Evening star., 1937-06-18
TAX INQUIRY TOLD
ACTOR PAID SELF
BY OWN COMPANY
Charles Laughton at Same
Time Gave It His U. S.
Earnings, Is Story.
OTHERS ARE NAMED
AS FORMING CONCERNS
Schick, Razor Magnate, One of
Those Avoiding Payments,
Treasury Experts Say.
BACKGROUND

OAI n onO L.
Income tar returns OF last March
iDere belo10 estimates, prectpitated
haSty surrey bu Treasury Depart
ment experts. Deciding that eua-
sion derices ucrc responsible for
much OF loss, Department so re-
ported to President, ,uho asked con-
gressional inquiry
Legislation to close loopholes is
eTpected this session. 7riM general
tar operhauling merit Winter.
By the Associated Press.
Elmer L. Trey. Treasury tax investi-
gator, told congressional Investigators
today Charles Laughton, the actor
had effected substantial reductions
IN taxes by turning over his Hollywood
earnings to British corporation.
A short time before the Treasury in
vestigator laid before the committee
the names of group of prominent
capitalists who, he asserted, escaped
American taxes by forming foreign
corporations.
At the conclusion of today's hearing
the committee. in closed session, au.
thorized Chairman Doughton to ask
the House Appropriations Committee
for legislation for S50,O for expenses
Vice Chairman Harrison said the
Inquiry may last good bit"
Trey said Laughton, described as a
British subject set up holding COM
na1v in Epo1opd opS cnp+r,ctoJ wit y,
it to pay him a $4,000 salary in 1885.
At the same time, he said, Lauehton
handed over to the company all his
earnings for that year from American
moving picture activities. These
totaled, he said, Sl90,280.
Proba bility of Legality Admitted.
The earnings of the British COM
pany, the Treasury official asserted,
were entirely those which Laughton
obtained from the American movie
industry
He added that the entire arrange
ment may be perfectly legal But
1t is Just another illustration. he said,
of methods used to get around Ameri-
can tax laws.
Roswell Magill, Undersecretary of
the Treasury, remarked, While COM
mlttee members were asking about
more names, that George Westing-
house, jr., had established a corpora
ton in the Bahamas, capitalized at
s3O0o,000
He said one year Westinghouse
O Nt c1Ihy,it fav
foundland, another year from British
Columbia and third from Jamaica.
There is no catching up with him."
Magill said,' adding that he could
name a dozen similar instances.
Senator Harrison asked if Westing-
house could be identified.
It's hard to identify him." Magill
replied. because he jumps around
like bug"
Trey outlined ways by which Ameri-
can levies may be avoided through
forming personal holding companies
abroad
He interlaced his testimony with
details of specific transactions, bring
ing numerous questions from commit
tee members as he listed individual
names.
Foreign Company Organizers.
Trey said these men had formed
foreign companies:
Phillip De Ronde, associated with
several New York financial institu-
tons and participant in various
steamship financing operations.
Jules S. Bache, whom Trey de-
scribed as "a prominent New York
capitalist"
Jacob Schick, a former Army
colonel, now citizen of Canada.
Percy K. Hudson, former men,
change
Committee members leaned forward
as Trey brought in the name of
'6chick, whom he described as
manufacturer of electric razors.
Col. Schick had served his coun-
try with distinction, Trey said. He
once drew pension as retired Army
officer
In 1885 he became a Canadian
citizen.
"As manufacturer of electric
razors, he had business which proved
very profitable, these profits, under
American laws, naturally were tax
able''
In November, 1888, the witness said
6chick formed Bahamas corporation,
to which he assigned $129,O0O.
The tax on this transfer was ST.
737, Trey said, "but if Col Schick had
reported his income in a personal re-
(See EVASION, Page A-5.)