mqees heey : a ae Vt. Louig NW He x 0: ( 4 M.S, peeraton¢. Connect tmnn crMowes EXCesswe Mi \ G VW_0 4G UW PS + Suge ted ape 4 bye ot a nd S ie 7, Oo 0 ae ¢ mM ae BUA - (0 aa) y A bb \ g Vi SleeSs of patents The following WO. No. 1578638 L578669 issued issued On February 24th, issued to administrator filed seriai No, 256754. dane NO.» 6, J, are Ms the numbers Browning: A 1928 ap plieasion for 1 and dates JBO91926 601926 John Browning, pa tent as bearing Application upon serial No. 369360 was filed Sony by Yohn Browning, ani application, “Serial 420094 was filed by him on January llth, 1930, SUBJECT REFERENCE Superposed Gun Re. JY. Thateher E. G Bennett iinclosure October 31st, 19% Would Belgium within the it signed up while like to get the attached agreement next several days so that Marriner he is there. off can to get i think this outlines the situation as I understand it except the last paragraph on Page 3. It is intended that this plan shall be in force until January lst, 1932 at which time the method of distribution for the future will be mutually agreed upon in the light of the experience had prior to that time. A pro rata share of the expense may or may not be the proper method. it will depend a good deal upon the success of the gun and the reception it receives by the public. -If they cannot mutually agree then, each one shall appoint an arbitrator and those two select a third. The contract apparently was dictated in the first place with the idea of two parties,- the J.M. & M.S. Browning Company and the John M. Browning Estate. Marriner, I notice, has written in the "Browning Arms Company" as a party. It would seem to me that they should be a party to the agreement but that by including them a different reference should be made to the parties in the body of the agreement. Possibly by referring, in the first paragraph, to the Browning Company and the Browning “state agency" as it "owners" would and take the care Browning of the i. Enclosure G. Arms Company situation. BENNETT as "Sales May 17, 1945 MEMORANDUM Assistant he sets - MR. M. A. BROWNING: In the first paragraph Deputy forth Commissioner, certain facts word on the right trade-mark was assigned "Browning" 16, butt plate 30, Trade-mark August 15, with a portrait below It is assumed 1928, #283,189 covers of this the M. latter trade-mark papers required June 17, the the the importation in of Mr. time by the M. & J. Browning Arms the Browning with "Browning" constituting part of was along with assigned S. of Customs Company he conveyed the Browning Arms Company assignment is looking into this question, there the Browning Arms entered into by was is or goodwill and mark. about commenced stated made, the that and the Mr. Ellis possibility that it was not at a contract to Company that 1932 actually a on Browning 17, this Com- name Bureau M. Arms the June If was the of name. manufacture to letter its to the center Thatcher's of back left the shotguns. use assigned the in automatic bill sale to Browning the of on and trade-mark John necessary at Browning "Automatic" side, registered other 1932 3 1928. 1930 that 1945, the name on 11, with the pany May Brothers Side October dated to a on Griffith, registered covers Company Customs, M. was April This of G. This and "FN", Bureau from £28,671. Company initials letter to trade-mark is and the relating trade-mark dated of company the time with the Remington Arms Company. In the following view of paragraph pending discussions contained in a with letter Fabrique from Mr. Nationale W. T. Woodson Memorandum dated of Mr. M. A. Browning September 9, 1931 might seems to the - "Tt trade mark us F.N. be that and of 17, 1945 the owner interest: Fabrique that May if at Nationale any time is the friendly relationship that now exists between the two companies be broken off, they could successfully file a petition to cancel your F.N. registration. However, no third party can register the letters F.N. for firearms as long as your registration is on the record, so we think it best to let this registration stand as it is, but not say too much about it." May peg e * So? & te ee % 19, 1945 ¥ i oF ton 28, 1 mbol CLG SLotei earing sularly relating to aT nnes iOGa. Tne Browning act for ry f Fo Pre : a Pe ais Bi: Ri 43 “Be Le ithe ¥ i : vy ae oy ¥ of x ae % a deck Seed te Ih @ iat We Cet BaP St we oul bee Nak “i £ | Pte EVR 3 yompany “in matters Ce ee eh ’ OR § 0% eehe : g ei re ‘ we = Fe oeae i hus ee Me “ % ey a Bes a PeRe ; i | etre” seme 4 - ce S < ae he ih Lat Fe eo, grin adie —. FP, Be + P oh, ee re 5 ge % Wy Gor oh Sat he eR de ls EP a ie SP , Syl —_ ig? : 4 ms ris re rs rs pi 14, elke tae toa Se we sa Sy es me” {Sac , be greatly app -eciated subd p oo entry to eorrespond with our ‘St. Li office to obtain specific release for shipments they are received. Very = Ps der truly ok BROWNING BY 6.0. c.c. Airmail Regular Mail M.A. — ts yours, = vee ARMS | # . COMPANY Browning, Vice Pres. £7 ary Charge to the account of. CLASS OF ~ DOMESTIC SERVICE TELEGRAM ORDINARY DAY _ LETTER URGENT RATE SERIAL DEFERRED NIGHT LETTER NIGHT LETTER Be X DESIRED CABLE ACCOUNTING Patrons should check class of service desired; otherwise the message will be transmitted as & telegram or ordinary cablegram. f INFORMATION TIME FILED | A. N. WILLIAMS PRESIDENT NEWCOMB CHAIRMAN OF J.C. WILLEVER FIRST VICE-PRESIDENT CARLTON THE BOARD Send the following message, stthject to the terms on back hereof, which are hereby agreed to DB. ELLIS BRO WNING RMS ) ST, LOUIS, } May 16, 1945 WE HAVE HAD AN VILL ALSO HAVE TO © om RE TRADEMARK DON'T RELEAS MORE OF CHECK NG ASPECTS THE SITUATION INTO THE LEGAL GENERALLY BEFORE GUNS UNTIL STOP CONTACTING M.eAe FN. BROWNING REGARDS OPPORTUNITY CHECK INTO @ TREASURY DEPARTMENT BUREAU OFFICE OF THE COMMISSIONER OF CUSTOMS WASHINGTON ADDRESS REPLY TO COMMISSIONER OF CUSTOMS MAY 364.11 11 25 1945 Browning Arms Company Utah” Ogden, Gentlemen: On January 14, 1930, your attorney, John R. Place, New York, New York, filed with this Bureau of entry in the United States your trade-mark No. Rafter, 74 Trinity and certain ports 248,671 embracing a design which includes the letters FN and the word Browming registered October 30, 1928, by Browming Brothers Company of Utah, and assiged to your company, which mark is applied to automatic shotguns in Class 9. Ogden, The appraiser of merchandise at Minneapolis, Minnesota, has reported to the Bureau that a number of parcel-post shipments of Browning automatic shotguns bearing the above-mentioned trade-mark have been received at the subport of St. Paul, Minnesota, which guns of the have been detained for violation athorizing the release of the requested to inform importers have presented to the a letter from the Browning Arms that company is a subsidiary of Ogden, Uteh. You are Arms Company of St. Louis trade-mark. The interested collector of customs at Minnespolis Company of St. Louis, Miss uri, trade-marked guns and stating Browning M. & M. S. the Bureau whether of J. the Arms that Company Browning is authorized to act for your company in matters affecting the importation of merchandise bearing your registered and recorded trade-mark and, if not, whether your company consents to the release from customs custody of the subject merchandise. By direction of the Commissioner: Very truly yours, HUA he Assistant Deputy Commissioner FOUNDERS BROWNING INVENTIONS JONATHAN BROWNING MATTHEW S. JOHN STANDARD EQUIPMENT HEAVY MACHINE GUNS LIGHT MACHINE GUNS MACHINE RIFLE AUTOMATIC PISTOL AUTOMATIC AIRCRAFT AND ANTI-AIRCRAFT ARTILLERY M. BROWNING ~ of z. au 2. PAT. QO © 2. Y) i { REG.U.S. OFF. ST. LOUIS B. ELLIS, DOUGLAS ( 6 ri GO{ ANON RE ne & VV WY 2 a Z Ce <> 1-3-7 Ass tw © number ® $4 had recelve Vi ner Y 4.aS ur O Ww 0: Trace= mer — }» cs ta 4 O el a c.f ‘Wen aX he Sy 0 a ° pear. as ~ ae | fe h FUN J ath intvea= > i LoA ao sO ‘ tor! NOPrProw » hf ™ o> a +> 4. | ‘ Sed deteLU u C ; { GL 4. u B re & Fa) PLEASE we ctC1LONe The 1 partme ) Te it men =ibers 4+ > UO same tee: ADDRESS LNA ALL t 7 me =. of Ls wit e ° Amer} a. { 7 whe * il CORRESPONDENCE TO THE COMPANY, ST. LOUIS,MO. ss of. 3y 5 ireasury ct —LK a <\ ty ake fT? <G “mar 1 LSSiON.e the OS © rao eS de n 4 © & to OD nd “ood rr» LL B publ i Ca tO 2 AMA £ rf ye OFFICERS PRESIDENT VAL A. BROWNING, MARRINER A. BROWNING, MATT S. BROWNING, ee ST.LOUIS,MO. - BROWNING EXECUTIVE iE VICE-PRES. VICE-PRES. BRANCH BRANCH MGR. January MEMORANDUM IN RG? RE: MEMOR AWN Di a ei QD wT RE Oe BROWNING ane BOOKS BUORKS em COMPAAY-ST. in order between following suggestions ‘eo ekie GUN, the captions T> 5 ESRI ¢ BARREL ARE AND should should be accuracy making OPERATIONS and coordinate Ogden St. Louis and offer, tors yes PRICE which are prepared used as basis for a the Ogden in billing. If memorandum are deal figures such necessary to two places beyond we have made under officers of the P Moen tyE gs Lists Pe by be being lists be this accounting offices comments checked in the below: Price vompany 1946 uM. &. Me. &@ MM. ho8 oP ADE 2m Te! . simplify to Se eres PARTS * MJ. ee LOUIS to procedure separate OF WP teut 26, with the by billing accounting the and invoice department recommendations followed we feel to are to prepared it computed prices insure which that which the we are will not more than decimal. INVOICING involees Louis office and guns, barrels and checked at being " rs 4 4f A rr Py in? ee ACCOUNTING ¥ n@ present will Ogden recorded will continue be based upon parts. These invoices as to extensions, upon the books. oe Fay $b eS: Fe yp Ty WA JHATIC recommend practice of that charging an account styled in the future this account guns. Duty only of fe 1 SH JEG tO cost be $4 2 the will CERTIFIED BAXTER PUBLIC be be St. lists for carefully footing before 1, 1946 the of guns plus duty discontinued and that cost charged charged & and January factory be be the s Guns" will price will pricing effective "Inventory WELLS, 2. JAS current in MILLER ACCOUNTANTS to with the an account factory styled "Duty on Guns”. This will account for guns purchased out duty the all differences duty is enable which may in rate of as part the considered a office without the necessity of some fluctuation due of Belgian franc. cost guns in excise tax subject to exchange the part of landed to While com- nevertheless considered purposes and is treated in the same manner as any (Keller-Dorian Corporation ve. Commis sioner of Internal Revenue- C.C.a. Cireuit March 4, We do any following many advantages and including & mark-up from the December percentage percentages percentage out this guns in costing of simplification. Up to the has out sales. in guns and gun test purposes actual on reliance for an doliar and cent been Newt we basis will course, be duty figure will, of sideration in computing gross profit for statement purposes. The gun inventory account of invoice as bas a an sufficient So as from to guns Fabrique costing herefor. detail determine and upon the Nationale cost CERTIFIED necessary invoice the particular BAXTER PUBLIC the be & As MILLER ACCOUNTANTS a to starting costing only will charged the much accomplished previously future be be invoices. WELLS, include upen while will It the will the that ihe cost placed feel Satisfactory. factory taxes. see different upon other tax hand for used income other vary be for see will can tax not and standpoint 1947 a 1946) procedure 31, as for costing is in basis and it - the of cost purposes conflict is of the to gross Second and Ogden puting ~ profit be the more using gun each model the account point we suggest that belonging at St. Louis furnish a physical the J. M. & M. &. Browning 31, 1947 which can be the Ugden books. Our suggested to December shown upon accounts as plan inventory Company reconciled contemplates and with of guns on hand the three as figures ledger follows: Inventory ~ automatic Shotguns Duty - Automatic Shotguns Gross Profit-Automatic Shotguns (Exclusive of Duty) importations separate & POPSET TREY Pa Gu WN general Bie & i iva automatic the NN P it ledger Te aA Fee TY nh accounts of the Superposed may be opened. caption of accounting shotgun Ct ESAS Comments wider shotguns apply following begin generai the equally ledger to barrels and for their accounts we for suggest handling: inventory - Barrels Duty - Barrels Gross Profit on Barreis (Exelusive & PFD Als upon has FS * ; HT Re : Ue LG factory been through ing price. a separate for costing Duty) a > Ete po43f Wt ’ PANLG For the year 1947 parts cost, duty plus & i> $ ey ee i accomplished the of through mark-up a of the We thet duty not This account and purposes. WELLS, been mark-up of the selling price to the sell- charged percentage should be considered as a part of practice will allow for & MILLER CERTIFIED PUBLIC ACCOUNTANTS based Costing parts BAXTER on invoiced percentage. reduction application suggest have to ti the billing parts using “yy for only submission @ unlit prices practical at the and time BrowninNE the the r © duct ion if any emali Same as that for used for parts. inasmuch as a on and ba and differences are > taken. has been we which barrels) hat the Browning parts. of sell inventories guns +g taking of ww Pp percent vage 5 the percentage @ mark-up + to decided phy Sical prorit beyond giving the used places shown that be two arms ‘e wish £60 Ae | vi in used the suggest past does not necessarily ak, nee d a higher percentage could Company r ealize for past comparison the a much two a4, f° no) iP wy bobs ta \ Parte ¢ Sol d 194! brit 3a LES Gross 72.47% Profit handle the on Gun and $1, 261,760.76 294,214.00 Profit 23. 32% Percentage suggest the following accounting for parte: WELLS, BAXTER We 2 19,061.54 &@ Gross dle $26,669.95 Of ofit CERTIFIED PUBLIC & general MILLER ACCOUNTANTS Barre] oa Lees 9 346,065.52 62,455.08 18.05% Ledger “the \ h ig calendar follows: mt SSE fi ‘ fis HERA INS | accounts to be #% ond se Yr inventory - Parts Duty on Parts ° Gross Profit on Parts (Exe lus ive of Duty} f sere and we at your adopted, will Pad We trust the suggestions above be glad to discuss further if desired and the we like to assist the bookkeeper to be would her entries time is thoroughly she WELLS, CERTIFIED placed familiar BAXTER PUBLIC & above upon with MILLER ACCOUNTANTS will the the bs with convenience. formulating as them made suggestions a eu te ay books until new method. are January MEMORANDUM IN RE: BOOKS BROWNING COMPANY-ST. OF J. LOUIS In simplify order to procedure between following suggestions separate captions GUN, BARREL Company should accuracy making Ogden to and by lists which are prepared used as basis for be a billing. If memorandum are deal figures such to accounting offices being Price this the comments LISTS in places Louis PRICE Ogden two St. PARTS the necessary coordinate we have made under officers of the below: by be and offer, checked in 1948 M. & M. S. OPERATIONS AND should be the 26, beyond with the billing accounting the and followed invoice department recommendations we feel are to prepared prices to insure which that which the it computed we are will not more than decimal. INVOICING Invoices will be based upon parts. These invoices Louis office and guns, barrels and checked being at Ogden recorded will continue as to extensions, upon the books. ACCOUNTING FOR AUTOMATIC We present recommend practice of that account styled in the future this account guns. Duty of price will pricing effective charging an only current in be and the St. lists for carefully footing before 1, 1948 the of guns plus duty discontinued and that SHOTGUNS to cost be the factory “Inventory Guns” will will WELLS, CERTIFIED be be BAXTER PUBLIC January be charged charged & cost MILLER ACCOUNTANTS to with the factory an account styled (2) "Duty on Guns". This will account for all guns purchased out duty which may in rate of as part the differences duty is the considered be a Ogden office without the necessity of some fluctuation due of Belgian franc. cost guns in excise tax subject to exchange of the landed part of the purposes it is nevertheless considered purposes and is treated in the same (Keller-Dorian Corporation vs. Commissioner C.C.A. Circuit conflict in following many advantages and including a mark-up these the December percentages can guns ~- March this percentage percentage out from is the gross Second and the puting - profit enable upon be in 4, costing a tax for any of We cost and costing to While com- income other tax taxes. Internal Revenue- do not see the other hand see simplification. Up to and of of for as 1946). standpoint 1947 as manner procedure 31, basis to on reliance has out sales. In the future and while the gun been any will vary for different guns used for test purposes we feel and satisfactory. The duty figure will, of course, Sideration in computing gross profit for statement and other purposes. The gun inventory account will include only the of invoice as basis a in sufficient so as from to guns Fabrique costing therefor. detail determine and upon the cost Nationale CERTIFIED be much given more con- be accomplished using will be necessary specify invoice the previously invoices. WELLS, be will It the will costing dollar cost basis that upon an actual factory cent placed BAXTER As & MILLER PUBLIC ACCOUNTANTS particular charged a to to starting gun each model the account point we suggest that St. Louis furnish a to the J. & 31, belonging at M. S. Browning 1947 which can be the Ogden books. Our suggested December shown upon accounts as M. physical plan inventory Company reconciled contemplates and with three of guns on hand the as figures ledger follows: Inventory ~- Automatic Shotguns Duty - Automatic Shotguns Gross Profit-Automatic Shotguns (Exclusive When separate automatic the importations general ACCOUNTING FOR of Duty) ledger accounts of the Superposed may be opened. caption of accounting shotgun BARRELS Comments under shotguns apply following begin general the equally ledger to barrels accounts for and their for we suggest handling: Inventory - Barrels Duty - Barrels Gross Profit on Barrels (Exclusive ACCOUNTING upon has through ing a PARTS For the year 1947 parts cost, duty, plus a accomplished the price. separate for FOR factory been costing of Duty) through have mark-up a been percentage. reduction application of the We that duty not considered as This practice will suggest account and purposes. WELLS, CERTIFIED BAXTER PUBLIC mark-up on invoiced of the Costing selling price to the sell- should be charged part of the inventory allow for the billing percentage parts & MILLER ACCOUNTANTS a based to (4) of parts using invoices for only two submission plus beyond to Browning the plus duty, the unit prices shown giving sales we believe the reduction application practical at the a places of and time decided the if percentage mark-up any small physical of the mark-up percentage same as that for guns used for parts. used inasmuch as gross profit on years follows: and of Sales handle the costing through differences arise can are they taken. We which has been used adjusted to suggest (the not necessarily need to higher percentage could be Browning Arms parts. A Profit be past the Company comparison wish is in the a for realize the ARMS Profit on a past much two higher calendar COMPANY Parts Sold 1946 1945 $37,661.49 $26,669.95 635312 71.47% 23,845.20 Profit on Gun and 19,061.54 Barrel Sales $1, 261,760.76 $346,085.52 23. 32% 18.052 294,214.00 suggest the following accounting for parts: WELLS, BAXTER CERTIFIED Im duty) Percentage We cents. of that Profit for used (exclusive Percentage Gross be percentage felt Gross price, cost Gross Sales factery to BROWNING Gross can preparing price does is half In Company mark-up selling barrels) It decimal. Arms taking inventories that be and the & general MILLER PUBLIC ACCOUNTANTS 62,455.08 ledger accounts to Inventory - Parts Duty on Paris Gross Profit on Parts and we at your adopted, will (Exclusive of We trust the suggestions above be glad to discuss further them made will with convenience. If desired and the we like to assist the bookkeeper to be would formulating her entries time is thoroughly as Duty) she WELLS, CERTIFIED placed familiar BAXTER & above upon with MILLER PUBLIC ACCOUNTANTS the the be you helpful in detail, suggestions at Ogden books until new method. are in such January 26, 1946 MEMORANDUM IN RE: BOOKS OF J. M. & M. S. BROWNING COMPANY-ST. LOUIS OPERATIONS In order to procedure between following suggestions separate GUN, captions BARREL Company should the and coordinate Ogden St. Louis to and offer, LISTS Price lists which are prepared used as basis for be a Ogden accuracy in billing. If making in this such places by PRICE the two being PARTS by necessary we have made under officers of billing accounting the and the recommendations we deal which are to prepared beyond with the figures feel the invoice department memorandum are followed to accounting below: checked be the offices comments AND should be simplify to insure which that prices we are it will computed more not than decimal. LNVOICING invoices will continue be Louis office and will be based upon guns, barrels and parts. These invoices checked being at Ogden recorded ACCOUNTING present as to extensions, upon the books. FOR AUTOMATIC SHOTGUNS We recommend that practice of charging to an account styled in the future this account guns. Duty cost only of the will WELLS, CERTIFIED be be BAXTER be charged & MILLER be the St. lists for carefully footing before 1, 1948 the of guns plus duty discontinued and that cost charged PUBLIC ACCOUNTANTS and January factory Guns" price will pricing effective “Inventory will current in to with the an account factory styled "Duty on Guns". This will account for all guns purchased out duty which may in rate of exchange considered as part of the puting gross and part of purposes it is nevertheless considered purposes and is treated in the same manner as any (Keller-Dorian Corporation vs. Commissioner of Internal C.C.A. Circuit the differences duty is the profit - Second conflict in advantages and including & mark-up these a from guns is Ogden office without the necessity of some fluctuation due of Belgian franc. cost guns in excise tax - March the December percentages the subject this percentage percentage out be following many enable the 4, costing basis as of com- other tax taxes. Revenue- see any Up to reliance has out sales. In the future guns and while the gun test purposes actual While simplification. for an to income do not the costing see different upon on for and hand for used tax cost other vary be of for We and will can a 1946). standpoint 1947 the landed procedure 31, in to to dollar and cent we been placed feel that basis will be upon costing be much given more Satisfactory. The duty figure will, of course, con- sideration in computing gross profit for statement and other purposes. The gun inventory account will include only the 7 factory cost of invoice as basis a in sufficient So as from to guns Fabrique costing therefor. detail determine and upon the Nationale be accomplished using will be necessary specify invoice the particular It the cost will previously invoices. WELLS, CERTIFIED BAXTER As & charged a MILLER PUBLIC ACCOUNTANTS to starting to gun each model the account point we suggest that St. Louis furnish a physical to the J. & 31, belonging at M. S&S. Browning 1947 which can be the Ogden books. Our suggested December shown upon accounts as M. plan inventory Company reconciled contemplates and with of guns on hand the three as figures ledger follows: Inventory - Automatic Shotg uns= Duty - Automatic Shotguns ~~*, Gross Profit-Automatic Shotguns. (Exclusive When separate of Duty) importations general ledger begin accounts of the superposed may be opened. caption of accounting shotgun ACCOUNTING FOR BARRELS automatic the Comments under shotguns apply following general the equally ledger to barrels and for their accounts we for suggest handling: inventory - Barrels Duty - Barrels Gross Profit on Barreis (Exclusive ACCOUNTING upon has a been For the year cost, duty accomplished the price. separate for PARTS factory through ing FOR costing of Duty) 1947 parts plus a through have mark-up a been invoiced percentage. reduction application of the We that duty not considered as This practice will suggest account and purposes. WELLS, CERTIFIED BAXTER mark-up on & of the Costing selling price to sell- percentage parts MILLER PUBLIC ACCOUNTANTS a based the should be charged to part of the inventory allow for the billing (4) of parts using invoices only two for submission plus a places beyond to Browning decided the plus duty, the unit prices shown giving sales we believe the reduction application of the practical if at the and time small physical and of the mark-up percentage same as that for guns used for parts. used inasmuch as gross profit on years follows: and of selling Sales are taken. We which has been used handle the is adjusted to suggest not necessarily need to higher percentage could be Browning Arms Company parts. <A comparison for Profit wish be (the the realize the ARMS Profit on a past much two calendar Parts Sold 1946 L949 $37,661.49 $26,669.95 19,061.54 63. 317 Profit on Gun higher COMPANY 23,845.20 and ThichTh Barrel Sales $1,261,760.76 $346,085.52 23. 32% 18.05% 29h, 214.00 suggest the following accounting for parts: WELLS, BAXTER CERTIFIED through past a Percentage We cost in the that Profit costing can they & general MILLER PUBLIC ACCOUNTANTS for In arise Percentage Gross to price, used differences feit Gross be of duty) Gross Sales can (exclusive does is factory cents. price preparing percentage BROWNING Gross half In Company mark-up barrels) It decimal. arms taking inventories that be percentage mark-up any the 62,455.08 ledger accounts to Inventory - Parts Duty on Parts Gross Profit on Parts and we at your adopted, will (Exclusive of We trust the suggestions above be glad to discuss further them made If desired and the we like to assist the bookkeeper to be would her entries time is thoroughly she WELLS, CERTIFIED placed familiar BAXTER PUBLIC above upon with & MILLER ACCOUNTANTS will with convenience. formulating as Duty) the the be you helpful in detail, suggestions are at Ugden in books until such new method. SEYMOUR LYNN WELLS, BAXTER & MILLER CERTIFIED PUBLIC ACCOUNTANTS WELLS,C.P.A. E.BAXTER,C.P.A. DONALD A 1218-21 MILLER,C.P.A. FIRST SECURITY OGDEN, December Mr. Bigelow Dear Mr. Ogden, M. BANK OFFICES SALT LAKE CITY AND OGDEN, UTAH BUILDING UTAH 31, 1947 Browning, Utah, Browning: Attached hereto is a the suggested pro cedure in S ve customs connection with refunds of excessi duties which may have been paid by the J. M. & M. S. Browning Company. memorandum as to If there are any regarding the memorandum, please do to call upon us. Very truly questions not hesitate yours, Meets 5 (Btn a dee December 31, 1947 have a MEMORANDUM AS TO SUGGESTED PROCEDURE IN CONNECTION WITH EXCESSIVE CUSTOMS DUTIES PAID TO THE UNITED STATES GOVERNMENT |” United are used which forms with connection of theft with the have forms which application for allowance They no doubt a application have not had experience with loss or | which duties excessive recover to making in in form special mer- of used damage, for have be may of series warehousing connection also merchandise. used be in Service Customs States They bond. in chandise can The paid. We excessive duties paid but have filed claims where guns have been lost in transit. No Louis will be St. Service, form or through necessary paid. able to numbers for guns all broker, support a for it The will claim be amounts, which form a used giving making through theft is Form to itself to in claiming they J. M. After the claims be filed with Missouri and in M.S. Browning should Louis, & use due No. have the CERTIFIED show at Customs the exact duties detail date, etc., claimed. application for loss 4315 does not but it excessive duties of payment Upon & in number, Collector BAXTER PUBLIC to the Bllis the Schade, properly Company. WELLS, from been course Mr. excessive entry is arising lend the to allowances doubt Mr. necessary refund in for ascertain customs and upon readily the Undoubtedly package to relation MILLER ACCOUNTANTS seem paid. prepared Customs at St. will be made to of payment receipt the from (2) the Treasury be credited of the J. M. cedure it and the Company it Department to an account & M. S. will not be adjust books of the the and end result is taxwise will be the claim suggested that a amount for the difference between the and that which would payable after of customs be duties. WELLS, CERTIFIED BAXTER PUBLIC & M. & also MILLER ACCOUNTANTS giving of the books this pro- upon accounts inventory the J. should amount following M. made refund By to upon It Company. necessary costing the Income" "Miscellaneous Browning the that suggested is 5. Browning same. should not excise tax effect to be the paid WELLS, BAXTER & MILLER CERTIFIED PUBLIC ACCOUNTANTS SEYMOUR WELLS, C.P. A. LYNN E.BAXTER,C.P.A. DONALD A MILLER,C.P.A. i2i8-2!| FIRST SECURITY OGDEN, Bigelow Ogden, Dear Mr. 1, 1947 Browning, Utah. Browning: the Commissioner or unusual sales to BUILDING UTAH December Mr. BANK OFFICES SALT LAKE CITY AND OGDEN, UTAH excise report: tax and of of We have reviewed rulings given by Internal Revenue relating to special articles which are ordinarily subject have the following information to If taxable articles are distributed by the manufacturer or importer for advertising purposes there is no tax liability. If a manufacturer or importer gives to the purchaser without charge an additional amount of so-called "free" or “bonus goods" of the same taxable class the tax is computed upon the price charged for the entire order. If a manufacturer or importer sells trial or sample packages of taxable articles for a nominal sum ascribed as the cost of postage and packaging, etc., there is a liability for tax based on the actual sales price of the articles. the general taxes Based upon the provisions relating to contained in Regulations 46, above rulings and the imposition of it is our the above truly yours, opinion excise that if you import and sell guns which are specially made up for a customer and the price at which they are sold is lower than your regular selling price that the excise tax to be paid would be based upon the selling price of the gun regardless of whether or not your regular mark-up had been added to the cost. We will be trust that information helpful. Very Weta avte. oe WELES, Sebi a ape wal acs Aran BAXTER: CERTIFIED LYNN E.BAXTER,C.P.A. DONALD A MILLER,C.P.A. 1218-2! FIRST SECURITY December Bigelow Dear Mr. Ogden, MILLER PUBLIC ACCOUNTANTS OGDEN, Mr. & BANK ss Aust SALT LAKE CITY AND OGDEN, UTAH BUILDING UTAH 1, 1947 Browning, Utah. Browning: We have reviewed rulings given by the Commissioner of Internal Revenue relating to special or unusual sales of articles which are ordinarily subject to excise tax and have the following information to report: if taxable articles are distributed by the manufacturer or importer for advertising purposes there is no tax liability. if a manufacturer or importer gives to the purchaser without charge an additional amount of so-called “free“ or "bonus goods" of the same taxable class the tax is computed upon the price charged for the entire order. If a manufacturer or importer sells trial or sample packages of taxable articles for a nominal sum ascribed as the cost of postage and packaging, etc., there is a liability for tax based on the actual sales price of the articles. the taxes general Based upon the provisions relating to contained in Regulations 46, above rulings and the imposition of it is our opinion regular mark-up excise that if you import and sell guns which are specially made up for a customer and the price at which they are sold is lower than your regular selling price that the excise tax to be paid would be based upon the selling price of the gun regardless will be been added to of the whether cost. We or not your trust that the above truly yours, Uneeg wy had information helpful. Very tr AINA by and bc toeen & inte or gant. cog duly om ienes with the lave of the State of Utah place y perened yea Gefen @f Doar said the im GOES ion @aly lemneetiont having amt % pleee ~saie, herainarse? Gallet ht 06h of tewo the Lie peivetgal “tate the ef business at the colt Company Coepamy heve this sting Peepseotively to “egeii Gifles, and te i Machine ole @tieting priser $6 fais date uGLGieG@ ‘ag Cols Company aay te be heweat ter geld & gare Of royalties which regsive qu segeune y wugh eras by subelivensees after the exp. raligs iu ihe eountry of gale applicable % of aad such the LeGeers Patent isoeei Br emh 2beli =Ethin Gfas whieh | ‘3 Of Soope of ihe S210 quntracte erequiei ay @igies eugh oages Gags 30 in shich the 18 getlsieG o6¢ Share Ge arses so 9¢]4 whald ented: ; t ag ae ticn Goad watually agreed agrews an $8 in Poyalay in ait say of she by such Lettera Patent. ie pPRPiies oes to were net able the prior Shoe “ie Gay inventions or iuprovenentes disclosed oF Oe cath ¢ oun try OF Gig Preper gone iruce ver aie LG Le theretoere that nor any medifice« nee WRG3e8 GL her party eompgeSive wiehtc ond the 2ni4 writings oxeauted im See gubsecuan’ Liacliigies ain detomina~ os 50 Sie gai “ wi has GegecG thie Lassvorwmny 3e be therounte @uly authoriaed igs P — ve las ot Wig ' ey | executed ae Oe Sere SERIO a RE a by e e OE seLEES $e Boe ay eS sean 2s ur oy. its Presiden’ and te onld COL¢'S Pagee? Fike any @O.OY hee eamesi thie inetrwemt to be exegn we ‘ANUP AG TURING 6 i#kier, iia atiormey~-ivefaot, 64 Ggten, Utah, this , of duly, 199hs ge Fa © Ow Se Public in ani tor of duly, 1991, perameliy eho, apem Seine framing Lee oP ak ie Coaparys; the that i the aaiéd inetresest <ee sic Dogm ef Diweetors; meng to be iy comsiest— : coe ana ‘tt = tie feee got ané geod ee : i See ae. "4 . a Seeae & . ae hin Bed gay of em ’ ee & Sie ah = Oe : Suge , er x ' ES. Pe SR is sas ese ips ae. acs. Mis, % t id ipa " J i 4s iB,4 ae Bah gee abe a . This will ennfirm held at the conference in Hartford, Messrse Se office Connecticut, MeStone, Vice-President the and Colt's Fire of Tuesday President, and understanding Patent afternoon, .C. aereement May Nichols, Arms 22, made at Manufacturing 1923, at whch Vice-President, W. Company, Osden, Utah, representing The J. i. & M. to the control of manufacture and sale of a new automatic machine gun as to date by itr. Browning of Utah, to Patent Mr.Val with reference Browning Colt's Ogden, It Fire is BrowninslCompany the conceived and the of Arms model developed which Manufacturing understood that for patent letters in caliber Co. application Sebrowning type John of & Mee in behalf the Js Me of the is now in course of preperation Manufacturing Company,, and that application and prosecuted by Colt's Patent “ire the such application the the aforesaid Patent fire automatic Arms filing of machine gun Arms States such M. been follows: of America Co. of 37 m-m has as United present Manufacuring of and were Penfield, of Colt{s Yireerms Company H. treasurer Patent a submitted covering by Colt's shall be filed Manufacturing Company, and that upon parties will execute a formal acreement con Company will grant to Colt's Patent Fire and sell within together taining the following provisions: The Je Me & Me SeBrowning Arms Manufacturing Company the United of America any improvements, the joint future States said automatic machine gun, or appurtenances thereto subject, however, sub-license hereinafter described. “ire Arms Manufacturing Company will assist tn of automatia and the for Colt's for the said machine ew will mamfacture the demonstration. Patent fire Arms Mamfacturing Company the United on behalf patent of will prosecute letters patent Company, and will apply for judgement of the Colt's Patent Fire Arms Manufacturing will supply such modelsas may be Arms Manufacturing Company reve Pier of circumstances warrant and ation such foreich countries, The Colt's Patent @ Rusumine in to Patent Colts models in manufacture the M.S sBrowning as elsewhere to of application ries and right priveleces The & exclusive modifications development necessary the Fire Coamnamr oe on States, letters aatd aitomsetie of the such J. M. foreign count- Company required for will to the manhine pay suns exploit- mann with ‘ ‘ig factureda by it and per gun for the first for the next one hundred i®ld in the one United hundred guns guns and sold, or such also feed clips and spare on factured and mutually agreed patent the upon event letters sold that of upons said the such manufacture parties Government basis either Company, fire to and thereafter be mutually may said automatic pride or such other during the to be paid or improvements and of same continue sale ami for sun shall manufacture of the Arms Manufacturing net The parties to manufacture shall (31,000.00 {750.00 per gun 3500.00 per agreed mchine amount upon; sun muas may be of life of letters thereon and thereafter after expiration of in such said automatic payment to Colts Patents such a Machine upon Fire sub-license priveleses to the J. & M. joint right or priveleze M. the Arms to be S.Browming to gun paid license foreich to license sell said territory upon basis either of a royalty or Company oof 60), of the procecds Colt's Patent Fire Arms Manufacturing formal to be paid or automatic fixed antins payment of any Manufacturing Co. Company, egreement agreed by net by Colt's any and the a Company manufacture to United Manufacuringe country & MeS.Browning matually use sul-license foreien privelese be own Company have said of to own use sub-License ahall a fixed priveleze its Firearms Such its or for Patent Me. for richt sun to Je joint machine a the a automatic in a defined or proceeds gun within Colt's have a royalty any mamfacturer as selling sold sold, @s elsewhere, and machine of 75% zovernment to sums parts royalties automatic States such net other and or of patent. The Patent 10% of America menufactured manufactured Sun manufactured royalty States shall contain such other and further provisions upon. Witness (Signed) (Sioned) W. H. Penfield as to Fanny Le Eitel as to J. M.Brownine (Signed) For The de M. & M. S.Browning (Signed) S. Me Stone, President Colt's Patent Fire Arms Mfc. Co. Company Thie will confirm the uenderetendias and aegresrent and: at e conference held at the cffice of colts Patent Sire érne Wige Company in Tertford, Son ectieut, Tuesday eafternom, Vay 22, 1926, at which were pressont. ‘ecers. 5.0, Stone, Precidcent, ‘Mehols, Vice «President, He Penfield, Vice vresident and Treaau wor, of Colt‘'s Patent “ire orne 1ge “ompeny, end Sar, Val Browning of Osden, Uteh representing the J,.& “so. Browning Company, with referenceto the control of the manmfacture end sale of «6 a = of automatic machine gun as can — anc cevelopec to date by | Jom <. Brownlag of Orden, Wteah, the modei of sag itt eal iber ST n/m hes been sumitted to Colt's Patent follows : |Fire orm Mfgs Company, as tt is understood thet application in behalf of The J.2.% ES. Broming Compamy for letters patent of the United “tates of anche eovering the aforesaid automatic oachine gan = now in course of preperation by ¢ 7O2t ‘s ‘atent Fire 4reg ofg¢. Company end thet such e> lieetion shell be filed and prosecuted by Colt's épme “Pe. Company, ©amt thet upon the (Miling the parties will exeeute a formal agreement provisiong: “he vee (rms lfg. Fire Patent Fire of euch app i ideation eonteining the following & B.S. Browning Compemy will erent to tolt'ts Fatent Company the exelusive richt te meamufe oture and eel) wiathin peel wes ndeizintes snl sub foot. nen weer, cesori bed » to the 7 pine and par ossorners ort of seic eutomatic gum, aocurtemances thereto sabetionnes hereinafter future The Colt's development Patent Fire res Ufg. Compenywill assist in the of seid sutematic machine cum anc will vemfecture delish The Coltts Petent Sire forme Ufg,. Cocpany in beg nif of the Vece Browning Company, will prosecute apnlieation for letters the necessary models patent the of for cemonetration. Umited and Stetee will apply “rn for of catert such foreign eamtrice ee in the judgment of the Colt's Yateut Fire wes ifge Company, cirouspetances werrent enc will gupply such models my be required for exploitetion in euch foreign ccuntrics. The Colt's retemt Fire as tres Ufg«s Company wili pay te the des “ses Browning Compeny os royalty on said eutemetic rachine guns mafnactured by it anc sold in the “ested states of smerien or clisewhers *1,000 por gun for the first one hundred guns sermifactured and sold, noe 3,00 per gun for the next one hundred guns mexmufectured and sold, nd thereafter (506,00 per cun nemmafactured and scid,or sueh other ona ao sey be mrbually agreed upong alco as rovelty on feed clipe and spare parte for said eutematie machine gun : namfoctured and sold 10% of the net selling price or such other emount as my be mutually agreed upomg such rove tes to be paid during the iife of Letters petert ucon seid autovatic machine cum or eny improverents thereon an! there:fter in the event thot manufacture end scale of the eeme continue after expiration of such letters patent. The parties shell heve a joint righ: or privilege to sub-iicense the thited otates ‘overmeent te sanmafacture for its own use said automatic gechine gun upon the basis either of a royalty or oe fised payxent te Colts Patent Fire orms Ife. Coupeny, 755 of the net — of cuch sub-license priv:me to be peld by Colt's Patent Fire <eme Ufg. Company to the J,U, ‘+ Browming eny foreign Company. The partice goverment shell to heave e joint manufacture seid right or privilege sautemetic machine te licen cun for se its pa use or to license eny mnufsoturer in a gp ecm ‘country to manufacture end sell said sutomtic =x kine gum within a defined territory upon the we OCSGS as zs AO TD sem ny ep as rxtur ier ha * kat hy ey& Rig eal Re lhe Bad es thiWRG s tee f Ss ce & MEMORANDUM WHICH J.M. There which the are Re DUTIABLE VALUE OF SHOTGUNS & M.S. BROWNING CONPANY IMPORTS FROM BELGIUN. four different are ordinarily applied United States. They applied to of dutiable value merchandise imported into ares 1. Foreign value. o- Bxport value. oe United States 4. Gost of production. The order in which to imported value. these merchandise value kinds or four is export as kinds of value are follows: 1. Foreign higher; value, whichever is <2. If the appraiser determines that neither foreign value nor export value can be satisfactorily ascertained, then United States value; | If the appraiser determines that neither foreign value, export value, nor United States value can be satisfactorily ascertained, then cost of production. Foreien value: The price value of imported merchandise the time of its exportation to the such or similar merchandise is freely home consumption to of the country of exportation, quantities and in ordinary at at foreign which sale for markets putting the cost of tion ready for cost is included home consumption Export value: not The the imported shipment in export all course the in the price the country of United of in in the of trade, merchandise to value purchasers United is States offered for the principal usual wholesale plus in a packed States, if the the a the condisimilar merchandise for of exportation. imported merchandise is the price at at the time such or which sale of its exportation to the similar merchandise is freely offered principal markets of to all purchasers in country of exportation, in the usual wholesale and the ordinary course of trade, for in United States, ready for plus the shipment if the United cost of cases, not included States value the time of its such or similar the exportation the for quantities packing in States and price to the making of the mer- chandise. United is the States value: The United price at States at which freely offered for sale in ready for delivery, states to all and the in for the purchasers ordinary transportation, insurance and other United States, and less expenses in (neither of which a commission selling not price) to paid States the on the port for United of expenses place of inshipmen of arrival in profits and general purchased the merchandise exceed lieu of profits 6% of the net contracted to be in the duty, may exceed or to of necessary from allowances allowances (not packed cost merchandise or, is less trade, exportation price) consumption, usual of of selling merchandise quantities country States United wholesale the United the the in the imported to market to the exportation merchandise principal cident bringing imported domestic in course of 8% of the and net United expenses, United States paid on the following ele- labor employed in merchandise purchased. Cost of Production: Cost of 1. The production consists of ments: producing chandise cost the at a of materials imported time and merchandise preceding the or date similar of mer- exportation of the imported permit its merchandise production in which the would ordinarily usual course of busi- general expenses (not less than of materials and labor) in the case coverings and pack- ness; 2. The usual 10% of the cost of such similar ing or Se The cost of and all other costs imported for of shipment to 4. An addition the cost added, in of same the of facture to of character as as value", "export value", other disposition of seller offers merchandise his control a certain certain price or at not chandise is such The same least be or kind and to the "United States imposed sale, For on resale, the use example, if condition that price or at not than a certain sale merchan- definitions on for manu- in the sale offered mer- of of restriction for more less than price, within a it a his the oY mer- meaning definitions. expression "all definitions, means available to all willing to pay for it, offered to all of them. merchandise or is merchandise country merchandise. at freely the 8% general imported employed respect resold not the class "freely", buyer the in plus than price same the less selling the with (not ordinarily term the and which or of profit ready profit the seller any States; the labor the make putting and without of condition packed materials means be a for value", mist to manufacturers who The incident United general by cases, in the fixing chandise, "foreign all merchandisé expenses)j/equal of merchandise; for sale that the potential even to purchasers", though Hence, only a as employed merchandise buyers who are it is a seller offers certain class of if not must in at able and actually his purchasers or to only declines it, to another within a class merchandise within controls hose the Belgium, home imported our at which the J.M. the Belgian such shotguns the tariff shotguns Belgium some to only class purchasers or to other are sale all pure or M.S. are not Belgium.- Schroeder or consumption home offered those it will likewise be offered for sale home certain class "foreign guns are not offered for imported shotguns It will also seen as defined that, if consumption or to all in only within consumption "foreign the the purchasers of words, circumstances numerous) to in for seen sale be sale value", Belgian home for definition are must for purchasers they the the for of buy to for Under to similar Company no though Freres Browning have (even to definitions. like freely liberty other for FN potential of offered if other meaning pay such the the to of if guns willing any and such and shotguns & actually able would a purchasers of purchasers law. are class seen, price shotguns and of the in class meaning be consumption given not thus by a is will imported within who it esoldby at sell his chasers in purchasers to purchasers for some a are in not Belgium, purchasers within value". In would have no "foreion the imported shotguns or value", have no are offered “export United States not "all to be that value", inasmuch as such for sale in Belgium for exportation to the J.M. & purchasers", M.S. as Browning required similar guns to Company the only and to establish "export the appraiser deter- value", Assuming, mines that nor "export an would method be of the therefore, imported guns value", the "United that have next neither a "foreign applicable kind resorting States value", Before appraisement, however, the appraiser of value" value to would that probably want offered for states to to know sale in all the of value. they are not so discard that method the as available guns are the United of to freely establish that if he were to find that sale in this country, he appraisement also and offered method market required Accordingly, of imported principal purchasers, kind last whether for of would would apply of appraisement, viz. “cost imported shotguns a "foreign of is the pro- duction". If the the determination larly so, if the same price of have relatively value", simple - particuwholesale such or similar guns in does not quantities for home consumption in Belgium because of different quantities per sale (individual In other words, of imported the price per gun, packed, at in Belgium at the time exportation or, if er order, 3 Pp at that price the wholesale ties which any sale "foreign varies for home home guns the Belgian pur- value" would in- purchasers on be guns value of Sunday a the the for like freely offered for all "foreign into the in per to United suns gun, value" Belgian which purchasers 1577.95 applicable imported holiday, shotguns 1510. francs by sun that to francs converted exchange portation duty Belgian are Belgium Belgian of the therefore, of 43%, on or quanti- guns. rate of the the valorem rate in the would that Belgium by tax quantities in payable Belgian guns, consumption tax at imported ‘aint "foreign quantities consumption ver case, in is price either consumption euns the In imported the order). is ordered in home different frequently the Belgian value" of for of most transactions to the wholesate because "foreien wo Assuming, lar of value" are chasers. clude the vary the france unless case fas ee the or in simifor wholesale packed, gun; plus a imported and the ad would be payable dollars at the date of ex- on a suns States whole- sale of the per acked 3 as of that date falls rate of exchange the as 3 of the last ample, preceding would be used. For exchange was $0.02284, the dollar rate of of the assumed the "foreign would be rate of 223%) of ad valorem duty (at the per be $8.11 $5.41 per gun. Tf freely the gun ex- $56.04, value" amount would were day if the equivalent and business + or (at the rate of 154) would imported guns had no "foreign value" and offered in the principal market of the purchasers in wholesale quantities at States $78.18 per gun, packed, they would be appraised at their "United States value", which would be calculated as follows: per gun, less 16% and profits on the United States ($12.51 per gun) of guns in the insurance all sale United Net to for be selling for the charges price general United $78.18 expenses States, less from place of the United States shipment in Belgium port of arrival per gun), less specific duty ($5.- per gun), per gun. This figure is equal to the "United plus the ad duty. As the ad 224%, the States value" hence, amounts is in transportation valorem "United $59.17 by 1.225 and, On that basis of valuation of 222%) would amount However, per gun and the the to $10.87 if the is obtained by dividing to $48.30 per gun. duty (at the valorem per of duty was $3.- rate duty was 15%, the calcu- of per for general expenses and profits charges from arrival in the less specific This figure valorem duty. value" would States, less place shipment United of States duty (%3.- rate rate $78.18 ance of gun. price United $59.17 duty selling the equals rate States in $k.50 valorem United guns at value" of gun) to States lation per States and specific ad valorem "United ad (estimated sal per be gun, gun), the "United As the ad follows: Net less 16% ($12.51 the sale of on transportation in valorem =6-= at equals States rate and Belgiumto (estimated equals as port of $1.50 per gun), $61.17 per gun. value" of insur- plus duty is the here ad the assumed to be 15%, the "United dividing $61.17 by 1.15 and, gun. On that basis of amount to $7.98 The per above for sale the imported equal at valuation general that expenses guns that in expenses of guns and their combined with the allowance of 8% larly, the for M.S. Browning Company Arms Company may company determining i's be on permissible. the United Browning Arms Company expenses determining of actual the maximm Simi- that the profit realized by the J.M. on its sale of the combined with the profit the guns, for sale of maximum suns allowance than only the actual amounts of such general ly, it would probably be subjects from That is the customary ments at States per less the exportation price ($78.18 to such selling would of less amount such date to profits of the profits if amount Company for would States Arms 8% of expenses net Browning purpose the such 8% of the the by the amount be price, allowed. expenses and in to J.M. Browning for & M.S. obtain be determining profits, necessary & Brownin of Similarly, profits the amount allowed. United to realized of selling the latter is permissible. States only the whether United gun), the importa- expenses net re- the general the vtates with such 8% of the expenses If “United to on respectively, connection sale of the than those in States general its whether general general purpose it is believed latter on the In that Company for 8% for profits gun). Browhing company, and per the be value” net that may States the is believed the "United of gard, of of percentage ($78.18 tion would profits, guns M.S. per duty and of the & valorem by ad expenses price JeM. to $53.19 United selling it amounts obtained the such least is the calculations 8% assumption hence, value" gun. allowed of States respective: statements on Commny the and their last the guns which are being appraised. procedure in connection with appraise- of value". fiscal The ts J.M. year & M.S. prior to Browning Company statement, dealings in sumably, would the If of three unless the antedated the praised, by first be probably ascertained exportation which of the addition tained from all sumption in of or for In other words, cost of materials which is ing prices of FN's the most of to it which period for and plus added automatic shotguns which the date production", whether to for the home United than the its usual general FN, when fixing States, percentage all guns con- United the of ascer- be probably be by the of "cost of kinds, its sold. In calculation usual general expenses in Yeost of production" amount to less than 10% of the and no event may the addition labor, profit such a cost in of materials If their "cost probably be be converted value" must the of in calculation and labor imported amount plus guns production", in into dollars be U.S. converted the were that expressed Belgian (as to usual to be kind of francs in the explained Bn less than same of of for of the expenses. appraised value no cost 8% general and sell- regardless may and its expenses event materials States of are a of manufacture the permit other frequently for preceding would probably such produce would time i.e. Belgium labor a exportation labor from and materials element particular those to ap- being are exportation countries would destination the guns sales, for exportation manufacturer's profit, for Belgium, the ordinarily fourth namely, from of of as would ‘The guns. such cost the of kind that required usually "cost at appraised be to profits. of their of time case which in guns, total year, elements very production time the than more and ascertained be the producing in experience guns cuns probably would appropriate were imported the production", value (itemized), expenses general total the for sales total show pre- statements, Both shotguns. imported the its to solely limited be would course, of at would would have way "foreign above). as to MEMORANDUM RE DUTIABLE VALUE OF WHICH BROWNING ARMS COMPANY MAY FROM BELGIUM There which the are four different are ordinarily applied United States. They to applied United States imported into production. k merchandise value or is as higher: 1. Foreign can 2. be If neither foreign value ascertained, then United o» If neither export foreign can be of va follows; value, whichever nor export _ Sta tes valu value, export value, ascertained, nor then cost value Be foreign The at 2 of ig Foreign imported value. 1! to value values, value United States value of production, price merchandise Export Coat order of dutiable are: Foreign The kinds SHOTGUNS IMPORT the : s- time ten, such 4 or of of its 7 the 3 mea of " imported exportation g similar consumption markets ews value ¥ to all the imported tion ready shipment included consumption Export value; The in export in the to the ae a Fen.’ “< offered in the principal in the usual course of trade, plus a packed condi-~ merchandise the price of in United States, country value rT United ~: 4 purchasers ordinary of the freely the cost home is exportation, in not to . of and ig $ country quantities for 8 merchandise sale putting € Bi Ge cs ee merchandise of of the if a who similar merchandise for exportation. imported merchandise is the has is he price at at the time such or which sale to country and in of its exportation to the United similar merchandise is freely offered markets of all purchasers in the principal of in the usual wholesale course of trade, for exportation, the ordinary United States, ready for plus the shipment if cost of cases, not included States value the exportation the for quantities packing in States and price to the making of the mer- chandise. United the States value: The United price at the time of its which such or similar states at freely offered ready for sale for delivery, in states to all and the ordinary in and from the exportation to profit and general Gise purchased may exceed 8% of the in lisu profit the by ed paid on Cost of States, net market United less cost merchandise in not bringins the the country of allowances for States on which allowances of selling commission selling of to less United States States duty, United a the quantities (neither expenses, of wholesale and the is packed shipment in merchandise incident price) purchased {not by merchan- price) paid or the to or, exceed contractimporter. Production: Cost of production consists ments: producing handise of the The cost the imported at of a time imported materia he merchandise abdor or employed we similar preceding the date merchandise which would of is United consumption, usual trade, importer and United the of sxpensés net domestic merchandise to the imported charges place the exportation of United 6% of the be in other imported principal course merchandias to the purchasers transportation of for of in mer- exportation ordinarily permit its production in the usual course of general expenses (not less than of materials and labor) in the case cases, coverings and pack- incident to a condition business; 2. The usual 10% of the cost of guch similar ing or Oo. The cost of and all other costs imported for shipment to in the packed United cost of materials expenses) equal to the added in fixing the of same general merchandise by duction make who putting States; An addition for profit the the all merchandise 4. of merchandise; the ready and (not less than 8% and labor plus general profit which is ordinarily selling price of character ag the imported in the country manufacturers merchandise the seme clags or kind be seen that, if the of of pro- merchan- dise. It will Company were to similar shotguns thus shotguns from FN and if were not sold in Belgium for exportation the United States, the imported other urchaser in guns would have no “export appraised at be lar shotguns for home be. appraised similar all were purchasers if such for sale either ed guns as explained would be accordingor guch freely offered for to all purchasers Otherwise, they would value", if such offered for in Belgium. "United shotguns States were domestic freely consumption or similar in Belgium or the appraised at their above, would if sale shotguns were United “cost in sale the United not so States, of to shot- values", for Finally, They or "foreign their imported value". like their consumption at Arms purchase any ly Browning simi- or to States. offer the import- production", Assuming, Company and were that they price, the lated on plus to therefore, purchase had a landed the "foreign United ad valorem Browning guns from FN at cost the guns purchase price thereof and Insurance charges from ($1.-), plus basis of the duty (22-1/2% On other of specific of $16.- hand, if Arms $16.- equivalent duty-paid States the value" transportation the such that each to that could be duty calcu- (316,-), Belgium (93.-), - $3.60), to plus or a total of $23.60. "foreign the value" and referred to 349.-, value") would allowance general ance at of 16% expenses agpecific the duty dutiable imported guns had no the United States as above value ("United States in dutiable calculated as ($7.84) the Browning and from sold their ¥ be charges were f: the for follows; profit, less Belgiumto the (5.-), value equals plus valorem rate of duty obtained by dividing is ad United by Arms the 1.225 an Company's and insur- States (G1.-), less This valorem 22-1/2%, $35.16 less transportation $355.16. the $49.-, figure represents duty. As the dutiable value ad is and, hence, amounts "United States value", to $28.70. In will note general that of also I allowed expenses and of net note these United that this kind landed duty-paid duty was a value, cost on $3.-. duty in is the that the the Arms profit assumption equals basis reason calculation latter least duty in my of of of calculation percentage You will in caleu- G5.- calculation "foreign for Company's that price ($49.-). whereas The on the at specific the you the Browning selling of specific its items States of fact 8% for two of 8% for I deducted lating specific caleulation that each the this the of value" higher the amount "United States value" would indicate that the guns would are be valued subject If at to more the cost of (purchase pri charges), plus duty), or a total paid cost on the guns slus & $5.of speci the latter would basis, th accordingly (transportation (specific duty), $28.46, contrasted of $23.60, od 9 if The above calculations purchase price of which may be arbitrary ficures, » (25.-, higher appraised duty-paid than theyi were plus be $16,- and insurance $6.46 (ad 3 valorem with a landed duty- appraised PP at "foreign2 on an assumed "foreign value", value", lations will value" and and an equivalent altogether too low at this however, illustrate the difference between purpose, If I be memorandum with New York, shall whatever N.¥., June 18, and glad to explanations subject, 1 Despite that value" not, time. I believe States the based $16.- "United clarify were will the above calcou- “foreign serve your supplement this may be the needed present to MEMORANDUM RE DUTIABLE VALUE WHICH BROWNING ARMS COMPANY FROM BELGIUM there are ordinarily tates. are four applied They imported to kinds merchandise of dutiable imported value into the 1. Foreign value. ee uxport value. 3. United States 4. Cost of in which merchandise il. production. these four as follows: Foreign value higher s or export kinds value, of value are whichever is neither foreign value nor.export value ascertained, then United States value; if neither foreign value, export value, United States value can be ascertained, cost of production. such or time foreign value similar merchandise to country exportation, of ordinary merchandise if chandise for can nor then a of in trade, a packed similar home to the United States freely for in the merchandise offered is price at which sale for home the principal markets of the usual wholesale quantities and putting the imported the United plus the cost of condition ready for shipment cost the is not included consumption in the to in the price country of exportation. of the in mer- valuet the such imported is purchasers course The at all in States, Export of of its exportation consumption the applied value? The at the United value. is If be Foreign which are? The order to different OF SHOTGUNS MAY IMPORT or chasers time export of its value imported merchandise is the to the United States at which is freely offered for markets of exportation similar merchandise in principal the of the country of sale to price all exportation, purin the usual for exportation to ing and ready the merchandise. United wholesale making quantities the for of shipment if not of imported to the imported merchandise is freely cipal market of United States to and in the ordinary transportation and other charges incident place of shipment in and less duty, of merchandise from the exportation to the United and expenses in importer United offered of commission the (neither States selling (not price) paid or by importer. to States, United pack- price of is the at which for sale delivery, in the prin- purchasers in the usual course trade, States of the to bring- country allowances on less for of profit merchandise purchased of which allowances may exceed 8% of the price) or, in of profit and expenses, the net United States selling exceed contracted all cases, States ready the trade, merchandise United for of the packed quantities general in consumption, wholesale cost value cost included exportation domestic of the its for Cost plus time similar the States, States or a course United such net ordinary The the by the the value: at the United in States price ing and lieu 6% of be paid on consists of to merchandise not purchased Production: Cost of production l. The cost of producing materials the and the following elements: labor employed in imported merchandise or preceding date merchandise at a time exportation of the imported would ordinarily permit usual course business; of The usual general of the cost of of such or similar its expenses materials and the similar of merchandise which production in the than 10% in case (not less labor) merchandise; the The cost of all ing and all other the imported dition ready States; and seaen to putting a packed for shipment to the United less than profit of the of materials (not and disenaes | equal ordinarily price incident in for is pack- merchandise addition general and costs An cost coverings of to labor the added in fixing merchandise of the character 8% plus profit the the imported manufacturers in the who the same class or kind be seen that, if the FN if like which selling same as make con- general merchandise country of by production of merchan- dise. it will thus were to purchase shotguns from were not sold Belgium for in in the United States, value". They would value", if to purchasers all they or such would be similar purchasers or shotguns their Assuming, were to purchase had a"foreign of purchase price charges from duty $3.-) total “cost of bheverese. such guns from the of $23.60, Belgium. sale Otherwise, if sale such to so offered for sale Sectep: the imported euns would production", that the FN at plus explained Browning Arms Company and that they landed duty~ each price, on the the basis transportation States Fin- as $16.= that States. all not United plus ad valorem duty for were calculated to offeréd United could Belgium "foreign the the ($16.-), “export in to thereof no their for equivalent be have offered value" guns purchaser freely were United at shotguns value", or the similar States shotguns Belgium freely in Company “United similar in cost their or either at were Arms other appraised consumption at any would for home to or shotguns shotguns consumption such paid be domestic if appraised imported similar imported for exportation accordingly appraised ally, be the and Browning ($1.-), (22-1/2% of $16.- and plus above. of the insurance specific = $3.60), ora On the hand, if sold the United . Value" and S49e~, their culated as follows: the were other in dutiable Browning Arms the imported States guns had above referred to value") would be cal- ($7.84) for as value ("United States $49.~-, less an allowance of 16% Company's general expenses and from no "foreign profit, less transportation and insurance charges States ($1.e-), less specific duty($5.-), equals $35.16. This figure represents the dutiable value plus the ad valorem duty. As the ad valorem rate of duty is 2241/2%, the dutiable is obtained $35.16 by 1.225 and, this calculation of "United States I allowed 8% for and its by dividing Belgiumto hence, at the United value amounts to $28.70 In note that expenses these two States items selling a specific in 8% for my equals price duty of calculation the that each of at that percentage of the net United I deducted least will also note that in calculating this kind of value, whereas landed duty-paid cost on the basis of "foreign $3.=. reason for the higher of “United States value" would indicate that the they would be the specific duty was amount of specific duty in is fact that guns are valued Subject to the higher calculation than $25 ,—, on latter guns accordingly $1.- (transportation duty), plus $6.46 trasted with a would and the landed basis, the $16.= charges), duty), duty-paid case be insurance (ad valorem in which plus (specific $5.- plus of if they based an assumed purchase which be above calculations were of $16.- and an "foreign 1 believe price,) cost The low (purchase $28.46, value". too duty-paid of “foreign equivalent landed or a total at together ever, calculation appraised of the price The duty. cost appraised the latter at more You specific If general assumption $5.- the Company's will on the ($49.-). of Arms you profit value" the Browning value", 423.60, on value", at this time, Despite the that the above calculations arbitrary will con=- were may ti ce illustrate alhow= the difference between will serve your present supplement this memorandum needed clarify New to York, N.Y¥., "foreign the June value" purpose. with and "United If not, whatever States I shall value” be glad to explanations may be subject. 18, 1945. gonn R. Rafter and S. BROWNING COMPANY OGDEN, UTAH METHOD OF DISTRIBUTION OF SECURITIES GENERAL PLAN OF ALLOCATION a $m 273 ¢ep fe Ae S 2Y ks& Ee a5 & > nl } eg SUDSIGAAaLrY , <3 Dea D Bb ind js aa «9 khhi WAAL ¢ CAB LES oud . wi es . head 2® adat re & S&S LOY & the; DE cate Cx F “LES so Corporation, : and ‘ as near a fhe other a pro rata fractional shares. that an apportionment that groups. As the second number of shares be made under all of the particular It is also holders stock to make all allocated shares like Union te that Pacific Securities shareholders to the extent among of such on #t% general secu family of a relatively small that the allocation shareholders will receive in cer to the family where the shares group of another are sufficiently LE this the preferred stock own this individually. aa the wishes that preferences ey between Company the various the basis group who already dio issuan a pro rata distribution, in the allocation securities rata some to the family generally such that allocated like Transportation be cbhserved of contemplates a % . 4 rity shareholders on securities in the allocation to avoid to aad it is contemplated substantially contemplated will allocation stockholder, instances will be allocated marketable issuance in order ode involving step, In thous in instances step without a pro receive Also « be made on substantially will in number tributed to listed as the first a plan which J large L. onl as can be computed to each will security. atts With respect contemplates others € basis plan whereas unquoted Ges ow oC av stock of individual are express shareholders within group. In the original allocation advance of the distribution market values bution date can so and the exact that shareholder will, in date adjusted, any pro rata each fact, be with receive it will be necessary for the purpose however, to differences of value the the in market an exact pro of rata the of making exact market value of can be adjusted distribution to use a market such valu allocati value on the securities on such in the cash distribution securities in value and the at the point cash date so that adjustment of distributio MECHANICS OF HANDLING DISTRIBUTION The investment three groups, lL. of the Parent in securities Stock of which 3. may be classified into namely: Listed Marketable Securities in the custody & Company, or in the Company’s Safe Deposit 2. Subsidiary are generally Companies, and other of J. Box. A. Hogle Investment in the Safe Deposit Stocks, Box of the Company. United States 24% Treasury Bonds due December 15, 1967/72 which by the time of Distribution will all be at the Trust Company in New York City for Safekeeping. The mechanical has been worked method by some of the has attention that such securities with been brought which are held held by the collects the dividends Trust Branch, Salt Department under and income, other split-ups, exchanges, surrenders safekeeping account much statements of the transactions. the same, those and may wish to advise the Company bution so that order, that it will In handling securities as to how such be pursuant of listed shall and sales, stock and them, service in general mailing handles the regular monthly is charged by the Trust value on an annual basis. an will wish to not now having such an arrangement that in this respect coincident each with the shareholder in advance from the Company It be requested of the distri- to him, or his to his desires. in the hands transfers purchases shareholders is transferred securities Company such contemplated such N. A., Trust such an arrangement of his desires transfers be placed into some of Utah, the handle having a safekeeping Bank wherein shareholders where of the fair market therefore, stock handles <A fee for this that possibly when the Utah, arrangement would shareholders to enter It is, an under Security them for redemption as a broker of $1.00 per $1,000.00 that City, some account Lake are distribution. for their Place Exchange arrangement our of the First and continue to the Trust Department Main recognized securities now owned already Company of these various investments it arrangement the distribution to their own personal shareholders, hold of handling Irving out as follows: With respect is Company securities of J.-A. be made. it is contemplated Hogle & Company who will Upon the completion that all such be instructed of these transfers J. A. Hogle & Company securities Main and to will be advised the Trust Department Exchange Place shareholders the First Utah. to avail themselves of Utah will wish to have the securities & Company, their nominee, may be handled expeditiously. In this be issued the & Company in shareholders subject name of of Utah, to Smith in who do not wish to avail is contemplated with In of the safekeeping account Bank case City, the the the Lake Smith Bank NAc, Salt of Security of Branch, Bank plan an arrangement Bank Security name For those transferred First the will such the in ficates of all of who desire Security to make delivery order that the Trust registered separate certi- of the safekeeping Department of the First safekeeping that the securities be held for order of individual, who thereafter each in shareholder. N. A., the those transactions each themselves of arrangement, connection for Utah, may by withdraw the securities or make such other disposition thereof as he wishes. If stocke holders do not express any wish their securities be delivered to the Bank, to Stock Subsidiary _COMBENE RSs These Company order registered subject of the of securities and transfer in the matter, the in their own names are generally thereof will on hand instruction, be registered in the names of the individual of the transfers delivery of Utah, at its Trust Utah, holders. Unit to be placed This will States will After Trust the allocation Company be made by the Company that and the other securities of all subject securities and, these securities that upon completion to the First at Main and Exchange Security Place, Salt to demand Bank Lake of the share- at one place. Bonds of these will be advised correspond with the allocation are that these advised shareholders box of the representatives it is contemplated then permit delivery Treasury by the company Department with Due December 15, 1967/72 in the safe deposit be handled of any other City, by the Bank shareholder. in the absence N. A., and held will securities to breakdown thereof denominations has been decided the denominations as made to can be as low respective as $900.00. upon, the Irving of these bonds to shareholders. We After is this t the Irving Trust Company The Security Bank shareholder these of Utah entitled safekeeping subject to to these receipts the securitie will be in safekeeping or may be withdra wishes of each is contemplated that the present cash will > redeemed so that shareholdex upon during contemplated that securities and that ributed, with the which F. Savings in place of this and the month in liquidation be immediately reafter in Series is adopted the distribution steps will cash investment be distributed soon as the plan of liquidation decided First will these bonds may remain be for taken will a to effect investment of 1951 be made, is it is a distribution during the month the other assets distribution being the final distribution. will of be dis- MEMORANDUM ON SALES _OF PROPERTY DISTRIBUTED IN KIND No gain or loss in kind of its assets. to liquidation, prior is realized However, gain or loss to liquidation. to the corporation, Thus, and by a corporation if a corporation upon sells the distribution its properties is recognized on the corporation's if assets have increased in value over the basis the neat. a taxable gain results it sells corporations if the corporation then distributes the proceeds Liquidation to may shareholders, ite shaseicidess, a capital which is inclusive of the gain previously tion. tion path | This duplication first distributes seockhoicace only. i. its properties where in kind and a distribution shareholders, the question often the made the or whether the taxed a having not of law. tion had that sales been made by the corporation. The intention to save takes nothing to ds with the the corporation the transfer or its officers in liquidation may as a sale by the corporation In the a liquidation case of U. past, were S. v. sale. well with erequently attributed Cumberland Public the sales in kind is a Co. in by the to the corpore= if the corpora= are made by the is closely a This is a question so long sales duplication stockholder and other in ica of in fact and of fact and as the corpora~ it had been in the followed to whether can be considered to the poe ee Service realized avoided by the Bureau the consequent by sale : however, be viewed to the sales participated negotiations of taxed is irrelevant Once, even be transactions | by a sale by the stockholders then in tax may be successfully However, prior established negotiations, Internal Revenue in tax. anticipation although cases, of in the it now seems =2= rather clear tiate for that a stockholder, sale of properties the corporation in no way Nevertheless, negotiations until it would assets are distributed an individual In appear is a party to them. view of the possible tax which might result to pay a tax on sales of assets no negotiations officers the and shareholders. not to sales sell It is frequently not always 1f he is an officer received after if, and in liquidation, the assets any even as and when clear the for whom of the corporation. of misinterpreting be conducted start in liquidation, if both the corporation until if to dangers nego- in liquidation, can agree or discussions stockholders, procedure is distributed particularly may negotiation. safest stockholders heavy that the on his own behalf, to be received to such the property that is acting, only contemplated it is still after though if acting the facts, and the stockholders were it is recommended by anyone, including have distributed been corporate to J. M. & M. S. BROWNING COMPANY OGDEN, MEMORANDUM Status ON PRESENT of Original Request Section ll2(b)(7)of Several representatives of for Ruling Internal informal the STATUS OF of Mr. with respect viously filed under plans for liquidation of the Internal Revenue cluding one with the General Internal Revenue, it plans virtually is viewpoint of a new within that Code. have Randolph to the been Paul request a series Counsel's office of The of the plans, for the Bureau which a ruling, under Internal Revenue adopts call the for purpose of importing the law and liquidation contemplated would within the provisions 112(c)(2), if it were not for Section pretation of the reorganization desired but, provisions on the apparently and hemce contrary, 112(b)(7). gives is unwilling if a ruling were as to to give would tax and the balance capital gain, stock, The tax of the except tax on @ complete thus entire for the computed at distribution would be distribution is of the substantially liquidation, with the upon, would 112(c)(2). ordinary rates taxed a importing equivalent exception the the ruling insisted profits of Section precedence This and the inter- that a tax should be computed under Section earnings such come In their likely rule accumulated formation guns, of Bureau of original provisions law in- the reorganization the pre- 112(b)(7) the come Bureau of the Bureau impossible. company the conferences, ruling subsidiary by with for a favorable original held under Section After that PLANS Code conferences office seems LIQUIDATION Under Revenue Revenue the Internal of UTA that as company to the earnings and profits would Alternative Plans be taxedat ordinary In view of this Paul was already conference be at San Francisco plans. for plans ferences with have under been eliminating the and his purpose his partner, officers company, consideration as ducted the that company a result three importing of further alternative company, which appears This distribution of all but would importing Arms assets beesutioun be thereafter con- which certain assets Company. liquidation redemption for a part A distribution in the 112(b)(7) plan. distributed stock plans original <A partial 3. con- the be of Bar during which several follows: would tion alternative under the Browning 2. of feature a complete require of possible the objectionable only Eisenstein, formation possibly and the as y Louis the involve the of and that Mr. of discussing discussed, suggestion liquidation under Section would by were Randolph A complete the of under to the shareholders in cancella- stock. in kind, or partial liquidation, Bar B Company, followed by a complete liquida- on these separate alternative plans B Company. Comments are him it was as Mr. 1. to be tion with inasmuch As a result of these conferences, alternative of situation, in San Francisco, held rates. submitted as follows: three Plan Contemplating Liquidation Under ~ §ection 112() (7) Without Formation @ Subsidiary Company to Import Guns plan original no subsidiary may have corporation plan, Estimated Value be would identical with the wouldbe distributed and In order that you results involved formed. approximate tax calculations following the of assets all the of an estimate this under that except substantially is plan This of are submitted: Assets (Excluding Market Changes Subsequent to hbecember 31, 1950: Estimated Value 8,794 ,265.92 December 31, 1950 increase through Earnings and Profits: Wet Earnings to Less Estimated Estimated Estimated June Income 30, Tax 1951 325 , 296. 35 118,800.00 $9,000, 762.27 Value Cash for Distribution: Gash june 30, 1951 Notes Receivable Accounts Receivable Less: Estimated 206,496.35 Income Other Liabilities 235,457.03 970,834.34 277,004.59 Tax 118,800.00 905,927.98 1,483,295.96 1,024,727.98 $458 , 567.98 Estimated ings and Accumulated Profits: Earn- ~ Balance June 30, 1951 Less Estimated Income Tax Estimated Basis fotal Assets Less for Bar Cash Remaining Assets oe 43h 332.65 118,800.00 B Stock: | $315 532.65 9,000, 762.27 458, 567 ° 98 $8, 542, 194 29 Nee OSs OOTES "x $2, a5 ook. 46 $941,176.60 Computation Federal of Taxes: fax: On Earnings and Profits, 50% Average Rate Applied to $315,532.65 On Capital Gain: 157,766.33 Cash Distributable 458,567.98 faxed $143,035.33 Less Earnings as and Profits Capital On Liguidation Value 315,532.65 Gain fax at 25% of Bar Snes B; 3, 000,000.00 Basis Gain Tax : 941,176.60 $2,058, 823.40 @ 51h es 25% fotal Federal. Tax State 708, 231.01 Tax: Assets Basis 9,000,762.27 2,679,904 46 Gain Tax at 5% Less Credits following $6, 320,857.81 ap neds pmrrems fotal Federal and State for Taxes- Deductible year: Bg anal ~from State: 316, 042.89 Taxes State Tax Deductible from Federal; 1,024 ,273.90 158,021.44 dn $708,231.01 @ 5% 35,411.55 193,432.99 Net Tax Cost Plan Contemplating tion of Parent of tionate the assets part of Partial Company fhis all 705.85 $830, 840.92 Liquida- plan contemplates of parent the the capital, a distribution company with the of substantially in retirement exception of for those a proporassets which relate results are Fotal to as gun business. the Computations the tax follovs:; 9,000, 762.27 Assets Less Assets which would be Distributed: not Cash or Bonds for Working Capital Browning Arms Fixed Assets Stock Company Real Estate Inventory of Guns Assets Less of Allocated 1,000, 000.00 1,070, 097.18 19, 982.19 ake, 993.92 85h 40 2,333,92769 6,666, 834.58 Distributed Basis; $6,666 , O38 . 56/89 , 000, 762.27 x $2 ,679 , 904.46 1, $h 681,836.29 Gain Federal TAX s farnings and Profits 315,532.65 Capital Gain hb 366,305.64 Total State 984,996.29 @ 50% @ 25% P') 766 ° 33 1,249, 342.721 $4,681 ,838.29 Tax: 234,091.91 5% x $4,681 ,838.29 Total 157 1,091,576.38 1,483 434.62 Taxes Less Credits for Taxesfollowing year: State Tax Deductible ~from Federal: ~~$234,091.91 @ 50% 117,045.95 $1,289, 342.71 @ 5% 62,467.13 Federal fax Deductible from States: Net Tax 179,513.08 Cost Plan Contemplating Distribution of Bar B Stock Only This plan may be accomplished in either one of two ways, namely: (1) hrough Bar a distribution B stock quent liquidation of the Bar B Company . (2) A partial liquidationby distribut- ing Bar B stock in exchange for a proportionate part of the company's capital stock. Lf a distribution conditions in kind of followedby a subse- it would appear under the results wouldbe tax of earnings and profits, with applied to reduce the basis of the parent company’s stock as basis be exceeded then such excess With the parent be treated company, and taxed as under this plan, such distribution be the entire are estimated, Company dent, which a which of being balance the any a return would continuing operations, the portion of any wouldbe out of earnings and profits would the of the year. If these a dividend from Browning Arms earnings to including at $723,630.00, gain. value capital taxes, of $200,000.00, distribution long-term accumulated after the such tax out this of any to ig Should portion existing an ordinary capital. the is made as of dividend that in kind end then the tax on such a divi- if a 60% average rate is used, would amount to $434,178.00. If a value of Bar B stock is used of $3,000,000.00 there no capital tax of further company’s gains as the aggregate basis would the be parent stock is $2,679,904.46 and the remainder of the distribu- tion of Bar B stock at this value would compute as $2,276,370.00, as follows: Value of Stock Less Portion Taxed as Dividend Dividend from Capital Applied to Reduce Basis 3, 000,000.00 723,630.00 $2 ,276, 370.00 (7) Of course, if the value of the above $3,000,000.00 it wouldbe possible tax after would be paid, the basis is Bar that some exhausted. used the aggregate basis for ell shareholders but in the actual computations will be inasmuch some instances even gains tax would result. One hazard of this the Bureau of Internal used attitude ized and of States @ part of earnings Commissioner ing that income In spite uniformly the and of of In the differ, it is the is the Revenue fact individual possible rather with that some Tax Court of the is not appreciation profits for determining source adheres of his policy of hold- constitute taxable unrealized appreciation does not to the distributing corporation, such unrealized determining source tion in substance, would, parent company’s of earnings and of distribution. hold that cost of Bar B stock, distribution, to while is capital to unreal- unrealized Revenue in stubborn respect the basis that that Internal a part figures is $2,679,904.46, of $3,000,000.00, method gains holds nevertheless market they increased capital shareholder's with a valuation appreciation. United as each B stock profits for the The Commissioner's the difference appreciation purpose interpreta- between or $669,926.76, of the and the fair value, would increase earnings and profits, even representing taxable income to the parent company. If the Bar B stock is worth $3,000,000.00 $2, 330,073.24 ings at the which, close this when added of the year though appreciation would amount to to the estimated accumulated 1951 of $723,630.00, not would make earnthe accumulated earnings $3,053,703.24 and consequently under such circumstances the distribution of Bar B stock would in as a taxable dividend in a tax in excess of $2,000,000.00. be taxed its rates which might If to obtain entirety result this plen a ruling from adopts. However, were the carried out Commissioner which he tions, that the on the Commissioner's carrying the case to the Tax appears a decision in our favor would appeal to Circuit tax the Bureau Commissioner could even at there, missioner. seem that at could not expect except on the position it would appear, under existing condi- Internal Revenue would possibly assert theory which would necessitate Court the United States where be certain. The Court of Appeals but the the of almost in one Circuit, decision is In other words, if this plan adopted chance ordinary we least we wouldbe an excellent of at $3,000,000.00 certain to have of winning the were a contest against but it Conm- it would would stand point. By reason of the rather small chance of losing the contested case, it may be considered alternative of distributing tionate part of parent If plan were this it may be possible of Internal Bar B stock company’s adopted, advisable with stock its The Federal in exchange as a partial resulting to obtain a favorable Revenue. to adopt tax second a propor- liquidation. increased ruling on such for the tax, then from the Commissioner a distribution if is assumed that 40% of the capital stock would be retired in exchange for Bar B stock, then on a valuation of $3,000,000.00 for it Bar B stock the tax wouldbe computed as follows: Valuation of Stock 3,000, 000.00 Gain $1,928, 038.26 1,071, 961.74 Allocated 40% of Basis Computation oF Tax: "$723,630.00 @ Estimated Average Rate of 60% $1,204 408.26 Capital Gain at 25% b 3h 178.00 301,102.06 ss Total Of if the course, $735,280.06 of 25%. Comparison of Plans liquidation erease (1) and of under Section 112(b)(7) the partial liquidation with reflects the the following in- in tax: Liquidation 112(b) (7) However, a further Company, Section Increased Cost of is given under if effect distribution in order 1, 303,921.54 Liquidation Under Liquidation Arms (2) A comparison fax on Partial to above increase at the capital $3,000,000.00 the tax will correspondingly gain rate increased is B stock of Bar valuation Partial the of assets to make 830,840.91 the $473, 080.63 partial other than calculation liquidation stock plen of Browning somewhat comparable the tax on the additional assets distributed would be $260,214.31, computed as follows: Assets not Distributed Less Browning Arms Remaining-Forward, 2, 333,927.69 1,070,097.18 1,263,830.51 Remaining-Forward, ee 1,263,830.51 ESG $1,203,030. 51/$8, 543,194.29 x $2" 679, 904.6 396 ,4h9.49 Gain $867, 381.02 Tax: State and Federal @ 30% The total difference in Previously Computed Tax $260,214.31 taxes would then be as Follows: on Partial Computed Liquidation Tax 1,303,921.54 on Assets not Distributed 260,214.31 Total 1,564 ,135.85 Less Tax on Liquidation ~Under Section 112(b) (7) 830,840.91 Difference However, this involved in considering these factors company the difference enumerated 1. Under continues basis the as on two partial operating the gun importing would an excess profits have all plans. factors Some of follows: of liquidation the parent business and after credit, as calculated which if it is assumed that an excess profits is worth 30% of this sum, liquidation the of the reflect plan under Section cost in terms of excess profits puted completely the of $151,618.94, tax is payable, not a comparison are distribution by us, does $733,294.94 or $45,485.68. 112(b)(7), while On this cheaper, would taxes $45,485.68 per year. 2. At the present time Federal sale by the parent company excise tax is com- to Browning Arms Company that the excise tax then owning Arms Company sells during the past guns sold might well be assessedon the guns > $75,000.00oa > per annum. an excess which assumption tax be would seems after which this additional income and excess reasonable, deducting the the net saving cost taxes, plus of in State tax would occasion. profits price However, profits this tax, additi and Fe Based on 77% Federal 34 State taxes, the total rate would be 80% which on $75,000.00 would amount to $60,000.00, leaving the net cost at only 3. of the assets $15,000.00 In the liquidation distributed have per annum. under a basis Section for subsequent stock, the or gain of the cost of parent company that if these assets are later a larger result as compared with in @ partial liquidation. speculative as it sold and, are later stituted basis However, the of the capital result to market The of this increaseé unless the distributed assets in the a likewise instances with increase value no value is obtained in some low basis, is the all determining oss sold 112(b)(7) is of no value through death of any of the shareholders sold where assets might gain would increased be event later be in any with liquida- (22) tion under Section the event sold, all of however, increased the to a material sum in are assets not be value of consequently, is speculative. basis stocks assets and would amount and 4, paying 112(b)(7) sold. as In the partial would be wouldbe retained. If would be parent that consolidated payable és before the returns it is but are the that an annual of $200,000.00 not filed) an of the dividend stockof Browning assumed company need stated, liquidation most distributed, pany These Arms Com- dividend (assuming then a Federal tax on these dividends would be payable of 7.05% and a State tax of 3%, or a total of 10.05% which on $200,000.00 would amount to $20,100.00. 5. would be under did the the price price The existing importing. to question the price Inasmuch consumer, Stabilization arises might to what Arms as there need any is quite possible well companies. However, this situation and it might held the Browning to was realized any such (v)(7) its by own the situation that two a gross in both restricted to permit not Company be situation if Browning ing Arms if the controls it equivalent as gross be that profit profits increase in the of Office in the formerly is full Arms Company Brown- existing of uncertainty Company would be gross profit eliminating that which formerly parent company, then any period where under Section li2 prevailed the during liquidation could be very serious. 6. If the Browning Arms Company were both importer (13) in so far this as Section situation would price controls disadvantages 102 is seem to almost concerned, it would almost a liquidation able, For Section 112(b)(7) illustration, the realities of exists in uncertainty which appear in spite that of some 112(b)(7) would be advis- between the difference and the partial result unchanged. under Section if the might benefit although remain the for not some that possible quite it were If the is it and wholesaler liquidation tax under is $733,294.94 it would take many years to overcome this difference in tax through the summarized disadvantages of the section, which might be as follows: Estimated Annual of Excis® Tax Estimated Annual Loss Net Cost Cost of of Credit 15,000.00 45,485.68 Total Less Saving eorporate 60,485.68 on InterDividends 20,100.00 Net Annual Cost Of $40, 385.68 course, these figures do speculative loss of basis in liquidating possible that take excise into consideration the under Section 112(b)(7) and it is On the other hand, however, profits tax credit only applies in years where profits tax and it would appear that penalty under Section 112(b)(7) the not the loss of the the more than estimated. corporation's there for is excess an excess liquidating at $40,385.68 per annum might be well ex- pended to save the $733,294.94 between these two plans. tax may be It representing should also the tax difference be borne in mind that the additional costs corporate tax are dollars and which in the hands of the shareholders less by the tax they would have to pay further considerably tribution Recent of this Developments a result of to be more receptive restricting the present liquidation in the Bar B Company, which would exist seem company viewpoint Mr. was contacted with the by Bureau idea was price ceiling Bisenstein, to Revers developed that their B stock. while the conference Out of his Bureau of Internal on a distribution in kind retirement of stock, view regarding appreciation, the Bureau ruling could present if we mightbe a plan to give embodying resulted in a higher tax. informal conference whereinhe will Mr. policy able discuss respect favorably its Eisenstein us without unrealized a favorable contemplates first to Revenue a distribution now present Paul, with rule of this Randolph informally views stock From not in of uncertainties regulations. requested of of Bar the of Mr. and in kind of a partner telephone Internal to a distribution in view the contempletes which plan the of officers discussions, to particularly under Louis a distribution could on a dis- money. As the are 112(b)(7) under Section liquidating for a plan which another where the distribution of Bar B stock would be made, without retirement of any also capital agree stock, under same year either to: in the equivalent conditions to make wherein a cash the company distribution would of an amount gains (1) he earnings (2) The entire accumulated This plan would result cash distribution thus made. to then it current by 25% of the Bureau is not receptive that their views couldbe the would be in this earnings as at the increasing plan requested distributed Bar 8B stock tion through a pro rata retirement We not as received yet word were as In the event contemplated of unrealized the the is capital or not to eliminate if the to whether obtained appreciation have of the and profits as existing close of the year. tax ruling and profits year. question of parent to the in partial company’s outcome a favorable of ligquida- capital this stock. conference. im } ' _COPY 5/0/27 Memorandum of Important Facts Bearing upon the Proposed Formal Agreement with the Browning Interests relating to _the 57 mm. Gun. elem Mr. Stone: We have Company agreed for the to grant a license to the Armstrong~Whitworth manufacture of 57 mm. gums upon \'. Browning, and it is urgently necessary with were accepted by Mr. that we out carry necessary we must we our agreement the that license papers. can a formal license to Armstrong-Bhitowrth a form license from the Browning interests agreement which we now have. With grant obtain informal viewto drafting the ourselves and from in detail and I find primarily from our among several the information submit license necessary us to that lack licenses from Armstrong-Whitworth there are of detaile’ Browning parties as to their In order that you may heave the which furnish ourselves replace John terme and formal Before to nenieed futureplans many the company Browning I have information as and and companies in regard a full to the understanding a interests reviewed difficulties the to the situation involved, resulting to the from relationship our ownership of the lack of detailed of patents. matter I following: i- We have an agreement with J.i. & M.S. Browning individually, dated April 6th,1903, whereby we agreed to pay to the said J.M.& M.S. Browning certain royalties for firearms "containing or embodying" any of the certain patented inventions relating to automatic LUNG » Z~ We have been advised in a letter dated January 60,1915, and signed by J.M. and M.S. Browning that the »sbove agreement, among others has been assigned to the J.M.& M.S. Browning Company, We have a further letter dated September 21, 1925,signed by J.M. & M.S, Browning Company, per M.A. Browning, saying that this agreement, among others, had been assigned to the Browning Brothers Company. We have no further information as to the exact dates of these transfers or as to the terms thereof, and we do not know whether only the agreements themselves were transferred or whether the legal title to the patents was also trensferred. We should have definite data as to these several transfers. S= So far as we know the 37 mm. gun is entirely distinct from anything intended to be include’ in the 1903 agreement, but before signing any specific agreement as to the royalties for the 37 mn. gum, we should have a definite release from Browning Brothers Company. (assuming that that company now holds the title to the 1903 agreement) making it perfectly clear that we are not obligated in any way under that agreement or any addenda thereto for the 37 mm. gun and that we are in no way obligated except as stated in the new 37 mm. license to be signed. page 2= 4a We have an informal memorandumof agreement with J.1'.& M.S. Browning Company relating te the 37 mm. gun, this memorandum being in the form of a record of a conference held at Hartford, May 22,1928. is signed "J.M. Browning, for the J,.\/.& U.S. Browning Company". This S= in view of the facet thet Nr, Browning signed this informal agreement on behalf of the J.Mo& M.S. Browning Company and not personally it is to be assumed either that he had, prior to the date of the agreement, made some sort of transferto that company, or that he contemplated some such transfer, We have no record as to whether there was an actual transfer, and, if there was a transfer, we do not know what it included. Further, we do not know whether the interest of the J.M.& M.S. Browning Company if any, has been transferred to the Browning Bros. Company, with the other agreements referred to in the above mentioned él, 1925. Apparently none of these transfers, in the Patent Offiese as it should have been, G-» various Mir. MoA. transfers even letter of Septenber if made, was recorded Browning, when here redently, said that there had been of patents as well as of agreements, but he did not have the data as to tke details. Mr. Val Browning when here resently Said that it wes his understanding that the 37 mm. patents were to be handled differently from the others. But as to none of these métbers do we have amy exact and definite information. vo~ We now desire to prepare a formal agreement as a substitute for the informal agreement of May, 1923, but we have no information as to whether this should be entered inte with Mr, John Browning as administrator of the estate of John M. Broming, or with J...& M.S. Browning Company or with Browning Bros. Company. S~- If there Company?‘ all was a definite patents and legal transfer to J.v.& M.S. applications be able to make the proposed formal relating agreement to the 37 mm. Browning gun, with that company we may (or ite successor Browning Bros. Compamyr); but if there was no such de finite legal transfer, these patents and applications are now owned by the estate of John ‘. Browning which was not a partyto any agreement signed JeMe& M.S. Browning Company. by Gee While the legal title to the U.S. patents and applications may be either in Jehn Browning, Administrator, or in one of the Companies , itis very doubtful if any tranefer of the legal title to any of the forei patents and applieations was ever legally effeeted, As to Grent Britian at least, the legal title is undoubtedly in the estateof John ity Browning .., for whieh no British administrater has yet been appointed. Tm order bo transfer the British patentsan administrator must be appointed who is a “Pesidentof Great Britian, of @m not‘ aew- sufficiently familiar with _ the laws England certainly of the other some proceedure countries must be duplicated involved te in one or more is necessary. know whether of the the precedure other countries, but in 10~ As to the U.S. patents and applicationswe could probably make an agreement with John Browning, Administrator, or with one of the conpanies, as the facta might warrant; but we could not inelude in this agreement the foreign patents, particeularly the British patents, a8 neither John Browning, Administrator, or either of the companies et present has legal title to the foreign patents, Apparentlyno difinite agreement can be reached involving the foreign patents until the necessary procedure is completed and the patents duly transferred to someone who {8 in position to sign an agreement. in Bae li-= We do not know what the plans of the Browning interests may be as to the final disposition of these U.S, and foreign patents and applications, and until we know this it is difficult to even suggest a plan of procedure. Very little would be geined by having a British or other foreign administrator appointed until such time as the Browning interests decide who is to hold the title to these various patents and applications. A foreign administrator, even if appointed, would not be able to do anything umtil some decision ig reache d as to who is to finally hold the patents, additional expense would be involved or temporary transfer to be fol lowed Considerable in making any preliminary by a subsequent retransfer. 12==Inasmuch as the Armstrong-Whitworth Company is primari ly interested in the foreign patents, particularly the British patents, we are not in @ position to enter into any definit e or final agreement with that company untilwe ean first enter inte Some agreement with the Browning interests which will inelude the foreign patents, and this, as stated above, cannot be done until some plan of prodeduré is decided upon by the Browning interests and the foreign patents are transferred accordingly. | In view of all we are entirely unable Whitworth Company of the foregoin it will g to grant the desired or even the Browning imterests the following must be done; to formal be apparent that license to Armst ronge to prepare the formal license from ourselves. Beforewe gan prepare these licenses substitute | __A~We must have specific detailed inform ation as to the transfers of patents, applications and agreem ents which been effeeted among the several Browning parties. various have already B_ The Browning interests met advise us defin as to what individual or company is to hold these several itely U.S. and foreign patents and any agreements relating to them. C The necessary formalities must be effeeted in order to transfer the various patents, particularly the foreig n patents, to the proper party. While it should with the this be borne various the. .50 caliber Whitworth, memorandum in mind that Cojtinental gun. European patents reeall in connection with the authenticated supplemental ete. the various The original 68 soon as have similar +411 Europe patents now that we that .30 and furnish license that issued was that were issued (or would to the 37 mm. gun, situation exists in connection and «50 company have with Armstrong. gun licenses a definite properly by number, date, relating to the .60 Cal. gun. various issued with to indenti fying supplemental in the agrecd relating on liber machine specifically this applications we have Continental European patents intention the primarily a very You in Continental Patents relates license would countries. except for the be prepared Most of the delay connected with the death of Mr. Browning) preparing the by reason of the same supplemental in Gonnection with the but we are now prevented from license difficulties 37 mm. to Armstrong-Whitworth as to title patents as are and apvlications. Company outlined herein MEMORANDUM OF AGREEMENT THIS INSTRUMENT S. BROWNING d. H. and existing & HM. and having in its principal hereinafter PATENT FIRE of ARMS and in the day Operated having THAT: Browning and and contracts Colt relating there such arms respeetively Machine eontracis existing te be by sub-iicensees of ali has been some to a share reecive on account after such and which are or shall executed this day. that it is entitled which the so arms by ‘he the shall embody any hereto were not able t agree prior agreements in that the in ail of the Patent. proper regard. It is therefore thon of the this day shali prejudice either kien of their respective richia.and vadevilities that country the agreed which of on mutually the Browning royalty the to the be within to share sold sales in issued contracts of date expiration Patent said this the Letters arms as of royalties paid the such prior and to by such Letters the Recoil prior disclosed of at disdussion or improvements tion State to Rifles, anventions parties the During the negotiations leading up to the aed in the Gas-Operated hereafter Gases of this may Leaak laws have Company Glaims the duly Company Coli Company COLTS a eorporation with said Company the the aud the Colt entitled of in the is scope Ogden of Utah called Company GO at State hereinafter Browning applicable the of business under sale of between pliase or not, of organized iaws and prineipal whether country duly COMPANY, Company Guns of said corporation the agreements 57 Millimeter Guns, by Browning Gompany, its WLINESSETH certain inte in accordance State, Machine execution the said executed entered placeof business MANUFACTURING and Zhe a with calleé existing Connecticut Hartford COMPANY, accordange State, organized OF AGREEMENT construc- neither said discussion, nor any modifica- agreements made by the said writings executed party in the subsequent LAWYERS OGDEN, UTAH — as to determinathe said matvper. IN WIMESS has WIERTOF the J. Me. & M. 8. BROWNING company caused this instrument to be executed thereunto duly authoriged and the COMPANY cauged MANUFACTURING by Se day ond day has Telier, its of duly, 1931. this instrumentto be & Se See OF UTAN COUNTY ct OF WEBER County aforesaid on this of 1931, he sworn acknowledged of the aia said day July, to me personally known, say he is that the seal affixed eorporate geal of said Company; the drd that instrument by = ae PATENT FIRE ARMS MANUFACTURING COMPANY Public is corporation 3 err ge a Notary Browning this COMPANY undersigned, M. said BROWHING the duly the 5S. executed Utah, me, by me instrument Ogden, ARS gs appeared E. G. Bennett Se ab MIRE Aaa @ Before the M. PATENT eee COLT'S SLATE President COLT'S Me i its said attorney-inefact, do by was the the signed ani authority of Board the instrument said its in and persoally who, upon being President of J. to the M. foregoing that behalf of the said of Directors; and that in to be the free act and corporation. My commission ES expires: Residing = Be THATCHER & YOUNG LAWYERS OGDEN, UTAH & corporation; sealed “ for eat PEATE Ogden, Utah. deed MEMORANDUM ~ October 24, 1939 4 Je Me & Me. & BROWNING COMPANY -~ COLT CONTRACT As the result of a conference between me and Mr. Gordon Baxter, it seems to me that we clearly understand what is attempted to be brought about by the proposed Colt contract. 1 shall try to state it, The royalties are to be a stated percentage of the net selling price of the arms in question. I1t is thus important that the term mmet selling price®™ myet be clearly understood, in ordinary ¢ ases there would be no misunderstanding as to the unusual conditions graph 5, it may be meaning. aris of. more c BS I read 6 contract for the sale o of two bases. In the fh: pay X@ per gun, items of expendi over the gums hat Colts with ture Where, uch as for the parties to ag: seems to me that there may be 4 which may be placed on eithe be the purchaser may agree to under: neste included cult however, there are i menti oned in in j the 8 that “ have ract, so the special been apport oned that Colts, woen the order is paid for, wil be fully reimbursed with respect to them, and in rik Pepe receive a fair price for the arms based on all other costs. The royalty would be based on this second item. sae shali in the other shall bill be instance, the contract may p rova de the special expendi tures sepa tely reimbursed for them be paid upon the net price for the EUNS. ihe total would in the first case. Thus, if the special rated over all of ad tne arms in the order af ae ails “uk ‘ina | oe billing wouid be for each gun &S when should AG The such, the minus would be be royal’ based if the special expense should fi rst contract As completed, : given, Y$. In computed Possibly the pr ce on the whole any event ty paragraph per the 6 B gun dy royalty, amount in eda be a same as expenditures ; t on price a received. billed j wee accomplishes that, tion if expression amount "net selling received by Colts, price" less is defined to discounts for in the mean cash the or total for other to each gun the special amounts apportioned and less reasons, because of the special expenditures mentioned in 6 b, whether Perhaps graph 3 b at y sure that ed applies on price bent Set expenditures are included or billed separately. @ special is sold wm the gun Thatcher for which the QOuUNG 4. THATCHER NATIONAL BANK OGDEN,UTAH D. THATCHER BUILDING - Ollowing are the number qa to 2. UM, 8r aE BS Bi ne h oe | M13 FIRST ROY @& YOUNG LAWYERS +t BY ch to ROY pe wt 4 CE on upon serial Broming, amd application, by him on January 11th, Serial 1930. August 7, 1931. Jello & MoS» Browning Co., Attention Mr. Ogden, Utah. Marriner Dear Marriner: @nd your the languege : mechanism A, Browning, iL enclose affidavits invention, I have unele assignment #4 with of li’. and to be executed by you followed rather closely respect Lindsey I believe it to your in your recent trigger application mafficiently and covers the matter, i think if would be well to keep one copy of each affidavit properly executed ih your personal files and one in the company files, unless you are int in the your habit file. a personal of keeping Your uncle Ba will no doubt want to examine application of August 6th sufficiently to satisfy himeelf referred that the invention to in the I am returnine from Mrs Lindsey, described in it is affidavit your the fille assignment consistine to the | your petition for patent, Yours Ene losures. Roy De one of ani company truly, TRATCHER RD?T:R the & YOUNG Thatcher. : letters MEMORANDUM do convey Me & Me. Se BROWNING COMPANY Right of Churts patent rights to the to direct company. administrator to in December 1927 the administrator of the Estate of John M,. Browning, deceased, filed a petition praying for euthority to assign to the ds Ms and Ms. 5. Browning Company all letters patent and applications for letters patent which stood in the name of John M. Browning. it was alleged in substance that John M. Browning was an inventory and Me S. Browning, his brother, a business man, and that they conducted their that business purpose; connection together that with his and all organized the work inventions done was the by Browning John made for M. the Company Browning benefit in for of the company, and that the company was entitled to the benefit of all patents issued to and all applications for patent filed by John M. Browning in his lifetime. It was also alleged procedure to in that and the heirs knew of of the the estate right of were the familiar with company. Notice was given by posting and mailing the heirs and on the hearing the court made its accoréance with the prayer of the petition. i trator, am executed informed that assicnmentsin John Browning, pursuance of the the notice order adminis- order. The question is raised as to whether or not the Court any authority in the miter. If it did not, then the ments were made without authority of the Court. Omaha, Vs. of Stockyards 245 Pac. 966, National Bank of South it was established that person, may make a Court render a judgment of the had assign- In the case Bragg etal, though and the may have it jurisdiction not in act beyond or case Hampshire or of exeess the an of subject omer matter or jurisdiction. In that ease the Court in a probate proceeding had authorized a ward's property to be mortgaged, but it appeared from the proceedings that the mortgage was to be made principally to secure debts and obligations of others. The Court held that Since there is no authority in the court to authorize a ward's property to be mortgaged for the benefit of others, the order of the court was void, and the action, which was one for a foreclosure of the mortgage, thus provided for, was directed to be dismissed as to the minor. in the of Vs. Woblley, District Judge, 269 Pace. 155, the Supreme Court was called upon to determine the power of a District Court in probate to try title to property claimed to belong to the estate but in the possession ofa third person. in that case the probate court had issued a citation requiring the plaintiff to appear before the court end show cause why shesit should not be directed to turn over to the administrator certain stock certificates, that being the property in cuestion. She appeared in person and testified under oath that the certificates had been transferred to her by the decedent, for a valuable consideration. She was then directed to file an Answer setting up her right which was done and the cause was set dow for trial. ‘whe administrator was given the right at the trial to file a Keply. ‘Thereupon the plaintiff objected to the court proceeding further on the ground that the court in such summary proceedings, or in any other probate proceedings was without authority or jurisdiction to try ownership and title to the stock, JOined and tried in and the that the issue of proceedings. the title court could not overruled be the objection, the plaintiff applied for a writ which was granted. The court held that the was controlled by Section 7755 and of prohibition proceeding Section 7734 authorizing the court to cite in a person suspected of having taken wrongful possession of eny of the effects of the deceased, or of having had such effects under his control, and that those sections did not authorize the court of probate to determine any disputed question of title. It should be observed that the plaintiff had appeared in court and filed her answer claiming title to the property, so that there Was no question of jurisdiction over the person. ‘The court said: "The power conferred upon court to subpoena and examine parties alleged to have concealed or withhold property of the estate does not authorize such court to try the title to the property in dispute." in Rolando Vs. District Court of Salt Lake County, Pac. 225, it was said in the sylabus: "Jurisdiction is right to adjudicate concerning the subject matter in a ell the given case, parties to .and to have jurisdiction court must have cognizance Applying the principles thus announced to taken in the browning Estate, it would seem that the directing a conveyance to the Browning Company would the action order be void of the clats of cases to which fle one to be adjudged belongs, proper parties must be present, and point decided must, in Substance and effect, be within the issues." And again, "where motion of defendant's attorneys in their own name soucht order requiring plaintiff suing for divorcee to pay them additional attorneys' fees én ground that they had prepared for and were ready for trial and that plaintiff and defmndant had adjusted their difficulties and desired action to be dismissed, order thereon that defendant have judgment against plaintiff ‘for the use and benefit of her attorneys! in specified sum held without jurisdiction and void, because attorneys were not action". for the same is that in ) reason. Probably the case the last of Rogers decision Vs. by Nichols our 284 Supreme Pac. Court 992, decided January 25, 1950. So far as the facts in that case are material to us they are as follows: The decedent in his lifetime had executed a written contract to sell real estate. In the Decree of Distribution the property was distributed to the surviving wife "subject to the contract of sale of Gon and Sarah West as shown by the records in the said estate, and that she be discharged upon making such distribution and making a deed to said Wests", Later an order to show cause was served upon the administratrix directing her to appear and show cause. why BEXVEGKuUpeMXKkhex she should not execute the deed. She filed an affidavit alleging that the court was wlthout jurisdictim to direct her to make conveyance. The court however entered its decree directing the conveyance to be executed. She disobeyed, imprisoned deed. was for cited an for contempt, and ordered to be thirty days or until she should execute the The court called attention to the fact that the Statute permits the probate court to direct specific performance of a written contract on a petition filed by a person claiming to be entitled under the contract to a conveyance, but it held that the probate court is without jurisdiction to hear or determine a suit brought by a stranger to a probate proceeding to quiet title the probate the was the to property claimed to belong to the estate. Beeause court did not proceed in the manner authorized by statute its judgment void and the refusal order was not directing the execution of the deed. of the administratrix to comply with contempt of court. The foregoing cases seem to be authority conclusion that the order made by the probate court the conveyance to the company was void, for the directing