Evening star., 1937-06-18

larger
Three Other Companies Formed.
apparently not satisfied with this
saving the chunky, dark-haired in
vestlgator continued, Col. Schick in
December, 1885, formed three other
Bananas corporations. to which he
transferred 57,79l shares of Schick
Dry Shaver Corp. stock. This was
practically all the stock outstanding.
This transfer was made possible,
Trey said, because Schick previously
had become Canadian citizen.
Because of Schick's having changed
his citizenship. Magill said, it might
be impossible to make out taxation
case against him.
We'll go after him as hard as we
can under the laws we have" he said.
He said some good might be done
by strengthening the withholding tax
on dividends paid by corporations to
aliens. He suggested right generous
rate"
Harrison asked whether there was
anything unusual about Schicks &C
qulring Canadian citizenship.
Law Waived for Him.
The prime minister, Trey replied.
granted Schick, who was his friend,
special dispensation" to get around
Canadian law requiring five years
residence before foreigner can be-
come Canadian citizen. Under
secretary Magill added, however, that
Canada co-operated with the United
States better than most countries in
tax evasion matters.
Trey testified Bache had formed
personal holding corporations in
Canada and transferred to one of
them $l3,000,000 in assets.
"Bache," Trey said, apparently
acted on the honest conviction that
he was within his rights"
No Criticism of Procedure.
Il cite the case not in criticism"
he added, but to illustrate that if the
law as he interprets it makes these
things possible, then it offers an in
ducement for persons who seek to
avoid taxes"
Trey said Bache formed two Cana
dian corporations in 1880, trans
ferring sl3.O0O0OO in assets to one of
them, the Wenonah Development Co.,
Ltd.
This relieved Bache of the receipt
OF income which previously ha. been
subject to American taxes" Trey con-
tnued. This company apparently
was very prosperous. It's assets in
creased constantly.
In 1882 it made a $2,3OO,OOO loan
10 Bache, and in 1884 he deducted
from his income tax $225,000, repre-
senting interest to the corporation
which he personally owned.
This reduced his return to nom
taxable status"
Drug Store Head Named.
The name OF Wallace Groves, New
York flnancier, also was brought in.
Trey said Groves, through several
hrms, controls the United Cigar and
Whelan Drug Store chains, and has
been in litigation with the Bureau of
Internal Revenue for many years.
He said that in 1886 Groves owned
Nassau Securities, Ltd, which had been
organized the year before with a capi-
tai stock of $5O,00o. Five shares OF
stock were issued, he said.
Groves also controlled, Trey asserted,
che General Investment Corp, which
was a substantial business enterprise.
De Ronde's name was the frst
brought into the inquiry as the COM
mittee began its second day Of investi-
cation. Trey described De Ronde as a
native-born American.
Sworn Statement Mentioned.
On last January 7, he testified, De
Ronde made sworn statement that
he was without any substantial
funds" and sought to settle his obli-
cation to the Government by paying
tl,700 in installmerts.
It was learned, Trey said, that on
January 6. 1937-just the day before
he offered the compromise-he re-
ceived $250,000 from the General In
vestment Co., which Trey said was an
American firm for which De Ronde
acted as agent for the sale Of q sub
way In Buenos Aires, Argentina.
De Ronde, the Treasury odicial
asserted, instructed that the money
Be paid to Phillip De Ronde, Ltd, a
Bahamas Island corporation, formed
three months previously.
Trey identified De Ronde as a
former president Of the Hibernian
Trust Co. Of New York and as con-
nected with the Empire Trust Go. OF
New York and the Phoenix Securities
Go. De Ronde, he said, also has en-
gagged in financing and operating
steamships.
Trey, dressed In dark blue and wear