Evening Star Newspaper, May 1, 1935, Page 6

NELLON CHARGES HT MORCENTHAY Interference With Justice Laid to Secretary by Tax Case Defendant. By the Associated Press. PITTSBURGH, May 1.—A blunt charge of “interference” with the administration of justice, made by a former Treasury Secretary, Andrew 'W. Mellon, against Treasury Secretary Morgenthau, constituted an enliven- ing out-of-court phase today of the Mellon income tax case, bolling over for the second time in a week. Within a short time after publica- tion yesterday of a telegram from Morgenthau upholding Attorney Rob- ert H. Jackson's conduct of the $3- 089,000 hearing and urging him to continue “with no abatement of vigor,” Mellon issued a statement from his home that Morgenthau was making & crude effort to “interfere with the administration of justice.” . Simultaneously, Frank J. Hogan, Mellon's counsel, made a statement accusing Government counsel of lack of “fairness” and of “persistently” attacking “the living and the dead, the young and the old, layman and lawyers” in conducting the case. Letters Involved. The bristling situation had its be- ginnings in the attempt of the Gov- ernment to get into the record certain letters between Mellon and his per- sonal attorney, D. R. Shepard. They concerned the absorption of the Me- Clintic-Marshall Corp. by Bethlehem Steel in 1931 The witness on the stand, Paul G. Rodewald, declined to submit the let- ters, holding they were not privileged. Jackson filed a brief in support of his claim, but it was rejected by the Tax Boord of Appeals. Jackson then asked for s 30-day adjournment to consult his superiors concerning obtaining a new attorney. After Morgenthau's telegram of sup- port Jackson said he would withdraw the adjournment motion todey. Jackson had claimed the Govern- ment was “not getting at the truth” in the case by failure to get in the correspondence. Secretary Morgen- thau in his telegram, released by Jackson, said he had discussed i matter with Herman Oliphant, gen- eral counsel for the Treasury. Sets Honesty Standard. “Our desire is emphatic that you eontinue to handle the Government's case along the lines that you have followed, with no abatement in the vigor of your efforts to get at the simple truth in these transactions or in your insistence that they shall be judged by the standards of com- mon business honesty.” Mellon said: “I have refrained during the trial of this case from any public com- ment, secure in the feeling that the entire controversy had finally reached a judicial body that could be de- pended upon to render a decision based upon truth rather than upon innuendo. “In spite of tactics pursued in high Government circles, when this mat- ter was before the grand jury and when that grand jury refused to be intimidated and to return an in- dictment, I had assumed that the administrative offices would be willing to try the case before this impartial tribunal as I have been. “Any invasion of my personal rights as a citizen is of relative un- importance. But when the Secretary of the Treasury, a member of the President's cabinet, descends to & public attempt to influence a matter now on trial before a duly consti-| | here to their foreign corporate con- tuted court, that action is & crude effort to interfere with the admin- istration of justice and a continua- tion of the political efforts of his administration in my case.” PRESS BUILDING PETITION ALLOWED Possible Revision of Reorganiza- tion Plan Seen After Court Move. poss i f the National|of the holding company operations Pr:sa B‘\?≪;:flrz:r;nincm plan | above mentioned is essential to the co- was seen today when District Su- preme Court Justice James M. Proc- tor signed an order permitting a com- mittee representing $700,000 of first mortgage bonds to intervene in the case. The Intervening Committee, oom- posed of James M. Johnson and Thomas C. Montgomery, proposed three principal changes in the plan. 1. To give first mortgage ‘bond- holders for each $1,000 51 per cent bond a new $1,000 bond bearing 3 per cent fixed and 2% per cent cumula- tive income rights. The original pian provides for two $500 bonds for each $1,000 bond, the first $500 bond to bear fixed interest at 5 per cent and the second $500 bond non-cumulative interest at 4 per cent. 3. The second general 6% per cent mortgage of $2,175,000 is to be can- celed and 4'; per cent first preferred stock issued in lieu thereof. The other plan gives back & new second mort- gage income bond paying up to 412 per cent. . 3. The common stock, now owned by the Press Building, is to be held by the trustee for the first mortgage bonds during the life of the bond issue and thereafter given back to the Press Club. Attorneys Norman B. Frost and Paul E. Lesh filed the intervening petition. DUST KILLS FISH TOPEKA, Kans., May 1 (#).—Dust storms are killing fish in Western Kan- sas, A. 8. Foulks, parole attorney for the State Board of Administration, said yesterday. He said he had seen scores of dead fish floating on the Pawnee River, game wardens explaining the dust IN'D. C. PROPOSED THE EVENING STAR WASHINGTO! May Day Basket Presented to Mrs. Roosevelt Fick, Mrs. Roosevelt, Deirdre Winn and Dorothy Werebee. Four small children were received by Mrs. Roosevelt this morning at the White House, where they presented her with a basket of flowers, symbolical of the May day festivities. They are, left to right: Connie Hough, Donald —A. P. Photo. NEW UTILITY TAXES Plan Offered by Committee Directed at Utility Hold- ing Groups. (Continued From First Page) & Electric Co., now a street car hold- ing company, which owns outright the stock of the Potomac Electric | | Power Co., which has a $66,000,000 | rate base; that the North American | Co. owns 78 per cent of the stock of the W. R. & E., which owns aalf the stock of the Capital Transit Co., and | the North American Co. owns directly 8 per cent of the stock of the Capital Transit Co.; and 72 per cent of the stock of the Washington Gas Light Co. (which owns the Georgetown Gas Light Co.), is owned by the Washington Suburban Co., a Massa- | chusetts common-law trust which was established “to avoid the technical provisions of the La Follette act.” Analyzing dividend payments to these holding corporations, the com- mittee found that during the calen- | dar year 1933 common stock divi- | dends amounting to $3,256,743 were paid by the above-mentioned utilities | trollers. Inimical to Welfare. The committee quoted the following from the special message of President Roosevelt on holding corporations: “Except where it is absolutely neces- sary to the continued functioning of a geographically integrated operating utility system, the utility holding com- pany with its present powers must g0. * * * In its destruction of local control and its substitution of ab- sentee management it has built up in the public utility field what has Jjustly been called & system of private socialism, which is inimical to the welfare of a free people.” ‘The committee concluded: “Not one ordination, financing or integration of the splendidly coherent local utility operations. Nothing but good would result from an integration of the cor- porate structures and the disposition of the investments into local hands. Washington is ‘adequately able to flanance and operate its own facili- tles.” The new tax provision would re- quire each utility to report to Assessor Richards on or before each August 1 the names of those who have, on any day when dividends on its voting stock were payable, during the prior calendar year, owned, directly or in- directly, more than 10 per cent of the voting stock. The utility would pay & 10 per cent tax on the total amount of such dividends so reported. Cor- responding allowance would be made for such payments in personal intan- gible property taxes here. ‘The utility firms now pay corpora- tion taxes as follows: Gas company, 5 per cent on gross earnings—that is, total income less taxes and deprecia- tion; telephone and power companies, 4 per cent on gross earnings, and street railway company, 4 per cent on gross receipts. The proposed new tax HARRINGTON DINING & E. STREETS NW. ‘INCORPORATED" formed a heavy scum. Permission has been given to seine the stream for fish still surviving. Night Final Delivery The last edition of The Star, known as the Night Final, and carrying a row of Red Stars down the front and delivered throughout the Together with The Sunday Star, page, is printed at 6 p.m city at 55c per month or, at 70c per month. This is & special service that many people desire for the very latest and complete news of the day. Call National 5000 and say that you want the “Night Final” delivered regularly to your home, and start immediately. 'OUR PLUMBER/ delivery will | ing taxes and depreciation. would be 4 per cent on gross receipts and 6 per cent on net corporate in- come—that 1s, total net operating rev- enue, less operating expenses, includ- Aggregate 1933 Taxes, The District gas, electric power, street raflroad and telephone com- panies in 1933 paid taxes totaling $950,000 less than they would have paid if assessed on thelir property here n.l;he realty tax rate, the committee said. ‘The difference between Federal and District taxes also was reyealed. In 1929 the Federal tax on the power company was $549.000 and in 1933 $751,148, an increase of 37 per cent. | For the Chesapeake & Potomac Tele- | phone Co. the 1929 taxes were $127,- | 039 and for 1933 $309,134, an increase | of 143 per cent. For the same period the District taxes on the power com- pany increased 13 per cent and on the | telephone company 12 per cent. | Further, the study shows the power | company paid in taxes to the Federal | Government in 1933 $751,148, while its total paid to the District was $441.702. “This obvious disproportion is not consistent with the services per- formed by the respective govern- ments,” the committee asserted. ‘To show how the present tax sys- | tem operates, the committee said the District taxes on the power company amount to less than 4 per cent on | gross receipts while the taxes on the tireet car company amount to about 6.1 per cent of gross receipts, although | net income of the power company is | 11.7 times the taxes imposed by the District while the net income of the fransit company is but a little more | than 1.4 times the taxes. | The committee also voiced objec- | tion to the proposed ad valorem taxes | for utilities as proposed in 1931-1932 | 2y the Mapes Committee of the House. | “There is now a pronounced trend away from ad valorem taxes and an adoption of a series of taxes intended | to reflect variations in capacity to pay,” the committee said. The street car merger act, relieving the railway company of much of ‘the | cost of street paving between the iracks, will place on the public costs of some $350,000 & year which other- wise would be carried by the com- pany, the committee found. An addi- tional $10,000 for costs of paving on bridges also has been passed on to the public, it said. Also, the street rail- way company has been relieved of the ccsts of crossing police of some $115,000 & year, it said, Bank Taxes Uniformity. Uniformity of bank taxes was con- sicered by the committee. It recog. pized that the business of national hariks and trust companies and incor- porated savings banks is now sub- stantially similar. National banks | and trust companies, however, pay a | 6 per cent tax on gross earnings while State banks or savings institutions pay | but 4 per cent after deduction of in- | terest paid on deposits. In recent years the business of savings banks has been expanded to include substan- tially all types of business handled by national banks and trust companies. | “If a uniform 5 per cept tax were applied to all incorporated banks, the net loss in revenue to the District would be approximately $180,000, the committee asserted. * * * The conclusions as to increase in State THURSDAY, MAY 2ND A d Seri Spiced Ope s e Ao 13¢ Milk Chocolate Caramels z‘¢ 60¢ Value—fall pownd Home Made Chocolate 24 Fudge Cake 40¢ Value 24¢ AT THE FOUNTAINS Chocolate Ice Cream Soda 10¢ Pineapple Sundae rosmtor 13710 nea| re| Dlevilgp Ham and Svflu el Cheese Sandwich and 15 Coffee regulor 23¢ ¢ SPECIALSANDWICH: Virginia Ham-Swiss Cheese—Pickle 20 Lettuce—Mayonnaise reg. 35¢ ¢ — 186 4% STORES One near you THOMPSON BROS. Anacostia, D. C. This Is Model nd words you any Pictures P-519 $189.50 Other $119.5 " before you buy! Terms ean be arranged. THOMPSON BROS. FURNITURE 1220-1226 GOOD HOPE RD. SE. Fres Frkin -—or be fired herself! pened . . . something Toughest Job in HOLLYWOOD 1t belonged to hard-boiled Bella; she had to keep the hungry horde of movie-mad job-seekers from crashing the studio gate for two years, then—something hap- and riches to two young unknowns. Read “Softie,” a fine behind-the-scenes story of Hollywood by Matt Taylor. In Sun- day’s issue of THIS WEEK, our new Colorgravure magazine. The Sunday Star Rear ing She managed nicely which brought fame D. C., WEDNESDAY, banks and reduction of taxation to national banks and ' trust companies would be decidedly erroneous under present conditions.” & Discussing the proposal that the savings banks be used to collect the taxes on money on deposit, the re- port states: “On December 31, 1934, there was on deposit in the banks of the Dis- trict approximately $257,000,000. Per- sonal property returns for vhe same year showed s total reported in cash on hand and in banks in the Distriet approximately $50,000,000. It is ob- vious there cannot be more than $200,000,000 in deposits in District banks which are not subject of re- port under the District personal prop- erty tax laws. S “The practical impossibility of an independent audit and check of every tax return so as to indicate the ac- curate balance on deposit in the Dis- trict by those subject to taxation is apparent. “It is recommended that legislation be considered which would require a confidential report by all banks of all deposits on the tax date and that there be substituted for the present five mills personal intangible tax on bank deposits a tax of four mills, payable directely from the deposits by the bank. “This would relieve the honest per- sons who flle returns by a reduction of 20 per cent in their tax return and would yield several hundred thousand dollars in additional revenue. The mechanical work of examing the accounts and making reports and pay- ments should constitute sufficient ad- ditional levy on the banks at the present time.” SALVATION ARMY DRIVE SUCCESS IS REPORTED District Responds to Campaign for Clothes and Articles to Aid Organization. The Salvation Army's annual “Spring housecleaning” drive for old clothing, furniture and odds and ends is meeting with a city-wide response, although an even larger volume of donations can be taken care of in the | army's repair stops. The donations are repaired and | sold, the proceeds going to support | indigent families and supply work for | almost 100 persons daily. The drive is being conducted from the special service center at First and F streets. Brigadier John G. McGee, in charge of soclal service work, today asked housewives with articles they are planning to discard to telephone the | center and trucks will be dispatched |Some Do MAY 1, 1935. - ABERNETHY HEADS EVANGELISM UNIT Calvary Baptist Pastor Is Elected by Federal Co’ " cil of Churches. Rev. Wifliam 8. Abernethy, pastor chairman of the department of evan- gelism of the General Council of the Churches of Christ in America. A two-day conference of the department closed this afternoon. Dr. Abernethy, whose term will last two years, suc- ceeds Dr. Willlam Hiram Foulkes of Newark, N. J., who had resigned. Others officers, elected at last night's dinner celebration, are: Bishop Ralpn Cushman, Denver, vice chairman; Rev. Charles E. Shaeffer, Philadeiphia, re- cording secretary; Rev. Jesse M. Bader, New York City, executive secretary; Dr, R. H. Miller of the National City Christian Church, chairman of the de- partment’s advisory council, and Dr. Foulkes, chairman ef the Committee of the Preaching Mission. Approxi- mately 250 persons attended the din- ner, held at the Calvary Baptist Church. Prior to his election as chair- man, Rev. Abernethy served as vice chairman of the department. Rev. Mr. Bader spoke today on “] e o o others do not You may not know this secret. Those little telitale odors may be promptly ard completely subdued with Key's Powder (hygienic)—two 3poonfuls to two quarts of warm water. It soothingly cleanses the folds of tender tissues and keeps you fresh— and safe. Three sizes: 35c. 65¢ and $1.26-drux stores everywhere carry {it. Every woman needs | veriisement. for the donations. veloping the Devotional Life of the Chureh,” Rev. Ralph McAfee on “Ef- fective Co-operation in Evangelism,” Frank Goodman, secretary of the radio department of the council, on “Using the Radio for Religion,” and Rev. W, Angie Smith, pastor of Mount Vernon Place Methodist Church, spoke on “Preparing for and THURSDAY, FRIDAY and SATURDAY Save 259, to 509 University. Reports on the United cr;m.nnun Youth Conferences : were submitted by Rev. William |P. Klein, New York City. "" - W An address this afternoon on “The Place and Program of l’nnldhl: in the United Church of C 2} dnd another by Rev. Mr. Abernethyop “Pacing Our Evangelistic Task” fol- lowed by a service of dedication by Dr. Poulkes, concluded the councils program. On the Cost of Your Glasses Two Optical Specials @ Distance or readig, white or pink gold filied frames, rim ' rimiess. © Krypisk Invisible Bifocals (lentes only). vision 1 Regular price for sach, $14.00 Special for Thursday, Friday and Saturday Only NOTE: Regular fee for examination omitted on these three days. Distance and reading 87.50 ' ‘Your eye comfort and vision depends on the proper eye examination and fit. 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