Evening star., 1936-02-22
DU POINT ALLEGES
i. S. "EXT0RT|0N"
Answer to Board of Tax Ap-
peaIs Says Charges Are
"KnoWingIy False"
BACKGROUND

UetduS OF Governments IdT
charges against Pierre S. du Pont
and John J. Raskob Dere repealed
early last month. Principal basis
mould seem to be In claim that in
1929 Du Pont sold to Raskob $13,-
449, 1875 in stocks, tDhtle Raskob sold
to Du Pont $13,032,250 in stocks.
Both then claimed losses through
stock transactions, Du Points con-
tested claim amounting to ST..
946.O4S.
Both Raskob and Du Pont haze
been actiue supporters OF American
Liberty League, pocal opponent OF
Roosevelt administration.
BY the Associated Press.
WILMINGTON, Del, February "a
Pierre S. du Pont, denying the Govern
ment's claim for $617.3l6 additional
income taxes, charged that the allega-
tions against him seek to force COM
promise settlement "in a manner
amounting to extortion."
In an answer filed with the. United
States Board of Tax Appeals in Wash
ington, the industrialist questions the
faith of the Internal Revenue COM
missioner in refusing to allow as prop
erly deductible almost million dollars
in charitable contributions in 1929. on
which year the Government claim is
made.
A summary Of the answer was made
public here yesterday at the E. I. du
Pont de Nemours d. Co.. of which
Du Pont is chairman of the board.
$4,000 Refund Held Due.
With the summary, he issued state
ment claiming that he not only does
not owe the Government $617,3l6, but
is entitled to a refund of $4,000.
In the summary, Du Pont described
as "willfully and knowingly false"
statement of the commissioner that he
and John j. Raskob, former Demo-
cratic national chairman, made fraud
ulent agreements to set up losses for
tax purposes.
Such a statement, du Pont asserted,
sis part Of scheme to injure petit
toner (du PonU and Mr.. Raskob, or
to force compromise of claims in
manner amounting to extortion."
Referring to the stock transaction
between himself and Raskob. du Pont
said:
1T is true that sold to Mr.. Raskob
during the year 1929 certain stocks,
with the purpose of establishing losses
already sustained. The procedure was
in the manner provided by law. At
that time, which was just after the
crash of October, 1929, the selling
of these securities in the open market
might have had an appreciable de-
pressing effect in the then disorgan-
ized state of affairs and l was unwill-
ing to risk a contribution to existing
disorder Mr.. Raskob sold to me a
similar amount of stocks, believe
for similar purposes and with similar
ideas with respect to the market.
Stocks Recovered Quickly
LAS will be remembered, there was
quite a quick recovery in prices of
some stocks. In the later part of
1929 and in the early part of 1880
I repurchased from Mr.. Raskob at
market values the same number OF
shares of the same stocks that l had
sold to him and sold back to him
previously purchased from him.
There was no agreement of I'M
derstanding between us that this sec
ond step should be taken. One can
we'll imagine the risk of agreeing to
buy back large amounts of stock in
the unsettled market of that time
and the awkward situation that might
have arisen from such an UNDER
standing
Neither Mr. Raskob nor was par
ticularly interested in holding for per-
manent investment the securities in
question. In fact the greater part of
them were finally sold by us and
passed out of our hands during the
following year. There was no reason
for an agreement or understanding
and none was made.
All OF these transactions were fully
set forth on my books and those of
Mr.. Raskob; they were duly audited
in the year 1881, passed by the Fed
eral auditor and approved by the COM
missioner Of internal revenue.
1T was Dot until March, 1895, that
the losses incurred by me in these
sales were questioned and the claim
that they were fictitious was made.
I am again forced to the conclusion
that the claims Of the commissioner
are not brought in good faith and
are part of the plan to injure me and
Mr.. Raskob or to force a compromise
from us.