Evening star., 1948-05-25
Probers Seek 10 Curb
TaxDodgiingbyForeign
Grain Spectators
By the Assoeioisd Prsss

BY the As,eeiatsd Press
Congressional investigators today
urged tighter curbs on foreign
brokers to bar American and alien
grain spectators from dodging a
profits tax.
This recommendation was made
by a special House committee which
has been looking into speculation by
aliens during 1s46-47.
The committee, headed by Rep
resentative August H. Andersen, Re.
publican, of Minnesota, indicated in
its report that some Americans may
be using brokers outside this coun-
try to evade payment Of the capital
gains tax.
The report noted tnat foreign
brokers do not have to disclose the
names OF traders for whom they
buy grain and other commodities
on United States exchanges.
Proposals Outlined.
The group suggested two moves to
halt this practice:
/. Require foreign brokers to file
lists of their customers with domes-
tic brokers when doing business on
United States markets.
2. Collect from resident and non-
resident aliens a tax on all capital
gains and, other profits received
from transactions taking place in
this country.
Congress exempted aliens from
the capital gains tax in 1886, but
specified that If they run a regular
business in this country the aliens
are liable for taxes on gains only.
The committee said it dug into
the business done by 80 out Of the
581 registered United States brokers
between January /, 1915 and De-
cember 81, 1947. Most Of the trad
ing was In cotton. wheat, corn, oats,
rye, eggs and lard.
These 50 firms bought 1927 ,331, ,732
worth Of commodities for 34l indi-
Hdual aliens and 13 corporations
claiming citizenship or legal status
in 46 foreign countries, but residing
in the United States.
Foreign Trading Listed.
Traders living outside the United
States did $418,169,564 worth of
futures trading in the same period
through the same brokers, the re-
port said. This group included 18s
individuals and 116 foreign corpora
tions representing % different
countries
The total estimated capital gains
were between $64, 800 900 and $129,-
100000, the committee said, and
none of 1t was subject to taxes.
Some of the traders may be
American citizens, who transact
their business through foreign
brokers in neighboring countries to
avoid taxation on capital gains" !"
the report said.
Mr.. Andersen told reporters the
committee does not have definite
evidence linking United States citi.
zens with trading through foreign
brokers, "but it feels there Ger
tainly Is a strong probability that
such practice Is not uncommon"
The report showed the largest
group of resident alien traders was
As claiming Chinese citizenship
There were 81 from Poland, 28
from France, 10 from England, 10
from Germany and A of unknown
nationality.
Many Live in Brazil.
The largest group of alien traders
living outside the United States was
Al In Brazil. Also, there were 81
in Uruguay, II in Argentina, IA in
China and 10 in Mexico.
The largest number of foreign cor
porations trading on United States
exchanges from outside this country
was 26 in Brazil. Others were IS
firms in Canada, IL in Mexico and
eight each in Argentina and Bel
gium.
The report cited these cases Of in
dividual countries:
Brazil-s81, ,7s2, ,7S0 worth Of trad
ing, with 26 corporations dealing ex-
clusively in cotton. One firm han
died $4,000 bales.
Canada-Total trading Of $77,577,-
602, with one Canadian who lived in
the United States buying 16,400 bales
of cotton, 10000 bushels of oats,
and $4,000 bushels of wheat. One
Canadian corporation traded in g.
400, 900 bushels of wheat.
China-s82,7 ,758,730 in total trad
ing. One Chinese bank speculated
in $4,000 bales of cotton, 2,710,O00
bushels of wheat, and 2,515,000
bushels of corn
Iran-s16,851,152 worth Of trading,
almost all of it by one man. The
trading included 100000 bushels of
wheat, $4,000 bales of cotton, COS 900
bushels of oats, and 1857 200 pounds
of butter.