September 4, 1975

House Ways and Means Com opens hearings on revision of tax laws; com chmn Al Ullman plans to cover 20 categories of changes within 6 wks; com member Joe D Waggonner Jr objects to timetable; other com members doubt Ullman's timetable could be met; staff members explain how tax shelters work; cite 3 specific cases: doctor with income of $105,000 legally paid no income tax; stockbroker with income of $181,000 paid $1,000 tax, and business exec with income of $448,000 paid $1,200 tax; individuals not identified; staff members describe practice of 'leverage' whereby borrowed money is turned into big tax deduction; Ullman says tax laws should be changed to make sure tax code does not provide main incentive for investment; Repr William M Ketchum says risk capital would not be available without tax shelters; Repr William A Steiger says police and firemen in his dist who invested in duplex houses are concerned over what will happen to them if com 'goes after big boys' (M)

Moderate Repub Sen members tell Pres Ford that conservative tone of his candicacy for full term in White House could cost him electoral votes on crucial indus states next yr; delegation represents all but 2 members of informal Sen Wednesday Club, which is made up of moderate and progressive Repubs; says Ford pledged to give Sons an opportunity to help to shape his campaign platform and orgn; delegation members noted (M)

Retail Sales Gain

$12.6-million proposed settlement to end litigation against former dirs and officers of Penn Central Co, investment bankers, accountants and 2 real estate subsidiaries is agreed to by attys for bankrupt rr's trustees, debenture holders and shareholders; details of settlement not disclosed, but will appear in Sept 5 newspaper by order of Judge Joseph S Lord 3d; notices give dissenters right to request exclusion from settlement and sets Nov 3 for hearing to consider fairness of plan and 2d hearing to consider fees for plaintiffs' attys; contributors to, and amts of settlements include: Howard Butcher 3d and Butcher & Sherrerd stock brokerage firm, $250,000; former rr official Alfred E Perlman, $25,000; 17 former and present rr officers, $25,000; Robert Haslett, former rr official, $2,000; and Penphil Co investment firm, $700,000; other defendants, whose contributions are not disclosed, listed; claim processing described; litigation, consolidation of some 20 suits brought by individual stockholders in behalf of shareholders, involved series of suits brought after Penn Central plunged into bankruptcy on June 21, '70; plaintiffs charged defendants with dereliction of duty and with responsibility for issuing false financial statements and misleading proxy material over period of yrs; Saunders, Perlman and unnamed rr officials illus (T)

Sources on Capitol Hill and at Interior Dept say Pres Ford will nominate ex-Repr Thomas S Kleppe, now Small Business Adm (SBA) head, to be Interior Sec; Kleppe career sketch; nomination expected to come under critical scrutiny by several Dems in Interior Com; com expected to probe Kleppe's sources of wealth for possible conflict of interest; in '69, Kleppe said he owned $1.13-million in IBM stock and $273,600 in stocks of Cardinal Petroleum Inc, of which he was a dir; he valued his total stock and munic bond holdings at $3,514,942; Sen will also probe Kleppe's leadership at SBA; Kleppe illus (M)