I
MEDFORD MAIL THIBUNE. MI&ftttD, OREGON
Dillon, Family Have
$3 Million Riding
On Tax Controversy
WASHINGTON (UPI)-Treas-; a former subsidiary. This was
ury Secretary Douglas Dillon I accomplished by distribution of
and members of his family j portfolio holdings. A company
have about $3 million riding on j spokesman said today the IRS
a tax case under continued ' first approved this but later re
study by the International Rev-1 opened the question and even
enue Service, an arm of the ! tuallv took the Dosition the dis-
MEDNESD.W, OCTOBER 23, 1963
Treasury Department
A spokesman for Dillon said
that the secretary has taken
every precaution to make cer
tain that no conflict of interest
arises in this or any other tax
case. An IRS spokesman de
clined to comment on the case.
As one of his first acts in of
fice, Dillon directed that no tax
tribution amounted to a sale
and therefore was subject to
added tax on realized capital
gains.
The company spokesman said
debate on this had gone on for
several years but first wis for
malized by IRS on Jan. 19. i9:il.
This was a few davs after "un
ion's confirmation hearings and
SMITING MASTERED Cathy Landry, 7, of Watertown, Mass.,
who had her right leg removed after doctors discovered it to be
cancerous, is getting along fine. Here Cathy demonstrates how
she has mastered rope skipping. (UPI)
Great to give, grand to gel!
BIG BEN
BABY BEN
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From onlv s78Pi
WE
STCLOX
James B. Donovan
Tells About
'k
On the anniversary of the harrowing Cuban
blockade crises, Bill Surface reports an exclu
sive interview with James B. Donovan, the
American attorney who personally negotiated
with the Cuban dictator for the release of the
Bay of Pigs prisoners.
Read this accurate and current personal ap
praisal of the fanatical dictator, who still
works to destroy our way of life, by the
American who knows him best in the
OCTOBER 20TH
Weekend
Issue
of j
Family
Weelcly
with your copy of th
Mtolford Mail Tribwn
case be brought to his attention j two days before he took oiike
unless it had been established
in advance that he had no in
terest in the affected firm.
The tax matter involving the
Dillons concerns a closed-end
investment company known as
United States 4 Foreign Securi
ties Corp., whose shares are
traded on the New York Stock,
Exchange. The firm is holding
close to $10 million as a reserve
in event of an adverse ruling.
Tells of Holdings
At his confirmation hearings
before the Senate Finance Com
mittee on Jan. 11, 1961, Dillon
said he personally owned 8'a
per cent- of the company's stock
and that his family holdings to
taled about 35 per cent. He said
he planned to continue this in
terest through a trust irrevoca
ble during his tenure as Treas
ury secretary.
A Dillon aide told United
Press International it could be
assumed there has been no
change in this situation. He said
the secretary, in line with his
policy of total isolation from
tax matters involving himself,
would have no comment on the
matter.
In its June statement to stock
holders, the most recent on file
here with the Securities & Ex
change Commission (SEC), U.S.
& Foreign Securities listed net
assets of Sill million, most of
them in blue chip common
stocks. It said it had set aside
$9,650,000 in event of an adverse
ruling in the tax case, which it
held to be unfounded.
Reflects Dillon Ownership
It noted that such a ruling
could cut the company's net
asset value from S36.44 to
$33.53, or $2.91 per share. The
company has 3.310,815 shares
outstanding. The company's
most recent annual report to the
SEC, filed last April 29, ap
peared to reflect Dillon family
ownership, mostly through
trusts, of 1,010,529 of these
shares, which would be about
30 per cent of the total.
The case dates back to the 1955
retirement of second preferred
stocks of the corporation and of
Youth Adventures
To Work in Forest
A cooperative agreement sign
ed recently by the forest service
and Youth Adventures, Inc.,
will permit the Mcdford youth
group to undertake development
and improvement work projects
on the Rogue River National
forest, according to C. E. Brown,
forest supervisor.
The agreement grew out of
the efforts of James McGoodwin,
Siskiyou regional director of the
group, to provide wholesome and
educational outdoor activity for
youth through camp-out work
projects.
Projects are picked to provide
safe healthful work that will ben
efit national forest users. Se
lected campsites offer recrea
tion opportunity to the group.
Technical advice and tools for
the projects are furnished by
the forest service.
MacGoodwin led two camp
out work parties last summer
on the Butte Falls Ranger dis
trict. More than 20 boys, ages
13 to 16, helped clean up camp
grounds and lake shores, con
structed a foot bridge, installed
traffic control barries, construct
ed garbage disposal pits, and
helped to install part of a camp
ground water system.
as a memuer ot president icri
nedy's cabinet.
This "proposed income tax
deficiency" initially w:is set at
S6.900.0m Accumulated interest
since has increased the po'en
tial liability to S9.75O.OO0.
President Of Firm
U.S. i Foreign Securities was
set up in 1924 by Dillon, Read
& Co., investment bankers. Be
fore his appointment by Presi
dent Eisenhower as ambas
sador to France in 1953, Dillon
was president of U.S. & Foreign
Securities and chairman of the
board of Dillon, Read. After his
stint in Paris he moved into the
State Department and was un
dersecretary of state during the
last two years of the Eisenhow
er administration.
Asked about possible con
flicts of interest at his confir
mation hearings for the Treas
ury post, Dillon said he was di
vesting himself of a number of
holdings which he ihought
might be improper in his new
post.
He said he had relinquished
all active participation in busi
ness with his first appointment
by Eisenhower, and that much
of his holdings already had
been turned over to manage
ment by irrevocable trusts.
He listed 12 firms in which
he intended to continue his hold
ings, of which U.S. & Foreign
Securities was the only one in
which he owned as much as one
per cent of the outstanding
stock.
Issues Two Orders
In line with his commitments
to the finance committee, Dil
lon on Feb. 21, 1961.issued two
orders designed lo keep speci
fic tax cases out of his office.
He said tax problems brought
to his aides from outside the
government should be promptly
referred without comment to
the commissioner of internal
revenue. Where Treasury offi
cials needed guidance on tax
matters he said they should con
sult Treasury Undersecretary
Henry Fowler rather than him
self. In a separate order he told
Fowler he did not want to be
concerned with individual tax
cases. But he said if any cases
came to Fowler for guidance,
and Fowler felt the need to dis
cuss policy with Dillon, he first
should reestablish through Dil
lon's trustees that Dillon had no
interest in the firm involved.
Actually, said a spokesman
for the secretary, no tax case
ever has been referred to Dillon.
TILE COMPANY
Dr. Sampson Chairman
For Bend Conference
ASHLAND Dr. Bill Sampson,
chairman of the education di
vision at Southern Oregon col
lege, was general chairman of
the Second Annual Fall Con
ference of the Oregon Associa
tion for Student Teaching re
cently at Bend.
Other representatives of
Southern Oregon college includ
ed Dr. John Conway, John Mc
C o 1 1 u m, Dorothea Bushncll,
Mary Helen Gwinn, Cwyncth
Brinkworth, Doris Lassen and
Florence Robinson.
"THAT'S
GERALD
McBOING
BOING'S
WAY0F SAYING
YOU'LL GO
WILD OVER
CLEAN-TASTING
Freedom Center Head
To Run for Congress
SALEM i UPI ) - Walter lluss.
Portland, director of the Free
dom Center, has filed prelimi
nary notice he intends to run for
congress.
Hun sod he would be a Re
publican candidate for th teat
nxr held bv Rep. Ecblh liieta,
tWlrt.
mm
ff. ( PRODUCT
fny pfpsi-coi a
jJ COMPANi
0 :i:2, U'. 'twMXY
JUST ON THE
LIGHT SIDE
OF LEMON
AND LIME
Bailed bv Pcpii Cc'a Co o'
Med'crd Under Appointment
from PcpS'-CrU Compjnv,
Nc York. N Y
10,000 YDS. OF CARPET til STOCK?
LARGEST SELECTION OF PATTERNS AND COLORS IN SO. OREGON
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Installation
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ALSO IN STOCK
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ROOM-SIZE REMNANTS
Sill
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All Types, Sizes
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50;
MODERN TILE COMPANY
AND FLOOR COVERING
730 South Grape
WE'LL FLOOR YOU ... FOR LESS"
Phone 773-7758
OPEN FRI. & SAT. Till 9:00
SUNDAY NOON Till 6:00
A 3
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