New-York tribune., 1921-02-17
u. S. May Pay
4 Billion Back
To Liquor Men
Senators Fear Plan Is Being
Considered to Give Huge
Sums to Breweries, Dis
tillers for 'Obsolescence'
investigation Is Sought
Ruined Trade Marks and
. Good Will Claims Take
Shape as Treasury Raid
From The Tri6une's Washington Bureau

FROM The Trtbuue'S JVaShinoton Bursn.
WASHINGTON, Feb. 16.-Sums esti-
mated all the way from $1,000 900 900
to $4,ooo,o0o,ooo may be returned to
the liquor interests of the United
States under rulings of the Treasury
Department, according to assertions
made IN the Senate to-day by Senators
Smoot, of Utah, and Frelinghuysen, of
New Jersey. Senator Smoot put the
figure at $1,000,0Oo,oO0. Senator Fre-
Ilnghuysen declared this estimate was
moderate and that he was informed
the amount would be between $4,000.
100000 and $4,000, 100000.
The money which is to be returned
to brewers, distillers and liquor deal
ers, according to Senator Frelinghuv-
sen, is for "obsolescence of propertv"
OF those whose business was terminated
by prohibition legislation, loss Of good
will and similar losses. He charged
that allowances are being made to the
liquor men by the Internal Revenue
Bureau which in some cases amount to
five times the sums allowed to other
taxpayers.
Secrecy Maintained
Senator Smoot brought the question
to the attention of the Senate by re-
ferring to the fact that the Senate on
january 18 passed a resolution nro-
posed by himself calling on the Secrs
tary of the Treasury for information
regarding refund, abatement or credit
against taxes for the years 1917, 1918
and 1919. This resolution, he said. had
not been answered. 1t calls for the
facts as to the number of claims for
such refund, abatement or credit and
information as to the following:
Inc aggregate amount of such claims
and an estimated proportion of said
aggregate attributable to, first, errone-
Gus assessment; second, stock divi-
dends; third, obsolescence of war prop
erty; and, fourth, opsolescence of prop
erty of those whose business was ter
minated by prohibition legislation: the
policy and basis, together with methods
of computation for allowances as to
good Will; and as to whether prouer
allowance for the claims so filed was
made In the financial reports of the
Treasury Department..
Senator Frelinghuysen read into the
record what purports to be a draft of
the ruling of the Internal Revenue Bu-
reau. Under this the liquor interests
would be allowed to make deductions
or would be granted credit for such
things as good will, trademarks,
brands and the intangible assets Of
their business. 1t is reported the value
OF these, as represented by the liquor
interests, would reach enormous sums.
Smoot Alarmed
1t is declared the ruling has been
under consideration for weeks, and it
is because Senator'S fear it will be is
sued, causing enormous Treasury
losses in the way of refunds, that the
airing came to-day.
Senator Smoot, after he left the floor.
said:
Il do not understand that the ruling
has been announced, but that it is
under consideration and is about to be
issued. Under the ruling allowances
would be made the liquor men FOR such
things as good will, trademarks, trade
brands and items of an intangible ma
ture. OF course, if the liquor men are
to be allowed to put their value on
such, Intangible assets, then the Treas
ury will suffer heavy losses. | am re-
liably Informed that these losses will
amount to $1,000, 100000. 1t was be.
cause heard such a ruling was in CON
temptation that l introduced the res
olution to which l referred on the floor
and to which there has been no re-
sponse."
A Congressional investigation of the
whole matter is threatened Senator
Smoot said he would ask the Finance
Committee to call before it the off,
ciais who have the subject in hand.
senator Freiinghuysen said it was time
ter.