Evening star. [volume] (Washington, D.C.) 1854-1972, 1925-12-12
MINING CONGRESS
HITS TAX CHARGES
Commissioner Blair Replies
Sharply to Criticism in
Probe Testimony.

Commissioner Blair of the Internal
Revenue Bureau replied sharply yes
terday to the criticisms contained in
the testimony taken by the Senate
investigating committee made public
Thursday. At the same time the
American Mining Congress. in session
here. replied to charges made in other
parts of this testimony.
Another mass of testimony relating
to methods employed by the bureau
in assessing discovery valuation of
mining companies in Arizona. Texas
and Louisiana was made public by
the committee. Engineers of the
company set up the claim the Gov
eminent had lost large sums in taxes
as a result. Representatives of the
Internal Revenue Bureau. however.
disputed the contentious of the
engineers.
Gulf Oil Case Settled.
Discussing the Gulf Oil Corporation
case Commissioner Blair empha sized
that it had been settled before the
present administration came into
power and before Secretary Mellon
took Office Mr.. Mellon was a stock
holder in the corporation, and engi-
neers of the committee claimed 1t has
escaped S4,590.3s5 In Federal taxes
during the years 1915 to 1919.
Since the inference may be drawn
from statements made at the hearings
by Representatives of the committee
that Secretary Mellon Influenced the
decision OF the bureau in the Gulf
case" Mr.. Blair said. Il simply wish
to state that this case was settled
before the present administration
came into power, before Mr.. Mellon
became Secretary of the Treasury
and before he could have exercised
any influence over the bureau"
The American Mining Congress de-
clared in a formal resolution that the
mining industry was being subjected to
unjust public attack and suspicion
consequent upon secret proceedings be-
fore the Senate committee on investi-
CATION of the Bureau of Internal Rev
enue. The industry, it was charged.
was not afforded an opportunity to pre-
sent the facts.
Protest Law Changes.
Protest was entered against any
changes or modification in the provi-
sious of the. tax law as regards mines
unless proper hearings were held, and
it was asserted that the actions of the
Senate committee had been harmful
to the mining industry and had i'm
peded the work. of the Internal Rev
enue Bureau.
The mining companies whose tax
Uses are dealt with in the testimony
before the committee made public to-
day included the United Verde EXte-
sion Mining Co. of Arizona, the Union
Sulphur Co, the Freeport. Tex. Sui
phur Co. and the Texas Gulf Sulphur
Co.
In the case of the United Verde Co.,
L. c. Manson. counsel for the COM
mittee. said an additional tax of S121,-
go for the year 1917 was involved,
and that the case was closed without
payment of this assessment, despite
the protest of subordinates in the
bureau.
Deputy Commissioner J. G.. Bright
of the bureau told the committee that
when he recommended that the case
be closed he believed he had the full
approval of the men in the bureau
who handled the case. He had been
informed. he said, that if it were
closed the Government would be in a
better position to deal with the tax
payer on 1918 taxes. and that any
inequalities inadvertently favoring the
taxpayer for the year previous could
be equaliZed.
In the case of the sulphur com
panies. l.. G. Manson, counsel for the
committee, contended there had been
gross generalization of the discovery
value of their properties in Louisiana
and Texas He asserted that in the
case of the Union Co. there was an
original valuation of 100000, with an
allowance by the income tax unit of
a value of s3.000,00O.
Manson placed the value of the Free
port company at s1,285.1T in 1912,
and contended that the bureau, in fix
ing discovery value for taxation pur-
poses. placed the<total at s13,375,S 57
as OF March !, 1913.
With respect to the Texas Gulf Co.,
Manson held that the company &C
quired it's property in 1917 for $780,
900, and that two years later the bu-
reau allowed it discovery value Of
S5,100,340.