate against the 
 proceeding. 
 
 There are many large firms whose names I could repeat to you 
 here, and which are quite familiar to you, that within the last two 
 years have ceased to keep a stock of goods in this country. They 
 have transferred their books and their papers to Great Britain, and 
 in place- of occupying stores and paying rents and keeping up a 
 staff of clerks and a stock of goods here, they simply represent the 
 business by samples, and deliver their goods direct from the ship 
 to their customers. By this means they avoid the risk of their 
 property being seized and confiscated on some imaginary charge or 
 clerical error. I have had some twenty years experience in this city 
 as an importer, and I think the merchants present will all agree 
 with me when I say, that in an importing business there is of neces- 
 sity a great number of details. We frequently receive our invoices 
 
12 
 
 "by the same steamer which brings our goods. There is generally 
 great hurry in making up the entry, and it is quite impossible for 
 an importer to be responsible or to examine every little detail that 
 goes into the manifold figures and calculations in making up an 
 entry of merchandise. [Applause.] You can see, gentlemen, in the 
 employment of a number of clerks what an immense temptation it- 
 is to a young man when he is offered a large bribe as an informer- 
 to get up a special, little irregularity, or clerical error, so as to divide 
 the spoils filched from the importer who employs him with these 
 revenue oflicers. [Applause.] 
 
 I do not know that I need say any thing to you about the law. 
 That matter has been most clearly laid down to you by my friend on 
 the right, Mr. Ciioate ; but there is one law that I understand as well 
 as any lawyer, and that is the law of right and wrong — [cheers] — 
 and I think if a law exists to-day which permits these revenue officers 
 to march into our counting houses and take away our books and 
 papers, the sooner we merchants turn around and stare such a law 
 square in the face the better. [Applause.] The sooner we come 
 and stand shoulder to shoulder in the defence of our rights the 
 sooner will we be safe. [Applause.] I should like to know under 
 the present system what safety a banker rn London, or in Paris, or 
 in Frankfort, can have in making advances on a shipment of goods 
 to this country — [cheers] — when the whole shipment on which he 
 makes these advances may be seized and confiscated for some little 
 technical or clerical error. With our experience in establishing a 
 manufacturing interest here, I should like to ask what inducements 
 are held out to foreign capitalists to invest in developing the 
 industries of this country. [Applause.] There is one thing that 
 merchants honor and prize even above their money, their books, 
 their papers and their property. I allude, gentlemen, to their good 
 name and reputation. [Long continued applause.] From the first 
 moment that a charge of defrauding the United States is made 
 against a respectable firm, the rumor seems to pervade the whole 
 atmosphere. It is sent from city to city by the rivals of the firm so 
 charged, and any little links that are wanting in the chain are very 
 soon supplied by these same gentlemen who are so anxious to for- 
 ward the news. [Applause.] Thus the reputation of a lifetime^ 
 that legacy which a merchant may wish to hand down to posterity^ 
 is torn away from him by a Government that he may have con- 
 tributed much to uphold and sustain. [Cheers.] 
 
THIS BOOK IS DUE ON THE T.AST DATE 
 STA3MPED BELOW 
 
 AN INITIAL FINE OF 25 CENTS 
 
 WILL BE ASSESSED FOR FAILURE TO RETURN 
 THIS BOOK ON THE DATE DUE. THE PENALTY 
 WILL INCREASE TO 50 CENTS ON THE FOURTH 
 DAY AND TO $1.00 ON THE SEVENTH DAY 
 OVERDUE. 
 
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 PAT JAN 21 1908 
 
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