Evening star., 1952-03-14
Morris Groups
Tax Exemption
Held in Doubt
Tunker Probe Roises
Question on Status
OF Chino Foundation

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THE Internal Revenue Bureau
never has decided whether the
China international Foundation,
Inc, headed by Newbold Morris.
lis charitable organization which
should be tax-exempt.
"A very serious question has
arisen which would indicate q
finding that it is not a charitable
Organization :. on grounds that
lit Is operating a profit business
lin competition with other busi-
lnesses," he declared.
Senator Nixon challenged as
Isertions by Mr.. Morris that the
foundation is q charitable activity
las the Senate Investigations SUBJ
committee ended its inquiry OF
surplus ship deals which netted
fabulous profits for group
headed by Joseph E. Casey and
represented by Mr.. Morris law
firm.
The foundation owns common
stock of the United Tanker Corp.
Ia group which has developed into
the real storm center Of the hear.
lings. United Tanker, financed al-
most entirely by Chinese capital.
lgot three tankers from the Casey
lgroup.
Probe Asked of Four Firms.
In other developments today:
l. Thomas e, Stakem. a top
MARITIME Administrator official.
disclosed he asked the Justice De-
|partment last June to investigate
four corporations. handling Al
surplus ships in which questions
lof foreign capital are involved.
Included in the four are United
Tanker and the American Over
seas Tanker Corp. parent firm
of the Casey group. which got
Ieight surplus tankers.
2. Raymond McKeough. former
member of the old Maritime COM
mission, said he considered IAN
abridgement Of the law" a deal in
which the Casey group got ap-
proval to transfer three Of its
tankers to a hastily-formed sub
sidiary, the National Tanker
Corp. Testimony has indicated
THAT the three ships later were
lsold to United Tanker at $45D,.
1000 profit for Mr.. Casey and two
Others.
3, Mr.. McKeough said Mr.. Nor
IRIS never contacted him about
1.-THE National Tanker : United
lTanktf deal. Later however. he
declared Mr.. Morris approached
.Ihim on behalf Of another group,
!; which was seeking permission to
lsell surplus ships to q European
|Iinterest. -,-.e
Tax Ruling Never Issued.
I Senator Nixon told reporters he
understood Mr.. Morris had re-
|Quested tax-exempt status FOR the
foundation in June. 1914, but that
Ia decision never has been reached
Jon income derived from the tanker
Operations.
Chairman Hoey disclosed also
that the Senate Finance Commit
tee is making an independent
study Of "the entire question" Of
tax exemption for such groups.
He added:
"My own idea now Of these
organizations. If they 60 into
business and buy stock. is that
they ought to pay taxes just like
other people," he said.
Mr.. Staken said he was directed
in April, 1851, to investigate q
number Of corporations handling
surplus ships whose citizenship
seemed to be in doubt" AS a re-
suit Of his inquiry. he said, the
Attorney General last June was
given four reports "in which we
felt there were some serious ques-
tions Of citizenship which should
receive the attention Of the JUS
ltice Department"
Test case Expected.
Senator Mundt brought out that
the Government already has seized
one vessel, the Meacham. which
was among the three obtained by
United Tanker. This is expected,
Mr.. Stakem said, to serve as q
test case" involving possible vio-
lations Of law regarding foreign
control Of the vessels.
Mr.. McKeough served as q
Democratic member Of Congress
from Illinois from 1885 to 1912.
During these same years, MIR.
Casey was a Democratic Repre-
sentative from Massachusetts,.
His questioning centered 1arge-
~ around action Of the old Mari
time Commission in approving the
(See SHIPS, Page A-6.)