CHAPTER X.

SCHWAB BECOMES SOLE PROPRIETOR OF THE DISTILLERY-THE BRANDING OFFICER-THE MODUS OPERANDI-SCHWAB TAKES HIS EMPLOYEES INTO HIS CONFIDENCE-THEIR INSTRUCTIONS.

I

N a very short time, Schwab accumulated, in the infa

mous manner we have just related, sufficient money to buy out the other members of the firm, and he became the sole proprietor of the distillery.

At the time we write of, a barrel of whisky only required to be branded by the proper Government official to show that the tax had been paid upon it. The officer who had charge of the brand was a resident of Dayton, Ohio, and his instructions were to keep it securely locked up in a box provided for the purpose, unless when it was required for use. When a distiller had a quantity of whisky on hand, say fifty or one hundred barrels, and wished to pay the tax upon it, it was necessary for him to notify the Revenue Collector, who would collect the amount due the Government, and send the branding officer to the distillery and brand the same "tax paid." Without this mark it would be unlawful to move a gallon of whisky from off the premises.

When this stamping officer first presented himself to Schwab, there was something in his face that reminded him

(Schwab) of one of the delegates whom he had so successfully bribed in former years; and judging, we suppose, his face to be the index of his mind, he remarked to a friend and confidant, D. V. Brown, "Tave, by tam! I dinks dis man will work shust so good as a delegate." But Peter found this a more difficult undertaking than he anticipated, as the officer was afraid to brand a barrel without reporting the same at the office. However, he finally agreed, through the seductive influence of a few dollars, to leave the brandlying carelessly in the distillery, while he went to old Mrs. Stops, near by, and partook of a few glasses of lager beer to dissipate the ill effects of the fumes of the liquor and refresh the inner man.

Schwab now represented to the Collector that there was not much money in the business, and he would not run the house to its full capacity. He would then pay tax upon a few barrels, and return to the distillery. The branding officer after branding as many barrels as the tax had been paid upon, would leave the brand as we have described, so that Schwab, or some one connected with him, could use it to an unlimited extent, thus realizing not less than five thousand dollars per day.

The branding officer's services were not long required in the fraud, for since he allowed his brand to be handled so freely, before a great while an impression of it was taken, and Schwab had one of his own.

During this time it had become necessary for him to take into his confidence his clerks, distiller, and cooper, and discharge all whom he thought could not be trusted, and replace them with his brother Adam and such men as he had formerly used for witnesses in prosecuting poor Jones.

The clerks must not put upon the books which are kept for the inspection of the Government officials the large amount of grain received daily at the house. The distiller's book must correspond with the clerk's, and not show the great amount of grain daily distilled by him. The cooper must keep quiet with regard to the number of barrels used.

It appears that about this time Schwab feared his books would not stand rigid examination, so a man named Samuel Milligan, living in Hamilton, was employed to make out an entirely new set.

CHAPTER XI

SCHWAB TAKES A CANAL BOAT CAPTAIN INTO HIS CONFIDENCEOPENS A COMMISSION HOUSE IN CINCINNATI-DODSWORTH, TAKEN INTO THE RING-ESTIMATE OF DAILY PROFIT-THE RING ENLARGED-SCHWAB STANDS BETWEEN THE RING AND THE GOVERNMENT -HIS CONTROL COMPLETE ON BOTH SIDES.

A

LL being now in complete running order at the dis

tillery, Schwab took into his confidence a canal boat captain with a picked crew. He next opened a commission house in Cincinnati, on the canal wharf. To this house he shipped his "crooked" whisky, as this was the name given to all upon which no tax had been paid.

Of course, by this time, there had been additional men admitted to the ring in Cincinnati, in the way of receivers of crooked whisky; the inducement being that they could purchase it for less than the actual tax.

He next induced the old man, Dodsworth, who kept the other distillery in Hamilton, already referred to, to go into the crooked business. The house was, accordingly, cleared and manned in the same manner as Schwab's had been. It was agreed that Schwab should receive the crooked whisky at Cincinnati, and dispose of the same, and should pay Dodsworth about ninety cents per gallon.

We have already stated that the market price of straight, i. e. tax paid whisky, was two dollars and eighteen cents; and the cost of manufacturing about fifteen cents per gallon. Accordingly, Dodsworth would clear by this arrangement seventy-five cents per gallon; Schwab, one dollar per gallon, and the persons purchasing from Schwab twentyeight cents less than the market value.

Now, suppose Dodsworth distills eight hundred bushels of grain per day, which he could easily do; allowing three-anda-half gallons to the bushel, this would produce two thousand eight hundred gallons of whisky. He pays tax on ten barrels each day, so as to make some show to the government. This would be five hundred and fifty gallons that he has paid tax on, leaving two thousand three hundred and fifty gallons crooked. Thus, Schwab makes just two thousand three hundred and fifty dollars per day out of Dods worth, while the latter makes just two thousand one hundred and fifteen dollars.

As Schwab became thus possessed of so much money, he soon connected himself with several other distillery houses in Cincinnati, in the same manner as he did with Dodsworth.

The ring houses were now run day and night to their full capacity. The market being thus glutted with untaxed whisky, it caused the distillers who were outside the ring, either to suspend business or become party to the fraud.