New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1911-07-01
SUES FOR 100000
state Seeks to Recover Unpaid
Stock Transfer Taxes.
| ARGE AMOUNT 0UTLAWED
,,oluded in Latter Are Claims
AGAINST U. S. Rubber Company
Subsidiary of 100000.

crits for the recovery Vi Pehe'A'iN"
,o,nting TO at least two millions Oh do'-
- for non-payment of stock transfer
-. oro beinC brought by the state Con-
,saI,,r through the Attorney General sam
roLer tho Deputy Attorney General IN
SSarre Of this litigation. said YESTERDAY
$50 an investigation of the BOOKS OIL van
,s transfer agents showed that lul'S
..~oo millions Of similar claims had oeeh
..,,,aucd through failure OF the state 10
80. oction within the prescribed time
,..o,,5e5 m the latter are penalty claims
-. the Rubber Goods Manufacturing
D'e.,narv. which is controlled by the Chi'eo
s,stee Rubber Company, amountihs "
$4,000 49,,
,oei5ce the penalty suits actions ior 'he
..-o,.er,. of approximately $4,000 alleged 10
:. d,e the state for stock transfer taxes
are pending 10 oc-
When Mr.. Ecker was asked now he o.
oo,,rtAd for the outlawing of such vast
sum in penalty claims he replied lhe'e
"a, no only one of two explanations; II
g. d,o n carelessness in past administra-
lions or else the force of examiners al
,oved the Office Of the stock transfer stamp
examiners vas inadequate physically 10
perform the work
The stock transfer stamp act was paSse"
IN 1905 and became effective in June OF ''o
came wear. The law provides that 'aN
of two cents must he paid on each sna'
,ransferred whose par value is Sl"V. h0
,op-navnocnt of the tax is made IHisue
,oearor and punishable by hhe OF COW
- e mn irrrisonment not TO eXceeo s'N
,,,ortbe or both. for each transaction pro-
,id.d tbat action is taken within two years
90 The actual transfer. Another provision
-. .he tax itself cannot he collected il
- oo,iop is taken within the following
six years
Partial List of Suits
The following is partial list OF 'he
sji,s already started: state against tne
r.nion Mines Company, to recover S"e0V
IN nenalties and Sli7 % in taxes; against D
II Rosenblatt & CO.. 20 recover S"SoU III
,e,slties and Ii7 % in taxes; against the
p,egsIo Gas Company for 1914 u in taxes,
renaltv claims of $500 outlawed; against
the Texas Company for $l,2S5 % In taxes
,era1,,- claims Of 10000 outlawed against
the American Light and Traction Company
for Sos 40 in taxes. penalty claims for $4,000
Coupany for s13S o6 i'm taxes, penalty claims
for $4,000 outlawed; against the General
Mines Company for $lO1 50 in taxes, penal
~ claims for $4,000 outlawed, and against
the American Telegraphone Company Tor
1924 Sc in taxes, penalty claims for $4,000
outlawed.
40 suit has been brought as yet against
the Rubber Goods Manufacturing Com
ranv. hut Mr.. Ecker informed that com
rsny that if the amount the state declares
&c due il IN taXes-Sj,01 46-wss not paid
before Thursday suit would be started.
The tax claim itself will be outlawed in
this case il action is not begun on or be-
fore July H. The state also alleges that
there were 900 separate transfers in stock
Of this company on which no tax was
raid. making a penalty claim aggregate or
half Million but as already mentioned
anv such claim is outlawed.
-gAfr. Norris counsel for the company.
.ssid yesterday that the Rubber Goods
Manufacturing Company held that ii did
not owe the state a cent in transfer taxes,
and would decline 10 pay the 5000. III
the Attorney General wants to sue, why,
let him 80 ahead" said Mr.. Norris.
Claim Against Rubber Company.
The states claim against the rubber
company arises from the absorption of
that company by the United States Manu-
featuring Company. At a meeting of the
board of directors Of the last company,
held May =, 1905, resolutions were passed
- wing that the board believes as an
entirety the total capital stock oc the
would be worth TO the United States Rub
Der Company $19,O51.4O0 and that two-thirds
Of the capital stock would be worth more
than two-thirds OF this sum- and then
advises the purchase of at least two-thirds
Of the Rubber Goods Manufacturing Com
Iauy stock.
This syndicate agreement was carried
out, and the syndicate manager was per-
mitted 10 exchange stock in the absorb
ug company for stock in the Rubber Goods
Manufacturing Company. Hence the trans
frrs upon which the state bases its claim
When Clark Williams was Controller an
tAapiner from his office discovered the
transfers consequent to the syndicate
aeseement This was in September Of last
YEAR TIL. examiner At once notified the
Rubber Goods Manufacturing Company
that be- owed the state approximately 5000
in taxes. IN Mr. Norris's correspondence
with Nj Williams On the subject he ar
eued that as the syndicate had long since
dissolved and tie resultant great diff
Guilty in collecting the tax from the per-
sons who should, II any. pay the tax" due
10 the states delay, some equitable adjust
ment should be made
The Attorney General. however. holds
that though the syndicate agreement was
made before The passage OF the stock trans
fer tax law the actual transfers were not
made until after that law mad gone into
effect and hence were, subject TO the law,