The Washington herald., 1922-12-08

allegs them to be facts neseo
upon such information.
ASKS DIRECT QUESTION
Continuing to direct his remarks
10 Secretary Mellon. the Wisconsin
Progressive said:
I now ask Q direct question
that an investigation will disclose.
Il Il true that due to the legal
evasions possible under existing
law disclosed by the secret rec
ords of your office that Mr..
Rockefeller, Mr.. Morgan. Mr..
MsIion and others Of great wealth
are not paying one-fifth OF the
income tax they are popularity
supposed to pay under the law
based on their wealth, due to in
vestments In tax.free securities,
stock dividends, trusts, stock ana
bond exchanges and other forms
of tax avoidance? I gather this
Is so from your official report
issued today.
Among other charges that Mr.
Frear said had been placed in his
hands "by weil-informed wit
nesses" and which should be In
vestigated" were:
MAKES OTHER CHARGES.
That the Aluminium Company
Of America received from Treas.
ury officials an amortization OF
s15,o00.0oo on about $so.ooo.ooo
valuation. although the property
was then generally employed In
production.
THAT the Standard Steel Com.
pany has an alleged ss,ooo,ooo
tax due. although the assessment
letter never has been sent out.
but remains in the files OF the
income tax unit.
That the tax audit Of Gulf OIL
has been made under questionable
surroundings and methods that
challenge full publicity.
Secretary Mellon 10 alleged
largely to own or control these
companies.
Representative Frear referred to
Secretary Melons "denunctation OF
q statement made by Governor
Blaine OF Wisconsin that he 10 not
enforcing the law" and the secre.
tary's statement that the proof OF
his position was contained In letters
he had written to Mr.. Frear. he
added:
AVOIDS SPECIFIC CASES.
All the letters written by Sec.
retary Mellon to me con-
tain nothing but general denials
or assertions. and evade or avoid
specific charges I have made In
letters to him. Let me cour-
teously, but frankly and publicly,
put questions to Mr.. Mellon that
he has thus far refused to answer:
Have you. Mr.. Mellon, imposed
a single penalty under section 22O
trefenue acO or prior law which
requires you to do 50 whenever
accumulated surpluses OF corpora.
tions are held IN order to avoid
payment Of individual surtaxes?
This section was a continuance OF
authority contained in prior laws
cited you in my letter OF Octo-
Der %. 1922.
In this connection. I call your
attention to Standard OIL OF New
Jerseys statement of ITS per cent
net profit in ten years. or TN per
cent net profit annually, of which
over 400 per cent Is alleged to be
held In surplus for stock divi-
dends. Also, Atlantic Standard OIL
with 800 per cent stock dividends
recently declared. Vacuum Oil
with 800 per cent stock dividends.
and many other companies quoted
in the press.
NO PENALTIES IMPOSED.
Have you made any demands on
such companies for the facts or
have you imposed any penalties?
j repeat q press statement previ-
susly quoted in my letters 10 you.
which says you have not. and
based upon such statement ana
your failure to answer, I allege
you have not.
Did you. Mr.. Mellon, begin the
stock dividend cutting with . 200
per cent dividend for Gulf OIL.
your own company Did Standard
OIL only follow your lead7 Did
you fail to psnalize yourself or
that company
Again. on information in my
hands. I charge that to be the
fact-
stock dividends from corpora
ton surplus declared within the
last three months are estimated at
nearly $4,000. .ooo. 900. in addition to
former cash dividends. which In
the case of Standard OIL. U. s.
Steel and many other companies
represents extortionate prices
charged the general public.
What cases. II any, have you
penalized to check the merry riot
now filling the financial columns
OF the press7 Based on your pre-
vious failure to answer specifically,
1 allege you have not penalized any
company.
Did YOU sell the Gulf on Com
pany or aid In its consolidation
with Standard Oil during the last
six months? 50 understand.
Have you imposed tax penalties
on any Of the companies Of which
you were an official before becom-
ing Secretary Of the Treasury?
You say In your letters these are
secret records. under your control
rs such. That is what Governor
Blaine. I understand. has con-
demned.
VIII YOU ask the President TO lift
the ban provided by law so that a
congressional investigation may
ascertain the facts?
These are matters that Congress
has permitted to remain secret for
no logical reason apparently and I
am hoping your answers will be
specific. so that the necessary full
publicity can be determined by
Congress