Evening Star Newspaper, May 24, 1937, Page 9

ROCKEFELLER TAX LOW DUE T0 GIFTS Estate Largely Transferred During Life—Half Billion in Philanthropies. 87 the Assoclated Press. L. H. Parker, chief of staff of the Joint Congressional Committee on Internal Revenue Taxation, expressed the opinion today that the enormous philanthropies of John D. Rockefeller, 8r., will leave little to be collected for Federal estate taxes. Parker based his opinion on a 1929 fnternal revenue report to Congress Wwhich he said disclosed that the finan- pier, who died early today in Florida, paid only $12,036.03 in income taxes in 1922. This sum represented the #ax on his net income, after deduc- tions of various refunds. “This small tax,” Parker said, ®would indicate that Mr. Rockefeller's Income-producing property has been largely transferred to his heirs or to his numerous charitable foundations. “The point which it seems well to eonsider is that the Federal estate tax will not produce much revenue in this case.” Out of a fortune variously esti- mated to range from $1,000,000,000 to $2,400,000,000, Rockefeller gave away about $500,000,000 to charities, foundations, educational and religious organizations. The report to the Congressional Committee on Internal Revenue in 1929 in discussing the Rockefeller es- tate, Parker said, pointed out that ¢ * * The result of not taxing gifts s to leave the door wide open for the avoidance of the estate tax in the case of all our citizens who have accumu- lated great wealth.” Congress amended the internal rev- enue laws in 1935 to provide for a Federal tax on gifts. Federal tax authorities said it would be impossible to estimate taxes from the Rockefeller estate until a return Is filed, but on a purely mathematical calculation, without allowing for Rockefeller philanthropies, they said ® $1,000,000,000 estate would be sub- ject to more than $500,000,000 in Federal inheritance taxes. Inheritances over $50,000,000 are subject o & 70 per cent levy. Magnate (Continued From Page A-5.) -_— e absorb in six weeks all that they could teach about bookkeeping and business theory. In the middle of August, 1855, he began to look for work. From 8 am. until 6 p.m. every day for a week he | tramped the hot streets. The only answer he got was “no,” but he began the same round the next Monday morning and kept at it for six weeks. On September 26 Hewitt & Tuttle | hired him to be assistant bookkeeper in their produce warehouse on the lake front. He celebrated the anni- versary all the rest of his life. He did not know what his pay would be when he took the job. At the end of the year he was handed $50 for a ‘Uttle more than three months’ work. ‘The next year he drew $25 a month, #nd the following year $50. From the day he drew his first pay he kept an exact record of every cent received and paid out. The famous Rockefeller “ledger A,” an account book kept by the future multi-million-: aire at about that time, revealed his early habit to distribute wealth as well as to accumulate wealth. En- tries showed such items as “50 cents ¢o & poor woman” and ““25 cents to & poor man.” For his employers he worked hard, audited scrupulously every bill that was paild or collected and succeeded In collecting some balances that had been regarded as hopeless. Denied Raise in Pay. When he was 18 years old his pay was ralsed to $700 a year. He asked for $800, but could not get it. He had saved nearly $1,000, so, after a care- ful look around. he invested his sav- Ings, plus $1,000 borrowed from his father, in a partnership with Maurice B. Clark, an Englishman 10 years his senior, and they opened a commission business. “We were prosperous from the be- &inning,” Mr. Rockefeller said later. “We did a business of $45,000 the first year. Our profit was not large—I think $4,400.” Although he was the junior partner 4and under age, he thoroughly organ- dzed the business. He practiced the most rigid economy, drove close bar- gains and liv. | as frugally as ever, putting most of his profits back into the business, “to grow.” Young Rockefeller daringly assumed large financial obligations to carry the firm through business deals. He borrowed all his father could lend, needed more and, summoning all his courage, asked a banker for a loan of $2,000. The banker let him have it on his own warehouse receipts. The lad of 19 walked out of the bank elated. He felt he was a man, full grown. Indeed, his fellow merchants called him “Mister Rockefeller” long before he was 21. A bank president warned him one day that he had borrowed nearly all the money in the bank. was put up at auction in 1865 and Mr. Rockefeller bought it in at $72,500. Thus began the firm of Rockefellers & Andrews, which grew within flve years into the-Standard 0il Co. of Ohio, incorporated in Jan- uary, 1870, with a capital of $1,000,000 —=& vast sum in those days. In the meantime Mr. Rockefeller’s brothers, William and Frank, besides Henry M. Flagler, Stephen V. Harkness and sev- eral others, had joined the enterprise. Less than 10 years had pessed since Mr. Rockefeller entered the ofl busi- ness. The year before Mr. Rockefeller bought up the assets of Andrews, Clark & Co. he had entered another partnership, destined to last half a century. In the Cleveland High School in 1853, one of his classmates was Laura Celestia Spelman, daugh- ter of a merchant of Akron, Ohio. They were married September 8, 1864, and for nearly 51 years shared an ideal life. Cared Little for Society. Mrs. Rockefeller cared little for so- cial activitles outside the circle of family friends. She gave much atten- tion to rearing and training her chil- dren, to the work of the church and the Sunday school and to charities. She died suddenly of heart disease on March 12, 1915, at Pocantico Hills, while her husband was in the South. For several years she had been unable to go to church, and it Wwas Mr. Rockefeller's custom to beng her notes of the sermons. Mr. and Mrs. Rockefeller were the parents of five children. One died in infancy. The others were Alta, who became Mrs. E. Parmlee Prentice of New York; Edith, who married Harold McCormick of Chicago in 1895 and divorced him in 1922; John D, jr, of New York, who married Abby Greene Aldrich, daughter of the late Nelson W. Aldrich, United States Senator from Rhode Island, and Bessle, who died a number of years ago. She was the wife of Charles A. Strong, formerly a professor of psychology of Columbia University. From the beginning the oil industry was highly speculative. Thousands of men with all sorts of business ex- perience and many more with no real training dashed into the field to get rich quick. When a new well was brought in with a big flow scores of men drove other wells with frantic haste nearby. Often the petroleums had to be stored in pools on the ground. The oll market alternated violently between feast and famine as new gushers came in or old wells ran dry and prices varied accord- ingly. These sudden fluctuations in the late sixties wrecked many re- finers. Forms Standard Ofl Co. But Rockefeller and his assoclates, though young men, were experienced veterans in business, trained for years in ways of economy and exact ac- counting. They seemed to manage better than any of their competitors. When they formed the Standard Oil Co. of Ohio they had the largest re- fining business in Cleveland. * Nevertheless, they told their neigh- bors that, unless some sort of or- ganization could be formed for mu- tual protection, they could see that they, as well as the others, would be wiped out, one by one, as the market fluctuated. Accordingly, Mr. Rocke- feller first asked the largest firm among his competitors if it would | care to join forces with the Standard Oil Co. The offer was accepted at once. Other neighbors then came in until, at the end of two years, nearly all of the petroleum refiners of Cleve- land were members of the Standard 0il Co. Cleveland became one of the chiet oil-refining centers of the country, taking the place previously occupled THE EVENING STAR, WASHINGTON, D. C. by Pittsburgh. Soon the principal re- finers of Pittsburgh and Philadelphia sought to join the Standard Oil or- ganization. They were welcomed into the alliance of interests, as were many other concerns in New York, New Jersey, New England and the ofl regions of Pennsylvania and West Virginia. For several years the stocks of these several companies were held in a pri- vate trust, but in 1882 the Standard Oil Trust was formed to hold them all. The total dividends paid by the Standard Ofl combination, from its formation in 1882 to its dissolution in 1911, were estimated at $751,000,000. Mr. Rockefeller's colossal wealth and power made him one of the greatest economic factors of his time. With him began the real development of big business and the era of the so- called “swollen fortunes,” which gave Tise to much public agitation and new political doctrines. His fame passed through various social phases. His money was sought and accepted to found institutions for the study and suppression of disease and to spread education and religion, "His gifts were criticized by some who called him a “public menace.” One gift he made was attacked by critics, who called it “tainted money,” charg- ing his business system destroyed open competition. But the gift was accepted. Accused of Crushing Foes. No man or corporation ever has been more bitterly assailed than Rockefeller and the Standard Oil Co. Rivals from the. earliest days accused them both of “crushing out” compe- tition, of getting rich on rebates of freight charges from the railroad companles, of bribing men to spy on competing companies. Popular writers of the “muck-rak- ing” period reiterated the charges in magazines and books. For many years it was the unbroken policy of Mr. Rockefeller and his associates to “say nothing and saw wood,” though they met all attacks before courts, Legis- latures and commissions and won most of the issues. The most spectacular of these cases came in 1907, when Judge Kenesaw M. Landis, then of the Federal Dis- trict Court in Chicago, forced Mr. Rockefeller to appear as a witness, fined the Standard Oil Co. of Indiana $20,000 on each of 1,462 counts, charg- ing acceptance of rebates on a ship- ment of oll. The total penalty of $29,240,000 never was paid, as the Su- preme Court reversed the case. Those were the days of “trust bust- ing,” and the Standard Oil suffered the fate of several other combinations when, in 1911, the Supreme Court, acting under the Sherman anti-trust act, ordered it dissolved. But the vari- ous constituent concerns into which |1t was split prospered even more than when under the one direct control. “We were simply trying to compass & situation,” was the answer Mr. Rock- efeller gave when asked why the com- pany was first organized. “But no man, no concern, was ever forced into the Standard Oil Co. Any such charge is false. We treated the smallest and the weakest of our competitors with Just as much consideration as the big- gest and ablest. the principles of co-operation, con- servation and service. * * * “The conditions were so chaotic (at of the refiners were very desirous of getting out of the business. We in- variably offered those who wanted to sell the option of taking cash or stock in our company. “We very much preferred to have them take the stock, because a dollar wheel, but as a matter of business pol- “Our organization was formed upon | the start of the company) that most |as he had applied himself to the task in those days looked as big as a cart- | group and replacements ¢ Every body type In icy we found it desirable to offer them the option. In most cases they were precipitate in their choice of cash. They knew what a dollar would buy, but they were very skeptical in regard to the probability of resurrecting the oll business and giving any permanent value to its shares. * * ¢ “Sometimes things are said about us that are cruel and they hurt. But I never despair. I believe in man and the brotherhood of man and am con- fident everything will come out for the good of all in the end. I have de- cided to say nothing, hoping that after my death the truth will gradually come to the surface and posterity will do_strict justice.” In the old days in Cleveland there were three Rockefeller brothers in the Standard Oil Co. John ‘was the eldest, Willlam was two years younger than John and Frank was four years younger than William. Frank was vice president of the company when he severed business ccnnections with his elder brother and in 1900 bought 12,000 acres at Belvi- dere, Kans,, and created a model stock farm. From then on until just before he died at Cleveland in 1917, he was a self-designated ‘“boss farmer”—dress- ing the part, repairing fences, digging ditches, breeding his own strains of cattle and developing trotting horses, which he drove for his own amuse- ment arcund his private race track. He also had large ranch interests in Texas and in Arizona. “I am Frank Rockefeller, stock farmer—not Frank Rockefeller, brother of John D.,” he used to say. For flve months in each year he used to live in Cleveland, and his eld- est brother was often there in those days, but they were never seen to- gether. Never Sent for Brother. In February, 1916, as he lay {ll in a Cleveland hospital after an intestinal operation which developed a fatal paralysis, Frank Rockefeller dictated this statement in reply to inquiries as to whether he had sent for his brother, then in Florida: “Frank Rockefeller has pot sent for his brother, John, and will not send for him, nor will he advise his brother of his illness.” His widow and three daughters shared his $800,000 estate. Willlam Rockefeller, who moved to New York from Cleveland in 1864 to take charge of the foreign oil trade, died at his estate near North Tarry- town, N. Y., June 24, 1922. He had been in {ll health for years. The size of his estate was not dis- closed, although it was believed to ex- ceed $100,000,000. John and William Rockefeller were not much alike. William was a mem- ber of a number of clubs and visited them, but his elder brother belonged to few clubs and seldom went to them. The younger man was not publicly known to be interested in philan- thropic work and was not prominent in religious activities. His largest known public gift was $1,000,000 to the United War Work Fund. ‘The brothers were Summer neigh- bors near Tarrytown, where they were often together. Only a few weeks be- fore the death of Willlam they spent several days visiting their boyhood home in upper New York. After he had retired from active | business, Mr. Rockefeller applied him- self to the task of giving as zealously of getting. Above all, he sought “to solve the problem of giving money away without making paupers of those who receive it.” He gathered about him a body of experienced advisers and established a of benevolent corporations, chief among which are the Rockefeller can be made at small cost. the line is now available Foundation, the General Education Board, the Rockefeller Institute for Medical Research and the Laura Spel- man Rockefeller Memorial, “I worked myself almost to a nerv- ous breakdown groping my way with- out sufficient guide or chart through the ever-widening fleld of philan- thropic endeavor,” said Mr. Rockefel- ler in explaining his methods. “It was forced upon me to organize and plan this department upon as distinct lines of progress as our other business af- fairs, “I have always indulged the hope that I should be able to help establish efficiency in giving, so that wealth may be of greater use to the present and future generations. If the people can be educated to help themselves, we strike at the roots of many of the evils of the world.” Always he felt his way, slowly and with extreme caution. As the school grew in usefulness he added to its funds, until at the end of 20 years he made his final gift, which brought his total contribution up to $35,000,000. He steadfastly refused to allow the university to be named after him and its officers have always declared he never criticized or interfered with the appointment of its teachers or sought to influence what they taught. It was only after an argument that he con- sented to the full official title of “The University of Chicago, founded by John D. Rockefeller.” “One of the most important of the elements which go to make up civ- ilization is the progress of morality and religion,” Mr. Rockefeller de- clared. " He proved his belief in this by giv- ing many millions to various religious institutions in this country, mainly of the Baptist faith. Often he declared his association with the church was the most important act of his life. And he had a simple philosophy. It found expression in few formal speeches, but he expounded it some- times in informal talks to young men: “Do all the good you can. Be earnest. Do not be afraid to work. “There is no feeling in the world, I think, to be compared with self- reliance. Do not sacrifice that to any- thing else. “Do not grow old before your time. Maintain an interest in life and in all living things. “Live within your means. One of the swiftest toboggans I know of is for a young man just starting in life to go into debt. “The true economy in life; I have found. is to discover the man who can do a particular thing—and then leave him to do it unhampered. “Sons of wealthy parents have not a ghost of a chance compared with boys who come from the country with the determination to do something in this world.” As he grew older—approaching and passing his 90th birthday anniversary —Mr. Rockefeller saw less and less of the public. At one time newspdper men were admitted to Pocantico Hills on his birthday anniversary, and a band would play his favorite tunes for hours, Eventually, however, the band disap- peared and finally newspaper men. In the Autumn of 1930 he left for the South ahead of schedule to avoid the interviewers and the flashlights. His 9lst birthday anniversary, on July 8, 1930, was made a little dif- ferent from the others by receipt of a congratulatory message from the late ‘“Mother” Jones, labor leader. This was a return gesture of amity form a one-time bitter foe, for “Mother” Jones, who, two decades earlier had fought the Rockefeller in- terests in the mines of Colorado, had herself recelved a message of cheer Ford offers equipm practically | ONDAY, MAY 2. from John D. Rockefeller, jr., when she achieved her 100th birthday an- niversary on May 1, 1930. Posed for Talkie News Reels. At times Rockefeller would emerge from his seclusion, always in the best of humor. Twice he posed for the talking news reels. Once, after hav- ing taxied around the field in an air- plane, down in Florida, he ended his little talking picture speech with a chuckle and “God bless Standard Oil!” Audiences laughed and ap- plauded a few days later in movie thea.ers all over the country. Once while he was playing golf at Pocantico Hills a newspaper photogra- pher climbed the 15-foot wall sur- rounding the estate and suddenly ap- peared, camera in hand, before Mr. Rockefeller. “Where did you come from?” Mr. Rockefeller demanded. The photographer silently pointed to the wall. “Out,” said Rockefellef. And then, with & twinkle: “Out the same way.” But the photographter was permit- ted to take his picture first, and then Rockefeller watched him make. his exit over the wall. Rockefeller attributed his long life to his temperate habits. No one ever saw him in a hurry. The chief of American business men, so noted as hustlers, he never hustled. He had a pulse well below 60, and no one can remember having seen him in a state of excitement. He never used tobacco or alcoholic beverages, ate moderately and very slowly and took care to linger a while at table by playing with his house- hold a game of numerica, a simple puzzle of numbers, somewhat like soli~ taire. The daily nap after luncheon and several hours of outdoor activity were his rule after the age of 34 years. He took up golf in 1899 and became a constant player. When well past 80 he played nine holes in from 4C to 45. “Kijkuit"—an old Dutch word for “Lookout”—his home on a high hill- top at Pocantico Hills, back of Tarry- town on the Hudson, was built at a cost of more than $2,000,000. It was said it cost about $500,000 a year to maintain the estate. Some 530 men and 30 teams were constantly em- ployed on the place. For many years he had a Summer place, called Forest Hills, near Cleve- land, surrounded by 640 acres of lawns, gardens and groves. The house burned in 1918 and was not re- built. After the fire Mr. Rockefeller never went back to Cleveland. Special TREAT for 4 o'clock Nibblers CROSSE & "W BLACKWELL'S date & nut Bread Ready o slice and serve. Always fresh. Extra Good with Sweet Butter Cream Cheese or any sandwich filling Now seiling at a greatly reduced price ASK YOUR GROCER ent that meets the needs of all operations. Your nearest Ford dealer will gladly let you We Are pleased to Announce That Beginning Wednesday, June 9, 45C0' Stores Will Be CLOSED Wednesday Afternoons Your co-operation in shopping Tuesday and early Wednes- day will be appreciated by all. Weake Sveny Ponny unt Deal “Where Quality Counts and Your Money Goes Furthest” America’s Finest %‘ Sweet Cream BUTTER Ib. 37c ctn. Derrydale Wrapped Quarters Butter™ 3 5¢| g Farmdale Delicious Large SWEET PEAS Glenwood Prepared Home Style Selected Guaranteed EGGS 25 10c cans APPLE SAUCE Rich, Creamy American CHEESE Ib. 23‘ Borden’ ; cHersy Lua 296 —_— Eagle Brand 2 pkgs. 1 7C CREAM CHEESE HAWAIIAN (broken slice) PINEAPPL ASCO Gelatin Desserts; 6 flavors Choice Alaska Salmon Fancy Seedless Calif. 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Laundry Gems CALO or MARCO l& DOG FOOD cans Marco Dog Food, 2 8 oz. cans 9¢ LYKIT 16 oz, pocroop & 'am 19¢ Dethol Flea Powder can 23¢ a 24 oz loaf for |]¢ 2 1bs. 27¢ PILLSBURY'S FLOUR 97 | 12 5. 57¢ bag Ask how easy it is to get a CombinationSKILLET, DUTCH OVEN and CHICKEN FRYER A TQc $1.50 value for only Chromium finish heavy gauge steel, 1012-in. top diameter. Every home needs one. VEGETABLES Ban anas Iceberg Lettuce 2 = 19¢ Frash Tomatoes 2 - 29¢ " WHATEVER YOUR LOADS, V-8 !(?"SIOMY WILL CUT YOUR HAULING COSTS . .- Green Spinach 3 ™ 4¢ Texas Onions 4 = 9¢ New Calif. Valencia ORANGES ial Car under V-8 Truck or Commercial < try a Ford rating conditions. Call him today our own ope o e an set a date for an on-the-job” test. with an 85-horsepower engine improved'i: g:::' heavy-duty, high-speed performance aCh o low that it is « modern motor .m:md ‘;“w ::IOBQ types most often used for light oeh s ice, there is an option of the new 60- ‘;fi . ume’r 'V- 8 that is setting new re:grds for h g‘ A gas and oil mileage. With these two engin and with the wide range 91 types available in }he Ford ‘{- 8 Truck and Commecial Car line, ~Our directors want to see you and talk with you,” he said. “I'll come right down,” Mr. Rocke- feller replied. “I'll come right away, for I want to borrow a great deal more.” During these early years he became known to the business community as & self-contained, frugal young man, free from bad habits, reliable and a steady attendant at church and Sun- day school. In his 15th year he had joined the E-lnefl Street Baptist Church in Cleve- ing or For the man who keeps an eye :nd:at\;l:gac delivery costs, there are some ad e “right down his alley.’ .}\nd th iy goes, whether hev h:u.}s h:ls\t ;:dhem e s Ford V-8 Truc Cemm. ; c;l';d‘:l:“l'; 1o the letter of Ford lrudm:: i(: reliability and true economy. They are o ice. They are thrifty to operate. They om, :ad attention . . . and: when they do, repalrs b Ruthe ® Convenient, economical ‘n::: a‘:‘:“‘z‘ 4l Credit ized Ford Finance m" Sugar Cured SMOKED When the pastor announced one Bunday that the house was to be sold %0 pay the debt, young Rockefeller #tood at the door and begged a con- tribution from every one who passed. Bome could give only 10 cents a week, few as much as $1, but he begged for months until he raised the $2,000 and saved the church. Later he be- came superintendent of the Sunday ochool, & position he held for more than 30 years, A Bible class for men which he organized and led became one of the largest of its kind in the country. It attracted young and old of every de- gree of affluence. “The religion of man is his most important possession,” he said. “There is nothing in the world that can compare with Christian fellowship; nothing that can satisfy but Christ.” ‘When Drake struck oil in Pennasyl- vania in 1859, there was a rush to the new field of wealth from all parts of the country. But the young merchant stayed out, questioning and studying, more than two years. Then he and his partner joined with Sam- - el Andrews, who had learned the art of cleansing and refining petroleum. Under the title of Andrews, Clark & Co. they organized a separate firm to refine ofl, and built a small re- finery on the bank of Kingsbury Run, near Cleveland. This business, by mutual consent, Boneless Pot Roast Lean Bolar Roast Shoulder Lamb Chops ». Shoulder Lamb Roast . Lean Stewing Lamb Briggs Graded Bologna . Briggs Skinless Franks 1. A Briggs Luxury Loaf m. All Excess Skin and FRESH-KILLED BROILING Chickens = 38¢c Average 11/; Ihs. Each 2 - T6¢ Fresh Spring Vegetables Taste Better with Louella Butter Prices Eflactive Until Wednesday Clesing, Washingten and Vieinity 8 1b. 1b. Whole or Shank Half 10 to 12 Lb. Average )