Evening star. [volume] (Washington, D.C.) 1854-1972, 1928-07-01
BY CARTER FIELD.

~ HOULD the Government advise In
advance, or merely punish after
Aside from the spectacular bat
tie between Secretary of the
Treasury Andrew w Mellon and Sen
ator James S. Cou2ens, with Henry
Ford's name thrown In, to attract more
popular interest, the recent tax decision
in the Ford Motor case is really OIL
interest to every business man VINO Is
ever likely to have an exceptional tax
case. and to every citizen likely to run
afoul of the law unwittingly. And in
this day and age of Government regu-
lation ever encroaching more and more
IN what once was considered a mans
nriyate business, a clear conscience Is
not necessarily good insurance against
heavy fines, unpleasant publicity and
possibly even Atlanta.
More and more, also, bureau drawn
regulations are supplementins loosely
written legislation, making 1t all the
more difficult for the moderate sized
business man, or even the biggest COR
porations, with their experts and law
vers, to figure out just what they can
and what they cannot do without get
ting into trouble with Uncle Sam.
There are q great many other things
In which neither memory nor conscience
are sure guides for keeping out of trou-
BILE. The case which brought this point
to the fore and produced a situation
which may lead to congressional le2iSla-
ton outlining Just what Government
officials may and may not do In warning
or advising citizens in advance, Is not
perfect illustration in its inception, De-
cause in all probability no one OF the
men involved had the slightest idea at
the time that they needed advice to
keep out of trouble. Their motive was
very different one. They were planning
to make a deal In which Dodge brothers
and Senator Couzens we're to change
their enormous paper profits In the Ford
Motor Co. into cash. This involved. in
turn. the necessity of making huge
income tax return on the following
March.
Had to Know Course.
Income taxes, due to this country's
entry into the war, had just reached
their peak at that time. They scaled up
to 81 per cent So it became vital to
know Just how the profits we're to be
computed by the Government. All de-
pended on what the Government would
consider as the value of the stock at the
time the income tax was first IMPOSED.
The excess of the sale price over that
initial tdlUG WOuld bC 0AAOAAit ~ NJ
taxed a croft.
Daniel C. Rouer. then Commissioner
of Internal Revenue, agreed 10 assess
this earlier valuation in advance, so
that the parties involved could compute
what their taxes would be before
agreeing. to sell their minority stock to
Ford and take their profits"
The whole battle between Couzens
and Mellon. believed by many to have
inspired CoGzans' bitter attacks on the
Treasury Department in general and
Mr.. Mellon in particular grew out of
this action. The Government contcnded
that the price for the stock as of the
day on which the income tax era
started was fixed too high by MFR.
Roper, and thereby reduced the amount
of profit on which Couzens, the Dodge
Brothers and other minority stock
holders had to pay taxes.
But the importance to the general
public is not whether Couzens and his
colleagues had to pay additional taxes
despite their precautionary inquiry in
advance. although the amount involved
ran I'D into the millions. The question
of the result of the majority decision
of the court In holding that Roper ex-
ceeded his authority In advising the
Ford stockholders In advance is of far
greater consequence. @sxs
What effect will this decision have
on the future conduct of the Govern
mental bureaus? What will be the
effect Of the minority opinion uphold