Evening star., 1935-08-06

per cent of the outstanding stock OF
the Ford Motor Co. Henry Ford
therefore. does not own more than
So per cent of the stock of the Ford
Motor Co., and the inheritance tax
could apply only to what he retains.
"Edsel Ford has already received an
interest in the Ford Motor Co. now
worth on the balance sheet $246, ,0OO,-
600. This Is not touched by inherit
ance or estate taxes. This illustrates
concretely what I have stated to be
the general rule, that estates do not
pass from rich men to poor men, but
usually to heirs already amply pro-
Vided for
IAN estate of 1884 O0O, 900, the bal
ance sheet value of the remaining SO
per 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 nor
NAL estates, stops graduation entirely
at $10,000,000 and the Ford estate,
on these figures, would be IS times the
point at which graduation of rates
~SSSS- AAAS AoA SGob CSOdOC, 81 IdE
returned to the Bureau of Internal
Revenue was $14O,o0o,0OO It is OBJ
vious that the hypothetical applica-
tion 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 $4,000, 900 a
year, this amount has not been dis
tributed to stockholders where 1t
would be subject to surtaxes The in
crease in value of the holdings of
Henry Ford. if realized upon by 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 by the advantages of ac-
cumulating wealth without paying
surtaxes thereon.
1T is impossible, on the bases of
published figures, to arrive at q 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-
v1dual possession and subject to tax or
how much Of them will pass to organ
izations that are exempt from tax, nor
what part of them will pass to his son
end what part to others.
THE inheritance tax, whatever its
amount, would not be a tax on the
Ford Motor Co., nor claim against it.
According to public. statements, the
Ford Motor Co. began business in 1903
with $4,000 in cash actually paid in,
and its net worth of $500, ,000, 900 in
1884 represents the accumulations
after the payment of dividends Over
this period the Ford Motor Co. has
added to the book value of its stock
through accumulation of surplus an
average of, roughly, $40 200 .00> year.
1t is obvious that corporation with
this record is not to be abandoned or
closed because of any tax on the right
to inherit its stock.
"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 sale of portion of the COM
mon stock. The effect of this would
be to convert what is now a family
industry into 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"