Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1924-01-18
MELLON, couzENs, EFT AIS.

The controversy between Secre-
tary Mellon and Senator CouZens
about the income tax is getting hot.
but the Secretary hasn't said to the
Senator yet that II the Senator will
publish a list Of his investments the
Secretary will publish a list OF his.
Boston Giobe.--But he has called
Senator Couzens' attention to his
former admission that his wealth
was largely invested in tax-exempt
securities. also asks whether he
thinks tax system which permits a
man with an annual income Of mil
lion dollars to avoid paying tax is
such as he considers right.
In this letter to Senator Couzens
Secretary Mellon writes as follows:
Il am glad that you have brought
up your own case. 1t Is not unusual
! have heard of other men in your
situation. and actual experience Is
tho best test. Just as the statement
In your previous letter that no man
having the opportunity to invest In
Standard OIL stock would touch tax
exempt securities was happily
answered by the probate record Of
the estate of William Rockefeller.
which showed the exact contrary, so
| think you arc the answer to your
own arguments.
in your letter OF Jan. II you say
that In 1920 you paid some $7.000,000
OF tax on the profit from the sale
OF certain property. obviously your
stock in the Ford Motor Car Com
pany. and you then largely invested
Your capital In tax-exempt securities.
1t is reported in the newspapers that
ali of your capital IL now in tax
exempt securities. and | have not
seen any denial from you. This
means If II means anything, that you
pay no income tax.
Now IT is a most unusual thing
that q man OF wealth and business
experience should put his entire
fortune into one class of security
which some change in the law might
render less valuable. 1t has usually
been considered prudent that invest
inents be diversified. aud you might
have selected, as we'll as tax ex-
empt securities. United States Gov
crnment and sound utility and in
duGtrial bonds. the care of which
would bring no more business worry
than tax cXempts. IL. as you say.
high surtaxes are immaterial. 1t
would be interesting to know what
Influenced you in your selection of
tax exempted securities to the eX
Clusion OF all others.
There is much more to that letter.
Out of his experience in financial
affairs Secretary Mellon describes
how the surtax affects investments
in railroads and in housing facilities.
His arguments seem impregnable.
Indeed. the only effective battcring
ram being used is the specious plea
that lowering the surtax helps the
rich and burdens the poor.
This is the kind of plea which Ats
easily into the mouths Of demagogues
and oven those anxious TO win votes.
Senator Moses says the Mellon plan
will be thing OF shreds and patches
before Congress Is through with it.
and We can believe it--provided of
course certain members of that body
become convinced they have some
thing with which to fool the public
into believing it the best. IF this
Congress. which can't even properly
function. be capable of developing a
measure superior to that on which.
In sense. one of our greatest
flnanciers has staked his reputation,
one may well believe In miracles.