The Bozeman courier. (Bozeman, Mont.) 1919-1954, 1925-07-15

Assistant Treasury Secretary
Tsls Fable. Of Fate Of Two
Successful Men

SueceSSIUt Neh
Men cannot BE- expected 70 continue
20 work day after day. Increasing TIE
productveness Of this country and
baneREing others, II they know that
On death the major portion OF their
earnings WIN be dissipaSed IN Federal
estate and state inheritance taxes, de-
cIarss Charles S. Dewey, Assistant
Secretary Of the Treasury, in the
American Bankers Association Jour
nal He says:
Il am going 20 relate 3 fable IN
/ terms Of modern business conditions.
John Henry and Walter Brown we're
: aggressive, hard@wOrking men. anu
! each had started business for himself
AT the time this history opens,
/ John Henry had Just died, leaving his
entire estate to his son, John Henry,
Jr., and had appointed his old friend,
Walter Brown, as executor. Prior 20
his death John Henry had moved to
! California, leaving his business in the
hands OF his son under whom It had
continued to make excellent Roadway.
The father had been doing a little
sDecuIating In oil This venture had
not proved successful and he was In
debted In the sum Of $500, 600.
Executor Walter Brown, on exami-
nation Of the estate. found the follow
ing situation:
CAPITAL stock OF Henry s. Co..
Inc. a Michigan Corpn........S S. OO. 900
Personal debts due banks ..... 100000
walter Brown soon made the I'M
pleasant discovery that in addition to
the personal Indebtedness Of $500. 900.
and administration expenses Of $780,
600, the following death duties must
be paid:
Federal estate tax ........s.... S4s7.500
California inheritance taX..oo.. 5s5,700
Michigan inheritance tax sssssss I22.00O
Total l.2O5.2OO
added to the personal debt and adj
ministration expenses, this made a
grand total liability Of $1,955, 200.
The year was 1920. Money was tight
Other manufacturing companies in the
same line which might have been In
terested in a purchase had no money
for extensions o were the banks in
q position to handle a loan Of this
type. Here was a most successful
business, built up from small begin
nings by one man and carried on to
further successes by his son, about to
be placed under the hammer.
els there any justice in taxation that
may force a man and his family to
lose the fruits of his entire life's labor
and permit others to benefit? As a las
resort, Henry, Jr., was forced into &
bond issue. A loan, to settle thu
debts. administration expenses ant
death duties, Of $2.25O,OOO was nego
tiated, upon the following basis:
5 'The capital stock Of the compan!
= was left at $5.OOO.O 900 represented b.
! $4,000 shares. First mortgage 8 pc
cent bonds were offered the publi
with a bonus Of two shares Of stool
with each $1,000 bond. The banker
TO protect his bond customers, KEEP
$4,000 shares to assure control O
management. and John Henry, Jr., n
ceived the balance Of 1880 shares
John now has a good Job as genera
manager Of his fathers old company
but they do not pay him very mucl
"NOw we must return to Waite
Brown. executor Of John Henry, s.
Walter had always kept close to hi
own manufacturing business. Tn
more he considered his own situation
the more closely It seemed to him I
resemble that Of his old friend.
70 she therefore called a lawyer an
n made q complete schedule Of his q
e. sets. requesting that an estimate 4,
10 administration expenses and deaf
-e duties be made. The schedule Of a
sets was as follows:
Capital stock. Walter Brown Co..
Mich. Corp "a. UOO,U
California real estate .......e... 1000. o
~ Tax-exempt bonds. Minn.s Mont
a. q 60O.O
Total S5.5O0.0
within q few days Mr.. Brown
I'll lawyer made the following report:
"