Evening star. [volume] (Washington, D.C.) 1854-1972, 1927-01-24
FORD TAX HEARINGS
ODE SHIFTED HERE
Only Few Defense Witnesses
Remain to Be Called
in Detroit.
BY the Associated Press.

BY the Associated Press.
DETROIT, January 24.-OfIcials in
charge of the Government tax suit
Ford Motor Co. today were prepared
to shift the hearings to Washing
ton. Only a few defense witnesses
remained to be heard, and indications
were the preliminary hearing here
would be concluded tomorrow.
Only defense evidence has been in
serted in the record of the case thus
far, Government counsel awaiting re-
moval of the hearing to the capital
before opening their case.
Halted Stock Listing.
How Ford Motor Co. stock was
nearly listed on the Stock Exchange
and how Henry Ford prevented this
with timely newspaper interview
was related today at the $50, 600, 900
tax trial.
A deposition Of A. l.. McMeans.
former secretary to John r. and Hor-
ace f. Dodge said that s. X. Roths-
child, who held an option on the 1000
Dodge shares in 1917. declared he was
associated with a New York group
who planned to organize a holding
company and sell stock. He relin-
quished the option when, he said. his
associates lost interest because Of
newspaper articles quoting Henry
Ford as planning to turn his plant
over to the Government.
The option was renewed in 1919,
being made to T. T. Berger, an asso-
ciate of Rothschild, but was again
surrendered, this time on payment
of 1915, 900 by Stewart Webb. repre-
sentative of Ford. in buying out mi
nority stock. 1t is on this sale that
the present suit hinges. The Govern.
ment contends the stock as of March
/, 1913, was valued too high for the
computation of taxable profits, and
claims an additional $50 900 900.
McMeans deposed that the Dodge
Brothers were willing to sell ''be.
cause they were on bad terms with
Ford and because they saw an on
portunity to make a large sum of
money" They had previously legally
compelled Ford to disburse dividends.
The defense testiony has revolved
about two dominant contentious
that the Internal Revenue Depart
ment originally set a valuation on
the stock as of 1918, for taxation
purposes, at $9,4S934 a share and
that such q valuation was not too
high
In support of the first point attor-
neys read into the record voluminous
correspondence intended to show that
former Commissioner of Internal Rev
enue Daniel G. Roper verified and ap-
proved the valuation in 1919. In re-
gard to the correctness of the figure
a number of expert witnesses, mostly
automotive leaders, testified the orig.
maj valuation, in their opinions, was
not too high.
United States Seeks $50, OOO, 900.
Government attorneys have given
little 1nkling of the nature of their
case beyond saying at the outset that
they Will waive argument on the point
as TO whether the valuation of 50
4S9.54 was actually set and will in
sledd attempt to prove the figure err
roneous.
The Government contends If lost
$4,000. 600 income taxes as a result
OF thls valuation and alleges the cor.
rect valuation should have been only
S5,94d.S4 share. The sum it seeks
70 recover represents the tax ON the
III profits accruing from sale
OF the stock III 1919.
Ford Not SubpOenaed.
Ford was not subpoenaed as a ,,,i+.
ness at the hearing here and neither
size stated If his appearance at Wash
ihgton was contemplated. Ford left
mere FOR Sudbury. Mass, a few DAYS
before the hearing opened.
Likewise neither side Indicated
" W ATlhef secretary of the Treasury
Mellon, under whose direction tbe
case was reopened, would be called
ne defense attorneys. however said
they would attempt to trace author.
Sp OF memoranda forwarded to Mel
, III a ~ iol 70 opening of the case in
which was included, as a sugpastior -
formula for assessing the stock, which
". heIu 10 be virtually identical with
me formula later used by the Urea s,,,,y,
De;partment in making a second eyaln.