Evening star., 1937-05-03

lCOI1LlElueQ from f1ESL rage
deductible losses for their income
taxes.
Among the stocks listed as included
in these sales were those OF General
Motors-a corporation in which
both are heavily interested-Anacon
da Copper, Warner Bros, National
Cash Register, Checker Cab and Otis
Elevator.
In opening the Governments case,
Chief Counsel Mason B. Leming Of
the Bureau OF Internal Revenue,
charged that Du Pont and Raskob
entered into an agreement in Novem-
Der, 1929, whereby they would sell
these stocks to each other and buy
them back at the same price later.
Leming said the alleged losses en-
tered by Du Pont and Raskob were
not bona flde losses
Leming declared the evidence would
show that on November IS, 1929,
there was deposited to the credit of
Mr. Raskob a check signed by Mr..
Du Pont in the sum Of s4,606, 900 and
that simultaneously check signed by
Mr.. Raskob in the amount OF s4,5s2.-
750 was deposited to Mr.. Du Points
account.
THE evidence will show that Mr.
Raskob at that time didn't have sum-
cient funds on hand to cover the
check.
But the checks met at the bank
and the evidence will show that these
condolences or facts-that is, the
checks meeting at the bank-occurred
four or five times"
The Government counsel said the
evidence would show that the shares
of stock held by Du Pont and Raskob
to each other were "ear-marked" for
re-acquisition later.
Leming dwelled upon the "close
business and confidential relationship
that existed between Mr.. Raskob and
Mr. Du Pont''
The alleged wash sales" came after
the Wall Street panic of 1929.
The crash in the market was brought
into the hearing by James S. Y. WINS
of Washington, chief counsel for Du
Pont.
Bankers and wealthy investors"
WINS said, were seeking to bolster
the stock market and prevent the
market from going lower"
WINS said Du Pont was trying
to sustain the market and stop the
panic and had authorized the Bank
ers' Trust Co. in New York to buy
stock for him to hold up their values.
The amount included in this au-
thorization, WINS said. was several
millions"
losing positions" in certain blocks
of stock and sold them to each other
to avoid dumping" them on the mar
ket.
These sales established heavy losses
which were deducted in the 1929 re-
turns. The blocks were repurchased
again in January, 1880.
The market had gone up meanwhile
and both Raskob and Du Pont realized
4 profit on the repurchase.
WINS said this WAS perfectly
legitimate transaction" Mr.. Du Pont
and Mr.. Raskob made these sales to
each other to keep from forcing the
market down further. 1t was not only
legitimate transaction, but honor
able.
"At no time was there an agree
ment between the parties to repur-
chase the blocks Of stock"
"All of the sales" WINS said, were
made at the risk Of the market and
there was never any agreement"
After the hearing got under way
Du Pont moved over to his attorneys
table, leaving Raskob alone by a win
dow in the corner.
The first witness was Herbert Sims,
controller of the Bankers Trust Co.,
who brought along large suit case
of records showing accounts main
tanned by Raskob and du Pont The
Government attorneys brought to the
hearing with them a large packing
no so f11ad with filino cahiret dra uers