Indianapolis Times, Indianapolis, Marion County, 15 December 1938 — Page 33

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Bl « 560 MONTHLY | Victim of PENSION GOAL; MINIMUM $30

{

| security reserve,

| $44.6

| posed

' p)—Alfred Hertz, former

* visor of

le iti. Lo . il nin pee ee ain a T * air

GWA Sponsors Say Security ~ Fund. Could Be Used if Tax Fell Short.

By LEE G. MILLE

WASHINGTON, Dec. 15 (U. P)— A maximum’ pension of $60 a month, instead of the Townsendites’

Rd nr

$200 goal, was proposed today by of-|

ficials of the General Welfare Federation for all Americans past 60 who retire from gainful work.

They proposed that the pension minimum be set at $30.

If the 2 per cent gross-income tax}

projected ‘by the federation raised too little at first to proide $30 a month for the anticipated eight million applications, the balance would be made up from a reserve fund. This fund, it was explained, would be created by taking over the existing old-age account built up under the Social Security Act, ‘which is nearing a billion dollars. Arthur L. Johnson, General Welfare Federation executive secre-

tary, said a previous version of the

so-called General Welfare Act had called for distribution of this social in six monthly installments, among haye paid for it, abandoned. Wages and Interest Exempt ~Mr. Johnson thinks the “General Welfare Act” would spread purchasing power in such & way as to stimulate all business, and that.receipts from the 2 per cent tax would accordingly rise month by month, pensions rising proportionately. When and if receipts exceeded the amount necessary to pay $60 a month to all past 60, he said, the new draft of the bill proposes that the excess be paid ‘into the Treasury’s general fund—for use in debt retirement or in paying the Government’s regular running expenses. Under the bill as tentatively revised—subject to approval of its ssteering committee” in the House— the 2 per cent tax would in general apply to all income of persons and firms except such ‘part of it as was paid out in wages, taxes and interest on debts. In addition the first $100 of monthly income would be exémpt. $2.10 for $220

Thus a railroad engineer making $220 a month, paying $10 a month interest on a mortgage and claiming the $100 general exemption would have=tp pay the 2 per cent tax on $110 a month. That would be $2.10. A wage earner who received the

This has been

. bare minimum. under the WageHour Act—$11 a k—would pay no . gross-income tax, since his monthly

income would be under $100. In

“ fact he would. save $5.72 a year, for

he would no longer have to pay the Social Security old-age tax, now 1 per cent (and due to rise gradually to- 3 per cent). . Say a corporation lawyer takes in $50,000 a year. He pays $10,000 of this in Federal and state income taxes, plus $2000 in other taxes. His law clerks and secretary and the servants in his home get a total

"* of $10,000 in salary and wages. That

leaves $28.000. Presuming, for the sake of clarity, that he receives his income in equal monthly in‘stallments and pays his taxes similarly, his monthly income minus wages and taxes paid out is $2333 a month. Subtract the $100-a-month blanket exemption, and he pays 2 per cent on $2233. In other words, month. "A farmer has cash receipts of $2000 a year, but his own cash crop is harvested and sold in a single month. He must pay the whole tax in that month. But, under the prodraft, he may deduct the wages paid his hired hand in the preceding six months, and any taxes

or interest paid in those six months.

He can claim only $100 in blanket exemption, however, since this monthly allowance is not cumula-

tive. Farm Provision Made

The cash value of board and lodging furnished to the hired hand would probably be deductible the same as his moneyywage, according to Mr. Johnson. Thus, if the farmer paid a hiredman the equivalent of $400 for six months’ work, and paid $100 in taxes and interest in those six months, and claimed the $100 monthly exemption in his harvest month, he would have to pay the 2 per cent tax on $1400. That would be $28. Suppose a big grocery chain does a business of $10,000,000 a month Say it pays one million a month in wages, $60,000 in interest on bonds, $40,000 tin taxes. Exemptions «1ot bothering with the $100-a-month blanket allowance, which would be insignificant here) would total $1,100,000, leaving $8,900,000 taxable at 2 per cent. The tax thus would .be

' $178,000 a month—which might well be more than the chain’s present

net profit. The result raturally would be increased prices for the chain's customers—particularly since the 2 per cent tax would also be imposed on the producers from whom the chain buys, thus forcing wholesale prices

up.

ILL CONDUCTOR QUITS A: S. MUSIC PROJECT

SAN FRANCISCO, Dec. 15 (U. conductor of the San Francisco Symphony Orchestra and prominent musical figure in New York and Europe, resigned today as superthe Federal Music Project in northern California. His resignation was announced by william R. Lawson, WPA administrator, who said it had been accepted with regret. Ill health which the famous conductor has suffered

‘since last September was given as;

the reason for his withdrawal. The

conductor's illness was blamed in good part e;

for the energy and th 6 ed to the

rifles.

A motorist: in Flushing, L. I., parked his car on solid pavement, and later returned to find it, as

pictured above, almost submerged i

n water. Another collapsed{

Recommendations for City

Hospital Are

Awaiting Action

A report carrying recommendations intended to correct alleged abuses

the millions Who of City Hospitals free facilities lay dormant today at

Health’ Board.

The City Council, which requested the reject it, Council mmebers said. The committee making the report was composed of public officials and laymen. & Charging that the hospital

accept or

OLD COIN; WHISKY AND CASH STOLEN

Two Boys and Baker Held in Gun Theft.

A 100-year-old French coin, $7 in pennies and a silver dollar constituted the total loot in cash reported stolen in Indianapolis today. The thief of several rifles, revolvers and cartridges from the garage of Thomas H. Mielke, 1214 N. Dearborn St. was believed solyed following the detention of two boys, one of whom was reported slightly injured when one of the guns discharged accidentally Sunday. Also held in the case is a baker, who the boys said gave them four dozen doughnuts for three of the The baker, charged with vagrancy, is being held under $1000 bond. : Joseph Duke, 2430 Ralston Ave, reported that two men stole two cases of whiskey valued at $49.35 from his truck while it was parked outside of Methodist Hospital. Theft of the French coin and. a watch valued at $40 was reported by Harry D. Gorhan, 11 E.. 24th St Also reported stolen were $7 in pennies and a silver dollar from the apartment of Mrs. Beulah O’nan.

HEALTH WALKER IS 90

CONNEAUT, O., Dec. 15 (U. P.).— Mrs. Sophronia Millen, 90, attributes her excellent health to exercise. She is fond of the outdoors and takes walks on sunny days.

City Hall and the

study, has power only to

has

been utilized by the County at large and exploited by persons who could pay for services they received free, the report makes the following corrective recommendations: 1. A central investigation bureau, which would require State legislation. | : 2. A central information bureau for informative purposes only. 3. A $6000 appropriation for an investigation department to inquire into all nonpay cases at City Hospital. ; 4. Intensification of the present system of investigating all nonpay cases by the private investigation bureau on a fee basis.

Declines Comment

Additional recomraendations for legislation to define more clearly the rights of persons involved in medical treatment and hospitalization are contained in the report. Declining to comment on it, Mayor Boetcher officially turned the report over to the Health Board. Dr. Herman G. Morgan, Health Board secretary, also declined to comment. «1 haven't read it,” he said. “I think I do know what's in it, but I don’t know what the Board'is going to do about it. It is difficult to say just what changes Or recommendations the Board could make. - City Hospital might do something.” Dr. Charles W. Myers, City Hospital superintendent, said: “I don’t know what will happen now. We've put in a lot of time and energy in the study and we hope something can be done about it. “We think we could do a lot of good work if something could be done about the recommendations in the study.”

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THURSDAY, DECEMBER 15, 1938

Collision With Fire Hydrant

auto had knocked over a hydrant, whose gushing water undermined the ground so that the street

ISLAND HAS MASS WEDDING

MISCQUCHE, P. E. I., Dec. 15 (U. P.)—Prince Edward Island’s first

“mass wedding” has been celebrated here. Three couples were married

.|Dealt - in High Finance Yet Failed to Add Cash to Assets.

NEW YORK, Dec. 15 (U. P).— Federal and State investigators today began tracing the background of F. Donald Coster, who 13 years ago started a series of financial manipulations with a little hair tonic company that led him to the | presidency of McKesson and Robbins, Inc., a gigantic wholesale drug firm which now has an 18 million _|dollar shortage. : ° Ambrose V. McCall, assistant New York attorney general, conducting a public hearing, said last night that he had “substantial reasons to believe that Coster is a man of different identity and is known to this office.” He refused |to elaborate. : Coster, a baldish, mild-counten-anced newcomer in the world of high finance, was arrested, fingerprinted and released on $5000 bond on the Federal charge of having filed false information with the Securities and Exchange Commission.

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ceremony at the St. John greasurer in -charge of the crude

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drugs department, which had the

Entered as

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Second-Class Matter

at Postoffice. Indianavolis Ind.

Life of Mild Appearing | Traced in Amazing 18-Million

—

PAGE 33

shortage. Dietrich has been associated with Coster since the days of his hair tonic firm that was called Girard & Company and manufacred such items as Lilac Vegetal, u de Quinine and others. First details of the company’s affairs, given at the public hearing yesterday by Julian F. Thompson, McKesson & Robbins treasurer who exposed the scandal two weeks ago, disclosed a strange situation. Mr. Thompson said in effect that the company -had no crude drugs department; that it was a blind; its five great warehouses ‘supposed to have been stocked with supplies did not exist; the two companies which handled its supposed sales and its financing throughout the world were simply mailing addresses.

It was an autonomous department, Mr. Thompson said, which turned its supposed profits into more stocks, and thrived—on the company’s books. It was showing such a large profit in accumulating stocks —on the books—that for a long time he, the treasurer, suspected nothing, he said. ii 2 Paid Commissions In ‘reality, though, it was costing the firm money in this way: The books showed that W. W.

Smith & Co. of Liverpool, England, |.

was executing all orders for the crude drugs department, buying and selling goods all over the world. The payments and collections were handled by Manning & Co. of Montreal, Quebec. The Smith company, how-

J Fiery YEARS AGO a small oil company first opened its doors. It sold good products. It had a policy of giving people their money's worth. [ll That company now distributes the most popular gasolines and motor oils in the midwest — because constantly it has sought and found ways to make its good products still better, and unfailingly has passed those improvements on to its customers, not at higher prices, but as extra values! w Today Standard does it again —this time with an improved STANOLIND, the lowest priced gasoline in its line. Ill Today STANOLIND is a new and better motor fuel

—yet at no advance in price! Try this economical new gasoline. See if it

doesn’t give

your car new life and power! ll Standard Oil Dealers have it.* Get a tankful today.

ever, worked on a commission basis and the commissions were being paid out by McKesson & Robbins. Mr. Thompson said that the Smith and Manning companies were nothing but pigeon-hole mailing offices; that apparently the crude drugs department had no assets whereas 18 million dollars’ worth of tangible goods were listed on the books, the company’s entire assets being listed at 80 million dollaxs. There were other puzzling features. The shortage wiped out McKesson & Robbins common stock and Mr. Thompson said that Coster was the largest common stockholder.

He said the crude drugs department’s 18-million-dollar assets might have been written in for financial inflation purposes, or the department might be a cover for some operations that the company could not acknowledge. He said that alcohol was included in the crude drugs listed stocks, but not nar¢otics. as the company had no narcotics permit. Dewey Probing, Too

District - Attorney Thomas E. Dewey of New York is investigating rumors that illicit drugs and alcohol traffic was involved. : Coster lives in Fairfield, Conn. He wears a mustache and eyeglasses. He has refused to say a word about the scandal although the board of directors demanded his resignation, and failing to get/it, called a meeting for Monday tb oust him. He has

been ill and United States Commis= sioner Robert ‘Alcorn of New Haven, Conn., went to his home and are raigned him in his parlor,

When his fingerprints were being taken he mumbled: “This is testy.” Despite his mild manner, he was described by Mr. Thompson as an “absolute and dominating” boss of the company to whom all'employees deferred. The thing that finally aroused Mr, Thompson's suspicions, he said, was the fact that the crude drugs department was contributing no cash to the company. year after year, in.

spite of a policy of converting assets

of other departments into cash. Since the crude drugs branch was autonomous, directed personally by Coster with Dietrich handling all details, Mr. Thompson said he had no authority to investigate it, but did so anyhow. s

EXPORT-IMPORT BANK SOLICITOR IS CHOSEN:

WASHINGTON, Dec. 15 (U. P.) Hampson Gary, who resigned as general counsel of the Federal Com» munications Commission was aps pointed solicitor for the Export-Ims port Bank today. ! : Reconstruction Finance Corp. Chairman Jesse Jones announced the appointment would be eflective.

Dec. 16.

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