Evening star., 1935-08-09
Mr.. JackSon:

Seemingly far from worried about
the fate of any goose" that lays
golden eggs" Mr.. Jackson, in his pre-
pared statement before the Senate
committee concerns himself only with
that portion of the Ford estate still
under immediate control Of Henry
Ford. Slightly more than 40 per cent
of the Ford Motor Co. stock Mr..
Jackson said, was passed over to Ed
sci Ford in 1919.
Mr.. Jackson then deals with the
remainder as follows:
IAN estate Of 1854 900 900, the bal
ance sheet value Of the remaining SO
ger cent of the stock which We will
assume Mr.. Henry Ford still owns.
is abnormal by any test we know. The
House bill. intended to cover most
normal estates, stops graduation en-
tirely at $10,000,000 and the Ford
estate, on these figures, would be IS
times the point at which graduation
of rates ceases. The largest estate
so far returned to the Bureau of In
ternal Revenue was sl40,O00,000. 1t is
obvious that the hypothetical applica-
ton of this law to the Ford fortune
would be a distortion of its usual ap-
plication.
Surplus Not Distributed.
Moreover, while the Ford Motor
Co. has been accumulating its surplus
at an average rate Of $20,000000
year, this amount has not been dis
tributed to stockholders where it
would be subject to surtaxes. The in
crease in value Of the holdings of
Henry Ford, if realized upon by a sale
in his lifetime, would pay heavy indi-
vidual taxes. If it now passes by in
heritance, it will have escaped all
surtaxes. Thus, if the heirs of Henry
Ford shall now find themselves in
high inheritance tax brackets. it is in
part offset b. the advantages of
accumulating wealth without paying
surtaxes thereon"
In contrast to the use of a definite
figure as the approximate inheritance
tax to be levied against the Henry
Ford estate of something over $780,
600, 900, Mr.. jackson declares:
1T is impossible, on the basis of
published figures, to arrive at a re-
liable estimate of the tax that might
be imposed upon the estate Of Henry
Ford. We do not know how much of
his holdings will remain in his indi-
vidual possession and subject to tax,
or how much of them will pass to or
CARNATIONS that are exempt from tax.
nor what part Of them will pass to
his son and what part to others.
Surplus Built Up.
THE inheritance tax, whatever its
amount. would not be tax on the
Ford Motor Co.. nor claim against it.
According to public statements, the
Ford Motor Co. began business in
1908 with $4,000 in cash actually
paid in, and it's net worth of $500, ,000,-
900 in 1884 represents the accumula-
| tions after the payment of dividends.
Over this period the Ford Motor Co.
has added to the book value of its
stock through accumulation of sur
plus an average of, roughly, S20,000,-
900 a year. 1t is obvious that a
corporation with this record is not
to be abandoned or closed because
of any tax on the right to inherit
its stock"
Sold to the Public"
What Senator Vandenberg calls
selling Ford to the bankers, to Wall
Street. to the money changers and
then to the public, Mr. Jackson de-
scribes as follows
The utmost to be anticipated
would be that some part of the equity
now represented by the common stock
would be sold to other interests or to
the public. This equity might be
disposed of in part through a bond
issue or through preferred stock or
by a sale of portion of the COM
mon stock. The effect of this would
be to convert what is now a family
industry into a widely owned one,
and to permit the public to share
in the future earnings of an enter
prise to the building of which public
patronage has made a substantial
contribution"
a