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JUNE 18, 1921
AN INTERESTING EXCISE TAX CASE
Indictment of Tire Co. Officials for Charging
Excise Taxes on Jobbing and Retail Prices
Should Serve as Warning to Other Industries
O., June 13.—Even though it is the
hope of the memibers of the music industry to
have excise taxes on musical instruments and
parts eliminated entirely in the Revised War
Revenue bill, it might be well to issue a word of
warning regarding the proper method of col-
lecting excise taxes under the present law while
it is still in force.
Music dealers generally have kept within the
law by simply announcing retail prices for
pianos and other musical instruments, which in-
cluded the excise tax collected by the manu-
facturer and paid by him to the Government
without making any special reference to the
fact. It appears, however, wholesalers and re
tailers in other lines of business have not been
so particular and are getting into trouble with
the Government as a result.
It has been the practice of wholesale tire
dealers, and in many cases retail tire dealers, to
quote prices with the announcement that they
were subject to a Federal excise tax of 5 per
cent, and the result has been that one concern
at Akron has been indicted and the officers
thereof arrested on the charge of violating Sec-
tiv./i 1319 of the Revenue Act of 1918, covering
misrepresentation of tax.
The excise tax, as is generally known, is a
tax to be paid by the manufacturer and is based
on the manufacturer's sale price, as distin-
guished from the luxury, or commodity, tax,
which it is intended is to be paid by the con-
sumer. The Government threatens to take ac-
tion against other tire wholesalers and dealers
on the charge that by collecting the tax sepa-
iately on the wholesalers' or retailers' list price,
which is naturally above the sales price of the
manufacturer, an amount is being collected that
is in excess of that provided for by the law.
It is pointed out very clearly that where the
manufacturer's price for an article is $25 and
the retail price $40, to collect the tax from
the consumer based on the retail price, means
that the final purchaser is paying a tax that is
60 per cent higher than that required by the
law. It is understood that the consumer ulti-
mately pays all taxes, but in the case of the
excise taxes he is only required to pay the 5
per cent tax actually demanded by the Govern-
ment from the manufacturer on his own selling
price, and to pass this tax along it must be in-
cluded as a part of the jobbers' or retailers'
price and not listed as a separate item.
Section 1319 of the Revenue Act of 1918,
under which the indictments of the tire men
have been handed down, reads:
"That whoever, in connection with the sale
or lease, or offer for sale or lease, of any article,
or for the purpose of making such sale or lease,
makes any statement, written or oral, (1) in-
tended or calculated to lead any person to be-
lieve that any part of the price at which such
article is sold or leased, or offered for sale or
lease, consists of a tax imposed under the au-
thority of the United States, or (2) ascribing a
particular part of such price to a tax imposed
under the authority of the United States, know-
ing that such statement is false or that the tax
is not so great as proportion of such price
ascribed to such tax, shall be guilty of a mis-
demeanor and upon conviction thereof shall be
punished by a fine of not more than $1,000 or
by imprisonment not exceeding one year, or
both."
It is believed that a number of cases in viola-
tion of the law, purely unintentional, came
about through the confusing of "excise" and
"luxury" taxes, for while the excise taxes are
chargeable only against the manufacturer's sale
price, luxury taxes are based on the retail sell-
ing price of the goods and are justly chargeable
CLEVELAND,
THE
MUSIC
TRADE
REVIEW
to the retail customer as a separate item. In
fact, in the matter of luxury taxes this is the
system generally followed in the advertising of
shoes, haberdashery, etc., the stores generally
calling attention to the fact that the prices are
subject to a luxury tax of 10 per cent over and
above a certain amount.
Fortunately, the music industry, with all its
troubles, has not yet been burdened with a
luxury tax and care should be taken that the
existing excise tax is collected in strict accord-
ance with the law.
PIANO FIRMS HAVE RECORD YEAR
Uniontown, Pa., Concerns Report Successful
Year at Annual Meeting—Officers Elected
UNIONTOWN, PA., June 10.—The W. F. Frederick
Piano Co. and the Davis, Burkhart & Tyler Co.,
a West Virginia corporation, controlled by the
Frederick Co., announced at the annual meet-
ing recently that the business of the two com-
panies for the fiscal year just closed had broken
all records.
Officers were elected as follows: Frederick
Co., W. F. Frederick, president, Uniontown; E.
B. Heyser, vice-president, Pittsburgh; A. V.
Williams, vice-president, Pittsburgh; William
Shafenberg, vice-president, Cumberland, Md.; C.
G. Hugus, Uniontown, secretary, and Frank
Snyder, treasurer, Uniontown.
Officers of the Davis Co. are W. F. Frederick,
president, Uniontown; N. E.•Davis, vice-presi-
dent, Wheeling, W. Va.; E. B. Heyser, Pitts-
burgh, vice-president; C. G. Hugus, Uniontown,
secretary, and Frank Snyder, treasurer, Union-
town. The company has stores in Clarksburg,
W. Va.; East Liverpool, Cambridge and Steu-
benville, O., and Wheeling, W. Va., the latter
being the main store.
MUSIC EXHIBITS AT LYONS FAIR
Autumn Lyons Sample Fair Offers Opportunity
to American Manufacturers in Europe
Provision for the exhibition of musical instru-
ments will be made at the Sample Fair, to be
held in Lyons, France, from October 1 to 15,
according to Commerce Reports, the publica-
tion of the Bureau of Foreign and Domestic
Commerce.
Request for permission as an exhibitor at the
fair must reach the New York office of the
Lyons Fair, 150 Nassau street, on or before
August 1. However, American manufacturers
of musical instruments interested in taking
part in the fair are advised to register at the
earliest possible moment in order to secure the
best location and to be listed in the official
catalog of the fair. Information as to details
can be obtained from Emile Garden, official
delegate for the United States, 150 Nassau
street, New York.
H. N. BRIGGS GETS NEW POSITION
Harry N. Briggs has resigned his position in
the Wanamaker piano department to accept the
position of general manager of the piano de-
partment of A. Hamberger & Sons Co., in Los
Angeles.
Mr. Briggs has had wide experience in the
music industry, having been connected with the
organization of Wiley B. Allen Co., Los An-
geles and San Francisco, for seven years and
in the piano department of John Wanamaker,
New York, for five years.
JOHN B. VESEY HEADS DIVISION
MEMPHIS, TENN., June 10.—John B. Vesey, local
manager of the W. W. Kimball Piano Co., was
elected chairman of the membership division of
the Chamber of Commerce at the annual elec-
tion of that organization recently.
FIFTY YEARS OF GROWTH
How Sherman, Clay & Co. Grew from a Small
Beginning to a $4,000,000 Corporation
The Sherman, Clay & Co. house organ, Har-
mony, in its June issue published a review of
the events during the last fifty years in the his-
tory of the firm which led up to its present
prosperous position in the financial and mu-
sical world.
The article tells how Leander S. Sherman
came to California in 1861 and secured a posi-
tion in a clock store and a few years later
entered the employ of A. A. Rosenberg, a music
dealer. Nine years after coming to the State
he purchased the music business from his em-
ployer and thus, in a small waj', was started an
institution which has become one of the greatest
of its kind.
The path to success was not an easy one,
however. There were many petty setbacks,
but the firm gradually grew. In 1906 occurred
the great San Francisco earthquake and the firm
which had then become Sherman, Clay & Co.,
through the addition of Major C. C. Clay, who
came to California from Memphis, Tenn., was
completely wiped out.
Reorganization was started immediately and
the rate of growth can be noted from the fact
that on March 14, 1921, the board of directors
voted to increase the capital stock from $2,000,-
000 to $4,000,000.
A. L. BAILEY SELLS_TW0 BRANCHES
$100,000 Corporation Purchases Burlington, Vt.>
and St. Albans Stores
BURLINGTON, VT., June 10.—A. L. Bailey, owner
of a chain of music stores in northern Vermont
and New Hampshire, has sold his local store
and another establishment at St. Albans, Vt,
to a new corporation, the president of which
is Stella W. Harris.
The new firm is capitalized for $100,000, of
which $46,000 is paid in. The officers of the
firm are: Stella Harris, president; Theodore St.
Antoine, vice-president and clerk, and C. W.
Harris, treasurer and general manager. All of
these officers have been connected with the local
store for a number of years.
J. H. WHITE LEAVES LARGE ESTATE
Late President of the Wilcox & White Co..
Leaves an Estate Valued at $206,500
MERIDEN, CONN., June 10.—James H. White,
president of the Wilcox & White Co., who died
on April 2, left an estate of $206,572.54, accord-
ing to an inventory which has just been com-
pleted.
Mr. White's will provided that two-thirds of
his capital in the Wilcox & White Co. be
turned over to his widow and one-third divided
equally between his three children, Frank C.
White and Mrs. Florence Smith, both of this
city, and Mrs. Grace Goodwin, of Washington,
D. C. His sister, Mrs. Silas Donovan, is to
receive $6,000 and the residue is to be divided
between his widow and children.
NEW WEAVER AGENT IN VIRGINIA
John E. Wrjght Placed in Charge of Ohio Ter-
ritory and Wholesale Piano Department
YORK, PA., June 10.—The Weaver Piano Co., Inc.,
announces the appointment of R. S. Gulledge as
its Virginia representative. John E. Wright,
formerly in the wholesale talking machine de-
partment of the Weaver Co., is now in charge
of the wholesale piano department and has been
made general wholesale manager of the com-
panys' interests in Ohio. Mr. Wright is a resi-
dent of Mansfield, O.