Walter G. Moyle, Washington, Page Dy Esquire Ce #4 July 19, 1940 that it is acting as agent, but this point has not been raised, it has kept a detailed record of all sales and has remitted once each month for all sales made by it during the preceding month. A short time after the 1932 transaction it was found thet the Arms company needed additional capital, whereupon the parent company contributed $100,000.00 to it as a contribution to surplus. Apparently that has been adequate for its purposes. The position now taken by the Bureau the parent, and result that the the seller, If essarily follow cannot is that the sale from the I think they Arms companyto the agency agreement are to be ignored with the Arms company must be treated as the importer and that position should be sustained it would necthat all sales were taxable and the Commissioner fix a basis 64 L, Ed. under Section 619. Advance Opinions 321), are clearly wrong unless under recent decisions of the United States Supreme court in income tax matters all business transactions between arfiliated corporations must be disregarded. (See Higgins vs. Smith While we are not disposed to recommend that our give up the fight for the refund, unless you conclude is desirable to do so, we have been advised tha it t would clients that it be | willing to settle the entire matter, the suit and the you ought to know, basis the Bureau will fix a basis for all of the arms sold since the effective date of the act at the average of the Remington~-Savage jobbing prices. What that is appears in the schedule in nO. 6, we are ali There is another anxious that it matter which should not become and will fluctuate from and there every sell to public. if though of course, time to you may clsecuss the matter with the Bureau, Brownings are now about to conclude negotiations with Remington for a contract under which the latter will manufacture the Browning shotgum for sale in the United States. The initial price to Brownings will pro« bably be about $28.00 an arm as Remington's net price & short time to give you pay excise taxes, but it if this belleve it will will itself pay if advise us 6 contract be, the there 1s made Remington will excise taxes, is any information Yours truly, Roy Db. & YOUNG Thatcher is Browning further | THATCHER RDTsmr time to jobbers varies. We will be able in the exact amowmt on which Remington will will be close to the amount we mentioned, you reason Arms want and please to ii.