Evening star., 1935-04-01
MELLON ASSUMES
ON STAND
Testifies Strange Income
Tax Law Made Stock
Deal Necessary.
Continued From First Page.)

back to my office and told Mr.. johnson
I had sold this block of Pittsburgh
Coal stock and asked him to take 1t to
Mr.. McEldowney."
@. What did you say regarding q
price?
A. I said y was $5O0,o00, and then
I asked him to pay the sum of my
note at the Union Trust.
Previous testimony has shown Mel
Ion owed $l,000,000 at the bank and
that the $500,000 received from the
stock was paid on the note.
@. Did Mr.. McEldowney say any
thing regarding applying that on the
note?
A. No. 1t was not mentioned.
@. Did you know that part of the
stock was held in other than your
personal portfolio?
Part Belonged to Brother.
A. knew generally that part was
in my own portfolio and part in the
and his late brother, R. B. Mellon.
@. Say anything to r. B. Mellon
regarding the sale?
A. Yes. I said I wanted to sell
my coal common and that I would
pick up the part which was in the
joint account.
@. He say anything?
A. Not particularly. There was no
disSension
Q. Did you form an opinion in
your own mind whether you wanted
to hold this stock-regarding its value
or lack of value?
able to sell with actual loss then. The
coal industry was in a very bad con-
dition. The possibility of the COM
mon stock with reference to the pre-
ferred was such that it held very
little value. The preferred had ac-
cumulated compound dividends that
had reached a large figure. So that
was taking away the value of the
| common and it was obvious to me
that the preferred stock would take
up all the possible earnings OF the
company-that the common was not
promising thing to hold.
Had Speculative Value.
@. Had you come to the conclusion
of its intrinsic value?
A. I didn't consider it had any in.
trinsic value. The only value I could
see was the value of common stock
in the market. 1t has a certain spec
ulative value.
Q. Did you have any repurchase
agreement?
A. I had not.
@. Have any thought or intent of
re-acquiring Pittsburgh Coal or any
Of the four other stocks sold to
Ascalot (another family holding cor
poration of the Mellons)?
A. No.
Mellon testified that about a year
later johnson suggested the repur-
chase of $500 shares of WESTINGHOUSE
Attorney Hogan asked If he had
ever any previous intention Of re-
purchasing that.
mo" was the reply.
Denies Directing Companies.
The financier emphatically denied
he ever had taken any part in direct
| ing the affairs of either of the family
holding corporations-Ascalot or Coal
esced.
None, whatever" he said, waving
both hands downward.
He recalled signing his 1881 income
| tax return in Washington, but said
he was busy and things were in a
turmoil"
Il was clearing up my own affairs
and only have general recollection.
merely asked johnson If it was o. K.
and questioned him some in general
way and signed the return
Hogan asked Mellon If he had conf
dence In johnson and the banker re-
piled implicit" adding that he knew
the return would be correct and prop
erly made out.
Ever prepare one yourself?" asked
Hogan.
II never have"
Did you consciously omit swearing
In order not to be bound?"
Il certainly did not"
Previous testimony had brought out
that Mellon did not take the oath in
signing his 1881 return in Washington,
but that he did later in Pittsburgh
upon becoming aware Of the omission.
johnson Suggested Sale.
Going into the sales of other bonds
and securities in years after 1881,
where evidence had shown Mellon
took income-tax deductions and his
family's holding companies later ac-
qlired the same stocks, Mellon said
johnson always had suggested the
transactions to him.
A sale made by Mellon in Decem-