The New York herald., 1922-01-13
UNTERMYER hints
GENERAL ELECTRIC
HIDES HUGEPROFITS
$187, 100000 Plant Listed as
S66,OOO,OOO, Less Than
Years Additions.
BOOKKEEPING IS SCORED
BOOKKEEPING IS SCORED
Warns Companies to Smash
Secret Compact Relating
to Sales Prices.

'~,~s''Nps OHtUihsC COQ6Scl " lliS
Lockwood Legislative Committee on
Housing, ct yesterdays hearing, COM
pleting his effort to show the exist
encc of a highly profitable monopoly
in incandescent bulbs enjoyed by the
General Electric Company. introduced
an analysis OF the company's financial
statements for the years 1918, 1919
Sf1d 1920, which showed that while
approximately s7c.000,0O0 had been
spent in those three years alone for
new plants and improvements. which
made the total plant account approxi-
mately s1s7 900 900. the figure stood on
the company's books on December 81,
1920. at s66,5SS, ,sS2.53.
Mr.. Untermyer did not make the di-
rect charge that the companys profits
in these three years were written off
or applied to depreciation reserve
account to evade the excess profits or
the income tax. He left that intima-
,icn after demanding in dramatic
public accountant employed by the
General Electric, who had authorized
him to write off huge proportions Of
the company's plant account each
year during the period mentioned
Plant DSsSn To 100000, 900.
After showing that the company had
expended during 1890 more than $31 1.0o0.0 900
for additional land, buildings, nachin-
cry and equipment and that 30 per cent
had been written off plant account and
added to reserve. although the usual an
nuai allowance for depreciation for this
class OF property has been about . per
cent. Mr. untermyer asked Mr.. Dewar:
so we have a plant that cost $lS7,-
100000 written down to $66.000,000. Has
that anything to do with the excess
profits tax or the income taxi"
Undoubtedly IT affects the Irofits,
admitted the accountant.
II should say 1t does retorted Mr..
Untcrmyer. ''and it affects the income
tax, so you wrote down, wrote or %
rer cent of the entire cost of your inn
provements for 1920
Mi. Untermyer's analysis of the Gen.
crai Electric Company's affairs followed
what was interpreted as warning 10
Walter Cary. vice-rresident of the
w
ing Company. that its price fixing ar
rangc.nent on bulbs with the General
Electric Company might be made the
subject of special consideration by the
committee Mr.. Cary. on the stand. had
remarked that IL the Westinghouse
company allowed its agent "A greater
commission than did the General Elec-
trio Company. as an inducement to sell
bulbs cheaper 1t would be in violation
OF the agreement with the General
Electric Company.
"You would not want US TO break our
agreement. would you?' he asked Mr.
Untermyer.
yes" replied the committees lawyer.
smash Il to pieces. IL you don't. We
will do II for YOU
- seeks si5,OOO,0OO I'm Fronts.
!. Mr.. Untcrmyer holds that besides the
sis.0O.oO0 written off the General Elec-
tries plant account In 1870 aud s150o0.0c0
additional profits that he would like TO
trace were added to the admitted profit
OF $4,000 900 IL would prove his conten-
tion that the company made approxi-
mately 100 per cent. profit in its bulb
business.
Charles W. Appleton. a former City
Magistrate. counsel for the lamp COM
mittee of the General Electric Company.
who was present at the hearing. told
a reporter later that all the company's
charges 10 depreciation during tie three
wears covered by Mr.. Untermycr's in
ouIry. had been passed upon and ap-
proved by the Governments tax ex-
perts. He said some OF the factories
constructed during the war had become
obsolete and useless and that the depre-
citation was complete. PIC added that
the depreciation on certain kinds OF
electrical. machinery ran much higher
than on other types. and on bulb maxi
ing machinery frequently was as high
as 70 or % per cent. year.
At the end of the formal hearing Mr..
Appleton and Edgar T. Brackett. fors
rner state Senator from SARATOGA, also
of counsel to the General Electric Com
pany. had a talk with Mr.. Untermycr.
but neither party 10 II would say or IN
innate what was discussed.
Mr.. Dewar's examination as TO writ
ing off values was In part as follows:
Nov II the writing off OF sf5.oo0.000
FOR 1920 was excessive. u would reduce
the profits to that extent. wouldn't it?'
Undoubtedly"
$50 that the paper profits would be
defective as compared with the real
profits. wouldn't they TO that extent?"
"If u were demonstrated that the de-
probation rates were excessive"
you know. do you not. that the usual
vritc-off on plant account Of buildings
v about 3 per cent. isn't it?"
IL cannot make any such admission.
because II might vary n depends upon
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