Datasets:

Eugleo

/

us-congressional-speeches

like 0

When we came into power we did not know of the extravagance fhat was going on. and there was no way of knowing it until we came into possession of the records.

H

Mr. FORDNEY

Unknown

FORDNEY

Unknown

M

08171921.txt

You spent two or three hundred thousand dollars in investigating war expenditures.

H

Mr. GARNER

Unknown

GARNER

Unknown

M

08171921.txt

Your Secretary of the Treasury came in here and asked for from $7.000.000.000 to $8.000.000.000 for the expenses of this year. He recommended a reduction of taxes without any reduction of expenditures. I will tell you another thing that was found when we came into power in March last. In the city of London. England. there were in the office of the Shipping Board 400 clerks and not work enough for 20. But they were on the pay roll. That was startling information. It makes me angry when I think of it. that men would impose upon the people of this country as they did during the war. and when you went to the people of this country to sell Government bonds to get money to run this war you said: " If you do not purchase these bonds you will be considered unpatriotic." Was not the wasteful squandering of public money even more reprehensible than refusing to give?

H

Mr. FORDINEY

Unknown

FORDINEY

Unknown

M

08171921.txt

Mr. Chairman. will the gentleman yield?

H

Mr. SMITH of Idaho

Unknown

SMITH

Idaho

M

08171921.txt

And that money was exacted from the people to pay the expense of the war. we hoped. in a legitimate and sane manner. I have pointed out two or three items of inexcusable extravagance. I yield to the gentleman.

H

Mr. FORDNEY

Unknown

FORDNEY

Unknown

M

08171921.txt

Were these 400 clerks employed in London by the Shipping Board Britishers or American citizens sent over there?

H

Mr. SMITH of Idaho

Unknown

SMITH

Idaho

M

08171921.txt

I do not know. but I imagine they were Democrats from south of the Mason and Dixon line. Let me proceed. The railroads were put under Government control for what seemed to be political advantage only. There were 1.900.000 employees in the service of the railroads. There was a total of 3.700.000 people employed on our railroads and steamship lines taken over by the Government. including the telegraph and telephone lines.

H

Mr. FORDNEY

Unknown

FORDNEY

Unknown

M

08171921.txt

Mr. Chairman. will the gentleman yield for a question?

H

Mr. GARNER

Unknown

GARNER

Unknown

M

08171921.txt

I will.

H

Mr. FORDNEY

Unknown

FORDNEY

Unknown

M

08171921.txt

The gentleman says the railroads were taken over for political purposes only. in the gentlemans opinion.

H

Mr. GARNER

Unknown

GARNER

Unknown

M

08171921.txt

That is my opinion.

H

Mr. FORDNEY

Unknown

FORDNEY

Unknown

M

08171921.txt

Will the gentleman tell us why the Republicans voted for it?

H

Mr. GARNER

Unknown

GARNER

Unknown

M

08171921.txt

I will tell you why if you will give me an opportunity. brother. The President placed in control of the railroads of this country his soninlaw. whom he was grooming for the Presidency. There were 750 great railway systems in the United States. operated under the efficient management of 750 general managers of those systems. HePresident Wilsonplaced the power in his soninlaw. Mr. McAdoo. to direct the operation of these roads while seated in a cushioned chair in his office in the city of Washington. Do you believe Mr. McAdoo. without experience in the management of railroads. knew more about the managing of these railway systems than those 750 welltrained men?

H

Mr. FORDNEY

Unknown

FORDNEY

Unknown

M

08171921.txt

Will the gentleman yield?

H

Mr. GARNER

Unknown

GARNER

Unknown

M

08171921.txt

In just a minute. Again. what did the railroads of this country have to do with the war in France? What service could they have rendered that they would not have willingly rendered upon request of the Government? If they had failed to comply with demands essential to the war. then would have been the time to place them under Government control. We would have had a much more efficient service under private management than we have had under Government control. Before taking over these railroads private enterprise was carrying freight in the United States for* seventytwo onehundredths of 1 cent per ton per mile. and when President Wilson changed his boarding house on March 4 last under instructions to vacate. which instructions he received on the 2d of November. the people of this country were paying 11 cents per ton per mile. or an increase of 85 per cent over the rate paid when the railroads were taken under Government control.

H

Mr. FORDNEY

Unknown

FORDNEY

Unknown

M

08171921.txt

And that was the reason the gentleman from Michigan voted for itbecause it was for political purposes and because Mr. McAdoo was put in control?

H

Mr. GARNER

Unknown

GARNER

Unknown

M

08171921.txt

I voted to put the President in control because he stated it was necessary for hinm to have such contrnol in order to win the war.

H

Mr. FORDNEY

Unknown

FORDNEY

Unknown

M

08171921.txt

Then the gentleman voted to put the Government in the hole. and it cost the people of the country all this inoney.

H

Mr. CARTER

Unknown

CARTER

Unknown

M

08171921.txt

No. Seriously. I voted to give the President such control and I voted for other war powers because he came and stated from that platform that it was necessary in the conduct of the war. We realized that in the emergency harmony and unity were essential. and I gave him my support. although I keenly felt the powers would be used for political purposes.

H

Mr. FORDNEY

Unknown

FORDNEY

Unknown

M

08171921.txt

The gentleman states that he voted that way in order to put the President in a hole. and he has just stated the many millions.of dollars that that vote cost the country.

H

Mr. CARTER

Unknown

CARTER

Unknown

M

08171921.txt

Whether that was my purpose or not. that was exactly what happened to him. [Laughter.J

H

Mr. FORDNEY

Unknown

FORDNEY

Unknown

M

08171921.txt

Will the gentleman yield?

H

Mr. OLIVER

Unknown

OLIVER

Unknown

M

08171921.txt

Yes. I yield to the gentleman.

H

Mr. FORDNEY

Unknown

FORDNEY

Unknown

M

08171921.txt

I am wondering if the gentleman has ever read the extended hearings that were held just prior to the taking over of the railroads. in which the presidents of all the leading railroads gave it as their opinion that their roads were in bad condition financially and could not longer be operated. and strongly urged. you may say. that the Government take the roads over?

H

Mr. OLIVER

Unknown

OLIVER

Unknown

M

08171921.txt

Ihave read much. but there is much that I have not read because I have not had the time.

H

Mr. OOIJDNEY

Unknown

OOIJDNEY

Unknown

M

08171921.txt

It is interesting to know-

H

Mr. OLIVER

Unknown

OLIVER

Unknown

M

08171921.txt

Wait a minute. I have read enough to convince me that the statement I just made that the railroads were taken over for political expediency and operated for political purposes is correct. and the country bears me out in that opinion. At least. a majority of 7.000.000 voted that way last fall.

H

Mr. FORDNEY

Unknown

FORDNEY

Unknown

M

08171921.txt

I invite the gentlemans attention to the hearings and the statements of the railroad presidents immediately before the taking over of the railroads. because it will be very pertinent to some of the legislation for which the gentleman voted.

H

Mr. OLIVER

Unknown

OLIVER

Unknown

M

08171921.txt

They were running then and carrying freight for less than threequarters of a cent per ton per- mile and now it is costing one and onethird cents per ton per mile.

H

Mr. FORDNEY

Unknown

FORDNEY

Unknown

M

08171921.txt

And they were saying to the Interstate Commerce Commission at that time that they could not run longer under those conditions.

H

Mr. OLIVER

Unknown

OLIVER

Unknown

M

08171921.txt

Probably the most glaring examples of the spending of public money for political purposes during the former administration were in connection with partisan investigations and prosecutions by the Department of Justice and the most or less unAmerican kind of censorship attempted through the medium of Mr. Creel and others. A year ago I diligently endeavored to find out what Mr. Creel had spent but the answer at that time was " Nobody knows." Michigan had an opportunity to witness the partisan operations of the Department of Justice. The election of a Senator from that State was investigated. It is safe to say a million dollars was expended by the Government in gathering evidence and in court proceedings. Due to propaganda and a prejudiced and unfair trial presided over by a seemingly biased judge the verdict was adverse to the Senator. The case was carried to the Supreme Court of the United States. and in the decision of the Supreme Court. exonerating the Senator. Chief Justice White made some very pertinent comment on the unfair conduct of the case in the State courts. On June 9. the Senate of the State of Michigan unanimously adopted the following resolution expressing the confidence of the State in the loyalty. ability. and integrity of its United States Senators: Senate resolution 13. Whereas the State of Michigan considers itself fortunate in having as its representatives in the Senate of the United States. CHAnLES E. TOWNSEND and TRUMAN H. NEWBERRY. both men in whom the confidence of the State reposes. the Senate of the State of Michigan wishes at this time to express its confidence in the loyalty. ability. and integrity of Senators CHARLES E. TOWNSEND and TRUMAN H. NEWBEURitY. Therefore be it Resolved. That a copy of these resolutions be spread upon the Journal of the Senate and that the Secretary of the Senate be Instructed to forward a copy of these resolutions to Senator CHARLFs B. TOWNSEND and Senator TnuMAN H-. NEWBERRY. The resolution was adopted. When the Democratic Party came into power it cost $1.000.000.000 a year to run this Government. When the Democratic Party went out of power it cost us $6.000.000.000 under their management to pay the running expenses of the Government. a difference of 6 to 1. Oh. let me say to you sincerely. in. the last eight years I have had all the Democracy that I hope God Almighty will ever visit on me for the rest of my natural life. Our fooling and tampering with the railroads cost us more than $4.000.000.000 in taxes heaped upon the People of this country. If we had left them alone. we would not have had that $4.000.000.000 tax to pay. The Democratic administration took over the telephone systems of the country. Mr. Burlesons report shows that that fooling with the telephone systems of .the country cost our people $14.000.000. By the way. there is a little telephone company up in the State of Michigan. which I have the honor to call my home State. That was taken over by the Government. What did that little telephone company up In Michigan have to do with the President going over to Paris and strutting around there like a peacock? We took the ships under Government control. and the management of this great shipping corporation cost us hundreds of millions of dollars. Let me tell you the situation we found there directly after the 4th of March. when we took charge of the books. We found that 10.000.000 tons of Government shipping. owned by this Government. was in the hands of ship operators. with contracts for this Government to pay all the expenses and pay to the managers 5 per cent of the gross receiptsof those ships. They are getting 5 per cent of the gross receipts and Uncle Sam is paying the bill. and we are asked now to appropriate $200.000.000 to pay the deficit of the Shipping Board. Mr."BYRNS of Tennessee. Will the gentleman yield?

H

Mr. FORDNEY

Unknown

FORDNEY

Unknown

M

08171921.txt

Does the gentleman know that Mr. Lasker. chairmuan of the Shipping Board. stated to the Senate Appropriations Committee in the hearings the other day that that kind of a contract is as old as the shipping business itself?

H

Mr. BYRNS of Tennessee

Unknown

BYRNS

Tennessee

M

08171921.txt

Any man who ever entered into a contract of that kind or signed a costplus- contract is not big enough to run a 10cent peanut stand. . All this folly was done by President Wilson for selfaggrandizement at the expense of the taxpayer.

H

Mr. FORDNEY

Unknown

FORDNEY

Unknown

M

08171921.txt

Will the gentleman yield?

H

Mr. TREADWAY

Unknown

TREADWAY

Unknown

M

08171921.txt

Touching the question of contracts for running the ships. will not the chairman inform us as to what kind of men the contracts were made with?

H

Mr. TREADWAY

Unknown

TREADWAY

Unknown

M

08171921.txt

The statement was made that one man with whom a contract had been made was a mule dealer. He purchased mules and shipped them to France. and he made so much money that finally lie found an old tub in which he shipped the: mules across the seas. and the Government. under Democratic Inanagement. sold him certain ships. taking his notes. so I am informed. without any security. and. giving him out of the Treasury of the United States a million and a half dollars to pay expenses. The board never kept any track of this loan and does not know whether this mule dealer spent the money in a poker game or on the ships. There is no record of how these dollars were spent.

H

Mr. FORDNEY

Unknown

FORDNEY

Unknown

M

08171921.txt

Will the gentleman yield?

H

Mr. BYRNS of Tennessee

Unknown

BYRNS

Tennessee

M

08171921.txt

I will. .

H

Mr. FORDNEY

Unknown

FORDNEY

Unknown

M

08171921.txt

Does not the gentleman know that Mr. Lasker has employed J. B. Smull. at $35.000 a year. a member of the charter conuittee which made these contracts.?

H

Mr. BYRNS of Tennessee

Unknown

BYRNS

Tennessee

M

08171921.txt

I do not know anything about that. but I tell you if you want to catch a thief.. employ one to do the catching. Gentlemen of the Congress. we have paid. 42 per cent in taxes of our cost of the Great War. No other. country engaged in the war raised. as much money in taxation. in proportion to their war expenditures. Great Britain raised. more money in proportion to her cost of the war than. any foreign country. She raised 28 per cent. Canada raised in taxes 18 per cent of her cost. France raised 11 per cent of her cost. and Italy 9 per cent of her cost. and we have paid 42 per cent and we have not emerged from under the. load yet. Now. deduct the ten billions owed to us by foreign Governments from our public debt and it leaves in. round numbersi $14.000.000.000 of puble debt. that we owe. Of that there was $1.000.000.000 owed before the war. and if you deduct that sum. it leaves $13.000.000.000. Gentlemen. 60 per cent of that 113.000.000.000. or $7.800.000.000. is in shorttime obligations. due in the next 22 months. Think of the fiscal management that would put out those shortterm obligations. knowing the people would protest against the collection. of the money to meet these obligations when they became due. It shouldered on the present administration the task of meeting 60 per cent of a total debt within two years. Oh. what management. I have always saidand I think this will bear me outthat the Democratic Party is not quite big enough to run this Government. We gave them eight years to try it. and they made the poorest piece of work of which I ever have heard.

H

Mr. FORDNEY

Unknown

FORDNEY

Unknown

M

08171921.txt

Will the gentleman yield?

H

Mr. BEGG

Unknown

BEGG

Unknown

M

08171921.txt

I will yield to the gentleman.

H

Mr. FORDNEY

Unknown

FORDNEY

Unknown

M

08171921.txt

I understood the gentleman to say that the net debt. subtracting the $10.000.000.000 owed us by the European Governments. was $14.000.000.000.

H

Mr. BEGG

Unknown

BEGG

Unknown

M

08171921.txt

Yes

H

Mr. FORDNEY

Unknown

FORDNEY

Unknown

M

08171921.txt

I have read. and been under the impression all the time. that the net public debt of the United States was around $20.000.000.000 plus. the $10.000.000.000 owed us.

H

Mr. BEGG

Unknown

BEGG

Unknown

M

08171921.txt

On the 30th of June. to be exact. the public debt was $23.977.500.000. That is the total gross debt. Deducting $10.000.000.000. you have. in round numbers. with accumulated interest. a public debtan excess of liabilities over creditsof a little better than $14.000.000.000. Now. if you subtract the $1.000.000.000 that we owed before the war. that leaves $13.000.000.000 as the portion of the war debt this country must pay. Of that $13.000.000.000. $7.800.000.000 is due in the next 20months.

H

Mr. FORDNEY

Unknown

FORDNEY

Unknown

M

08171921.txt

Rotten finance.

H

Mr. COPLEY

Unknown

COPLEY

Unknown

M

08171921.txt

The gentleman from Illinois says "rotten finance." but that does not quite express it. I was trying to think of a stronger term. [Laughter.1 Gentlemen. we have in this bill provided for the reduction of reventfe receipts amounting to $790.330.000 in the calendar year of 1923. about $200.000.000 will be the reduction of revenue within the present fiscal year ending the 30th of June next. This change of rates that we provide for takes effect generally on the 1st day of January next. but income and profits tax changes will not be reflected in revenue collections until the calendar year 1923. We have brought in a bill that provides for the repeal on the 1st of January next of the excessprofits tax imposed by existing law on corporations. Under existing law the normal income tax on corporations is 10 per cent. we have increased that tax to 12 per cent. and eliminated the excessprofits tax. That extra 21 per cent will yield not less than $135.000.000 additional in the normal tax of corporations. The following table is a recapitulation of the principal changes in rates contained in the new bill. with estimated gains and losses such changes will occasion: Estimated changes in annual revenue receipts under proposed new rates for 12mniknh period. IRatoc not fully in force until calendar year 1923.1 Loss. Gain. Repeal of excess profits .............................. 0 Increae of corporation income tax from 10 per cent to 12A per cent ..........................................$133.70000 Reduaction of surtax rates on individual incomes (maximunm12 per cent) I................................ 90.00.00 ........ Increased exemption of heads of family: To $2.500 for incomes not in excess of 15.000........40.000.000........... Additional exemption for dependents increased to $100 from$20......00 ........................30.000.00........... Repeal of tax on transportation (freight. passenger. and express) as of Jan. 1. 122.......................2.2.000.0........... Repeal of tax on life insurance......................... 0.00 ... ........ Repeal of tax on beverages (sees. 628.and 030).......... 0.0e0.000 ..... License tax on sellers of soft drinks............................ 1 Tax of 6 cents on cereal beverages.............................. 12000.0ow Tax of 5 cents on carbonic acid gas............................. 200.00 Tax of 2 cents a gallon on fruit ipices of soft drinks............... Tax of d cents a gallon on still drinks. not minieral and 1 table water ............................................. Tax of 10cents a gallon on fountain sinups............. Repeal or reduction ofexcise taxes: Section 9000 Paragraph.5 (sporting goods)............... 2.000.000........... Paragraph 0 (candy) ......................... 8010000............ Paragraph 13 (electric fanis) ........... .0.00............ Paragraph 19 (fu: articles)..........4.10.000........... Sotion 004................................. 000.00........... .Changein section 907. perfumery. cosmetics. and propriotary mnedioins(5 cents tax on manufactur0s)0.....0...............000.000 Total........ ..... 0. 000 177.750.000 N t loss. 00 0. 000 .............. 5Ef1ect0vc Jan. 1. 1022. WIhile the above table indicates a net loss in revenue receipts of $790.330.000. only a portion of this loss will be reflected in revenue collections for the fiscal year ending June 30. 1922. Inasmuch as the repeal of the excessprofits tax and reduction of surtax rates on individual incomes do not become effective until the calendar year of 1922. $406.250.000 of the contemplated loss of revenue will not be reflected in revenue collections prior to the calendar year of 1923. The following is an estimate of the income for the fiscal year 1922 and the calenldar year 1922: Estimated income for fiscal year 1922. Estimated revenue under present law from internalrevenue taxes----------------------------------- $3. 570. 000. 000 Changes male by proposed law - LossesExcessprofits tax (no change in receipts for 1922). Increased corporation income tax (no change in receipts for 1922). Surtax rates (nq change in receipts for 1922). Increased exemption to $2.500-----------Increased exemption to dependents--------Transportation taxes--------------------Tax on beverages. etc------------------Section 000 ----- -- - -Section 904-----------------------------Gains23 000 000 17 250 000 131 000 000 12 000 000 7 390 000 7 000 000 107. 640. 000 Section 109------------------------------ 4. 000. 000 Total ---------------------------------- 193. 640. 000 Estimated revenue for 1922. internal revenue--------- 3. 37o. 360. 000 Customs----------------------------------------- 370. 000 000 Miscellaneous------------------------------------ -487.643. 000 Total revenue----------------------------- 4. 234. 003. 000 Estimated loss and gain in income for calendar Vear 1922 resulting from taw chtanges. Exeessprofits tax (no change in receipts for 1022). Increased corporation income tax (no change in recoipts for 1022). Surtax rates (no change in receipts for 1922). Losses : Increased exemption to $2.500 ------------------ $40.000.000 Increased exemption to dependents-------------- -0. 000. 000 Transportation taxes -------------------------- 202.000.000 Tax on beverages. etc -------------------------- 24.000.000 Section 900-----------------------------------14 70 000 .Section 004----------------------------------- -15$000. 000 385. 700. 000 Section 907---------------------------------- 000. 000 Net loss for year--------------------------- 377.790.000 We have reduced the surtax on large incomes from 65 to 32 per cent. making a total of 40 per cent as the maximum normal income and surtaxes of individuals. The normal income tax is 8 per cent. which. added to the 32. makes 40 per cent. We did that for the reason we believe the present abnormal surtaxes on large incomes caused the diversion of these large incomes from usual investments into taxfree securities. As proof. let me say that for the year 1918 there were paid in taxes by people whose incomes were $300.000 or more per year. $917.000.000. For the following year. 1919. those taxes dropped down to $587.000.000. or a loss of 36 per cent over the year 1918. Last year there was collected from incomes of $300.000 or more. $347.000.000. or a loss of 62 per cent over the year 1918. In my opinion. that is conclusive evidence that large incomes have been diverted from investment in taxable securities to taxfree securities. There are in round numbers $14.000.000.000 or $15.000.000.000 of outstanding State. municipal. and county bonds free from taxation. I was quite interested in the report of the Commissioner.of Internal Revenue for the year 1917. wherein he points out the number of people who paid taxes whose incomes were from $1.000 to $2.000. from $2.000 to $3.000. and so on up to $5.000.000 a year and over. All incomes of $5.000.000 or more paid the same surtax. 65 per cent. Then the most interesting part was. how many taxpayers were there who paid taxes on those large sums in the various States? I was quite interested to know how many there were in the State of Michigan. I found not a single taxpayer in tie.State of Michigai paid taxes on $4.000.000 of income. afid we know of one man whose reputed income is considerably more. What is the reason? That money was either invested in taxfree securities or it was retained in the business. The desirable things which have been accomplished in the preparation of the new revenue bill are not fully explained by an examination of the rates. It may be recalled that Secretary Houston recommended against tax reductions. his program contemplating a shifting of taxes. and the heading of one paragraph in his report was "Tax revision without tax reduction." More recently opinions have been expressed that tax reductions could not be safely accomplished at this time. The problem which confronted the committee in the preparation of the bill was the seeking out of a means of reducing taxes. The committee felt that the country demanded not a shifting of tax burdens but tax relief. relief from the payment of the amount of taxes being exacted from the people under existing law. This bill is predicated on a policy of strictest economy. It is predicated on promises by various departmental heads to reduce expenditures. These pledges were made. some of them in the presence of the President. The committee held a number of conferences. and the chief subject was economy. The bill will succeed if the program of economy is strictly enforced. and this must be done. Reducing expenditures makes possible desired tax reductions. With few exceptions the retailsales taxes have been repealed. The excise taxes retaiied for the most part are placed upon the manufacturer. Under the new bill the number of tax returns will be very greatly reduced. With a view to simplifying tax forms the bill provides for the creation of a tax board on which the taxpayers will be represented. Several changes have been made in the law to clear up administrative dificulties and to simplify the tax forms. a conspicuous one being the amendment regarding Libertybond exemptions. In administering the existing law many loopholes have been discovered by the Treasury Department. and corrective recommendations by the department are incorporated in the bill. The spirit of cooperation which was evidenced by the President. Cabinet officers. and other Government officials in securing pledges of economy was most gratifying. It has made tax reduction possible. The bill is a good one. and it would seem that those who oppose its passage will have difficulty in explaining their motives. We have been told by some that the repeal of the socalled excessprofits tax would benefit the big corporations. According to my best information that is not so. That tax operated against the corporation with small invested capital. As evidence I call attention to a tabulation prepared by Treasury officials showing average invested capital of corporations earning various percentages on capital invested. It is strikingly noticeable that the largest corporations did not earn income in excess of the 8 per cent excessprofits credit and hence were exempt from the excessprofits tax. Average size of corporations (measured by invested capital) carning different rates of profit. corporation returns. 1918. Per cent Number Inetd Average of income Per cent of net income to invested m or Invested and capital. rations. capia l capital. profts tax tonlet income. Less than 5 per cent............. 10. 689 $14. 104. 248. 246 $1. 319. 511 10.9 5 per cent to 10 percent......... 21.869 15. 925. 632. 944 728. 229 11.93 10 per cent to 15 per cent........ 22. 684 8.962.689.034 395. 111 21.60 15 percent to20 per cent........ 17.388 5.482.627.463 315.311 33.99 20 per cent to 25 per cent........ 11.987 3.251. 948.260 271.290 41.51 25 per cent to 30 per cent...... 7. 743 3.785. 581. 785 488. 904 51.22 30 per cent to 40 per cent------.. 9.050 2.421. 285.621 267. 545 53.38 40 per cent to 50 per cent........ 4.807 1.232.173.122 256. 329 57.58 50 per cent to 75 per cent........ 4.911 781. 254. 745 159. 693 62.30 75 per cent to 100 per cent....... 1. 734 205. 744. 478 118. 653 64. 24 100 per cent and over............ 2.194 133.853.470 61.009 67.40 Total...................... 115.056 56.290.039.168 489.240 37.88 In the pending bill we have increased the exemption of married people. man or woman. heads of families. from $2.000 to $2.500 on incomes not in excess of $5.000. That exemption affects 60 per cent of all the incomes of all the people required to make incometax reports. The report of the Commissioner of Internal Revenue is that the total inconre of the people of the country in 1918 was $17.755.000.000. and the incomes between $1.000 and $5.000 represented $10.500.000.000 of that sum. In other words. 60 per cent of all of the incomes are affected by this increase of $500 in the exemption granted the heads of families. and that does not apply to incomes of more than $5.000 a year. In addition to that we have provided that the allowance for each child under IS years of age. or dependent. there shall be an exemption of $400 instead of $200. as in the existing law. That $200 additional for children. based on the average of five and onetenth persons for each family in the United States. assuming there will be an average of one and onehalf dependent children per family. means an average I exemption per family of $300 additional. This together with the $500 new exemption mentioned reduces the Governments income as compared with existing law $70.000.000-$40.0q0.000 for the $500 exemption and $80.000.000 for the other. We have repealed $90.000.000 of the surtaxes and have cut out $70.000.000 from the lower incomes. That is the sum and substance in the change in the income tax law. There were 317.000 corporations reporting in 1918. and 119.000 of those paid no taxes. Those that did pay paid an average of from 20 to 33b per cent of their incomes in taxes. We propose now to impose a flat 12J per cent tax on the earnings of all corporations in excess of the $2.000 exemption. It is fair and equitable. I wanted those taxes to take effect last January. but we have decided by a majority of the Republicans of this House to make it January 1 next. and I am with the majority of my party at all times. While I would love to have the votes of the gentlemen on the Democratic side of the House. so help me John Rogers. I do not want you to help make up this bill. because you will spoil it if you have a finger in the pie. We have removed the transportation tax on freight and passengers. That tax was about evenly divided. The 3 per cent tax on freight did not yield quite as much revenue as the 8 per cent on passenger fares and Pullmancar tickets. The two together were estimated to yield this fiscal year $262.500.000. The bill provides that these taxes shall all be repealed January 1 next. These taxes on transportation are reflected in commodity costs in general. and in particular they are reflected in the cost of building material. The repeal of this added charge to transportation is a most desirable one. I have referred to the effect of Democratic control on the cost of carrying freight. Rates were nearly doubled and the railroads are in bad shape. Money now due the railroads is an inheritance from the Democratic Party. which must be taken care of by this administration. and it is now here at our doorstep. There are $545.000.000 of obligations owing to the railroads of this country because of our fooling with them and attempting to run them better than the people who owned them could run them. and this debt is all due this year and early next year. There are $100.000.000 of warsavings certificates due this year which must be extended into longtime bonds. or should be. at least. The Shipping Board. the greatest mistake of all. asked for this year to pay a deficit. $200.000.000. We find that the outgoing administration recommended that there be purchased and kept on hand 22.000.000 shells for the Army and Navy. There were only 6.000.000 used by us in the late war. yet they wanted 22.000.000 shells for some war to come. Think of the folly of exacting from the people money to pay for 22.000.000 shells to be kept on hand. when we used only 6.000.000 in the late war! It has been found that we have $97.000.000 worth of nitrate on hand. What for? For the manufacture of explosives for some future war. Why not sell it at a reasonable price? Nitrate is used in the manufacture of fertilizer for the farmers. especially for the South. Why keep $97.000.000 worth of that stuff on hand? Why not dispose of it at a fair price and use the money to discharge some of these debts now due? One other thing I must call the attention of the gentleman from Texas to. and that is this: He is not responsible for it. and. neither am I. but somebody is or some set of people. After the war was over. after the armistice was signed. the past administration sent 40.000 automobiles and trucks to France. They purchased after the armistice 70.000 automobiles and trucks and sent 40.000 over the sea and sold them. so I am informed. for about 24 per cent of their cost. Can you think of any more criminal expenditure of the peoples money than that?

H

Mr. FORDNEY

Unknown

FORDNEY

Unknown

M

08171921.txt

Will the gentleman yield?

H

Mr. FIELDS

Unknown

FIELDS

Unknown

M

08171921.txt

Let me continue a bit more and I will. if the gentleman pleases. I want to call attention to a few things. You know the old style of branding a Government horse was to heat an iron with the letters " U. S." on it and brand the horses shoulder or the horses hip so the hair would not grow there any more. Humanely they decided that they would change that cruel way of branding the horse and would brand him on the hoof. and they ordered some branding irons made of a combination of steel and copper for which they paid $14 a piece. They had 148.000 horses. 46.000 in France remember. When the armistice was signed they had 195.000 branding irons for which they paid $2.730.000 and had not branded a horse. [Laughter and applause on the Republican side.] They had an order in for more harness. and they had five sets of harness on hand for every horse the Government owned. and they had four sets of currycombs. brushes. and blankets for every horse the Government owned. Now. the men in the Cavalry and the Ordnance Corps and many others rode horses. Mind you. they had 148.000 horses and 975.000 stddles on hand and an order in for more. That is correct. They had a million and a half halters and an order in for 500.000 more. all for 148.000 horses. They had 4.700.000 men under arms in the Army. the Navy. and Marine Corps and they had 36.000.000 sets of spurs on hand or about seven sets of spurs for every man. woman. and child in the Army. Taxpayers of the country. there is where some of your money went. and.we considered the man who evaded the purchasing of bonds as unpatriotic. Now. my friends. the Republican Party is obliged to go to the people of the country and raise money to meet the folly of the outgoing administration and its extravagant use of money. The President went over to France to arrange a treaty of peace.

H

Mr. FORDNEY

Unknown

FORDNEY

Unknown

M

08171921.txt

Tell about the number of men employed by the railroads.

H

Mr. COPLEY

Unknown

COPLEY

Unknown

M

08171921.txt

They doubled up the employees on the railroads and carried less freight. We had twice as many employed on the railroads carrying twothirds of the freight that was handled by the roads before the Government took hold and had great dissatisfaction. While the railroads were under Federal control a train on time was out of the question. I had a carload of goods shipped to this city from the city of Detroit. and it took 68 days for the car to get from Detroit here under Government control. Oh. wonderful efficiency. wonderful efficiency ! Why. these things are enough to rile any man who has the interest of the public at heart. who must pay. the bills. Here is a large portion of these debts now unpaid. and we are called upon to provide the money to meet them. This bill is to provide the money. and our Democratic friends will vote against it. I complain about these matters because the Democratic Party contracted these debts and now criticize Republicans for paying them.

H

Mr. FORDNEY

Unknown

FORDNEY

Unknown

M

08171921.txt

What about the expense of the Presidents trip to Paris on the peace commission?

H

Mr. WYANT

Unknown

WYANT

Unknown

M

08171921.txt

The President sent in his statement to the House saying that it cost $1.600.000 for him to go to Paristwo trips. two honeymoons. He took with him 1.385 people. most of them on the pay rolls of the Army and Navy. of which he did not render any account. He took 53 cooks and waiters from one hotel in New York. the Biltmore.. and he took the head chefs. I am told. from the Willard and Raleigh Hotels here and went over to Europe and said. to the French people who owned the best hotel in Paris: " Get out. we are going to run it in our waythree crews. 8hour shifts." and they did run it that way. The request came. so I am informed. and the bills were paid for $600.000 damages done to the hotel. Now. what did he do over there. Remember. he took 1.385 people with him. Mr. Lansing. then Secretary of State. before an investigating committee- of the Senate. was asked: " What do you know about the Shantung feature of the League of Nations? " " I do not know anything about it." " Why do you not know? Were not you one of the men selected by the President to go over and arrange that treaty? " "Yes. but I was not consulted? " " Who was? " " Nobody but Col. House." One thousand three hundred and eightyfive people. We heard every day. didnt we. what was being done there? Did I say every day? No. but once in a long: time a cable would come that Wilson was in good health. doing well. [Laughter and applause on the Republican side.] . He was evidently under the influence of Lloyd George and Clemenceau. He wanted a League of Nations. Oh. I am talking about the bill. because now comes pay day. the fiddler wants his pay now. He wanted a League of Nations. and you take it from. me. as my candid opinion. that. Clemenceau and Lloyd George and Orlando said to him. "If you will get the people of the United States to accept the League of Nations as we write it. we will make you President of the league. and you will be the biggest fellow on earth. and he tried it but failed. But he slipped a cog. Somebody over here threw a monkey wrench into the machinery. Gentlemen. I have occupied too much time. I have talked a little about the bill and a whole lot about the Democratic Party. But the things I have related. gentlemen. that the people of this country are now called upon to dig down deep into their pockets to pay for. are not be be overlooked or forgotten. Had we gone into this war when we should have gone. and taken part when the honor of this Nation demanded it. before the election of 1916. our expenditures would have been less and there would have been fewer graves filled in a foreign land by our beloved boys. Oh. no: they wanted the slogan. " He kept us out of war." I saw . cartoohn once that well fitted the slogan. " He kept us out of war." It depicted " Teddy " and Gen. Wood shaking hands. and " Teddy " as saying. " General. there is no question but that he kept us out of war." Gentlemen. I am glad that the war is over. and I hope we may never have another. The South and North. the East and the West were equally patriotic and sent their sons. Thank God. my beloved sons came out all right. but nothing on this earth ever pained me so as when I bid my young son goodby and bade him " Go. my son. and fight for your country." My heart goes out to the mother and the father. to the beloved wife and little ones. whose dear one fills a foreign grave. And it is the duty of the pepole of the United States. who enjoy the best Government under Gods sun and have the best country and the greatest freedom of any people. not only to pay the cost of this war in dollars and cents but to do the right thing by our beloved boys who fought in it. And we will do it. my friends. Gentlemen of the committee. I have occupied more time than I wanted to. There are many gentlemen who wish to speak upon this bill. I commend the measure that the Ways and Means Committee has presented for your consideration. We made an honest effort. my friends. seriously considering every inch of the way. to adjust the rates of this bill in the interest of the taxpayers and the public at large. We believe we have given you as equitable a measure as it was possible to draft. Gentlemen. I thank you. [Applause on the Republican side. the Members rising.]

H

Mr. FORDNEY

Unknown

FORDNEY

Unknown

M

08171921.txt

The gentleman from Texas is recognized. [Applause on the Democratic side. the Members rising.]

H

The CHAIRMAN

Unknown

Unknown

Unknown

Special

08171921.txt

Mr. Chairman and gentlemen of the committee. I am sure that each member of the committee has enjoyed the comic performance given us by our friend from Micligan. but I would not say we had been enlightened by it. In fact. the thing he tried not to talk about was the bill we are about to consider. The only thing that I remember about it are the three stories which he told us several weeks ago in the last speech he made on the tariff. The long string of figures which he talked about in referring to war expenditures calls to my mind an incident which happened down in Texas in the nineties. when the Populisjs were very strong and the Democrats were having some considerable contest with them at the polls. Our friend " Cyclone " Davis. Member of Congress at large from Texas a few years ago. but then a prominent leader of the Populist Party. was making a speech over in Tomt CoNNALss district. in McLennan County. and our Democratic organization sent out a man by the name of Russell Kingsbury to meet " Cyclone." and demolish him. Our side got a division of the time. and of course " Cyclone " insisted that he should open and close. In his opening address he gave out a row of statistics which were as bewildering as Einsteins theory of relativity. He had the entire audience spellbound by the thousands of millions and hundreds of billions of doliars which he talked about. When Kingsburys time came. not to be outdone. he proceeded to give some few statistics himself. I have heard that there never was such a mass of statistics reeled off in any one speech ever delivered in Texas. before or since. as Kingsbury reeled off on that occasion. He began by talking in millions and billions and from that he " riz " until presently he was talking in figures which were so big that they were absolutely beyond comprehension. when " Cyclone " interrupted to say. " My God. man. where did you get your figures? " Kingsbury quickly replied. " I made them. just like you did." . When the gentleman from Michigan was reeling off his big line of figures about expenditures during the war and at the peace conference. I knew that. as to some of them. lie was playing the Kingsbury act and was making them as lie went. Of course. ie knew it. too. I want to say that I think the H-[ouse has not been treated fairly by the gentleman from Michigan. because I believe the most partial friend of his on the Republican side will agree that as the chairman of the Ways and Means Committee it was his duty to at least give soic information concerning the bill which we are now about to consider. Out of the iour which ie used in speaking I challenge you to find in his remarks. if he will permit them to appear in the RECORD. 10 minutes devoted to the consideration of this bill. Now. is that treating you fairly? This bill carries some very important and farreaching provisions. and we would naturally expect the chairman of the great Ways and Means Committee to discuss them at some length. but did he do it? Oh. no. But he did get over to the tariff question. because the gentleman from Michigan can not make a speech. it is impossible for him to talk about anything on thp face of the earth. without ringing in his position on the tariff. Statistics. tariff. lumber. and sugar. and my friend is through. If you had gotten him started on lumber or sugar. lie would not have devoted even the 10 minutes to the consideration of the bill which he. as the chairman. has submitted to this House. I was amused at the gentlemans answer. although somewhat grieved. because I am fond of the gentleman from Michigan. as to why he voted for the bill which authorized the President to take over the railroads. But. gentlemen. when ie told this House that he voted to take over the railroads in order to put the President of the United States in the hole. lie did not express the sentiments of the patriotic membership of the Republican Party in the House. I deny-

H

Mr. GARNER

Unknown

GARNER

Unknown

M

08171921.txt

Will the gentleman yield? I will admit I was joking when I made the remark.

H

Mr. FORDNEY

Unknown

FORDNEY

Unknown

M

08171921.txt

Yes. I think the gentleman from Michigan had better admit that he intended his whole speech to be taken as a joke. This Nation exhibited during the war the finest demonstration of patriotism. regardless of party. ever exhibited by any nation. and I deny that any Republican. Democrat. or Socialist. or whatever he may be. voted for these measures in time of war other than from a patriotic and dutyloving motive. I voted for many of these measures myself. and I voted for measures during the war that I would not support in time of peace. Some of these measures. I thought. were unnecessary even in time of war. But actuated by the same motive that prompted the gentleman from Michigan and his colleagues when they voted for these ineasuresalthough they now criticize them and try to put the responsibility on some one elseI voted for them because I believed that In a united America lay the best hope for an early and successful termination of the war. Events amply justified that belief. The gentleman from Michigan refers to the cost to the Government on account of taking over the railroads. I have no special defense of the Railroad Administration either under Director General McAdoo or Director General Hines or under the present Director General. Mr. Davis. That is not my business. and it is not a part of this legislation. But I do want to call the attention of you Republicans to the strategy that is being played on you today. or will be played with you before you have a chance to take a recess. The gentleman from Michigan says that the railroa(l have already cost us $4.000.000.000. He is in error in that. They have cost us only $2.600.000.000 to date. a large part of which has been loaned to the railroads. But that is about as close as he ever comes in any figures that ie gives youjust an error of $1.400.000.000. But there has been appropriated. out of the Treasury of the United States up to this time by a Republican as well as a Democratic Congress for the benefit of the railroads $2.600.000.000. Now. what are you going to be called on to do? They dare not let you go home and meet your constituencies and let them express themselves on the proposition of paying the railroads $500.000.000 w .hen they owe us more than that amount. which we should use as an offset. because you can not put that bill through. Wise men. knowing that you respect the people in your districtsand if you do not respect them. you respect your own political scalpsthey dare not permit you to go home and undertake to find out the sentiment existing in your districts about this proposed Winslow bill which they propose to force through in the early part of next week. They do not cxpect that bill to become a law before the recess. because they know it is impossible to put it through the Senate in such a short time. But they also know that this body is more responsive and responsible than the Senate to the public weal. They know that you must go home next year and seek a new commission. while twothirds of the Senators retain office. Therefore they must clinch you now before permitting you to go home amid meet your constituents. But. gentlemen. you will have to explain your votes next week on the railroad bill. and you are going to have the most uneasy task that you ever undertook in your lives. Mr. Chairman. I probably ought to take a moment to give just a little history of this bill. My friend from Michigan said he did not want the Democrats to assist in making it up. I have no great complaint to make about that. But. gentlemen. I will tell you what I do have a complaint to make about. and I think that you honest Republicansand there are I many of you fairminded men. patriotic menI will tell you what I do complain about. and you ought to complain about it. You ought tp complain about being called upon to vote upon this measure without sufficient information touching its provisions. You have not got it and you will not get it. Only this morning were printed the hearings of the Secretary of the Treasury given on the first and fourth days of this month. There is no excuse for the delay. except a desire to keep from you the information that you are entitled to before you vote for this measure. That much of criticism can be made and ought to be made against the ReDublican membership of the Ways and Means Committee. as well as the officials of the Treasury Departient. Mr. Chairman. the history of taxation in this country Is interesting. but I think we all will agree that within the last 50 years the principal interest in taxation has centered around taxation through the customhouse. Prior to the war we never heard much of large interests in this country complaining of the expenses of the Government. we never heard much of large associations. of commercial clubs. or of other wealthy people meeting and resolving themselves into committees and national organizations In order to reduce or to influence taxation other than through the customhouse. Our taxes have been collected. as you will recall. for the past 50 years by excise taxes on tobacco and liquor and through the customhouse. with some other incidental taxes of minor importance. Now the entire system is changed. Immense fortunes have been made in this country under the protective tariff system. . They are concentrated largely in the hands of a limited number of men. Those men who have accumulated these great fortunes and who now own them care nothing about the customhouse any more. or at least the larger Portion of them care nothing about what you do at the customhouse. but they are intensely interested in these direct taxes and they are going to make a fight not only now but in future years to shift as much as possible of these taxes from their own incomes and estates to the masses of the people of the United States. Heretofore their entire efforts have been along the line of trying to enrich the manufacturing and other industries in which they were interested by means of a high protective tariff. so that they could accumulate these fortunes. Having accumulated them. now when we are confronted with the necessity of raising $4.000.000.000 a year to run the Government. their efforts will be directed at shifting the taxes from their own backs to the backs of the masses of the people of the United States. How are we going to divide? Here is an aisle. The division is coming between your party and mine. My party is going to sayI believe and I hope it will saythat we propose in the system of taxation which we will put upon the statute books. if you will commission us to power in times of peace. that it shall be levied upon those best able to pay. Your proposition is going to be that you will run the Government as economically as possible. but that whatever taxes are levied must not conflict with the interest of big business .in this country. That is about what you will say. That means. after all. that you are going to the masses. to get your taxes rather than the classes such as I have mentioned. Your policy is clearly demonstrated in this bill. The strongest argument made before the Committee on Ways and Means by any Member or by any witness that appeared before it. and the best authorities cited on any one subject that we Inquired about. were made by Mr. RMsEYn. of Iowa. who made the argument on the inheritance tax. and I invite you to read that argument. which Is printed In our hearings. It will be well worth your while. Also. I invite you to read his speech appearing in the RECORD this morning. If you will take the declaration which -he cites there by Mr. Roosevelt and Mr. Carnegie and the philosophy given by them. there is not a man In this House but who should Insist that the Inheritance tax be doubled or more than doubled in this bill instead of levying such taxes as that which is placed upon the medicine of the poor man in this country. Oh. you shift the taxes. The gentleman from Michigan has shifted. He Is a shifter. He is one of the best shifters we have. He has shifted the taxes. And whom did he shift them from? He shifted them from these gentlemen who have the big incomes. these gentlemen who talk in terms of thousands and millions. to the candy that the little boys eat on the street. the candy that he buys with one penny. You shifted the taxes. Mr. FORDNEY. from those who had incomes fabulous in their amount to the crossroads country store which sells $100 worth of soda water in a year. You brought in a scheme which would seek to compel him to pay $10 per year vendors tax for the privilege of selling soda watqr to the few custovers who drop into his store. Ah. genLXI323 tiemen. you have repealed some of these taxes. and. so far. so good. but every one of you is going to have to answer to your constituents for some. other things you have done. You are going to have to tell your constituents why it was that you reduced the surtaxes from 65 per cent to 32 per cent on incones of $66.000 upward when you left the normal taxes on your constituents at the old rates and continued their payment of these rates as though the war had never ended. There are taxpayers in this room. Take the Fordney bill. I challenge you to take the Fordney bill and under it make your tax return and figure out the taxes you will have to pay this year and compare them with what you have been paying. and. by the gods. there is not a cent of difference in It. You have not been relieved. Well. if you have not been relieved how haveyour constituents been relieved? What relief do you get under this bill? You get this much relief for which I am willing to give you credit. You have repealed the transportation tax. You deserve credit for that. You were forced to do it by your own patriotic membership. because the Secretary of the Treasury had no idea of repealing it. but he was forced to take it up piecemeal and you swallowed it all at once. and I congratulate you for it. But I do want to tell you what you have done. and some of you Republicans ought to correct it. because there is no chance of our doing it. You do not intend to give us an opportunity to offer amendments. Gentlemen. that is a procedure In the House of Representatives that is indefensible.

H

Mr. GARNER

Unknown

GARNER

Unknown

M

08171921.txt

Will the gentleman yield?

H

Mr. FORDNEY

Unknown

FORDNEY

Unknown

M

08171921.txt

I will.-

H

Mr. GARNER

Unknown

GARNER

Unknown

M

08171921.txt

The Secretary of the Treasury recommended the repeal of the transportation tax.

H

Mr. FORDNEY

Unknown

FORDNEY

Unknown

M

08171921.txt

Oh. yes. I know he did. after he was forced to do something of that kind. He. never intended to do it at all. How any party can select a man like Mr. Mellon and put him in the Treasury Department as their financial and fiscal agent and then have the people of the United States expect him to recommend relief from a tax as long as they are paying the major portion of it is something I can not understand. I will tell you what you are going to do. I will call the attention of the gentleman from Iowa to it. I see him rise in his place. Why did you relieve the express company of $17.000.000 worth of taxes and not relieve the parcel post from the same sort of tax? Somebody has got to explain that. Here is what happened. gentlemen. When we made up the tax law in 1918I remember it as if it were yesterdaywe put a tax on express and freight and we stopped there. What happened?

H

Mr. GARNER

Unknown

GARNER

Unknown

M

08171921.txt

Will the gentleman yield?

H

Mr. FORDNEY

Unknown

FORDNEY

Unknown

M

08171921.txt

Just a moment until I get through making this statement. What happened?

H

Mr. GARNER

Unknown

GARNER

Unknown

M

08171921.txt

Will the gentleman yield?

H

Mr. FORDNEY

Unknown

FORDNEY

Unknown

M

08171921.txt

I said in just a minute. If the gentleman can ease his pain for a moment. then I will yield to him. for I know he is hurting. In 1918 when we made up the revenue bill to get all the money we could in the Treasury to pay the heavy expenses of the warand that is what we didwe put a tax on freight and express packages. The express people came in and said. "Our rates have been made about the same as the rates on parcelpost packages. and if you put this 5 per cent turnover tax on uswe put out a million packages a day. and it will put us out of business if you let the parcel post go free." Well. we investigated it. We asked for information from the Post Office Department. and we ascertained that the contention of the express people was correct. We had no desire to put anybody out of business. so we placed comparatively the same amount of tax on the parcel post as on express. and the tax has been collected on both since then. Now. what does a Republican Ways and Means .Committee do. probably without any information? They do not seek any information except the kind they want. They repeal the express tax and let it remain on the parcel post. How can the parcel post continue and hope to do any business at all If you are going to relieve the express company of $17.000.000 annually and let the tax remain on parcel post?

H

Mr. GARNER

Unknown

GARNER

Unknown

M

08171921.txt

Will the gentleman yield now?

H

Mr. FORDNEY

Unknown

FORDNEY

Unknown

M

08171921.txt

I yield.to the gentleman.

H

Mr. GARNER

Unknown

GARNER

Unknown

M

08171921.txt

The one good reason why we did not change the parcel post is that Postmaster General Burleson showed that there was a loss of $30.000.000 a year in the parcel post now with present rates.

H

Mr. FORDNEY

Unknown

FORDNEY

Unknown

M

08171921.txt

As a matter of fact. Postmaster General Burleson. contended up to the very hour that he left office that there was a profit in parcelpost business. It is Mr. Will H. Hays. present Postmaster General. who wants to reduce the postage on the big publishers of the country. who is contending that there is a loss in parcelpost business. If you. have. got a. loss of $80.000.000 a year you ought not tor handicap the busi ness by keeping $17.000.000 taxes on the parcel post.

H

Mr. GARNER

Unknown

GARNER

Unknown

M

08171921.txt

According to Democratic figures the more we get into the Treasury the more we will lose.

H

Mr. GREEN of Iowa

Unknown

GREEN

Iowa

M

08171921.txt

I merely call that to your attention.. Let me say that it is impossible for me.. or any other man outside ot the experts of the Treasury Department. to tell you the effect of many of the administrative provisions in this bill. So- you will have to pardon me. as I imagine you will have to pardam every other member of the. Ways and Means Committee. IncludIng the Republican membership. which got their information. without the Democrats being present. from making any explanation of these administrative provisions. They had many hearings and had all the experts and they wrote the bil. Yem do not know what the effect will be. and I challenge anyone toe rise in his place and tell me the effect of the administrative pro) visions in this biH. The administrative features of the bill are as important as the levy of the tax. So. for the reasons I have stated . I do not know what these provisions mean and neither do you. The bill is rushed in here on us: without. adequate tim to study it. but I can assure you from all the circumstances usually attending recommendations from. the Treasury feDmtment that these administrative features have been drawn in the interest of those who pay the high taxes and against these who pay the low taxes.

H

Mr. GARNER

Unknown

GARNER

Unknown

M

08171921.txt

Will the gentleman yield?

H

Mr. GREEN of Iowa

Unknown

GREEN

Iowa

M

08171921.txt

If the gentleman does not know anything about it. why does he make that assertion?

H

Mr. GREEN of Iowa

Unknown

GREEN

Iowa

M

08171921.txt

I draw the. deduction from the fact that the Treasury Department.. whenever they recommend a tax. have. recommended that it be paid by the ipasses of the people and always:in favor of the classes that I have mentioned.

H

Mr. GARNER

Unknown

GARNER

Unknown

M

08171921.txt

A short time age we understood the gentleman to say that all these gentlemen who paid a surtax above a certain point were entirely exempt from taxation..

H

Mr. GREEN of laws

Unknown

GREEN

laws

M

08171921.txt

I will say that. although the rule cats oa every opportunity on this side and that side et- intelligent. patriotic men to perfect this measure and empress their views.. you will get a chance to say whether or not you are willing to go. back to your people and say I am going to! remit the taxes of the rich by repealing these high surtaxes while we continue the war tax upon the business interests of the country. You are going on record. I never lived in the city but always in the country. but in any district that has as much as two coiintles in it you give me the problem involved. in this legislation.. you give me the taxes you failed to repeal which are caried in the 1918 war revenue act. let me: go to them and say.. here is the law at present and here is what they repealthe excessprofits taxes and the high surtaxesand I will see what that audience wil say about relieving the rich of their high surtaxes and the repeal of the excessprofits taxes and leaving these- other taxes on the statute book..

H

Mr. GARNER

Unknown

GARNER

Unknown

M

08171921.txt

Will the gentleman yield?

H

Mr. GREEN of Iowa

Unknown

GREEN

Iowa

M

08171921.txt

I will.

H

Mr. GARNER

Unknown

GARNER

Unknown

M

08171921.txt

Does the gentleman mean to say that the Democratic Party is not in favor of the repeal of the excessprofits tax? President Wilson. Senator Grass. Secretary Houtten all recommended that that thing be done and gave as a reason that we would get more taxes out of it than we did before

H

Mr. GREEN of Iowa

Unknown

GREEN

Iowa

M

08171921.txt

Oh. .gentlemen. this is the first time I ever heard of the Republicans in a report calling on the Democrats as witnesses. You told us you repudiated them in 1920. We have been told in this Chamber hundreds of times since this Congress met that we had been repudiated at the. polls in November. and yet you want to invoke our Judgment to justify your falres. (Laughter and applause on the Democratic side.)

H

Mr. GARNER

Unknown

GARNER

Unknown

M

08171921.txt

Will the gentleman yield?

H

Mr. FORDNEY

Unknown

FORDNEY

Unknown

M

08171921.txt

I will yiel.

H

Mr. GARNER

Unknown

GARNER

Unknown

M

08171921.txt

The amount of income effected by the reductions Is 60 per cent of the total income. while those that have been relieved by the reduction of surtaxes are only 8 per cent of the total income.

H

Mr. FORDNEY

Unknown

FORDNEY

Unknown

M

08171921.txt

Let me say to the gentleman from Michigan that this side of the House will join you in every provision of your bill in the interest of the people. we will join you In making your exemption $2.500 in place of $2.000. we will join you in making the exemption $4.000 instead of $2.000. but we will not join you In reducing the surtaxes from a maximum of M5 per cent to a maximum of 82 per cent. That is the issue. Yea are trying to justify the relieving of the uiah fom. paying theft* just proportion of the taxes according to their ability to pay. because. forsooth. you permit. the married man to have $500 additional exemption.

H

Mr. GARNER

Unknown

GARNER

Unknown

M

08171921.txt

That proposition makes it impossible for you to join with us at alm

H

Mr.. FORDNEY

Unknown

FORDNEY

Unknown

M

08171921.txt

It will be impossible because you and your colleagues. have for your pumpose the framing of a bill which I can not support. sad unlessyour colleagues of the rank and file hold you back.. as they did at the- caucus Monday afternoon. you will have. a bill which they wil not support. I say that they have made a better bill Inthe Republican conference than you reported to it. I c6n. gratulate them and Join with them whenever they do the right thing. but if you. had your way- you would shift most of these surtaxes and have a consumption or sales tax instead. And you know I know it.

H

Mr. GARNER

Unknown

GARNER

Unknown

M

08171921.txt

How do you. know?

H

Mr. FORDNEY

Unknown

FORDNEY

Unknown

M

08171921.txt

Because I have heard you say you favored a sales tax.

H

Mr. GARNER

Unknown

GARNER

Unknown

M

08171921.txt

I am for. the bilt Readi it and you will find my sentiments.

H

Mr. FORDNEY

Unknown

FORDNEY

Unknown

M

08171921.txt

Oh. yes.. the: gentleman is for the bill. becase he has to. be fur thel bilk. [Applause and laughter on the eocratle side.j

H

Mr. GARiNL

Unknown

GARINL

Unknown

M

08171921.txt

And the gentleman does not. have to. because he is on the opposite side.

H

Mr.. FORDNEY

Unknown

FORDNEY

Unknown

M

08171921.txt

How I blushed for the gentleman when he was making his remarks & few minutes ago. when I thought he was playing the demagogue. You will remember what a pitiful story he told last winter. I. remember that it brought tears to the eyes: of some. The gentleman.. bighearted as: he is. arise and tears rolled down his cheeks when he spoke o the bays who had been across the water.. When he spoke of those whn had been buried in France and those who hadl come back wounded and helpless for lif I know I thought then that this Government. should be as generous as it Is possible for any Government to be with those boys who came back here maimed and unfit. for the ordinary talks. of lide Thea I blushed. I say.. for him wheat I heard: him today tellk you how he is going to do this. that. and the other. when I remembered that it is not 30 days since the President.. his President . whom he praises and. whom I refrain from. eriticiing as he dbes exPresident Wilson.. came to. the Senate and by his edict. said a bill for the relief of. the boys shouki not be passed at this time. and how the- bill went baek to the commAittee..

H

Mr. GARNER

Unknown

GARNER

Unknown

M

08171921.txt

Mr. Chairman.. will the. gentleman yield?

H

Mr. CAMPBELL. of Kansas

Unknown

CAMPBELL

Kansas

M

08171921.txt

Did not the gtlemas side of the Hause go on record within the: last. ai moths saggAnst that sort of legislation?

H

Mr.. CAMPBELL of Kansas

Unknown

CAMPBELL

Kansas

M

08171921.txt

It did. not. I deny that.

H

Mr. GARNER

Unknown

GARNER

Unknown

M

08171921.txt

Did not a large majority of the Members on the: gentleman?s side of the House vote against the bill?

H

Mr.. CAMPEiLL of Kansas

Unknown

CAMPEILL

Kansas

M

08171921.txt

Oh. the gentleman is beginning now to talk almt partisanship. This has never been made a party matter. I remember staying here until 6 oclock In the morning because I was net. in favor of the provisions of that partieular bi. I take my responsibility I make no professions except what are truly in my heart. -I stayed here when Seatt Ferrs and H"arson. of Mississippt. and other- Democrats. were trying to puss that bill. and at last I threw the. Irish proposition to the gentieman from Kansas and killed the: bil I say we: ought to serve these men who came back from Prance-

H

Mr. GARNER

Unknown

GARNER

Unknown

M

08171921.txt

And yet during the last Congress the gentleman refssed. to do It.

H

Mr.. AJMPBELL of. Kamsas

Unknown

AJMPBELL

. Kamsas

M

08171921.txt

Who was in control of the last Congress?

H

Mr. GARNER

Unknown

GARNER

Unknown

M

08171921.txt