Evening star., 1925-03-09
Investigating Body Says
Steel Corporation Saved
$21,478,513 in Taxes.
BIG PROFIT is ALLEGED
TO ALUMINIUM COMPANY
Mellon Defends Settlement of
Claim Against Steamship Com
pany Heavily in Debt.

Evidence designed to show that
the Federal Government has lost
millions of dollars in taxes through
war amortization allowances to the
United States Steel Corporation. the
Aluminium Company OF America and
hundreds of other companies is con-
tanned in official Transcripts of hear
inGs filed with the Senate by the
Couzens investigating committee.
Counsel and engineers for the
committee contended that an amorti-
zation allowance of S55,063,312 to the
United States Steel Corporation was
$27,926,0l4 in excess of what IL
should have been. and that there
was involved a difference in tax of
$21.47s,51S. This case has not been
closed, however.
Aluminium Firm Case.
An over allowance of at least
s6, 500. 900 to the Aluminium Company
of America on the amortization total
of S15,5ss,614 was alleged by coun-
sci and the engineers.
A loss of some S50,000.0 900 in taxes
from the various copper companies
also was alleged because of the fail
=
extend to the years 1917 and 1918 a
system of revaluation ordered recent
ly by Secretary Mellon.
l.. c. Manson, counsel for the COM
mittee. said with reference to the
Steel Corporation case that there was
no uniformity of treatment in the de-
termination of amortization.
Views of Engineer.
"It depends very largely" h said,
ION the personal view of the engi-
neer who happens to make the in
vestigation."
Complaint also was made by Mr..
Manson that amortization allowances
were made without sufficient investi-
cation.
With respect to the Aluminium Co.
of America, Mr. Manson disclosed that
the company first had put in a claim for
s6,S52, SAT, based on a fiat 25 per cent
Of expenditures for wartime extensions,
but that this had been rejected because
the basis of computation did not meet
with the requirements of the law Then
the company countered with revised
claim for s1S,26S,435, on which an al
lowance of $15,5ss,614 was made. The
tax involved was not made clear in the
record.
Reference was made in the testimony
to Secretary Melons connection with
this company, members of the commit
tee saying that 1t had been their un-
derstanding that the cases of companies
with which he was connected had been
settled before he took office. Mr.. Man
son said that was not the case.
Mellon Defends Course.
Replying to testimony before the
Couzens Senate committee in refer
ence to settlement of the Atlantic,
Gulf and West Indies Steamship Cor
poration taxes. Secretary Mellon, In
formal statement today, de-
declared that the Treasury in settling
with the steamship company had made
application .'of proper business prin-
ciples familiar to every one"
The Secretary denied differences
that he was interested personally in
the steamship corporation. He said
he had no interest either in the cor
poratfon or any of its subsidiary COM
panies and was not acquainted with
any Of its officers.
The inferences that has grown from
the testimony. Mr.. Mellon said, pre-
sented another argument against
publicity for tax matters 1t was
mot correct" he declared that the
Government paid back out of the
Treasury S7,2S2,460 that had been
collected from the steamship companies
The facts were, he continued, that
after an additional S9,913,s41 in taxes
and penalties had been assessed
against the company, an investigation
showed that the financial condition
of the company was such that to
press the claim would have resulted
in bankruptcy, 'in which proceeding
any payment to the United States
would have been jeopardized."
Settled ON Rent Terms.
The company offered to settle for
$100O,000 cash." the statement said.
THE department investigation show
ed that s1,2S0,0o0 was as much as the
company could probably raise from
it's bankers and pay the government
and still avoid bankruptcy proceed
ings. This taxpayer also had judg-
ment against the Shipping Board of
81, ,351 900, which the department in
sisted must be satisfied by the tax
paper as well as the cash demanded
by the department. In other words
the United States received in COM
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