"COAL BARON."

Auckland Star, Volume LXV, Issue 144, 20 June 1934, Page 5

"COAL BARON."

£2,200,000 ESTATE. EFFECT OF DEATH DUTIES. FORCED REALISATION. (From Our Own Correspondent..) SYDNEY, Juno 14. The firm of J. and H. Brown, colliery, steamship and tug-boat proprietors, was long regarded as the most wealthy family partnership in Australia. It owned coal-mines, ships, tugboats and a private railway, engineering workshops and, of course, a large quantity of real estate, with some other less tangiblo investments. The senior partner, John Brown, the greatest of Australia's "coal barons," was interested also in racehorses; but he was perhaps best known for his- unflinching conservatism and his uncompromising hostility to the demands of Labour extremists. However, I am concerned just now not with his economic views, but with his possessions. In 1927 William Brown, one of the partners, died, leaving a will which provided that his estate be divided into three portions, one each for his brothers John and Stephen and one for their sister, Mrs. Nairn. So huge- was the estate that it took four years for the Valuer-General and the Stamp Duties Office to complete their investigations. But in 1927, at date of death the total assets of the partnership were estimated provisionally at £2,200,000; and the value, for probate purposes of William Brown's share was put down at £710,000. About three years later—in 1930 —John Brown died, and the estate therefore had to be revalued. The official figures show that the assets liad now shrunk in value to £1,715,000, or nearly £500.000 less than the value fixed at the time of William Brown's death, Jess,than three years before. I

Sister Also Dies. It is not yet quite certain what was the exact value of John Brown's estate, excluding his one-third share in the partnership and one-third of William's assets; but it was put down for probate purposes at £728,000. But while a special staff of Government officials was still engaged in unravelling the complications in the estate of William and John, their sister, Mrs. Nairn, William's third beneficiary, died also. To execute her will it was necessary to value the partnership assets again, and this time the figures showed a value of only £950,000, representing a shrinkage of a million and a quarter in a little over five years—between the death of William Brown, early in 1927, and the death of I Mrs. Nairn, late in 1931. Meanwhile an attempt was being made to administer the will of John Brown, who, after arranging for several private legacies amounting to some thousands of pounds, divided the residue of his estate into two halves, one going to the general manager of the company, Mr. Armstrong, and the other to Sir Adrian Knox, known not only as a great judge j and lawyer, but as a great racing man and an intimate friend of the "Coal j Baron." But Sir Adrian Knox died in | April, 1932, and when the J. and A. j Brown estate was revalued once more to carry out the provisions of the Knox will its value had declined still further to £714,000. Refused to Establish Trust. Now it is easy to understand that immense expense was involved in clearing up these estates and finding the ready money to pay income tax, probate, and * death duties. On this last item, the highest scale of 35 per cent was chargeable, and to make provision for this, portions of the assets had to be disposed of. William and John Brown were both strong-willed and obdurate men, and they had always rejected eugI gestions for the flotation of a company and the establishment of a trust, to facilitate the handling of their immense wealth. Had some such course been adopted, the various fractions of the J. and H. Brown estate, which became transferable by will, could have been represented by shares, in "a going concern," and it would have been comparatively easy to finance the payment of income tax and death duties, and the expenses of probate and administration. ■ As it was, the only practicable way of

meeting this heavy expenditure was to

sell tugboats, real estate, and other negotiable assets —naturally at a figure below their real value, N In this way and for these purposes, the value of the J. and H. Brown estate was reduced in less than six years — between 1027 and 1932—from £2,200.000 to £714.000. On the argument that "all wealth is socially created" there is much to be said for death duties -vhieh restore to the community some portion of the •wealth that all classes have cooperated to produce for the owner. But this deduction is really enormous, and a contemplation of such figures should certainly encourage all burdened with superfluous wealth, to make arrangements to meet death duties and other "post mortem" claims upon the estate in the easiest and cheapest way while yet there is time.