Show if M r l. a I Ill b Washington Some Washington Some weeks ago when the Treasury was parading a n alot alot lot of ot names of Finding well known indi midi the thc Goat before a joint con congressional al tax committee I discussed l i the purposes of the investigation tion lion and reached the conclusion that the whole affair was staged If I remember correctly I called it a vaudeville stunt designed by the Treasury to save its face for or having made bad guesses ns as to tax collet- collet The tax collections as everyone everyone everyone ev ev- ev- ev knows were much below New Deal estimates and somebody had to be th the goat So it was natural natural nat nat- ural to make rich men the thc goat b by calling them tax evaders At the same time I reported to you the fact that there was a difference difference differ differ- ence of opinion among Treasury subordinates Some of them wanted to make a great show of names of at individuals als who had resorted to practices not prohibited by law in order to reduce their taxes I did not know at that time how serious the dis disagreement was within with with- in the thc Treasury It has only only- lately come out into the open As a 3 result two important Treasury officials have quit their jobs and have gone back to private life I refer to Morrison Morrison Morrison Mor Mor- rison and Russell I. I Ryan chief counsel and assistant chief counsel respectively of the bureau of internal revenue These two taro men know more a about bout tax evaders and tax than anybody else in inthe inthe the Treasury but they had one grievous fault They wanted to be behonest behonest behonest honest about the whole situation That was a 3 fault because being honest honest hon hon- est did not make possible a flamboyant flamboyant flam flam- boyant display of hatred for taxpayers ers Cs who had employed legitimate means to pay as ns little tax as the thc law permitted As far as I can ascertain l and Ryan wanted to cooperate cooperate cooperate co co- operate fully with the in ino inthe n far tax in investigation investigation investigation in- in o the Treasury in so ar as a 3 b by a joint congressional committee would point the way for improvement of the law They knew as many others know that the thc internal revenue laws have holes in them The smart lawyers and smart taxpayers naturally have taken advantage of these holes in inthe the law because they are human despite the fact they are rich So the chief counsel and his assistant proposed to Secretary l and Treasury General Counsel Herman Herman Herman Her Her- man Oliphant that the investigation be made lines along along lines of a scientific character that close study be given to some of the methods that tha t had been empl employed to avoid t taxes In other words and Ryan were anxious to develop legislation on von the basis of or the experiences which they had had and loopholes they had found to be in common use But their fault butt W was honesty as government officials would not be denied the vaudeville performance perform perform- ance ante and the columns upon columns of publicity which Mr and Mr Oliphant not to mention President Roosevelt desired to sec see I stayed through all of tho the hearIngs hearings hearings hear hear- ings before the joint congressional committee They Stooping ran for fourteen Low days Each day r the thc Treasury trotted trotted trotted trot trot- ted out another official as as' as the witness wit wit- ness Hess before the committee and he was armed with a prepared statement statement state state- ment meat which he read for some two hours to a committee that sat back in easy chairs and smoked cigars in n comfort while comfort while newspaper men avidly wrote stories about rich men some good and some bad who had committed the thc heinous sin of paying a as little t tax x as the law permitted I 1 I The resignations of and andRyan andRyan Ryan rather convince me that the Treasury stooped to about the lowest lowest lowest low low- est level it has reached in recent years Of course ourse it was not the first time in our history that income tax has been used for political in in- in Reprisal is a strong S d' d word to use abou about government officials officials of of- fici ls but I cannot escape the feeling feeling feel feel- ing that the thc Tre Treasury sury used that investigation investigation investigation in in- as a method of reprisal against many men who had opposed the New Deal 1 I reach that conclusion on the b basis basis- of a review of the names names which and Ryan I. I refused to parade before the committee com corn but which the Treasury itself used as the principal actors N Not of more than three of the odd eighty n names mes presented to the committee had contributed to the Democratic national nation 11 campaign fund a year ago The tactics were not far from r m those employed cd by the late Hucy Long in ino o enforcing his bis will upon the people of Louisiana I can add to this a statement of the the fact that Secretary Magill who had charge of presenting presenting present present- ing mg called eVl evidence tence before the committee at the capitol believed the Treasury was not following an entirely wise course in the methods it employed But Bul Mr Magill went 1 along with the scheme and Ind there Were many of th the cO 4 3 covering that hearing who felt he tried to do the thc job fairly So now Morrison and Russell Ryan are back in pr private v l life e and in their places are men picked by Mr Oliphant ant men who are arc likely to obey orders regardless of the whims of Mr Oliphant and Secretary l Another Instance of official action action ac ac- ac tion that seems to indicate a bad trend in govern govern- Indicates ment lately has Bad Trend occurred This incident incident in in- was propagated propagated propagated gated by the federal power commission commission commission commis commis- sion one of the numerous federal agencies that is supposed to be I largely judicial in character but which is equipped at the same time with administrative powers The facts are these There was a group of men who served as directors of the Associated ed Gas and Electric c company These same individuals were directors directors directors tors for numerous corporations that are subsidiaries of that same com com- pany The federal power act provides that the commission may require directors of one power company to divest themselves of ot connection with any other power companies- companies one of the strongest features of the thela la law lav w. w The commission is empowered to tomake make its own investigation of these interlocked director directorates and then on its own motion may require such directors to appear and give the commission satisfactory reasons why they are holding places on the boards of more than one corpo corpora tion This also is a sound provision of law and undoubtedly works to the benefit of all consumers of light and power Before I proceed further let lel it be definitely understood that tha I have not a great deal of ot respect for the Associated Gas and Electric company com com- pany Its record does docs not warrant my respect as an observer Undoubtedly Undoubtedly Undoubtedly Un Un- however its management management manage manage- ment complies with the terms of its corporate charter but lt as a great public utility it has obligations to the public beyond the terms of its charter and it is my opinion that the moral obligations are such that this age demands full observation of them This brings us to the crux of the power commission comm action Late in September Vice Chairman Seavey of the Ule commission had ordered the group of directors referred to above to show cause why they should not be compelled to relinquish various positions ons on other boards of tors A hearing date was set A Afew Afew Afew few days before the thc hearing date the directors in question resigned the positions to which the thc commission commission commis commis- sion sian objected and then Ulen their attorney attorney attorney ney issued a statement which said in effect that they had resigned because they were convicted in the minds of the commission before the commissioners had heard the case He used rather strong language perhaps too loo strong in expressing his views Upon publication of the attorneys attorney's statement sk Vice Chairman Seavey promptly ordered him to appear before before before be be- fore the commission to give give- his reasons for forthe the statement and to defend himself against disbarment from practice as a lawyer before the commission Now lest I be I Ido Ido Ido do not know the attorney Mr P Paxson Paxson Pax- Pax son I know nothing about the merits merits merits mer mer- its of the case in question But it is significant that an agency of the government suddenly decides that it itcan itcan itcan can prevent a 3 man from e earning his living because he criticized members members members mem mem- bers of that agency Occasionally situations develop in national politics that provide a real laugh One of Just a them Is not at Big Laugh hand It r results from the nasty controversy that swirls around the he head Jd of Hugo Black of Alabama newly appointed associate justice of the Supreme court who is charged with being a member of the Ku Klux Klan Terrible as Is the ch charge and worse if it eventuates that Mr Justice Justice Justice Jus Jus- tice Black still is subject to the oath of the invisible empire there is humor humor humor hu hu- hu- hu mor in the way Nay a lo lot of senators and other government officials are running to cover It has been almost almost al al- al- al most a scramble among Democratic Democrat Democrat- tic t- t ic senators to let the public know by issuing statements that they would not have voted for Senator Blacks Black's confirmation as a member of the court f if they had known he was a klansman It makes one laugh again when one recalls how carefully y the majority of the Democrats Democrats Democrats Demo Demo- in the senate refused to hear evidence or hold any sort of a 1 hearing hearing hearing hear hear- ing concerning Mr Blacks Black's qualM They did this by voting down a motion for lor hearings s. s It is not pleasant sant to contemplate how the thc sell senate tc so many times passes on on judicial appointments with wiLh lh the carefree abandon of a boy boyon on in his way way- home from rum school C e cr Union |