Richmond times-dispatch. [volume] (Richmond, Va.) 1914-current, 1922-10-23
SAYS MELLON NULL|FIED
THE ACTION OF CONGRESS
Representative Frcar Crit.
cizcs Ruling OIL Standard
Oil Dividends.
DECLARES LAW is SET ASIDE
CharEes Overthrow OF ] NV Designed
To ltrnch Surpluscs Accumulated by
Corporations 70 Prevent Payment
OF Individual Surfaces
tBy Associated Frees

WASHINGTON, Oct. 22.-Sccretary
Mellon was charged today by Repre-
sentative FTear. Republican. WILSON,
sin. with overthrowing the action Of
Congress by his ruling that section
go OF the revenue law. designed 10
reach SURPRISES accumulated by cor
porations TO prevent the payment Of
individual surfaces. was not appli-
cable In the case OF the protected
400 per cent stock dividend OF the
Standard oil Company OF New Jcr-
scy.
The charge was made in letter
TO Mr.. Mellon made public by the
Wisconsin Representative. The COM
municaticn was in reply TO a letter
from Mr. Mellon in response to one
written by Nj. Frcar early in the
week calling attention to the re-
ported stock dividend and urging
that the penalty provision be in
voked. Mr.. Mellon wrote that see
;ion 220 had no relation to such
stock dividends as tina; proposed by
the New Jersey oil company. but
added that there had been and viii
he no laxi;y on tho part Of the Treas
NY In evoklng ;hat section "whcr-
ever. there is any basis 70: SO do
ing
Ignores Purport of statute.
Your letter" replied MIR. Frcar
under date o: today. ignores and
m!san1rchends the plain reading and
1ur1ort Of tho statute. and your rul-
irc assumes the prcroCativcs Of the
supreme Court when 1t sets aside
this law.
~ trust that You are not under
n MISREPRESENTATION as 70 tho Qucs-
ilo1 sGuarcly presented TO you, be-
cause the press has been filled with
announcements that tho purpose Of
the stock dividends TO I've issued by
the standard oil Company, and the
proposed stock dividend of $500, 600
GOO in United States Steel, in which
YOU are supposed TO be Interested
is for the purpose OF avoiding the
s"rtaxes which would apply II these
enormous amounts. agErcgatiug over
SL000.0Q0.O0O. Were distributed as
cash dividends.
Naturally, as "A man OF great
wealth, Interested in sixty or moro
corporations affected by tho ruling
on stock dividends and taxation. YOU
VIII md your personal interest in
VOWED IN any decision, but assume
in Your position as a public officer
you will be governed by the law and
the interests OF the public rather
than by any personal consideration.
Cannot he misunderstood.
I'm your letter TO me YOU say the
corporation has paid it's full tax
This refers. take Il, 10 section $50.
but tho penalty of 20 per cent is
imposed by Congress ia order to
reach the unwarranted SURPRISES
ihHt are held by corporations and
not distributed as cash dividends in
order to cvado the TAX payment under
the individual surtaN law. That is
the distinction so clearly made by
Congress that II cannot fairly rc
misunderstood. II is another way OF
reaching the tax on undistributed
profits which is undoubtedly per-
United under tho law and the de-
cision OF the supreme Court in the
stock dividend case
Your efforts TO protect govern
mcnt Treasury IN the past have no,
boon directed toward collecting
tax upon large ana powerful cor
porat!ons. and in the present cmcrg
cncy your action in everything tho
express VIII OF Congress VIII result
in loss TO the Treasury of an
amount reaching scvcru! hundred
million dollars annually.
Il trust that YOU Will reconsider
your rul!us."