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About Medford mail tribune. (Medford, Or.) 1909-1989 | View Entire Issue (Feb. 22, 1963)
From Page One MEDFOBD MAIL TRIBUNE. MEDFORD. OREGON FRIDAY. FEBRUARY 22. 19633 Specific Irregularities Listed by Appling in Withycombe Probe Appling listed specific ir regularities turned up by his audits. They ranged from un explained use of cash to an elevator and a deluxe cook top with a remote control pushbutton panel in the Hintz house. Appling noted, however, a Clackamas county grand jury twice declined to return any indictments. - Col. Lawrence M. Blaisdell admitted he knew of what he called minor procedural irregularities on the part of some of his superiors. He said when he questioned them it the time he was assured they were proper. Blaisdell told of one case where Hintz ignored other bids to authorize purchase of a particular lawn mwer. Blaisdell said he later found out the base was buying the mower from Hintz. Blaisdell said when he questioned Hintz, Hintz told him he did not know whether to commend or fire him. A member of the guard for 18 years, Blaisdell said his si lence was motivated in part by respect for orders and "a certain type of loyalty." Loysltr Cited "Had I known he was crooked, my loyalty would have ceased," he said. Atty. Gen. Robert Thorn ton told the committee of several statutes that might have bearing on the general situation. They included of fenses ranging from misde meanor to felony. Thornton said Gov. Mark Hatfield so far has refused to give him the authority he needs to act on his own in the case. Thornton also said it was difficult to make claim to bonding firms -until a final liability figure to the federal government for misuse of fed eral funds is established. A fiscal officer estimated ear lier the state liability might reach $40,000. . The Appling report includ ed these items A requisition for one Tongue Point log at $195, signed by Maj. W. H. Mosher for Lt. Col. William M. Ad ams. Appling said a copy of the document examined at Se attle "apparently had been altered to show 195 logs at a value of $13,065 and bore the signature 'Anderson.' ' Appling said the logs were sold to the Lynwood Lumber Co. of Clackamas for $2,712 and the proceeds purportedly put into the unauthorized' fund. SIGHTED THUG. GOT SAME New London, Conn. - d'PU -Sailor William j. McBritte lip ped periscope while making a check aboard a moored sub marine Thursday and noticed unusual activity in a nearby parking lot. McBritte and Chief James A. Brisetts rush ed to the lot and caught Michael Kope, 16, breaking into McBrlttP' --- and turned him over to police. Sharp Cutback in Capital Gains Tax on Timber Sales Requested By A. ROBERT SMITH Treasury Secretary Douglas i May on the post-war exDan- by members of the Timber, lev it believes in hnvina tim. miliinn A0ia..A . Mail Tribune Washington Correipondtnt Washington-(Special-A big new battle involving the tim ber products industry is shap ing up on Cap itol Hill. The Kennedy Ad m i n istration has asked Congress for a sharp cutback in the capital gains allow ance on tim ber sales one smith of the most beneficial features of the fed eral tax laws for many com panies in tile forest products industry since World War II. The industry is mustering its strength and mapping strategy to fight this feature of the Kennedy tax bill. As one official of the National Lumber Manufacturers As sociation put it: "This is a gut issue for our industry. All the stops get pulled out on this one." The tax bill, a complex of suggested deductions and re forms, is before the House Ways and Means Committee. Dillon several days ago give the committee a detailed out line of the administration's wishes. But only Congress, by legislative enactment, caa au thorize tax changes. Like many businessmen, the lumber operators aren't com plaining about the most pub licized tax cuts the reduc tion in corporation income taxes from 52 to 47 per cent and the cut in capital gains taxes from 25 to 22 per cent. Ordinary Gain . What . has aroused them deeply, is the special change covering timber sales propos ed by Dillon. It would treat timber income of corporations as ordinary gain, subject to the 47 per cent corporate tax rate instead of the lesser cap ital gains tax which has ap plied since 1944. The only firms unaffected would be those earning $25,000 or less, which would be taxed at 22 per cent. There is no mystery about the hostile reaction of the ma jor companies of the forestry products industry to this tax change. As Fortune magazine reported in an article last Four different ways to make going more fun than getting there You can see why one of America's favorite outdoor sports is driving Chevrolets, with four entirely different kinds of ears like these to Choose from. There's the Jel-smootk Chevrolet, about as luxurious as you can go without going overboard in price (has lots of new lower upkeep features, too, like a flush-and-dry rocker panel ventilating system that helps remove t rust-causing salt and slush) ; the new low-cost j Chevy II, a good-looking, fun-loving car that would send any family packing; another per ennial family favorite, the sporty Corvair, whose rear-engine traction will make you think that ice and snow are kid stuff; and for pure driving adventure, America's only homegrown sports car," Corvette now in two all-new ver sions with looks that can stop traffic like a rush-hour blizzard. Chances are you've already picked your favorite. The next thing is to take the wheel at your Chevrolet dealer's. If that doesn't have you thinking of places to go, may be you'd rather just have a ball around town! Keeps Going Great JET-SMOOTH CHEVROLET IMPALA SPORT COUPE CHEVY II NOVA 400 SPORT COUPE CORVAIR M0NZA CLUB COUPE CORVETTE STING RAY SPORT COUPE Now Bonanza Buys on four entirely different kinds 0 cars at your Chevrolet dealer's Showroom COURTESY CHEVROLET May on the post-war expaiv sion of Georgia-Pacific Corp., "the easiest part of the inte grated producer's profit is the capital gains he gets from cutting low-cost timber and selling it to his own mills." Because of the caiptal gains feature. Fortune reported that in 1961 Georgia-Pacific paid 28 per cent of its profits in taxes, Weyerhaeuser paid 27 per cent and U.S. Plywood paid 30 per cent. All of these timber products producers, and many others, would pay higher federal income taxes under the new Kennedy tax bill. The Treasury Department reports that the distribution of capital gains tax benefits for 1959 gave the timber in dustry $44 million, the ply wood industry $11 million and the paper industry $22.3 mil lion. By cutting back on capital gains. Treasury estimates that timber will produce an addi tional $90 million in tax rev enue for Uncle Sam, $73 million from corporations and $15 million from individuals. In justification of the cut back, Treasury states: "The restriction on the cap ital gain treatment, which is now primarily of benefit to the larger concerns, would help restore a healthy compe titive balance in the indus try. Many believe that the capital gain feature has in fact been a source of distortion and overstimulation which has helped the larger firms to achieve higher after tax profits, caused artifical and erratic bidding up of timber prices, and thus squeezed out many smaller sawmill operators." In support of its claim that capital gains treatment chiefly benefits big corporations, Treasury stated that out of the total capital gains bene fits of $77.7 million realized in 1959 by over 7,000 corpora tions in the forest products industry, $47 million went to 20 corporations, each with as sets exceeding $100 million. Three timber companies got $18.6 million, or 42 per cent of the total timber industry benefits. Two plywood pro ducers got nearly $10 million, or 90 per cent of the plywood industry s total. "There is no evidence that the capital gain provisions are helpful to the survival of small contract cutters," said Treasury. "While the econom ic causes of the decline of the small sawmill operator, who is typically a contract cutter, are complex, one factor i apparently the squeeze on his profits engendered by the competition of larger firms both in buying timber and selling the product." The industry s rebuttal is being prepared in New York by members of the Timber Tax Committee affiliated with the National Lumber Manu facturers Association. The in dustry hopes to kill this fea ture of Kennedy's tax bill, and they hope for support from the many members of Congress from states in which forest products are important, starting with Rep. Wilbur Mills (D Ark.), chairman of Ways and Means. Another reason given bv Treasury for the cutback is that "capital gains treatment is often a factor contributing to accelerated liquidation of timber." Heavy Borrowings Without identifying the firm. Treasury said "X Corp oration has been buying large blocks of timber with heavy borrowings backed by accel erated harvesting for debt re payment. This corporation has stated that as a matter of pol icy it believes in buying tim. berland and standing timber with borrowed money, using common stock to raise capital to build paper, lumber and plywood mills, distributions facilities, and for merchandis ing, in order to exploit tim ber ownership." "The present tax law thus fosters a type of operation which is basically inimical to sound husbandry and develop ment of the nation's forest resources," it said. Another tax change affect ing timber would list refor estation as an expense against current income, along with such items currently al lowed like fire breaks, soil preparation, temporary roads and timber stand improve ments. Reforestation costs un der existing law must be cap italized. This revision would save the industry an estimated $10 million and "is designed to maintain and increase the pace of private reforestation efforts to meet projected de mands," Treasury explained. The NLMA regards this welcome change like "getting a mouse for an elephant!" The elephant is capital gains and they are preparing for a hard fight to keep this jumbo benefit. Qtiie bible 3 SPEAKS Q TO YOU Sunday, 9:00 a.m. K-SHA-860kc nil ul'i CVuliai Scitxn preirart "Gaining Dominion Ovtr Ago" 5c 5c 5c 5c 5c 5c 5c 5c 5c 5c 5c 5c 5c 5c 5c 5c 5c 5c 5c 5c 5c 5c THIS IS rff. MO BULL J BUT A BUFFALO NICKEL And It Will Buy A Lot At WESTERN THRIFT'S BIG NICKEL SALE! ALL DAY SATURDAY (TOMORROW) 23 FEB. 15c EPSOM SALTS Vi Lb. St. Joseph's . 5 49c GEM RAZORS Discontinued Model 5 15c Plastic Clothes Pins SEVEN COIL SPRING Multi-Colored - Pkg. of 12 5 19c RUBBER SINK STOPPER Wide type for all sinks 5 State Librarian Picks Books Over Additional Staff Salem -IUPU- State Librarian Eloise Ebert chose books over the governor's recommenda tions when put on the spot Thursday by the ways and means education subcommittee. When asked by Rep. John Mosser (R-Portland) to choose between books and the gov ernor's recommendations, the librarian replied, "you're try ing to put me on the spot, aren't you?" Yes, I am, Mosser said. "I'd rather have the money for books." Miss Ebert appeared before the subcommittee to outline the state library's $1.1 million budget request. The budget includes funds for several new staff positions asked by the governor. Services 'Pathetic' She termed library services to state institutions "pathetic" In many cases and said the Oregon library system would not be adequate "even if budgets were increased." She said the state s library is "plagued by an increasing volume in publishing, and a steady rise in the cost of li brary materials." "Today s mail included 65 reference requests, and more than 500 requests for different books, she said. She explained that local libraries "do not have the material," and that the state library supplements all li brary services in tiie state. 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