The Washington times. [volume] (Washington [D.C.]) 1902-1939, 1937-06-18
AVOIDANCE
PROBE NAMES
FINANCIERS

Continued from Page IL
ment Corporation, offered to com,
promise q tax claim for $1,7OO.
At this time, he said, the Gov.
eminent claimed that Deronde
owed $4,000 taxes. It was this
claim, Trey said, that he offered
to settle for $l,70O. Deronde, he
said, had told the Government
that he had mo substantial
funds"
The $25O,0OO, he said, Deronde
received for commission in the
sale Of Buenos Aires subways.
! The $3.50 900, Trey said, was
paid to Philip Deronde, Ltd, Q
Bahama personal holding corpo
ration. Trey testified:
SAT q hearing held, DerOnde
said that he placed q 100000
check to the corporations &C
count in . BuenOs Aires bank.
Ell he rest, $4,000, was
turned over to the corporation
in cash, although he was vague
on how this was physically &C
cOlnplished.
"He said he was an officer and
director Of the corporation, but
not . stakeholder. When asked
who the stockholders might be,
DerOnde said oh, they are some
Argentine, Paraguayan and Eng
lish friends of mine.'"
U. s. "OUT" $33,00O
"The substance Of this case is
that DerOnde shipped $25O,000
out Of this country, and with it
went the $4,000 taxes that
would have been levied against it.
1--WE don't know where this
money is-whether the assets Of
this corporation are in New
York, South America, the b.
hamaS or where"
At this point. Undersecretary Of
Treasury Roswell Gagill rose ant
asked the committee to call De
ronde to testify.
Trey said that Deronde'S case
has been turned over to the lega
department Of the Treasury.
Trey said Bache apparently usec
a foreign personal holding com
pany in the belief that he wa!
obeying the law.
I'VE therefore cite the cast moi
in criticism of Mr.. Bache but tx
show how foreign personal hold
ing companies can be used by thu
wealthy to avoid taxes" sale
Trey.
Bache, he said, formed two
Canadian corporations, one Of
them the Winona Development
Co., Ltd. He said that Bacht
transferred $13,O00,00O to thesC
corporations. He also formed tht
Doan's Mines Corporation in thu
Bahamas.
Constant Litigation
The case of Wallace Groves
New York .financier was next de
cribed by Trey. He said Grove'
has been Gin constant litigation
with the Bureau of Internal Reve
nue..
Groves, he said, established the
Nassau Securities Corporation, II
the Bahamas. Five shares were
issued. Groves, he said, through
buying and selling stock Of the
General Investment Corporation
and others using the foreign cor
poration, avoided American taxa
ton.
Trey, described how the BAHIA
mas, Panama and other countries
have been used as bases for these
companies to enable Americans te
escape taxes.
Names Westinghouse
Under questioning Undersecre
tary of the Treasury Magill named
George Westinghouse, jr., as hay
ing formed q $4,000, 900 Bahamas
corporation.
He said one year Westinghouse
reports from New Brunswick, a
second year from the Bahamas
and a third year from Jamaica
making it difficult to catch UP
with him"
A heavy tax on the fortunes OF
American heiresses who marry
titled foreigners was revealed to-
day as one Of the detectives of the
Treasury in the investigation.
Treasury officials planned to
submit to the committee specific
examples Of rich Americans who
have married foreigners and, by
relinquishing their American cit.
izenShip, pay small tax on their
huge American income.
viii DivuIge Secrets
A sharp increase in the present
tax on the huge profits reaped by
foreigners In investments in Amer.
lean securities in the last few years
is also a part of the general tax
revision sought by the Treasury.
While the tax was reduced to
10 per cent last year, with Con-
gress and the Treasury fully
aware Of the billions invested by
foreigners in American stocks and
bonds, the Treasury now holds
that the tax Is too low.
T~V-, l. ,.1l