750 Rich Men

Franklin Roosevelt was in a little better than his usual good humor one day last week when his newshawks came to press conference. The session had been postponed from the usual 10:30 a. m. to noon to get maximum attendance. Soon he was pouring into their ears a tale of unethical practices, of rich men who had avoided taxes by hiring high-priced lawyers to find loopholes in the law. He had before him case histories provided by the Treasury Department. One man had incorporated his yacht and transferred to the corporation $3,000,000 in securities. Much of the income from these securities then escaped taxation, being used to pay the "losses" of the corporation from which he "chartered" the yacht at fees which fell far short of paying its upkeep. Other rich men formed partnerships with their wives and children thus splitting their income several ways so as to escape high surtaxes. A retired Army officer who has a large income from securities which he hopes to sell at big profit, took out Canadian citizenship papers and transferred his securities to four corporations in the Bahamas in order to escape the income and capital gains tax. Some of such schemes were illegal, some might be technically legal. All were immoral. Franklin Roosevelt was going to bring them to the attention of Congress.

Eager newshawks began questioning. How much revenue had the Treasury lost by such schemes? He could not say, exactly. Had this tax-dodging just sprung up? No, it had been growing for several years, but lately it was much worse. How many people were engaged in it? Not many, perhaps about 150 of the very rich. Who was the yacht owner? Oh, it was illegal to name the tax-dodgers out of court. They would come out. A Congressional investigation can reveal anything.

Newshawks smacked their lips over a good story and a better one to come, for tax-dodging tycoons are juicy copy. But newshawks were gently cynical, just two years ago at this time the President put forward his soak-the-rich inheritance, gift and surtaxes. Early last year he put forward his undivided profits tax on corporations. Some suggested that Franklin Roosevelt was having a periodic attack of soak-the-richitis.

Chairman Doughton of the House Ways & Means Committee seized the opportunity to blame on wealthy tax-dodgers the whole $400,000,000 shortage in revenues from the estimate in the President's last Budget message. But that would have taken 8,000 millionaires wiggling out of $50,000 in taxes each, and the Doughton theory soon perished.

What remained true was that, from a political standpoint, 150 rich men could do much to make the country forget Nine Old Men. Politicians calculated that with the Wages & Hours bill which he proposed fortnight ago, plus a red-hot new hunt for malefactors of great wealth, the President might recover some of the popularity he had lost on the Supreme Court issue.

P: The President pressed a button, flashing a green light that opened San Francisco's Golden Gate Bridge (see p. 53).

P: To the Senate he sent eight treaties, conventions and protocols drafted at the Inter-American Conference last winter in Buenos Aires. From a treaty for the preservation of peace to a convention to facilitate the holding of international art exhibitions, he strongly recommended them all for ratification.

P: Immured for several days with a bad cold, the President did not see his customary quota of visitors.

P: Although the time when veterans might convert their Wartime insurance from "term" to "regular" was supposed to have expired in 1927, Congress thrice extended the time for a total of ten years. Last week the President stepped in and vetoed a bill which would have extended the period a fourth time, thereby automatically bringing the conversion period to an end June 2. Promptly this week the House overrode the veto 368-10-13, the Senate 69-10-12.

P:Having signed the second deficiency bill appropriating $82,000,000, chiefly for TVA, and authorizing that body to start work on a new $112,000,000 dam at Gilbertsville, Ky., Franklin Roosevelt last week packed himself off to spend Memorial Day with his mother at Hyde Park, his first visit with her in four months.

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