The Birmingham age-herald. [volume] (Birmingham, Ala.) 1902-1950, 1924-03-22
MELONS FRIENDS
NAMED IN ATTACK
ON TAX BUREAU
Former Department EN-
pl0yes Charge Graft
And Inefficiency
INCOME DIVISION
is REORGANIZED
Attempt Made TIC Stop
Appropriations For
Refunds


WASHINGTON, March 21.-vistas
of fraud, corruption and chaos, rival
| ing the sensation disclosures of the
oil and department of justice inquiries
have been opened up by the Senate
committee investigating the internal
revenue bureau.
Sharp attacks by witnesses Friday
on the bureaus administration and
charges of favoritism to certain huge
corporations, close to Secretary Of the
Treasury Mellon, SO nettled treasury
officials at the hearing that they
struck back at the witnesses.
Nelson 7. Harrison, solicitor for the
bureau who was present at the hear
ings, rebuked a former employee of the
bureau, J. p. Moore, for having dis
closed the contents of reports the lat
ter made concerning the Lee HI. Smith
company Of Pittsburg.
Days Developments
Sensational Developments in the tax
fraud situation Friday were:
1. A sweeping reorganization in the
income tax unit of the bureau was
instituted.
2. Earl G. Rickmeyer, former auditor
Of the bureau, and Garrett Underwood,
insurance agent, were sentenced here
to II months on a charge of attempt
ing to defraud the government of
81 ,000, 600 in taxes.
3. Charges of graft and trafficking
in inside information by employees Of
former claims engineer in the bureau,
before the committee.
4. Orders were issued to employees to
unna6 IA ~ rfafr
concerns and re-examination Of disal-
lowed claims were ordered by Mellon
when his friends were involved, Adams
told the committee.
5. Charges that promotion for able
men was impossible; that pull was
necessary and that the officials in the
bureau were "pin-heads" were made by
Albert J. Bradley, bureau auditor,
another witness.
9. Huge tax refunds to oil, steel and
other companies in which Secretary
Mellon is or was interested, were dis
closed by Senator Mcclellan of Ten
nessee.
z. Senator King Of Utah made an
unsuccessful attempt to strike out ap-
preparations for refunding illegally
collected taxes" until a through ex-
animation of the claims could be made.
Reorganization of the income tax
unit was made "for the purpose OF
equalizing the sizes Of sections, sfel
better administrative control and to
simplify and localize the control of re-
turns and distribution Of work along
geographical lines" it was announced
at treasury headquarters.
Conviction of Rickmeyer and Under
wood followed after they attempted to
extract brides from taxpayers to de-
stroy evidence of under payments
amounting to more than 100000.
Adams Charges
Adams charges were the most
serious thus far presented to the Senate
committee. Members OF. the amortiza-
tons section trafficked in inside
treasury information" he declared.
Refund claims to corporations were
reduced or increased Unfortunately
in star chamber sessions.
1.-THE bureau is rotten" Adams de-
clared, conditions during the year I
there were outrageous. The recommen-
dations Of field engineers were ignored
and tax decisions were made without
regard to findings In the case"
He said in one case it was previously
decided that a certain company should
be refunded $4,000 and that the
engineer was forced by his superiors
to make his report conform to the de-
sired reduction.
Orders were given, he said, in the
amortization section to expedite the
claims of the Standard Steel Car COM
pany, the Aluminium Ore company Of
America, the United States Steel cor
ksAwn h. A.
featuring company, the Colorado Fuel
and Iron company, and the Great Lakes
Shipping company, while the Ford
Motor company and other concerns
that were not on the inside" had to
pay exorbitant amounts.
Moore supported Adams story in it's
graver points, though differing slight
ing in details. He said he had
been instructed to write re-
port allowing the Berwind White Oil
company 100000, which they had
claimed in overpayments. This. he re-
fused. He also said that he had made
a report on the Lee Fl. Smith company
of Pittsburg, Dental Supply Manufac-
turers, which involved under-payments
of $4,000, but had been instructed by
Secretary Mellon to make another ex-
animation.
1t was after Moore's testimony that
Harrison jumped up adj demanded to
know why he had disclosed this in
formation to the committee.
Meanwhile, Senator King of Utah
was denouncing the tax refund meth
DDS in the Senate. He advocated public
proceedings before an independent tri-
bunal.
Albert ]. Bradley, an auditor in the
bureau, after stating that his testi-
mony might cause his dismissal, de-
clared:
'|rhe bureau is a closed corporation
"A corporation dominated by five men.
One and all. they are the smallest pin
heads ] have seen in nv life"