New-York tribune., 1918-01-30
Steel Man Claimed Texas
as Residence to Escape
Levy Here, Is Charge
Son Is Also Accused
Widow of Financier Saws
limitations Statute Out
laws Claim

Although it is more than six years
since John W. Gates, the steel man
and 1nancier died, and more than four
years since his son, Charles G.. Gates
the plunger, died, the State Controller
yesterday started proceedings before
Surrogate Fowler to obtain for New
York an inheritance tax upon the
estate Of tho elder Gates. The Con.
trolcr alleged that the state was
cheated of this tax by the father and
son.
John W. Gates, avcrred the Control-
lcr, had never been a bona hde resi-
dent of Texas, although his will was
admitted to probate in that state ant
his estate was taxed under the laws
OF Tcxas-sOmc $62600O less than it
would have been taxed under tho laws
of New York. In 1907. the Controller
declared, the personal property Of John
w. Gates in this city was assessed at
s25O,OOO; the next year he made afli-
davit that he had changed his residence
to Port Arthur, Tex, and the assess
mcnt was reduced to 81 600.
"a. NutCS UCStucu IICIC
"Mr. Gates never intended to and
never did change his home or domicilc
to Texas said counsel to the comp
trollcr. ellis purpose was to avoid the
increased personal tax and provide
against the transfer tax, which is in
excess of that Of Texas. He conceived
and put into effect to)crablc plan
through selfserving declarations and
inexpensive tactics to pretend to be a
resident of Port Arthur, Texas. and, at
the same time, maintain both in intent
and in fact his domcilc and residence
in New York and there secure the pro-
lection of the state of New York with
out liability to taxes duly and fairly
imposed during his lifetime and upon
his DEATH"
1t was pointed out that the house
which Mr.. Gates owned in Port Arthur
was assessed at $4,000 less by $4,000
than the annual rental Of the apart
mcnt he maintained in the Hotel Plaza
Mi is!cading statements made by
Charles G. Gates to William Sohmcr
then State Comptroller, induced that
official, it is said, to waive claim on "a
considerable amount of personal prop
crty in this state, including 3O,l7G
shares of Texas Company, 10000 shares
of Republic Iron and Steel Company
1850 shares Of Producers Oil Com
pany, 900 shares of the Plaza OPP
Grating Company. 1883 shares Of the
Manufacturers Coal and Coke Com
papy. 1867 shares Of Kcmpland Cop
per Company, 9,lSS shares of Furnace
Valley Gopher Company, 2o,o7o shares
of Kansas City and Northern Railroad
Company, and 1000 shares Of Home
stead Zinc and Lead Company.
Controller Travis said that not until
last August did he obtain information
concerning certain additional tangible
property that Mr.. Gates had had in
his apartment in the Hotel Plaza, in
Guiding valuable paintings, brio -brac
furniture and other personal effects
This delay in the receipt Of infor-
nation, he said, caused the delay in
bringing the case to court. He asked
that an appraiser be appointed to APP
praise the personal estate of Mr.
Gates, that MIR. Gates be declared as
having died a resident of New York
and that the estate be ordered to pa,
the transfer tax, with accrued penal
ties.
Paid Tax of S7O9 Here
Mr.. Gates'S net estate amounted tc
s1G,639, ,636, and paid to Texas S13,9Oa
His New York estate was appraised a
$62.OS7 and paid tax of S709
The motion of the State Controllcl
was opposed by Mrs. Dcllora r. Gates
widow of John W. Gates and cXecutri>
of his estate. She declared that thcr,
had been no fraud and that the claim
of the State Of New York was outlawct
by the statute Of limitations Surro
as kcd counsel on both sides to submit
hriCfe