New-York tribune., 1922-11-13

zen years was to prevent the inposi-
tion OF tbs individual au1eax Oh it's
stockholders Il yo9 claim 1t is rot
| then. indeed, Congress has duty to
per, orn III reaching by law The undig~
| trIbuted surplus that thus avoids ;pai-
Tidual surtaXes.
You say thet after the stock djv,-
oehds are declared the statute still an.
piles ] ask Yea frankly Why 1t should
hot apply before the dividends arc de.
ci&Fed when the evidence has 6cen enb-
mitted, and | fprtasr aak you IN ali
sincerity what cases, Il any, have been
TreQoiFeo oy you to pay 2 penalty undez
Session 220. I ask this because the
press states that the Commissioner ,,S ~
internal Revenue has never ayyed the
9t&na&rd Oli Company for a staten er1t
OF IT'S needs in business that would
!eacH 900 per cent surplus accumulated
IN ten years. Again I ask YOU phaF
companies have been penalized. and I
40 not make this inquiry out OF cnrios-
~, but cali your attention to invest
I3ont Opportunities Volume 4, No. II.
;Novel1 Der, 1922, published, believe. in
NeR, 1ofk, which contains many blank
appi'cations for Investments in Stand
arg oll STOCK, and which, statcs in its
lows:
Since we were last privileged to
address you, two dominant factors in
world finances have made decisive
moves. Andrew Mellon, banker. oil
msgaate ana capable secretary Of our
treasury, controlling the immensely
wealthy Gulf Oil Corporation, insupn-
ratea the stock dividend and melon
cutting era Of 1922-'23, Gulf Oil led
the movement with eco per cent stock
aiViGend. The stock Jumped from S4o0
Rocketellere Followed
ihe Rockefellers followed inme-
a3atety BY deciding to distribute the
Ssandard Oh surpluses. The Standard
oils OF kentucky, California, New Jcr-
eey, New York and Vacuum followed
with the oisstributton Of from 100 to 400
per cent. Nearly thirty Standard Oils
ere 'poasibies." The American Radi-
ator and National Biscuit companies
we're doubtless Influenced end also d.
clared large stock dividends. Many
others will follow.
>, Uur last issue indicated thess pos
Si,bliitles. CPage &, September, 1922
The probable effect on future American
marietta is not exaggerated. Nothino
like Il has ever happened before--and
Is unlikely to happen again In a pener-
AJ1cn.
This startling statement made nv an
anvespmeaS journal and reputable
nouse, take II, in New York, terms
Aou as the capable Secretary Of the
treasury controlling the Immensely
wealthy Gulf Oil Corporation tbat teSrs ~.
augursted the stock dividend End
melon-cutting era of 1922 '28, when the
SOCK OF your company julnped fror1
Sa0o to $500, and that Rockefeller com.
penies simply followed your lead
:. Also the significant statement moth.
ing like il has ever happened hefore
and l5 unlikely to happen again In +h;s
generation Standard Oil stock ann]i.
cataons were attached and offered FOR
sale with this announcement. lei have
1ncorrectiy quoted any fact or the law
a..s ssail Dc glad to be SO Informed and
VIII make full correction.
Az our statement to the press that
s snis years Treasury deficit will reach
$e7o,0oo,o00 (due in large mart 70 tha
sseo,ooe,Ooo excess profits tan rennal
urged By you) is also noted and v;biIs
aundfeds OF millions Of dollars in pen- I
Ai1ies ana surtaXes doubtless NAV be |
,cohectea under Section 220, as intendeS |
oy Congress, to my mind other factors
~ She case heretofore referred to are
oh greater Importance. Only secrat
Ieeosos ana secret administration of
.a, aW nakes this startling situation pos
'ibie. In the next letter I NAV carry w
,oals 70 Newcastle when indicating the
;9urpose and effect of Section go az
from the stock dividend
lecision. '0e''o
-, .,Extended editorial comment BY
1,he me New York journal of Commerce,
). tWo-column editorial in The Wall
street Journal all speak from the
ie~.p ONT Of distinguished New York
anker, who said he spent one month
making up his tax return and eleven
ionths in trying to learn how to avoid
rs taxes; Apparently. your solution
al be happy one for him, but / feel
afe 1t Is not shat contemplated bv The
nacted. ""'
renewing my observation that IL is
n incongruous situation that asks YOU
enforce Section 22o, but again nre-
y strict imposition of the penalty
1eraln provided to reach abnorrnsl
arplu5eS, / am, very sIucereI,, xrn,.r.