New-York tribune., 1922-01-13
Untcrmyer Says Company
Juggling of Earnings
Has Bearing on Income
and Excess Profit Tax
Charge Based OH
Auditing Figures
improvements i'm , Years
500, 600, 900; Total Val
uation Is 500, 200, 600

Samuel Untermyer. chief counsel tc
'he Lockwood housing committee, made
inc charge at yosto rdav's session OF
tn" committee that reports Of tho Gen
era! Electric Company's annual busi
ness had been manipulated to covcl
up millions Of dollars of profits. This
juggling OF accounts he declared, had
direct bearing on the government
income and excess profits tax.
Through the testimony of Douglas
Dewar, public accountant employed
bv the General Electric to audit its
books Mr.. Untermycr developed that
IN the twenty eight-ycar period and
cd December 81, 1920, the company
had spent more than SIS. 900 0Ot Tor
its vario"s plants. Despite the fact
tina. about snu.OOO,O0O of this was
spent for improvcm snts within the
last two years. he pointed out, the
total value of all the company's prop
erty was set down in its 1920 report
as only S66,0O0.oOO.
Mr. untcrmyer characterized this
writing down. process as grossly
misleading,' saying it was done ain
order to keep the profits Of ,nc Gen
cral Elecarc Company from looking
too big
1T is Il method of covering up the
~ - profits" he continued
Effects Shown on Taxes
Suddenly turning to the witness he
asked: Has thai anything to do with
the excess profits tax or the income
tan? ?"
"undoubtc1Iy it affects the profits, "
replied Dewar.
II should say it docs. and it affects
the income tax added Untcrmyer
Dewar denied that the General Elcc-
trio Company was trying to cvade the
Federal taxes, saying that the figuring
in the reports was based on dcprecia-
ton growing out of the company5 $ war
time activities.
Former Senator Edgar I. Bracket
and Charles Appleton. former magis-
trate, who were present during the dis
closures as attorneys for the General
Electric Company, appeared consider
ably exercised by the charges and
sought a conference with Mr.. Inter
mver Immediately at the close of the
session.
1t was shown from the testimony
of Dcwar, of the accountant firm of
Warwick. Mitchell e. Co., and docu-
mcnts submitted by Mr.. Untermycr,
that from total expenditure of $751;
1l,1ll.59 by the General Electric Com
pany on its properties during the twcn-
ty-cight years ending December 81,
1920, there had been written Off Sl5,-
I34, ,129 .06, reducing the net value Of all
the plants owned by the company on
December 81, 1920 to S66, ,536, ,6S2.53.
Buying Of New Plants
In the three years 1918. 1919 and
1920, according to the record, the com
pany spent SIG 100000 for new plants,
properties and other improvements.
"And having spent S76,00O,000 in the
three years for plant improvements
asked Mr.. untcrmycr, "thc company
finds itself at the end Of 1920 With a
total plant capital OF $66 6,000,0 900,
doesn't it,
"Yos, SIR" replied Dcwar.
"And that includes everything it had
before 1918, doesn't it?'
a"Ycs." :cp.!ed the accountant
And YOU consider it perfectly lcgiti-
mate bookkeeping, do you. to put this
whole vast plant account at less than
was spent in three years on additions
to its property?'
81 think replied Dewar. "that tho
rates Of depreciation charged are fair,
having regard to all the circum-
Stances
Time and time again Mr. Untcrrlyer
sought an admission from the witness
that the figures were juggled for the
purpose of concealng the company's $
profits. Dcwar admitted that ne did
CONTINUED on pass fcur)