The labor world. [volume] (Duluth, Minn.) 1896-current, 1922-12-02

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ilpstrates&the mad rush of wealth to
: .ver before congress awakes to the
ysituatipn and stops the swindle. Ten
Companies ,of5this group have in the
Als,st few weeks distributed $751,104,-
f311 in the fern Of stock dividends
and only $12s,s5G,37S has been is
sued in cash, a total of 1881, ,960,6S4.
Twepty-seven more companies in this
, Monp are scheduled to take similar
| actfQn. The press is predicting stock
/ dividends in the next week by the
sAtlantif Refining Co., Standard of
5IndianaS F,irie Oil & Gas and the
srrairie PH4 Line.
:, Standard of Indiana is the COM
pany which has practically absorbed
isthea wealth stored in Wyoming oil
Fields which was recently. taken away
from the United States through the
= Teapot Dome oil grab, which has so
aroused the country.
A. Old Tricks Encouragde.
Since the dissolutions of the old
HStandard Oil Co. in 1911 there has
pbeen paid to this group $2,3S9,593,-
1882 in dividends. Before 1922 there
was distributed $s24,s55.96s in cash
and $2sS,20o,Q0o in stock. Two amaz-
ing facts are revealed by these fig
sures. The first is that distribution
of earnings through stock dividends.
although not new trick, has run
wild as a result of encouragement by
the present administration, especial
Ey, tho example of Secretary Mellon.
'nself one of the richest men in the
tnited States, whose Gulf Oil COM
pany took the lead in stock dividend
distribution. The secend fact is that
made by the oil companies In spite
of. the lower price of gasoline, earn
ings that In 1892 were more than
half the earnings of the preceding
ten years.
What will congress do about it2
Several things arc under discus
Jon.
First of all congressman are har-
.assing Secretary Mellon to know
Why the surplus of company is
lot taxed, and the tax collected, as
contemplated by congress under Sec
ION eco, which reads:
r.. What the Law Says.
IF any corporation Is
lyailed of for the purpose OF pre-
;enting the imposition of the surtax
lpoh it's members by permitting Its
profits to accumulate instead of be-
ng divided there shall be levied and
IN
he net income of such corporation
tax equal of 25 per centume in ad-
>ition to the tax imposed by Sec
II ~ co.:
ioptcderding to Congressman Frear
,ecretafy Mellon has failed to an
;wer or' explain any of the inquiries
made by me regarding
he cxaction of tax penalties under
section 22O."
When a company like Standard
ill. has a net profit after ten years
# IT'S percent and declares a divi-
lend approaching a billion dollars In
,ne year there is admittedly sur
,lus INTO in fact needed in the bust
-,css," which is taxable according tc
he law.
Save so Per Cent.
It il interesting to remember tha
sNuen Of wealth like Mr.. Rockefeller
nd Mr.. Mellon would have to pay
q the United States 50 per cent o.
t:tA dividends If paid in, cash, bu
'"--yhen paid in stock they are not tax
Bile, according to the courts deci
ion. The stock distributed as divi
lends can of course be sold in1nle
lately by the recipient and the casl
.alue realized.
'As you we'll appreciate, Mr.. Sec
etary," says Congressman Frear
out of the wealth Of your expert
noes more financial crimes are com
nitted in the name of stock divi
ter1ds' than by all the tax exemp
eturity transactions which you de
lohnce.t past, present or future"
Encourages Tax Dodging.
."The stock dividend fever" say
1r. Frear. ."encourages tax lodging
spreads out and furnishse sur
.luses for g6bbling up small compe
itors and it freezes out the littl
tockholders, of the same company.
Attention Of. Mr.. Mellon is caile'
lso to the Internal Revenue Blu
eau'sy demand upon congress 10
100000, only a fraction Of the to
amount needed. with which to re
una taxes rebated in secret to Sc
ret companies, or Individuals an
ANTS to know why their names can
ntIbe published. y =. .
ltis believed that the mad rus
,,cover earnings into the pocket
= It wealthy stockholders has bee
recipitatsd BY the pending invest
alton into the oil business by cor
ress. an :investfsat ton that; will II
lude not only the Teapot Dome gra
ut the methods of money makn
;l1ich prevail througho houts the ii
ystry. n Il. ..I ss5.. NJ. l:I E.se a
n s55 81 III VI sGs