Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-06-05
Justice Departments Han
ding of Hill Case Attacked
by Senator.
EXCHANGE OF LETTERS
WITH MITCHELL REVEALED
Declares He Has Had No Reply
to Request for Information
Made Two Months Ago.
BY G. GOULD LINCOLN.

Senator James Couzens of Michigan
today started drive to make the Fed
eral estate tax effective and to prevent,
as far as possible, the avoidance OF this
tax by great fortunes through the in
of before-death gifts"
At the same time the Michigan Sena-
tor attacked vigorously the Department
of Justice because of its handling of the
estate tax case of the late Mrs. James
j. Hill, widow at the time of her death
of the famous railroad magnate.
He made public correspondence be-
tween himself and Attorney General
Mitchell regarding this case. consisting
OF his original letter to Mr.. Mitchell
and the inclosed memorandum, the At
torney Generals reply, and a second
letter written by Senator Couzens to the
Attorney General, to which, Senator
Couzens says, he has never had a reply.
although it was sent TO Mr.. Mitchell
two months ago.
Full Explanation Asked.
Senator Couzens, in his letter, asked
Attorney General Mitchell to explain
fully and to justify the action Of the
Government in the Hill case.
Il am interested in this matter" said
Senator Couzens today when he made
public the correspondence between him
self and the Attorney General, ''pri-
marily because of the Illustration 1t Of
fers of the failure of the present statute
property in anticipation Of death for
the purpose of avoiding estate taxes.
Congress, in enacting the provision that
gifts made within two years Of death
should be considered as made in antici-
patton of death, believed that this would
prevent evasionS of the estate tax. It
is apparent, however, that the courts.
others, have nullified to a great extent
this intention of Congress.
The facts in the Hill case. entirely
aside from the serious question OF ON
cial ethics which they raised against
the present Attorney General, are I'M
portant as indicating the need for re-
enactment by Congress OF the gift tax
as the only effective means Of prevent
ing evasion of the estate tax. Ger
repealed or all available means should
be employed to make it apply to all
citizens alike. The Hill case. I am
informed, is only one of many instances
where it has been evaded with a re-
sultant loss of many millions OF tax
revenue"
The defense which has been made
in the past for Attorney General
Mitchell in connection with this Hill
estate tax case is that it was before
the Department of Justice while Sar-
gent was Attorney General, and that
Mr.. Mitchell, who was then solicitor
general, kept strictly out OF the case
because he had acted as attorney for
Mrs. Hill when the trusts for the benent
of her children and grandchildren were
drawn up.
attacked because of his connection with
the case of Mrs Hill by Senator Thomas
D. Schall of Minnesota. Mr.. Mitchell
had refused to accept Senator SchallS
recommendation that Ernest MlchCl be
appointed United States district Judge
in Minnesota, and Schall counteIed by
making various charges against tire A.
torney General. including the one that
his previous position as personal astor-
new for Mrs. Hill had influenced the
Government against pressing the suit
for collection of S1.l30.61608 additional
tax which the Treasury Department
held had been evaded through disposal
by Mrs. Hill of her property before
death.
Asked Report on Hill Case.
Senator Couzens was first attracted
to the situation by the speeches OF
Senator Schall With a view to de-
termining the real facts of the situation
he asked the Government ofhclal to
give him a report on the Hill case. to-
gether with an opinion as to the pro-
priety of the Governments action re-
specting it.
This report when received bore out
the facts presented by Senator Schall,
as follows:
THAT Mr. Mitchell as attorney for
Mrs. Hill drew up trust agreements,
transferring $16.000,000 to relatives at
a time when she was seriously Ill.
2-That Mrs. Hill died within two
years after these trust agreements were
executed.
3-That the Treasury Department
in anticipation of death, and that the
estate accordingly was Subject to an
additional inheritance tax of Sl,l30.-
GIG .O8. and this decision was afirmed
in the first decision Of the case on ap-
peal by Judge Molyneaux of the United
States District Court for Minnesota.
4-That the administrator appealed
the case to the United States Court Of
Appeals. and in that court, at a time
when Mr.. Mitchell was serving as
United States solicitor general. the Gov
eminent made no oral argument what
soever in defense of the Treasury's po-
sition, and the case was decided against
the Government.
S. That thereafter C. M. Charest.
Continued on Page 4, Column -