Evening star., 1937-12-07
Mellon

Mellon
Continued From First Page)
now being erected here with Mellon
money, are stored under strong guard
In the Corcoran Gallery of Art
While only the five masterpieces
mentioned were involved in the 931
tax dispute, the total collection of fine
art turned over to the trust is esti-
mated to be worth in excess of $780,
100000.
Comment by Shepard.
In his comment on the boards deci-
sion-made on behalf of Mr. Melons
family and other members of the Edu-
cational and Charitable Trust-Mr
Shepard said:
/ The Treasury Departments charge
of fraud was the important issue The
board in unanimously rejecting this
charge, confirmed the decision of a
Pittsburgh grand jury in May. 1884
on the same charge, first raised by the
Attorney General.
Mr.. Mellon never entertained the
slightest doubt that the charge so un-
justly made against him would be
found to be without justification. We
deeply regret that he did not live tc
read the reputation of that charge
which the decision rendered today
has settled.
The other questions involved tech
nical provisions of the tax laws, the
majority of which the board decided
in favor of Mr.. Mellon"
Says Mellon Denied Right.
Mr.. Shepard also declared the
Treasury Department departed from
customary procedure in pressing the
tax case against Mr.. Mellon. He
charged that Mr. Mellon was not ac-
corded the right of a hearing prior to
filing of the Governments charges.
The attorney also asserted the Mel
Ion tax file in the Treasury Depart
ment bears stamped notation Case
has not been considered on its merits
THE point favoring the Govern
ment relating to corporate reorganiza-
tions is surprising" Mr.. Shepard
stated.
'It is based upon a technical con-
struction of two very recent decisions
which we are advised are inapplicable
and which Mr. Melons counsel were
not permitted to meet. The executors
and the trustees of Mr.. Melons
Tha rito hln I,ct oly-:caI ho
Board of Tax Appeals has erred as
to this point and other technical
features. We have asked our attor-
neys to study the decision immedi-
ately looking toward an appeal"
The Treasury had claimed a total
OF s3,075, 103 in taxes for 1881, but,
under today's ruling, the major part
of the claim was disalloWed. The
boards decision was contained in a
125-page printed pamphlet released
to the press and to interested parties
this morning at the boards Offices in
the Internal Revenue Building.
Fraud Charge Ruled Out.
The board specifically ruled out
charges of fraud in the sale of 1892
shares of the Pittsburgh Coal Co. in
1881, holding that this transaction
was completed, valid sale"-not
manipulated for tax evasion or avoid
ance
1t also ruled against the Treasury's
contention of fraud in the sales of
stock, totaling $685. 900, of the Ameri-
can Locomotive Co., the Texas Gulf
Sulphur Co., the United Light &,
Power Co. and the Westinghouse Elec-
trio g. Manufacturing Co. to the
Ascalot Co. The latter company, Or
ganized in 1890, was owned by Ailsa
Mellon Bruce, Mr. Melons daughter
The board held this sale was valid
and bonafide"
The Treasurys i'm that Mr.. Mel.
lon was owner of certain bank stock:
and received $804,466 in dividends
whereas he reported only the receipt
Of $755,397 as interest, was disallowec
by the board, which ruled that Mr.
Mellon was not the owner of thest
stocks.
Mr.. Shepard quoted Mr.. Mellon'
statement at the outset of the ta1
proceedings, as follows:
The proper amount of tax to b.
paid py citizen necessarily may b.
subject to dispute. If the authorized
officers of the Government shoult
decide that additional taxes ar
claimed, I am quite willing to NEE
the Governments representative
either in a friendly conference or il
open court and settle any question
that may arise. I want n
adjustment of my taxes that is no
entirely within my legal rights. Blu
most important of all, want an en-
put to the long campaign of vilifica
tion that has been carried on an
my name cleared of the unwarrante
charges which the Attorney Genera
has seen fit to bring against me-"
1881 Income Charges.
The Treasury had contended MI
Melons gross income in 1881 wa
$13,482,66 instead of the $6,758,70
he reported to the Internal Revenu
Bureau. The principal points a
issue were losses Mr.. Mellon elaine
for large stock sales and the deduc
tions he claimed for his art gift to tn
educational and charitable trust.
The actual taxes claimed by tn
Government were $2,050,063, plus
so per cent fraud" penalty. whic
made the total claim $3,075,103. Nj
Mellon, filed counter-claim demand
ing a refund of $4,000 on tn
$64T, 1000 tax he paid in 1881.
His deductions for the art gift I