Evening star. [volume] (Washington, D.C.) 1854-1972, 1927-01-09
COUZENS TAX SUIT
ON TRIAL TUESDAY
Action Against Senator IS
Seen as Outcome of
Mellon Attack.
Special Dispatch 20 The star.

Special Dispatch 20 The star
DETROIT, January 9.--The great
esq Tax suit in history will come to
trial here Tuesday. with a hotel ball
room hired for the occasion.
The Government warts "A check for
$9.455 .303lO from United States Sena.
tor James Couzens 40 part of x30.-
81 ,659.52 from nine former minority
stockholders in the Ford Motor co.
But 1t Is really case of Couzens VS.
Mellon.
1t all started when Mr.. Couzens be
gan nosing into secretary MELONS
Bureau Of Internal Revenue
Ihen Mr.. Mellon delved into the
archives. lie emerged in March, 1925.
with the announcement that MIR.
CouzenS himself owed Uncle Sam ten
millions on his income taxes for 1919.
lie contended that the profits from
sale of the minority interest in the
Ford Motor Co to Henry Ford and
Edsel Ford in 1919, Tor nearly s1Oo..
100000. had been uuderestimated by
the Bureau of Internal Revenue in
the Wilson administration.
Mr.. CouZens and his associates an
pealed to the Board of Tax Appeals
against the supplementary assessment
levied against them by MIR. Mellon.
1t is this board which will hear the
case.
Sold Out TO Ford.
When Ford offered in 1919 to buy
out the minority stockholders they
consulted the Government before
agreeing, because their profits since
March. 1918. would be taxed as income
for that year.
Daniel {. Roper. commissioner of
internal revenue under Secretary
Carter Glass, approved 1918 valua-
ton of $20.6S6 1920, or t9,4S9.34 a
share, on Couzens' also shares. Cou-
zens sold them for S29,30S ,S57.40, or
$13,444.43 a share. paying taxes on
profit of sS,622, O96.70. The other
stockholders did accordingly.
Couzens total taxes for that year.
1919, were S7.2s1 .S075s.
When the alleged differentiation
was discovered the Government claim.
ed additional taxes of Sl0.9Oe, 5ss.Os.
Since then the Bureau of Internal
Revenue increased it's new estimate
of the 1913 valuation from $2.634 TO
S3.547.S4 a share and reduced It's addi-
uonal claim against Couzens to So
4O5,3O3.10. His normal tax and sur.
tax amounted to 70 per cent on part
of his income
There were 1895 shares sold. All
the stock except that of Senator Cou.
Gems and his sister, Mrs. Rosetta
Hauss. brought $12,5O0 share. He
received S13.444.43 a share and she
$13, 900.
Former Stockholders.
The former stockholders involved.
the number of their shares and the
additional assessments the Govern
nent now claims are noted as follows:
James Couzens. also, $9.455. 3O3.10;
Horace Fl. Rackham, 1000. $4.337,-
295.2O; estate of John F. Dodge, 1000,
s4.S37 1920; estate of II. E. Dodge,
1000, S4,337 ,295.20; John w. Anderson,
325, $l,43S,S26.35; Mrs. Rosetta V.
Hauss. 20, $S4, 404. $50: David Gray. 525,
$2,277 .079.SS; Paul r. Gray, 525, So
277079.SS; estate of p. w. Gray, 525.
$2.277, 079.SS.
Senator Couzens originally invested
S1,500. OF this amount he nut up a
81, 900 note, which was retired with
dividends during the first few months
OF the company's operation. Later he
bought for $4,000 so shares held by
Albert Strelow. A few months after.
ward he saw Strelow waiting In line
for job as laborer at the Ford works,
his $4,000 lost on a mining stock.
The story of this industrial snow.
talization of 500, 600, 900 and actual
assets, including those of associated
Ford enterprises, ofapproximately one
billion, is scheduled TO be told i'm detail
beginning next week in the ballroom
of the Hotel Statler. James Couzens'
intimate knowledge of the Ford Motor
Co. will be put before the board
through his attorneys, Arthur J. La
cey and Clarence &. Wilcox. The dis
tinguished counsel gathered for the
hearings also will include John w.
Davis and Charles Evans Hughes.
The attorneys will argue that the
case Is a question of whether the
Government shall keep it's word. The
estimate placed on the profits. as an.
proved by Commissioner Roper. was
an important factor in making the
sale of the stock, since the taxes would
make a great difference in the amount
to be realized from the deal. The
lawyers argue that Commissioner
Roper acted in a judicial capacity i'm
appraising the 1918 value of the Ford
stocks and that the present Treasury
ADMINISTRATION has no power to over
ride his decision.