Evening Star Newspaper, March 1, 1936, Page 6

TAXONINDUSTRY IPT%SINGE'S Toll in Many Cases'Is More Than Dividends, Survey Reveals. BY JOHN C. HENRY Out of a maze of Federal, State and local taxation, in which exist many conflicting and overlapping m‘::t tax assessment exacted from Ameri industry rose approximately .120 per cent between 1925 and 1933. Spe- cifically, the taxes paid by all corpora- tions filing returns with the United States Bureau of Internal Revenue amounted to $1,170,331,206 for 1925 and to $2,546,863,000 in 1933. These figures include all classifications of direct taxes. As an interesting comparison, net profits of these same tions dropped from $8,146,051,570 in 1925 to a deficit of $1,353,141,000 in 1933. In further comparison, cash divi- dend disbursements decreased from $5,189,474,507 to $3,127,459,000, during the same span of years. ‘The purpose of citing these figures is to show how a steady increase in governmental functions and obliga- tions was accompanied by a growing tax structure, Federal, State and local, with & consequent increase in finan- cial weight upon.ndustry. The year 1933 is the last for which full sta- tistics of income are available, but the increase in rates of many existing levies and the enactment of new tolls such as those for unemployment com- pensation and old-age pensions are adding steadily to tax requirements. Industrial Load Revealed. Although all items of cost to indus- try are not compiled in the bureau summaries, it is shown that com- pensation to management in 1933 amounted to $1,994,961,000, while rents paid on property totaled $1,421,778,000. Interest on obligations amounted to $3,510,996,000 and depreciation was estimated at $3,495,842,000. Wages to labor were included in “cost of goods sold,” which totaled $43,625,788,000. Heaviest financial operations for 1933 were found in the manufacturing group, where 88,649 corporations re- ported total taxes of $852,823,000 as compared with net profits of $236,- 709,000. Dividends to shareholders amounted to $1,169,593,000, while com- pensation to management totaled $706,412,000. In this classification, wages to labor were estimated at slightly more than $7,000,000,000. While these composite figures for all industry give an effective picture through 1933, some individual com- panies have assembled similar data for 1934 and have applied it on a per-share basis, For instance, The Lamp, house organ of the Standard Ofl Co. of New Jersey, recently carried an analy- & . showing the comparative share of labor, management, stockholders and the tax collector in earnings of the company. Pay Roll Was $166,000,000. Stating that there were ,000 em- ployes in the Standard Oil of New Jersey world-wide group in 1934, The Lamp continues: “The aggregate pay roll covering all employes from the president to cdolie water boy was $166,000,000. Per share of stock this amounted to $6.38. Of that amount, management, as rep- resented by those earning annual sal- aries of $5,000 or more, received 47 cents per share. This was 7.4 per cent of the pay roll. Of the manage- ment’s share, the aggregate salaries of the board of directors amounted to 3 cents per share. “After labor and management were paid, the tax man stepped in. With less than half of its business domestic, the Jersey group paid in the United States in 1934 the huge sum of $37,~ 335,000 in property and corporation income taxes, and $39,674,000 as con- sumer sales taxes—a total bill resting on _lhe domestic business of $77,000,000. This was an average of $2.97 per share of stock. “Having provided for these three groups—Ilabor, management and gov- erpment, to stockholders has his turn. In 1934, there remained a net distributable profit of $45,618,960, or $1.76 per share. Of this, $1.25 was paid as dividends and 51 cents trans- ferred to surplus.” Pennsy Paid $24,000,000. The Pennsylvania Railroad has broken its expenses down to show that the 1934 tax bill of $24,000,000 required about 7 cents of each dollar of the road's revenue. In the same period, wages and salaries for all classes of employes amounted to $151,000,000, or about 42 cents in each dollar. Dividends were hardly more than half the tax bill and amounted to 323 cents per share.. : In the utility field, where Gov- ernment operations of an increasingly competitive nature are not burdened with a comparable tax load, such a company as Consolidated Gas of New York reported $3.32 per share earn- ~ Winter is ALL SMILES CHALFONTE HADDON HALL You will be, too, with the heartening hospitalities of these Boardwalk hotels to add to the sea and the season. Sunny lounges and Ocean Decks. Riding on the sand. Gell. Indoors, pean Plan. Special weekly rates. Leods and Lippincolt Company ATLANTIC CITY _THE SUNDAY STAR, WASHINGTO Dolls Exhibited for Hospital Benefit Olive Frances Polio, 7-year-old daughter of Mr. and Mrs. R. L. Polio, photographed yesterday as she arranged an exhibition of her collection of dolls, representing the native attire of 20 nations, in the north room of the Mayflower, Proceeds of the exhibition will be turned over to the Children's Hospital, for the assistance of less fortunate children, All industrial returns. 1,170,331 2,546,863 8,146,051 - *1,353,141 5,180,474 3,127,459 1,994,961 Total taxes, 1925. (Add three ciphers for true figures.) Agriculture, related. Mining and industries. quarrying. 8,603 55,049 21,536 72,918 13,903 265,759 42,531 162,919 30,808 335,141 5,408 90,924 15,152 37,608 Manu- facturing, 546,740 852,823 3,561,861 236,709 2,223,795 1,169,593 708,412 —Underwood & Underwood Photo. ‘Transportas tion and utilities, 186,313 170,679 1,511,944 151,624 1,006,817 999,535 80,514 Con- struction. 117,580 14,924 107,036 *56,672 70,004 30,349 617,732 Trade. 145,349 250,855 900,076 53,480 506,373 213,144 600,298 Above tables show how taxes of all American industry rose by more than $1,300,000,000 in eight years while net profits were falling from more than $8,000,000,000 to actual deficit of $1,350,000,000. In same period, cash dividends fell off by more than $1,000,000,000. Trend in all industry’is shown to be about same in six main divisions of industry included in table. ings on its 12,000,000 shares of stock, with a tax bill of $36,375,002, or al- most exactly the same amount per share. The company disbursed $36,- 724,886 in dividends, equal to $3.45 per share. For a picture of the 1925 and 1933 relationship between total taxes, net profits and cash dividends, the ac- companying table contains compara- tive figures. Wages to labor were not available for these groups, but com- pensation to management—salaries to executives—is listed for the 1933 re- turns. The statistics were compiled by the Bureau of Internal Revenue. In the 1933 figures, 446,842 corpo- rations are included in aggregate re- turns. Heavy earnings of some of these concerns enabled them to pay total dividends of more than $3,000,- 000,000, but the balance of profits against losses showed the net “profit” really a deficit of more than $1,000,- 000,000 for the group. This situation was most noticeably true in the man- ufacturing and transportation and utility groups, where dividends paid by comparatively few of the com- panies far exceeded net profits of all wx?paniu. Taxes (Continued From First Page.) confidence in the outlook when asked what would be done if the full program is not enacted. “There is no ‘if’ about it,” he re- plied. “We'll get it.” Aside from the tax on undistributed corporate profits, no one method of applying the new taxes apparently had official or semi-official approval. It remained for the Ways and Means Committee to receive, sort and select from proposals those that seem most profitable, obtain estimates of their yield from the Treasury and then come to a final decision. This process was scheduled to begin next week after the receipt of Presi- dent Roosevelt’s message—scheduled for delivery Tuesday—calling for an increased permanent annual yield of $620,000,000, plus $500,000,000 to re- place revenue lost through the invali- dation of the processing tax. This half billion would be spread over one to three years. Mr. Roosevelt remained in his study at the White House yesterday to pre- pare his message. The undisturbed corporate income tax would be aimed at profits which the corporations shunt into reserves instead of distributing as dividends, which become taxable. through the in- come tax of individuals receiving them. In some cases these profits have been distributed ultimately in the form of new stock, also untaxable. “I have always believed that these /N = undistributed profits of corporations should be taxed just as the profits of partnerships or individuals are taxed,” Byrns said. “It is discriminatory to tax the profits of a partnership while 8 corporation across the street and in the same line is not taxed on its profits, which go into reserves or are dis- Do You Own A $50 PENNY % $50 lndh?cae:.édl;:'niu LINCOLN HEADS over 10 yrs. o $2 Other coins worth up to $3,000.00 Send 10c today for mew issue Na- VIC’'S HOBBY SHOP Dept. R-102 Lorain, Obio s Beware the Ides of March! Lion one day and Lamb the next, March is always dangerous to health. Regulate your office temperature with this VEN- TILATOR . . . youll better. It gives you feel better and work plenty of fresh air, but stops bitter, drafty winds which chill everybody, and blow papers away. Brack- ets finished in rust-proof enamel, E. J. Murphy Co., Inc. 710 12th Street N. W. NAtional 2477 SPECIAL FOR A LIMITED TIME WS ng s ) and ‘Men's Felt Hats Cleaned and Blocked ALL WORK GUARANTEED TO BE SATISFACTORY KASH Beautifully Cleaned Pressed AND KARY ONLY An Average 5-Pound Bundle List Prices Howard’s Price -$1.00 “Dress Well—It Pays” - AND LAUNDERERS 134347 8. CAPITOL STREET INSURED AGAINST FIRE AND : THEFT A CONVENIENT BRANCH IN YOUR NEIGHBORHOOD 3211 2303 4th 2002 Y. Washiniston ‘Blvd. 5119 Georsia 1 g . N.W. $132 Veomem: Ave: W 5002 Connecticut Avenué 1020 North Capitol Street m;mc g X 137 B3t Histhor BTt \ D. C., MARCH T, 1936—PART ONE. SENATORS CLASH ON IMMIGRATION == Witness at Hearing Accuses Service Agents of Lobbying. By the Associated Press. Senators clashed angrily yesterday as a committee heard a charge that the immigration service was “lobby- ing” for greater discretionary authority in deporting “undesirable” aliens. H. L. Challlaux, national director of Americanism for the American Legion, declared immigration service agents were making speeches in favor of the Coolidge-Kerr bill for deporta- tion of foreign-born criminals because it would give the department more discretion than a rival bill by Senator lil:znom. Democrat, of North Caro- “It is unfair for them to go about the country advocating this bill,” said Challlaux. “They ought to go back on their jobs.” ’ Earlier Senator Reynolds had pro- tested that witnesses opposing the Coolidge-Kerr bill were being “cut short” on their time before the Sen- ate Immigration Committee. “If the witnesses are to be rushed,” he said, “if they are not to be availed of an opportunity to talk and others are not to be allowed to question these witnesses, ranted,” snapped Senator King, Demo- crat, of Utah, Reynolds protested nevertheless that the witnesses had been told to keep their statements short. “The Senator is not running this committee,” said King. “l recognize I am just a guest,” ——— tributed in the form of stock.” Senator Byrd is the author of an amendment to eliminate the tax ex- empt features of Federal, State and municipal bonds introduced after Pres- ident Roosevelt himself had called for | such action in his tax message of the last session. 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Other officers to be inducted are Morris Blumenthal, first vice presi- dent; Carl W. Linker, second vice presjde: Barney Robins, financial secretary; Dr. Maurice A. Goldberg, recording secretary; Benjamin M. Madden, treasurer, and Louis W. Brown, sergeant at arms, WITH THIS COUPON WATCH REPAIRING Repaired $ As Low as Guaranteed One Year The Upstairs Jewelry Store 27 AUl Watches Carefally T F sunw. lnixneltl and Clean Apart b ushly’ by and. No Machines Uses CLIF THIS COUPON JEWISH CONGREGATIONS LAY CONVENTION PLANS Directing attention to ethical prob- u lems of modern life, committees from local Jewish congregations, under the leadership of Morris Stein, general chairman, have developed plans for the 1936: convention -of- the United Synagogue -of ‘and the ‘Women’s League of the United Syna- gogue at the Willard Hotel March 13 017, More than 1,000 representatives from all sections of the United States and Canada are expected to attend the sessions here and the Washington congregations will be hosts. The general theme of the conven- tion will be developed by speeches and open forum discussions on the follow- ing topics: “The Major Ethical Prob- lems of Modern Civilization,” “The Ethical Resources of Judaism,” “The Home as an Agency Making for Ethical Growth” and “The Synagogue as an Agency Making for Ethical Growth.” . @ OFFICIAL PIANO of the @ METROPOLITAN OPERA Welcome as the First Breath of Spring—These New Spring Suits and Coats ‘THE SUITS are shown in new fabrics of beauty and qual- ity—tailored, swagger and mannish models. One and two button jackets, also suits with dashing leng coats. Sizes 14 to 20, 38 to 44. THE COATS include new Chesterfield models, jaunty swagger and sports coats—in ombres, plaids, checks, her- navy, grey and black. Sizes 14 to 20, 38 to 54. Second Floor. 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