Evening Star Newspaper, February 14, 1935, Page 2

THE EVENING STAR, WASHINGTON, D. C, THURSDAY, FEBRUARY 14, 1935. . R N < 1 Rt P da R R RR L LR LD ST T CHARGES OF TAX EVASION REBOUND Trade Commission State- ment Puts Neglect Blame on Treasury. BY DAVID LAWRENCE. 1t has often been said that the left hand doesn't know what the right| hand is doing in Government, and something happened this wesk which illustrates it better than any incident in a long while. The Federal Trade Commission in 8 public statement has accused the public utilities of “tax evasion.” If this is so, then it is also accusing the Treasury Department of incompetence and serious neglect of duty. It is the business of the Treasury Department to collect taxes and to put anybody in jail who evades taxes. There is no case of evasion pending against any of the companies men- tioned in the Federal Trade Commis- sion announcement. If it were, the courts would have the case by this time. : Also, the Treasury can at any time proceed on back taxes and the pres- ent administration can ledge a case against any taxpayer who wasn't prosecuted by the last administration. “Tax-Evasion Practice.” The announcement from the Fed- eral Trade Commission is clumsily worded, in that it admits the law used to permit consolidated returns, but the statement goes on to refer to “this tax-evasion practice.” The al- lJeged practice held up to scorn is per- fectly well known to every tax lawyer in the country; namely, that a parent company can pay one return in taxes on all of its subsidiaries’ income and that losses and profits may be offset one against the other But the Trade Commission appar- ently was seeking to injure the utili- ties and give the impression they had done something wrong about their taxes. Just now the utilities are the targets of all sorts of abuse, even on matters in which they have obeyed the law. If the Federal Trade Commission is right in its charges of tax “evasion,” then the Treasury is remiss in not putting in jail all the tax evaders. If the Treasury is right and there was no violation of law by the utilities on taxes, then the Federal Trade Com- mission’s announcement contained several libels against the companies mentioned by name, for each of these companies is a going concern and has issued securities to the public. and it is a serious matter to accuse them of tax “evasion.” Word Meanings Differ. Whoever wrote the Federal Trade Commission statement evidently didn't know the difference between tax “eva- sion” and tax “avoidance.” The terms are not used interchangeably. One means the evasion of the law and is punishable by fines and imprisonment | upon conviction. The other means that the law says what shall and shall not be taxable and that a taxpayer has a right to avoid taxes by taking advantage of the exemptions and reg- ulations specified in the law stself. Perhaps the most serious charge in the Trade Commission statement is this: “Holding companies are not justified in recording as income the savings from this procedure (consoli- dated returns). The subsidiary com- panies in a holding company group are entitled to the benefits of any savings to the group due to the filing of a consolidated return.” If this is so, then all the State commissions which regulate the oper- ating companies have missed a bet, as has also the Treasury Department. But now that the tax law has been changed and consolidated returns no longer are permiited, the operating companies pay their taxes direct to the Federal Government. Hence the alleged savings has been cut off en- tirely and the consumers do not get in any more than they did before. Question of Purpose, ‘The question then turns on whether the Federal Trade Commissicn was really trying to correct an important tax “evasion” or whether it was al- lowing itself to be used in the gen- eral attack being made on holding company !nvestors, who are due to lose much of their savings altogether if the present bill is jammed thbrough without amendment in an atmosphere of prejudice created by the Trade Com- mission’s barrage of statements. Enough abuses in holding com- pany financing that need corréction have been disclosed by the Trade Commission without charging exist- ing companies with violations of law they have never perpetrated. Donald Richberg, Federal co-ordi- nator, was supposed to watch and ‘ron out these conflicts between bureaus and departments, tut there is as yet no co-ordination which prevents one agency in the Government from at- tacking the good faith and integrity of anothe! (Copyright. 1935.) Strike Cripples Brazil Plant. NATAL, Brazil, February 14 (#).— A strike in the American-owned light and power company of North- east Brazil yesterday paralyzed tram- ways, light, water and telephone serv- ices throughout the city. The strikers were demanding higher wages. Police were detailed to guard the properties of the company. Congress in Brief By the Associated Press. TODAY. Benate. ‘Takes up $4,880,000,000 relief bill. Judiciary Subcommittee opens hear- ings on anti-lynching bill. Munitions Committee questions Newport News shipbuilders on nsval contracts. : Finance Committee considers social security. House. Considers miscellaneous and private bills. Patents Committee takes up Macon disaster investigation. Ways and Means Committee works on social security bill. YESTERDAY. Senate In recess. H Appropriations Committee reported out $4,880,000,000 work-relief bill. Judiclary Subcommittee heard puk- lishers and automobile manufacturets opposing 30-hour week. House. In recess. Military Committee heard Repre- sentative Dockweiler, Democrat, of California, assert 25,000 Japanese on West Coast are capable of immediat2 arming. Interstate Commerce Committee ap> proved amended ofl bill. Ways and Means Committee con® sidered adial security, : | What’s What Behind News In Capital Auto Production Wins Roosevelt Over to Code Extension. BY PAUL MALLON. \WO dressed-up formal state- ments were all that came out publicly from President Roose- velt's recent meeting Wwith labor leaders. They were merely for show window purposes. William Green, president of the American Federation of Labor, com- 1 pressed his grievances against the auto |code into 1500 words and sugared [them with a broad promise of co- | operation. Mr. Roosevelt had heard |in advance about the Green statement |and said: “I've got one, too. Let's iexchange.” He sang his prepared praises of labor objectives in 500 words. It made the gathering quite a sociable affair, but that is not all that happened. What was not given out was Mr. Roosevelt's private explanation of why he renewed the objectionable (to labor) auto code for four months more. He sald the strong production of autos is the main driving force behind the encour- aging industrial activity now under way, and he did not care or dare to interfere with it. This reason has never been men- tioned before, but it is sound, and it made an impression on the labor lead- ers. Auto production is now at peak. During the past 60 days it has brought improvement in steel. glass, rubber |and all its related industries. In four months more this situation will have passed. Another thing Mr. Roosevelt let the labor leaders in on privately was his them what he was going to do, but did say something like this: “The N. R. A. is creaking. You know it and I know it, because we can hear the squeaks. We are going to take the squeaks out ‘or it very soon.” Leans to One-Man Rule. The President did not directly say so, but he is supposed to have lost patience with the five-man board control over N. R. A,, and in fact with all board control, including the pro- posed relief board idea. He leans toward a plan placing one man at the top of the N. R. A. and at the top of the new relief set-up, and then in- stituting boards under these top men. It is likely that Mr. Roosevelt has come to this view because of all the grief unloaded in his lap by boards (particularly N. R. A. recently) unable to agree. He cannof spend all his time settling the differences of tempera- mental boards. A top man could settle them, with the President acting as a court of final appeal in the important cases. There are many mysteries in the current industrial revival. No one seems to know, for instance, what is causing steel to be operating at 55 per cent of capacity. Autos are responsible for perhaps 20 per cent of production, but that does mot account for the whole improve- ment. The railroads are not taking any large amounts. Steel erperts here are puzzled. So are railroad men. Car loadings were up 10 per cent last week. But no one knows why. Autos furnish a slight excuse for this also, but do not explain the general improvement in all classes of freight. The mystery is further deepened by the fact that middlemen do not seem to be stocking up. Retail business has not been doing anything lately. Forces May Be At Work. There may be the germ of something important in the sheer lack of ex- planations. Nobody was able to ex- plain the drop while it was going on. Perhaps forces are at work which are greater than those which show up in economic charts. There may be such a thing as a relentless force of economic nature, You can tell better later. In view of the evidence that un- identified economic agents are at work, the opinion of the experts about the outlook may not be worth much. For whatever it is worth, it is that Febru- ary will be a good month and March will also be unexpectedly good. After that they know not. It looks as if Mussolini has been reading the Japanese theories of empire building by diplomatic and warlike aggression. The diplomatic prophets here say he is going to ab- sorb the black African kingdom of Abyssinia in much the same way that the Japanese have devoured Man- choukuo. This i§ what they see behind Signor Mussolini’s action in calling out Italy’s machines of war. MR It seems Mussolini has been restrain- ing his appetite for Abyssinia because he was afraid France might obfect. A few Abyssinian tribesmen fixed that by going on a rampage and killing a French officer. Some Italian troops also are supposed to have been mo- lested by people dressed as Abyssinians. Like Biting the Dog. ‘This may be on the level, but an Abyssinian shooting a Frenchman or an Italian is something like a dog biting a man. Dogs usually apprecia- ate the odds are against them. At any rate, the betting here is 10 to 1 that Abyssinia will wind up in the Italian doghouse, under chain. With Solomon-like wisdom, the House Appropriations Committee limited cabinet officers to $2,500 each for new cars in the State, Justice, Commerce and Labor appropriation bill. The same limitation will he adopted in later bills for other de- partments. The Supreme Court has been kept under close surveillance lately by lawyers and mewsmen. Flocks hang around all day, erpecting the gold decision. This is more attention than the Court ever received before and there are indi- cations that the Court does mot like it. Speaker Byrns is irritated about the Senate taking all this"time with the relief bill. He was required to put it through in a hurry without letting his boys have any fun' with it at all. The next big bill may move through the House more slowly. view about N. R. A. He did not tell | UKE GIRL BEGINS HONEYMOON TRIP Cromwell and Bride Sail for Mediterranean After Sur- prise Wedding. {D By the Assoclated Press. NEW YORK, February 14.—Amer- ica's richest girl, Doris Duke, was married yesterday to James H. R. Cromwell, Xnickerbocker scion, infla- tionist and writer on political-eco- nomic topics. ‘They were bound today, aboard the Italian liner Conte di Savoia, for a honeymoon in Italy and Egypt. ‘The tall, blond, pretty daughter of the late tobacco magnate, James Bu- chanan Duke, is 22. Her husband is 38, the son by her first marriage of Mrs. E. T. Stotes- bury of Philadelphia. In 1928, he was divorced from the former Miss Delphine Dodge of the Detroit auto- mobile family, whom he married in 1920. ‘Wedding Proves Surprise. Although the names of Miss Duke and Cromwell have been linked for several years in society gossip columns —and although *hey've been together quite frequently of late in Newport, Palm Beach and in New York's May- fair circles—the wedding was a sur- prise. The ceremony—at 10:30 a.m. at the Duke mansion, on the corner of Fifth avenue and Seventy-eighth street— was but another example of Miss Duke's desire to eschew the limelight. At the request of her physician, Dr. Richard A, Hoffman, Deputy City Clerk Philip A. Hines went to the Duke home early and issued the license. Half an hour after Hines' visit, Miss Duke and Cromwell were married by Supreme Court Justice Burt Jay Humphrey, & friend of the Duke fam- ily. Miss Duke, who has never flaunted her millions, was adamant against an ostentatious church wed- ding. Witnesses Few. ‘The small group of witnesses in- cluded the mothers of the bride and bridegroom, Mrs. Stotesbury and Mrs. James B. Duke; Dr. Hoffman and former Supreme Court Justice Nor- man S. Dike, a family friend: Walker Inman, Miss Duke's half brother, and Eaton Cromwell, who served his brother as best man. The newlyweds left soon after the wedding to board the Conte di Savoia. Steamship officials tried in vain to keep their sailing a secret. Although the bride kept to her cabin, Cromwell chatted with reporters for several minutes. They met six years ago at Bar Harbor, he disclosed. “Was it a case of love at first sight?” he was asked. “It certainly was.” “Were you engaged for long? Isn't the marriage sudden?"” “Yes, it was sudden. We were never really engaged. Neither of us believed in formal engagements.” Says Wife Nervous. Cromwell excused his wife, saying she was too nervous to leave her cabin. Seclusion has been the lot in life for the Duke heiress. Simplicity was the rule of her child- hood, decreed by her father. She was ) privately tutored, mostly at the vast Duke farms near Somerville, N. J. In Summers she lived quietly at the Newport plane, Rough Point. Part of every year she has passed at Lynne- wood, a retreat near Myers Park, N. C. Only in the lgst two years or so has she frequented night clubs and so- ciety's bright spots. Then, more often than not, she was squired by her half- brother. Worked in Banking House. Cromwell, a well known amateur sportman, is the grandson of the late Charles Thorne Cromwell, eminent lawyer of a generation ago. Educated at the University of Pennsylvania, he worked for a time in the Drexel bank- ing house. After his marriage to sale of Dodge Brothers Co. after the death of Horace Dodge. With the Florida boom he tried to promote a replica of Biarritz on the coast below Palm Beach. This col- lapsed with the break of the boom. Cromwell turned to the study of economics and wrote frequent books and articles. In Wall Street he is re- garded as one of the silver inflationists partial to Father Charles E. Coughlin’s ideas on economics. Miss Dodge he was associated in the | 3,601,851 PROFIT MADE ON 2 SHIPS Munitions Witness Asserts U . S. Gains by Use of Costlier Material. By the Assoclated Press. ‘Testimony that his company had made $5,601,851 or 35 per cent profit in 1927 on two cruisers when it ex- pected only $1,800,000 was given the Senate Munitions Commitee today by Homer L. Ferguson, president of the Newport News Shipbuilding & Dry- dock Co. At the same time, he told the com- mittee that although the cost of cruisers had increased several million dollars in the last six years they ae- tually cost the Government less in the long run because there was a great deal more material in them which made them more valuable. The contract price for the cruisers with the Government was $20.960,000 and the net cost was $15753,457, the witness explained. “I was amazed we made so much,” the shipbuilder declared. Increased Costs Alleged. ‘The committee immediately intro- duced evidence that the company re- cently had bid $10,500,000 and $11,- 000,000 on cruisers. Ferguson insisted the net cost was greater because of increased cost of design and equip- ment and therefore the profit less. “The cost to the Government, co! sidering the price,” Ferguson said, * much less under present contracts.” ‘The committee also was preparing to question A. P. Homer, a Wash- ington marine architect, whose ap- pearance on the witness stand was de- layed recently by a doctor’s teport that he had high blood pressure. Committee members planned to ask Homer to explain intimations of other witnesses that he had Washington con- tacts which enabled him to obtain warship contracts for shipyards for “a | consideration.” He has denied using connections in such a manner. Tckes Asked to Testify. Secretary Ickes, the public works | administrator, also has been asked to | testify tomorrow. The committee | wants to learn from him, among other | things, the amount of P. W. A. money | which has been set aside for ship- | building. Senator Nye, Republican, of | North Dakota recently estimated the | total at nearly $500.000,000. In the study of the Newport News Building & Drydock Co. since 1926, | Senator Bone. Democrat, of Washing- |ton, a committee member, planned a ’spetlll effort to determine if wages n profits. “These companies have a system of bonus payments and wage schedules that defies solution,” he told news men. “The shipyards do not recognize the American Federation of Labor and the best efforts of that organization to learn what scale of pay the yards are on have been futile.” Bone expressed dissatisfaction with the result of wage questions he put to officials of the New York Shipbuilding Corp. when they were on the stand recently. Officers of that company said wages were increased after a shipyards strike. but one added the strike had not been necessary to ob- tain the gaines. Long Testimony Expected. Excepting the tesimony of Homer and Secretary Ickes, examination of officials of the Newport News Co. is expected to engage the committee the | remainder of the this week and part of the next. Payment of $7,000,000 by the Navy to the Newport News Co. for scfapping | wartime contracts while the company | managed neverthless to complete a disputed battle ship was disclosed yes- terday before the committee. Fergu- son, defenced spiritedly his receipt of pay for cancelling warship contracts | when hostilities in Europe ceased “Do you think you can break $70-, 000,000 in contracts and tell a com- | pany to go shake itself?” he flung at | Committee Counsel Stephen Raushen- bush. | Assertions by committee members | that naval officers had been in col- lusion with shipbuilders in deciding ! bidders on naval contracts met denial | from Secretary Swason. The Navy Sec- | retary said that such charges were “not true and without the slightest foundation.” Richest Girl Married Copyright, A. P. Wirephoto. ~ Doris Duke, tobacco heiress, stiown here with her husband, James Henry Roberts Cromwell, New York advertising man, after their marriage yesterday. Picture made in thelr suite on S. 8. Conte di Savois, on which ’ [} shipyards have kept step wxlh| ! Mother Comforts Child’s Assailant Copyright, A. P. Wirephoto. While her 8-year-old daughter, Helen Williams, lay near death in a hospital in Hollywood, Mrs. Katherine ‘Williams went to the county jail and visited her son, Willlam Hardy. Hardy, 21, half-brother to Helen, has confessed, according to police, to brutally beating the girl with a hammer and locking her in a rumble seat. New Numbers R Control of Mutuel New York | A “new racket” in the numbers | game was being investigated today by Leslie C. Garnett, United States At- torney for the District, and the special police vice squad, headed by Lieut. George Little. A New York racketeer, who claim his agents are in control of the mutuel machines at major race tracks and furnish two “positive winners” a month, is said to be the subject of the investiga- tion. With an unknown Qquantity of ‘special dispatches” already distributed {in the District among gamblers and numbers game followers, the District Attorney's office yesterday gave Lieut. Little’s vice squad orders to round up any suspects who may be connected with the new scheme. The yellow circular letters in ques- racketeer will furnish the correct numbers of prices paid at a major track 215 hours before the race is run. With this information, the racketeer informs prospective patzons they can clean up on these tips. Instructs Bettors. Declaring thousands of dollars have been invested in the proposition as a pool and to “pay off” the racing mu- tuel machines, the originator of the scheme informs gamblers of the Dis- trict that his agents will control the racing machines at all major tracks twice a month. Immediately after $5 has been wired the promoter at his | New York office, the player will re- ceive the so-called winning number. ‘Wamnings, however, have been dis- patched to recipients of the “tip” not to play more than 50 cents with any numbers banker and to scatter the | | plays all over the city to avoid sus- | picion. Winning Tip Probed in District Tracks Twice a Month Pledged by tion claim that for $5 the Wall Street | acket Promising Machines at Major Operator. | After the “take,” the winnings of a | 10-cent play, or $54, must be wired the | New York promoter and the original | | $5 will be refunded. “This is to insure secrecy and to pay | for telegraphic messages. No letters | will be received,” the racketeer warned | gamblers here. “You will find all your | answers in the cicular letter.” Winnings Estimated. I ‘The net winnings of a 50-cent play, |sccording to the percentage figured out by the so-called professional numbers king, will be in the neigh- | |borhood of $2,160. Several of these | plays distributed throughout the city’s |numbers games would ‘“break the | | bank,” the special dispatch to Wash- | | ington’s gambling fraternity reads. District Attorney Garnett declared it | was not known whether the mails had been used in distributing this infor- mation. Telegraph companies, how- | ever, would be involved in the racket once a deal was made with the New York office. The Department of Justice yester- day sent to Garnett a letter ordering investigation into another similar scheme offered Washington gamblers by “Old Joe, the Numbers Man,” while in Washington last month, sup- posedly operating from an address on New Jersey avenue. “This circular, distributed in Wash- ington in large numbers recently, is a palpable fraud” Garnett explained. He declared that all numbers rack- eteers suspected of participating in the fraud will be rounded up and prose- cuted. | Meanwhile, Lieut. Little's vice squad | is on the lookout for Washington | (agents of the scheme which would | make local players “rich.” | |ANN HARDING DENIES }BANNISTER CHARGES Files Answer to “Unfit” Allega- tions in Battle Over Pos- session of Child. By the Assoclated Press. LOS ANGELES, February 14— Blond Ann Harding of the films en- tered a gencral denial in Superior Court yesterday to charges by her former husband, Harry Bannister, that she was “not a fit and proper person” tc have custody of their daughter Jane, 6. Miss Harding divorced Bawnister in Reno May 7, 1932,,at which time the Nevada court awarded her custody of and to Bannister for 2 months. Last January 3, however, Miss Harding’s petition that she be awarded exclusive custody of the child was granted in a Nevada court, the answer yesterday stated. Bannister recently asked the local court to remove the child from his former wife's care. He also declared that both parents of the child were legal residents of Los Angeles County at the time Miss Harding went to Reno and secured the divorce, and that the Nevada court thus lacked jurisdiction. Miss Harding now is en route to the Orient. Her answer was filed through an attorney. BAND CONCERT. By the United States Soldiers’ Home Band Orchestra, this evening at 5:30 o'clock. John S. M. Zimmermann, bandmaster; Anton Pointner, assistant leader. March, “For Honor and for Home,” Perrin Overture, “Ruslan and Ludmilla,” Glinka Suite, “Espagnol,” “Andalucis,” Miramentes “Castle in Spain. “Dance in the Market Place.” “Dulcinea Dreams.” “Tales of the Troubadour.” Selection from “Sweet Adeline”. .Kern , “Che Mi Amigo”.....Valverda Waltz, “Valse Poudre”.... .Popy Finale, “Emperor's Bodyguard,” Meinicke “The Star Spangled Banner.” 82 Years in Same House. LORETTO, Pa. (#).—Eighty-two years ago Samuel Henry Kettell was born in a frame house in Loretto. He died in the same house, never having lived in any other. His brother, Andrew, 85, who lived there all his life also, survives him. Postal Savings Mount. The number of postal savings de- posits in Japad 8 incvessing. the child for 10 months each year | 'EIGHT ENTER ROW FOR GROSS ESTATE Former Diplomat’s $850,000 For- tune Object of Court Fight by Chicagoans. By the Associated Press. CHICAGO, February 14.—Eight Chicagoans have appeared as possible claimants for the $850,000 estate of Christian Channing Gross, former Chicago diplomat, who died in an auto accident in 1933. Gross, by his will, now in probate in New York, left his estate to his surviving children. Two children, Barbara and Peter, were killed with their father. Gross claimed parentage of Anna Virginia, born after her parents were divorced in 1928, but the mother, the former Virginia Randolph Harrison, declared he was not the child's father in one court contest be- tween them. Attorney Robert Cantwell, jr., who was Gross’ lawyer, yesterday for- warded to New York the names of 11 collateral relatives who would inherit the estate if the former wife's claim regarding the daugther were upheld. They are George Lynch, an uncle, and 10 first cousins, Frank Lynch, Thomas Dwyer, Mrs. Fred Ralston, Mrs. Theodore Fisher, Mrs. Thomas F. Curran, Mrs. Richard Whitting- ham, Mrs. Margaret Rhodes, Mrs. George Reneke, Mrs. Florence Mills and Miss Irene Dwyer. Flower Lovers Disagree. ‘The National Chrysanthemum and Dahlia Society of Scotland is threat- ened with a split over whether flowers POKET IS SLAN INSTRIE BATILE Companion Wounded When Firing Starts at Penn- sylvania Colliery. By the Associated Press. ‘WILKES-BARRE, Pa, February 14. —One man was shot to death and another was seriously wounded at nearby Larksville today as a miners’ strike in Luzerne County entered its eleventh day. Frank Petrosky, 28, of Larksville, sald by police to have been a mem- ber of the striking anthracite miners of Pennsylvania, was killed, and An- thony Legosh, 31, of Edwardsville, member of the same union, was seri- ously wounded in a clash near the Woodward colliery of the Glen Alden Coal Co. Recognition Demanded. The anthracite miners of Pennsyl- vania called their strike at all col- lieries of the Glen Alden Co. in Lu- | zerne County in an effort to force rec- | ognition from mine operators. i Police said Petrosky and Legosh were on a picket line in Larksville Borough as United Mine Workers of America, rival union, were going to work at the Woodward colliery this morning. A fight started, State troopers said, and shots were fired. Petrosky was shot through the heart and Legosh was wounded in the back. State Troopers Investigate. State troopers immediately began investigation of the shooting and a detail went to the Woodward Colliery. State Police Corpl. Joseph F. Santilli, pointing out that the fight occurred just as the miners were go- ing to work, said this factor led State police to believe the disorder was con: nected with the struggle between rival unionists. The shooting occurred about a mile | and & half from the Woodward Col- | liery. Larksville adjoins the Plymouth | section, where several disorders be- tween miners have occurred since the strike began February 4. MAN-TO-MAN LENDING ADVOCATED BY JONES B. F. C. Head Says Bankers 8hould Reaffirm Their Faith in Human Race. By the Associated Press. this country needs right now, said Jesse H. Jones, chairman of the Re- construction Finance Corp., is more old-fashioned man-to-man lending. depression and the panic, he advised, but let them also reaffirm their faith in the human race and the future of the republic and back it with cash. “There has been too much weigh- ing of collateral as the only basis of a loan. The average banker's char- acter into consideration the loan ma- chinery today operates on this basis, to the injury of the prosperity of the Nation; you apply for a loan and offer the collateral. The banker cal- culates how much he can get for the collateral and then offers to lend you half that amount. “The R. F. C. loaned $4,000,000,000 in the heat of the depression on col- lateral the bankers wouldn't take. We have collected more than 61 per cent of these loans, amounting to more than $2,500,000,000. “That demonstrates the strength of the country and the fact the Amer- ican people still pay their debts. The bankers are going to have toxrelearn this and be more liberal.” Women's Guilds Formed. Two women's guilds are being or- should be called “Mrs.” or “Miss.” - I | Price $1 at The Evening Star Business Office, or by mail, postpaid | L | Name ...... | | Street c.ioiiriiiiiiiiiiiiiiiiiie. City. eoeeveverennanses. State.... ganized in Scotland. The Euening Star Offers Its Readers This Worth-While BOOK It explains the permanent departments of the Federal Government and the Alphabet Bureaus of the New Deal. Every American should read it. Order today. === Order Form————— 1 ] [ | | 5. = MIAMI, Fla, February 14—What| S | as a resuit of the exchange of stock Let the bankers assimilate the les- | sons in conservatism learned in the | KENNAMERFRIEND TELLS OF THREAT Declared Defendant Said He Wa§ Going to Kill John Correll, By the Assoclated Press. PAWNEE, Okla., February 14 —Jack Snedden, friend of Phil Kennamer, reiterated in cross-examination today at Kennamer's murder trial the 19- yeer-old son of a Federal judge threatened the life of John Gorrell Gorrell, 23-year-old dental student in Kansas City, was slain Thanksgiv- ing night in Tulsa while home on va- cation. Kennamer has admitted the slaying but asserts he killed in self- defense as he sought to thwart an ex- tortion plot against Homer F. Wileox, wealthy Tulsa oil man, which allegedly involved the kidnaping of his daugh- ter, Virginia, 19. Declared Head of Gang. Snedden, a State witness, said Ken« namer told him Gorrell was head of & Kansas City gang “Did Phil tell you what he would do to stop the kidnaping?” “He told me he'd kill Gorrell.” “Did he tell you not Yo tell Vir- ginia?” “Yes, but I told Virginia.” “How long after?” A “I think the next day” The extortion note was introduced. Snedden identified the hand writing of the note and on the envelope as being Kennamer's, when the note was given to him ‘by A. Flint Moss, de- fense counsel chief, but later said: “No, I don't know whose handwrit- ing it is, but I can tell Phil's any- where 1 see it.” Declared He Was Drunk. Holly Anderson, prosecutor, sought to draw from Snedden on re-direct examination the admission Kennamer was drunk when he made remarks about Gorrell. Snedden replied Ken- namer made the remarks “when he was both drunk and sober.” Snedden also testified Kennamer was drunk every time he protested his affection Wilcox Mrs. O. L. Har a State's wite ness who almost d a mistrial yesterday when she asserted from the witness stand she had been threat- ened with death if she testified, was arraigned today on a contempt of court citation and bond was fixed at $1,000. Mrs. Harmon, manager of a Tulsa apartment house, was charac- terized by the defense as a profes- sional witness, — COLLECTION OF COINS IS SOLD FOR $32,257 Washington Man Purchases 1870 Uruguay Doubloon for $860 in New York. By the Associated Press NEW YORK, February 14 —Sale of approximately 1,600 coins from the collection of the late Waldo New- comer, former Baltimore banker, brought $32,257 at the conclusion of the two-day auction yesterday. John Lakewood of Washington, D. C.. purchased an 1870 Uruguayan doubloon for $860 at the final session. The gold coin was said to be the only known specimen. HOPPER T0 SPEAK ‘Thomas B. Hopper, general superin- tendent of the Washington Gas Light Co., will speak on “Manufacture and Distribution of Gas in Washington” at a meeting of the American Society of Mechanical Engineers tonight at 8 o'clock in the auditorium of the Potomac Electric Power Co. The society will hold an informal dinner preceding the meeting at 6:30 p.m. at the Raleigh Hotel. Oyster Roast Slated. RIVERDALE HEIGHTS. Md., Feb- ruary 14 (Special) —The annual oys- ter roast of the Riverdale Heights Volunteer Fire Department will be given Sunday from 2:30 to §:30 p.m. at the fire house. Your Income Tax Losses on Stock Transactions. No gain or loss is recognized for income tax purposes as a result of the exchange of stock or securities in a corporation solely for stock or securi- ties in another corporation in pursu- ance of a plan of reorganization to which both corporations are parties or or securities in a corporation solely for stock or securities in the same corporation in connection with a re- capitalization. Where money or other, property is received along with such exchanges, no loss is recognized, al- though a taxable gain may result. The statute also prohibits the deduc= tion for any loss from the sale or other disposition of stock or securities where the taxpayer. within a period of 30 days before or after the date of sale or other disposition, acquires or enters into a contract or option to acquire substantially identical stock or securities. Two Changes Made. Two important changes are made by section 112 of the revenue act of 1934. Under section 112 (g) of the revenue act of 1932 no taxable gain was recognized as having resulted to the recipicnt stockholders of & corpo- ration from a distribution of stock or securities in such corporation or in another corporation, a party to a re- organization without the surrender of the stock in respect to which the dis- tribution was made. These provisions are entirely omitted from the revenue act of 1934, thus giving such distri- butions the status of dividend distri- butions paid in property. The other important change is in the definition of the term “reorgani- zation” as contained in section 112 (8) of the revenue act of 1934. In sec- tion 112 () (1) (A) of the revenue sct of 1932 the term “reorganiza- tion” is defined to mean “a merger or consolidation (including the acqui- sition by one corporation of at least a majority of the voting stock and at least & majority of the total number of shares of all other classes of stock of another corporation, or substan- tially all the properties of another corporation).” Corresponding Provisions Cited. The corresponding provisions of section 112 (g) of the revenue act of 1934 define the term “reorganization” as “(A) a statutory merger of consoli- dation, or (B) the acquisition by one corporation in exchange for all or a part of its voting stock; of at least 80 per centum of the voting stock and at least 80 per centum of the total num- ber of shares of all other classes of stock of another corporation; or of substantially all the properties of an- other corporation.” The remaining provisions of section 112 (g) (1) are substantially the same as the provie sions of section 112 () (1) (B). (O, and (D) of the revenue act of 1932, |