Show N NEWS W S BEHIND B E H I NOT THE HEN NEWS E W S By Ray Tucker Telegrams Telegram's Washington Columnist WASHINGTON Wholesale 1 adoption of Chinese babies furnishes a clever racket by which wealthy taxpayers may escape some of the heavy duties they will have to pay under proposed proposed proposed pro pro- posed war rates Treasury lawyers lawyers lawyers law law- concede that the scheme is perfectly legal Under this system an American Ameri Amen can may legally support a ChInese Chinese Chinese Chi ChI- nese child under 18 and take advantage of the deduction allowed for each dependent All he need do is to py more than 50 per cent of the youngsters youngster's annual upkeep in order to qualify qualify fy as actual provider for a de dependent dependent dependent de- de pendent he never has seen It Itis Itis Itis is estimated that half the cost of subsistence for a Chinese youngster amounts to about 30 annually A taxpayer in the surtax brackets would save more than that on each worth of deductions provided he adopted sufficient children to make it worth while The internal revenue bureau ruled in favor of this scheme last October In that case a aNew aNew aNew New York Chinaman adopted of his countrymen in good faith He divided his whole property among them in his will But tax experts say the ruling holds for anybody if he qualifies in accord with the law Cordell Hulls Hull's persistent re refusal refusal refusal re- re to freeze axis assets in inthe inthe inthe the United States is opposed privately by every state treasury treasury treas treas- ury and commerce departmental expert who has studied the problem in detail In their opinion there is no diplomatic or financial argument against use of this economic weapon The secretary of state points out that such action might lead Germany Italy and Japan to retaliate But his own experts reply that these nations will seize such property if they deem it advisable without regard to our policy They note also that American owners of plants in these countries with a few exceptions exceptions exceptions ex ex- ex- ex have not been able to 4 use them for making profits They operate under the same profitless totalitarian system ap applied applied applied ap- ap plied to domestic industries And our citizens' citizens Indirect holdings holdings holdings hold hold- ings in foreign securities consist consist consist con con- for the most part of virtually virtually virtually virtu virtu- ally worthless investments in government provincial and municipal municipal municipal mu mu- bonds American property still pays dividends to individuals and corporations in the axis coun coun- tries It is understood that some of this money actually falls into the hands of Hitler Goering and Goebbels who have confiscated vast plants and securities within the reich It is suspected also that large amounts of this money after transfer to certain South American banks are used to buy cotton oil and foodstuffs for shipment to Germany Japan and Italy and to finance age The commerce departments department's balance sheet on international investments would appear to re repudiate repudiate repudiate re- re the state departments department's contention that American interests interests interests inter inter- ests would suf suffer er in a material way The following figures picture picture picture pic pic- pic- pic ture the financial situation as of January 1938 There has been hardly any shift since that date American investments direct and indirect in Japan Italy and all the countries of Hitler- Hitler dominated Europe amount to about That sum represents book value and no nobody nobody nobody no- no body contends that there has not been tremendous depreciation tion in physical property and securities On the other hand the holdings holdings holdings hold hold- ings of axis int interests rests in the United States total approximately approximately approximately Whereas Americans are drawing out hardly a nickel on their investments investments investments invest invest- ments the nations against which the administration has aligned us are making a pretty profit The Germans for instance still have a fat finger in the chemical and rayon industries which are getting rich on national defense expenditures Such is Mr Hulls Hull's prestige however that nobody except Henry Jr dares to dispute him openly The liquidation of British holdings in South America has become the subject of private c conversations involving England England England Eng Eng- land the United States and the countries directly concerned These investments are estimated to total mostly in such key industries as utilities and railroads The the scenes diplomatic diplomatic diplomatic diplo diplo- matic consideration is that if Britain should be defeated a victorious Hitler would demand this property as spoils In such circumstances the United States would intervene to prevent his getting such a physical and economic economic eco ceo foothold in this hemi hemi- sphere And that would be re regarded regarded regarded re- re by the reich as cause for war The smarter policy ac according according according ac- ac cording to the official belief here at London and in South America Is to make the transfer in advance of such a calamity There has been a suggestion that Secretary of Commerce Jesse H. H Jones through the theR R F C should create a corporation corporation corporation corpora corpora- tion to purchase railroad and utility securities from the Brit Brit- ish But the South Americans especially the seem to resent such a scheme The slowly are building up balances in London and they would like to use these funds to buy back old issues as this country did during the World war Senator Claude Pepper of Florida is in the state department department department depart depart- ment doghouse His pyrotechnical pyrotechnical pyrotechnical demand for seizure of the Azores a landing at Dakar and blowing Tokyo to bits has provoked provoked pro pro- yoked an international furor Axis foreign n offices do not realize that Mr Pepper after all is a comparatively lightweight lightweight lightweight light light- weight member of the senate and not an official mouthpiece They gave a weight to his words which not even the newest cub reporter at Washington does So to the disturbance of state department officials he has made all sorts of trouble Not even Secretary Hulls Hull's r repudiation re repudiation re- re of the Pepper proposals proposals proposals pro pro- has counteracted their international harm Axis diplomats diplomats diplomats diplo diplo- mats accustomed to talking with their tongues in their cheeks regarded it as just one of those official denials Copyright 1941 McClure Syndicate |