10
THE- SUNDAY OREGOXIAN, PORTLAND, NOVEMBER 19, 1922
MIliHffi 111 TAXES
LOST TO UNCLE SAM
' Provision of Income Law
: : ' Permits Evasion.
EXCHANGES NOT TAXABLE
.Thousands of Stocks and Bonds
Virtually Sold Without Con
tributing to Government.
r BY HARDEN COLFAX.
(Copyright, 1922. by The Oregonian.)
WASHINGTON, D. C, Nov. 18.
(Special.) Congress probably will
be asked by the treasury department
within the next four weeks to make
a change in the tax law under which
the government's income would be
increased by $100,000,000 or more an
nually. The proposed change con
cerns section 202 of the law, a por
tion of which would have to be re
pealed if the change is made. Un
der that section as it stands thou
sands of sales of stocky bonds, real '
estate and other property are re
ported to have been made under the
guise of exchanges, absolutely free
of tax on the profits involved. It is
difficult to measure the- amount of
income thus lost to the government,
but unofficial observers place it at
from $75,000,000 to $125,00,0,000 an
nually. Both the bureau of internal reve
nue, the tax collecting branch of the
federal government and the tax sim
plification board have had the sec
tion under scrutiny for some time.
In addition, Secretary Mellon is re
ported as having a lively interest
personally in the subject and may
make the proposed recommendation
in his forthcoming annual report.
The section provides:
"On an exchange of property, real,
personal or mixed, for any other
such property, no gain or gloss shall
bo recognized unless the property
has a readily realizable market
value, but even if the property has
a readily realizable market value,
no gain or loss shall be recognized
when any such property ... is
exchanged for property of a like
kind or use."
"Exchange" Bnslne Brisk.
There are several other provisions
of similar tenor. Under the protec
tion of this section of the law, many
dealers in stocks and other securi
ties are openly advertising, the
treasury is informed, their willing
ness to make "exchange" of securi
ties without the levy of taxes on en
hanced values of the securities thus
exchanged. Under previous revenue
laws this practice was not permit
ted. Thousands of sales, it is reported,
are made during the course of ordi
nary business every week in the se
curities market of New York alone,
possessors of high-priced stocks and
bonds thus being enabled to con
vert them, free of Income1 tax, into
other forms of securities. It would
be possible, under this section, unof
ficial observers say, for an individ
ual or firm to conduct a mammoth
business in stocks and bonds through
a system of exchanges without plac
ing clients to the inconvenience of
paying the government any income
tax whatever. More reputable
firms, however, regard this kind of
trading as an evasion,, of law and
do not participate in it.
Millions Slip Away.
The subject has been discussed for
some time by officials of the inter
nal revenue bureau, who realize the
magnitude of the fortune in taxes
slipping away from the government
every year that the present provi
sion of the law remains in effect.
Members of the tax simplification
board also have looked into this po
tential source of revenue and may
embody in their forthcoming report
a recommendation that the exchange
provision be repealed. The report
of the board is being writffen now
for presentation to congress Decem
ber 4, but, It is understood, no defi
nite decision has yet been reached
with respect to that section.
The board has under considera
tion the recommendation of other
measures as well, to simplify the
procedure of tax reporting and col
lection. So has Secretary Mellon,
who will likely embody them in his
report.
Industrial and commercial devel
opments of the week showed no pro
nounced change from their previous
upward trend. Car loadings dropped
slightly from 1,014,000 to 994,000
carloads for the week but, despite
the slight decrease, hung up a new
record, being the highest ever re
corded for the first week in Novem
ber. Shipments of lumber showed a
decided gain, as did the volume of
orders, but production dropped about
8 per cent below the level of the
preceding week.
Alio Ontput Enormous.
There is no longer any doubt as
to where the automobile manufac
turers are bound with their produc
tion figures. On the first day of
November they 6tood within a few
thousand cars of the total for the
whole year of 1920, the biggest year
ever recorded. It is estimated that
. by the middle of November they had
passed the 1920 mark easily and
from now on the returns will only
indicate the growing largeness of
the new record. The year probably
will close with a total output of
about 2.500,000 cars or 300,000 more
than 1920.
Sensational advances in the price
' cf corn within the past four weeks
is spelling real prosperity for the
." farmers of the middle west. The
advance, almost wholly unexpected,
found the farmers with most of their
c,rop on hand, reversing the usual
; procedure, under which the middle
: man has reaped the profit. Cotton
I also continued toward higher levels,
As an indication that business is
continuing to improve, one of the
largest of the 5 and 10-cent stores
reported aggregate October sales of
$15,775,000 as compared with $14,-
' 408,000 in October last year.
Women Realtors to Meet.
The Women's Realty board will
hold its regular semi-monthly meet
ing next Friday noon at the Oregon
grill. A. R. Ritter. president of the
V
-i
Northwest Real Estate association,
will deliver the principal address,
stressing especially those topics
which are of particular interest to
women engaged in the real estate
business. Mr. Hitter will relate
some personal experiences while
actively engaged as a realtor during
his term as president of the Port
land Realty board.- Mrs. T. B. Neu
haueen will preside at the luncheon.
SOLONS GET WARNING
Progressive Party Chief Sends
Out Circular letter.
V
'As state chairman of the "pro
gressive party, I suppose that I rep
resent, as nearly as It is possible at
this time, the 100,000 progressive
republicans and the 30,K0 liberal
democrats who voted for Walter M.
Pierce for governor," announced
Norman S. Richards In a letter, he
has sent to the members of the re
cently formed progressive party.
Continuing, the statement says: "I
am assuming that 4000 machine
democrats voted for Pierce for
purely partisan reasons, and in spite
of their dislike. Until this poten
tial third party, formed by the
breaking away from the reactionary
elements at the last election, is bet
ter organized and has a more, com
petent head, I presume to speak for
them."
Addressing the members of the
legislature, Mr. Richards said: ' "
' Senator Pierce was elected gov
ernor by the federated patriotic so
cieties and the ku klux klan. sup
plemented by the progressive move
ment and the independent vote tWs
the narrowest must admit and. on a
tax reduction programme. And if
either or both houses of tlh legisla
ture attempt to organize to defeat
this general plan, which the people
by their votes have approved, we
will find leaders for a movement
which -will give every legislator im
plicated in such a scheme-plenty of
'air' at the next election."
CAR STRIKES AGED MAN
u A. Williams, 80, Hurt in Triple
Mishap on East Side.
In, a triple accident at Grand ave
nue and East Stark street yester
day afternoon, L. A., xWilliams, 80
years of age, a gardener- living at
466 East Washington street, was
struck down and severely injured.
At St. Vincent's hospital he was
found to be suffering from a badly
bruised right shoulder and from
shock.
He was caught under the wheels
of a machine driven by L. H. Camp
bell, 66 East Twenty-sixth street,
which was thrown from its path by
a Montavilla street car. Campbell,
Boing east on BtarK street, was
struck by the car, northbound on
Grand avenue. Williams had just
stepped from the curb when the
machine struck him.
Alexander M. Jackson, eon of A.
G. Jackson, Buffered cuts about the
head when he was thrown from his
father's machine at Oregon and East
Sixth street, the car landing on the
sidewalk, following collision with
another automobile. The boy was
taken into the North Pacific Dental
college, nearby, where his wounds
were dressed. Other members of the
family were badly shaken but not
injured.
STUDENT BADLY INJURED
Auto on Way to Football Game
' Upset Near Junction City.
EUGENE, Or., Nov. 18. (Special.)
Paul Van Allen, a student of the
University of Oregon, from Days
Creek, Douglas county, was serious
ly hurt when the automobile in
which he was riding from Eugene
to the football game at Corvallis
today overturned at a curve in the
highway just west of Junction City.
The other occupants of the car were
not seriously hurt. Van Allen was
injured in the back. He is now at
the Eugene hospital.
An automobile driven by H. H.
Moore of this city, also filled with
people on the fv-ay to the game, over
turned near Corvallis, but none of
the occupants was seriously in
jured.
Press Club Paper Issued.
'El Toro," the official publication
of Ihe Seattle Press club, is just off
the press and several c,opies have
found their way to Portland. The
editor-in-chief, who styles himself
the "Toreador," is Kenneth Gilbert;
Rox Reynolds is "matador" and
picadors" were Thomas Thurlby,
Stuart Morris and Paul Fung.
William J. Pretain, ex-Portland
newspaper man, was a liberal con
tributor to the publication. "Seven,
Saw de Bars" is the title of a sport
contribution by Hugh Wiley.
r SEE
See
The Quality Store
00tt Al
Meier &
GREAT OPPORTUNITY
SEEH FOR AMERICA
Harden Thinks Intervention
Needed More Than Ever.
FURTHER STRIFE IS NEAR
English and French Interests Are
Expected to Clash Again Over
Problems in Turkey.
BY MAXIMILIAN HARDEN,
Germany's Foremost Publicist.
(Copyright. 1922. by The Orsgonlan.)
Becauso the seed for rew wars has
been sown in th near east and the
general European dcvelopmentSkare omi
nous. Harden believes that tire oppor
tunity for the United States to aid in
Europe's restoration is greater today
than ever before.
BERLIN. Nov. 18. (Special cable.)
Considering the American election
returns, U would not. seem that the
Hughes doctrine has obtained the
same success as the Monroe doc
trine. The principle that no foreign
state' must meddle in American
affairs seems to have been undis
puted everywhere for a long time,
but the amendment which the cable
now angrily announces, and which
is much discussed by disappointed
Europeans, is not so indisputably
right, namely, "international co
operation means for America en
tanglements in quarrels which we
do not desire to have anything to
do with."
Whether the chief of the state de
partment really said that or whether
the reporter interpreted wrongly is
uncertain, but the wise Hughes,
who called the Washington confer
ence and who knows better than
anybody else America's demands
concerning Europe, cannot have
meant that one called because of
his power to arbitrate would neces
sarily be entangled in the quarrel
he was judging.
Ocean No Longer Defense.
Whether the continent experi
ences a renaissance or goes into
liquidation it will still remain im
portant economically, politically and
culturally to the new world whose
pilgrims it furnishes and America
will not desire to prove that the
war for which she sacrificed her
precious blood of her youthful. sons
was a grotesque mistake by now
abandoning the fight for right and
human Justice. To do so she would
threaten herself with being sepa
rated only by oceans, which no
longer are effective defenses against
two kinds of chaos.
The man who co-operates espe
cially when strong like America
can control his partner's every
movement, thus protecting himself
from possible dangerous separate
action. Are not the dangers of in
dividual national action already
apparent enough? Because , the
post-war Lloyd Georgian era fright
ened France into believing Eng
land's "island isolation dangerous"
for England is not essentially a
European power, having other and
greater interests in other continents
England still kept alive the bal
ance of power theory, fearing
Franco-German co-operation.
And because France thought nec
essary to threaten England, not
only with submarines and airplanes
in the channel but with more ef-
OIL LIGHT BEATS
ELECTRIC OR GAS
Burns 94 Air
A new oil lamp that gives an
amazingly brilliant, soft, whit i light,
even better than gas or electricity,
has been tested by the U. S. gov
ernment and 35 leading universities
and found to be superior to 10 ordi
nary oil lamps. It burns without
odor, emoke or noise no pumping
up, is simple, clean, safe. Burns
94 air and 6 common lesrosene
(coal oil).
The inventor, W. C. Johnson, SI
N. Fifti St., Portland, Or, is offer
ing to send a lamp on 10 day3"
FREE trial, or even to give one
FREE to the first user in each lo
cality who will help him introduce
it. Write him today for full par
ticulars. Also ask him to explain
how you can get the agency, and
without experience or money make
250 to $500 per month.
way
in)
s rais
to Buyv.at
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ir rami
Cinnlit Merchandise
j v m ii
OUR WINDOWS
Page 11 and Back
(This Section)
The Quality store
of Portland, Oregon l
ITM. flUTH. MOIIIMftOM. Ak.DE M ST .
fectual weapons on the petroleum
routes and in India, she brought the
Turks back to Europe. Thus seed
for new wars are sown in the near
east; nationalism is encouraged in
Italy; Germany and Egypt and the
soviet Russians are given oppor
tunity for alliances and suitable
fronts for attack.
Farther Strife Indicated.
The British elections have re
sulted in conservative successes,
which means strengthening of the
British anti-Turk position, so that
Lausanne will show still more
clearly the strife between English
and French interests.
What good has the British help
against French demands done Ger
many? German money is almost
valueless and nothing is done to
remedy it. The reparations com-1
mission went to Berlin desiring an
understanding, but could get no !
definite proposals from Stinnes and :
the industrial party, which would !
promise only small reparations and
asked the evacuation of the Rhine
land and most favored nation treat
ment for Germany's surplus manu
factures to be produced by the 10
hour work day. . Unfortunately, the
victors found the demands too great
and their own advantages too small.
Foreign Control Predicted.
What - will issue from this dark
thicket? Foreign financial super
vision of Germany must come unless
Germany shows she can stabilize
her currency. The proposed finan
cial loan would be swallowed up in
a short time without leaving a trace.
That foreigners now are buying
German land, dwellings and fac
tories at 5 per cent their real value
is a sad commentary on the fall of
the mark, but In this way, foreign
interests become bound up with Ger
many, which is a preparation for
the only ral solution rational
internationalization of the European
situation.
And America is to be absent from
all this end will have nothing to
do with the quarreling boys, a
continent Is feverish from the after
math of terrible fighting and a new
struggle is begun for the earth's
gold, iron and coal.
Will America let pass this hour
of opportunity for co-operation and
perhaps arbitration . by adopting
prohibition of state wisdom?
Sunn side Scouts Win Prize.
Boy Scout troop, No. 4if, has been
announced as winner of the Music
week award offered the troop that
vuuld obtain the largest number of
pledges from homes to devote one
hour to music during the week. A
portable phonograph was the prize.
This is the Sunnyside school troop
and H. J. Wells is scoutmaster.
Members of this troop obtained 500
promises. Severali thousand music
pledges were brought in by the 108
scout truops in the city.
The
Great Lang
Gas, Wood and Coal
One gas burner does all your
Cooking and Baking, heating
the water at the same time
with the same gas.
From $84.00 Up,
Installed
F. S. LANG
MFG. CO.
191 Fourth St. Portland, Or.
m-f w
Page
Saves You Money
.Range
i
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WOMEN
f
Ojregoin
Do you remember the thou
sands of willing hands that
worked in the sphagnum
moss during the war?
A. , ' t
Do you remember the thou
sands of surgical dressings
made andshippedto France?
Do you know that out of
that work was developed
a most superior product?
TRADE MACK REG.
Continuing the work of the
Red Cross we are today
manufacturing in Portland
products unexcelled for
' softness, coolness and ab
sorbency. With improved
facilities we are able to re
tain all the virtues of sphag
num moss while removing
all harshness and defects.
- ,
, ' - v. '
Watch this space for future
announcements.
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