Evening star., 1938-11-23
Wurriinq
Continued From First Page)

out this morning, Justice Laws held
that it was admissible for the Gov
ernment to estimate living expenses
for the Warning brothers, a conten-
ton which had been hotly denied
by defense counsel.
Mr. Leese testified that in arriving
at the taxable income from the War;
rings number business he had esti-
mated Emmitt Warnings living eX-
penses at $4,000 during 1884 and the
upkeep of Emmitt and his brothers,
Leo and Charles Rags) at $4,000
each for each of the years 1885 and
1896, basing these conclusions on the
manner in which they lived, the
number of automobiles they drove
and other factors in evidence.
In contending that these living ex-
penses were pulled out of the air."
Harry T. Whelan, one of the attor-
,neys for the Warnings. declared:
They have set up living expenses
for the three brothers of $50 a day
during 1885 and 1896. Where in the
record is there any evidence that
they spent such sums?"
United States Attorney David A.
Pine replied that since the defend
ants had failed to give the revenue
officers any estimate of their living
expenses, it was necessary to make
some estimate and the Government
regarded the figures in evidence as
fair.
The three Warning brothers paid
income taxes of $5,51622 and should
have paid $34, ,10101 during the three
years they built up $4,000, 900 num-
berS business, the Government con-
tended as it placed its closing testi-
mony in the record.
The Government, as it's closing
gesture. placed in evidence charts
showing the income taxes which In
ternal Revenue officials say the War;
rings owe. To identify these charts
and explain how they were compiled,
Mr.. Leese was called back to the
stand late yesterday.
Explains 1894 Computation.
For 1884, the year Emmitt War
ring started in the numbers game,
Mr.. Leese explained, he took the
figures on the Warning books as
basis for computation, since these
were the only data available. The
books were not started until July of
that year, he pointed out, although
Emmitt had said he actually started
in business about March.
The books showed a net play be-
tween July and the close of the year
of $2O301741. Hits" or losses, were
listed as $168, Salts, leaving Emmitt
and his brothers gross profit of
$34, ,105.57, Mr.. Leese said. Emmitt
paid an income tax of $656.53 for
1884, when, according to the Inter-
nal Revenue Bureau analysis, he
should have paid $3,604.87.
In his investigation of the taxes
due for 1884 and 1885, Mr.. Leese tes-
titled, he found expenditures which
the Intelligence Unit had uncovered
exceeded recorded net income, and
so he disregarded the books and
computed the taxable profits on the
basis of what the brothers spent.
The Government listed 1885 as
partnership" though the brothers
did not file a partnership return
until 1896.
Individual Taxes in 1885.
For 1885 the brothers made indi-
vidual returns. each reporting for
taxation $1,868.84. Leo Warning,
claiming his exemption as a mar
ried man, didn't pay any tax. En-
mitt and Charles Rags) Warning
each paid little over $27 each.
Based on expenditures for auto
mobiles, houses, a boat and various
other things, including living ex-
penses, the Warnings made a net
taxable income of $85, ,627.15 that
year, the Government contended.
Instead of paying total taxes of
$5455, they should have paid $10,-
61696, Mr.. Leese declared.
In 1885, Mr.. Leese's analysis show
ed, the Warnings made a net income
of $124, ,89013, and should have paid
taxes of $19,87918, instead of the
$4,805.1 they paid.
The Governments income charts
listed $4,000 paid out for each OF
the years 1895 and 1896 for pro
ton paid police" though Federal
investigators had testified that En-
mitt described these alleged extor-
tions as about $4,000 for 1896.
Excessive summer heat is blamed
for the death Of f1so In soma rivers