IOWA HISTORY PROJECT

Chapter XVII

Burlington Saturday Evening Post

Capt E. H. Thomas    

RIVER HELPED DEFRAUD REVENUE  

DISTILLERIES THAT ESCAPED

THE GALLON TAX  

Old Tax-Dodgers Now Gone to Their

Reward.  Straightening The Des Moines  

   During my time on the steamboats there were many distilleries in operation at the different towns between Davenport and St. Louis.  The government tax on high wines at that time was two dollars per gallon.  This heavy tax made it an inducement to defraud the government. Several of the distilleries told me that they could not pay this tax and get any money out of it themselves.  That to operate a distillery and be honest would prove a losing game for the operator.  So they devised a number of plans to escape the payment of the two dollars per gallon.  After the high wines were made they were piped into barrels in the bonded warehouses, where the law required them to stay until the tax was paid, the barrels stamped and the stamps cancelled.  Now there may have been some honest men among those government officials around the distilleries, but many of them contracted the habit of holding their hands behind their backs to receive some money from the distiller.  After receiving the cash the key to the bonded warehouse was turned over to the distiller and the government official would have business out of town.  A steamboat would land and the barrels would be rolled out of the warehouse and on to her decks.  Thro this plan the distiller would evade the payment of $160 on every barrel shipped, and the government lose just that amount.  All of the steamboats carried this stuff when asked to do so.  I remember that the government officials at one time commenced an action against one of the Northern Line boats, with the idea of collecting the tax from the boat, or company.  It was a test case, in which the government lost.  The court decided, that as common carriers, the steamboat men were not liable.  That they were not supposed or required to know anything about the taxes, whether they were paid or not.  Another plan to dodge the tax was to underestimate the capacity of output of the distillery.  If the house had a capacity of 2,00 gallons in 24 hours, the proprietor would estimate it at 1,000.  Then, when things were just right, when he had the storekeeper  and gauger fixed, and there were no revenue officers around, he would “double the mash”  as they called it.  Produce 2,000 gallons in 24 hours, instead of the usual 1,000 gallons shown in their daily reports.  This extra output of 1,000 gallons was got out of the building at once usually in the night time.  Many of these establishments, owned flat boats, with which they could do the night work.  Take the stuff to some rectifier who would soon convert it into whiskey.

   The most ingenious and successful method for getting rid of this tax I noticed was invented by a man who operated a distillery and vinegar factory in the same building.  He would make a shipment of both kinds of gods, but many of the barrels branded vinegar contained high wines.  This man was a Yankee from the New England states, and a shrewd fellow.  He operated this establishment for many years, and the revenue officers never got on to the trick.

   Now and then the steamboat clerks would take a cargo of this kind, knowing that it was a crooked deal.  On one occasion we were approaching a certain town there, and received a hail from the distillery, which was located near the lower end of a chute, two miles below the town.  We went in there and found a gang of men rolling barrels out of the bonded warehouse into a large flat boat.  This work was being done about the middle of the afternoon.  We simply put out lines on to the flat boat and towed it along up the river, the gang of men transferring the barrels to the steamboat as we went.  When this had been done the flat boat was cut loose from the steamer.  The man in charge of the barrels was in a nervous condition, asked many questions, and was very anxious that the boat, should reach Davenport that night.. I suspected that he was making a steal, and during the following year I learned he was.  There were one thousand barrels of the stuff, on which he cleaned up $160 per barrel, the amount of the government tax.  As a result of this shipment, I was called to Chicago as a witness in the federal court, where the U. S. attorney gave me the details of the transaction.  A subpoena was also issued for the clerk of the steamer, but he could not be found.  The government officials appeared to have received their price at both ends of the route, as we landed the barrels in Davenport in daylight the following day.  The government had no positive testimony and the case never came to trial.  In after years, I met the clerk and he told me that he made no bill for the goods, but that the boat received one dollar per barrel, or one thousand dollars, for the shipment.  The usual freight charge would have been about 25 cents per barrel.

   A special revenue officer was at one time sent to one of these distilleries to watch the proprietor the government officers and the barrels.  The distillery was located about three miles below the town, and the special man was stopping at a hotel in town.  While he slept, a steamboat landed at the bonded warehouse, and loaded all of the high wines.  I met the steamer about five miles below the distillery, a big stern wheel boat and she was sailing rapidly, down the river.  The only lights that I could see about her were those on her chimneys, and she stood away from me so far that I did not get her name.  When I landed at the town, I met the special revenue officer, and he appeared to be very much disgruntled because I could not give him the name of the steamboat which had stolen his whiskey.  He made much noise at the landing, but none of the people on the levee were so mean as to insinuate that the special had been well paid for his sleep at the hotel.  He took the train south that day but he did not find the boat nor the barrels.

  I was well acquainted with one of these distillers, who operated two plants, which produced 2,000 gallons of the liquid every 24 hours.  He run them regularly for 10 or 12 years, beat the government every week in the year, and it was his boast that he had never spent an hour in jail or paid a fine.  After he had quit the business I was joking with him, and told him I would like to have one half of the money he had paid the government as taxes.  He answered this by saying that I would be much better fixed financially if I had one half of that he did not pay.  “But,” he said, “It cost me a lot of money to dodge this tax.  I was forced to purchase everybody in the two distilleries, from firemen up to the ranking government officer. Some of the those government officials demanded a high price, but I had to get them in order to run the business.”

  The United States district attorney, in Chicago, questioned me in reference to this man.  He said that the government had been able to catch all of the other fellows, now and then, but had never succeeded in making a case against this one man who was operating two distilleries.

   And so the business went along until the early 80’s, when many of the distillers had gone out of business, or been forced out by the government.

Straightening the Des Moines  

  Increasing the value of the low lands of Iowa by straightening the Des Moines river and building banks and levees is advocated by Captain E. H. Thomas in a letter to the courier.  Mr. Thomas who had made a deep study of the stream, its possibilities and its defects, points a way to reclaim many acres in Iowa, and states that the state should get busy at once and do something. Captain Thomas letter follows:  

   “I Have read your editorial in reference to straightening or taking the kinks out of the streams of Iowa, and as you suggest I think our state officials should show some interest in the matter of reclaiming the low lands.  For a period of about twenty years, I made a study of the streams and the action of the water.  My business made it necessary for me to acquire a knowledge of these things.  I learned this.  That the natural course of all streams is from point to bend; that the main channel is in this direction and at no place under the points.  All short bends hold the water or carry a head.  Such head of water varies from a few inches to several feet, owing to the shape of the head.  From levels and measurements taken at Ottumwa when the river was at flood stage, I am convinced that the bends between Ottumwa when the river was at flood stage, I am convinced that the bends between the Ottumwa boat house and the south of village creek carries a head of no less than two feet.

  “The velocity of the discharge is checked and the points acting as so many wing dams, back the water up in the bends.  I am also satisfied that if the river was straightened between the two points named, there would be two feet less water at Ottumwa, when the river is at its usual high water stage at fourteen feet.

  “The only place to get a correct water mark is on a stretch of straight river.  One does not notice it in passing down with a boat, but the river between the packing house and the mouth of village creek is as crooked as a snake in motion.  From the top of Monkey mountain one can get a good view of it.  It is all short bends to the right and o the left, what we river men call “letter S bends.”  Here in these bends the current is checked and in these ends the current is checked and the water held piled up.  If there is a fourteen foot rise above Ottumwa it I safe to say that it will gather a head of two feet in passing the South Ottumwa bend and hold the sixteen feet until it passes the mouth of Village Creek.  This is an easy problem for all those who have investigated the matter, but not so plain to those who have not.  Between the mouth of Village creek and Eldon, where there are no short bends, the river will again lake its proper level of fourteen feet.  Of course if the banks along there should be but twelve feet there would be two feet of water on the bottom farms, as water when it has a chance seeks its level and find it, so that it appears to be very plain that what is needed to reclaim or keep the water off the 50,000 acres of low lands along the Des Moines river is to first straighten the stream, lake all of the short bends out of it then to put all ------------------- [rest of article missing]