Los Angeles herald., 1909-09-22
BALLINGER IS
SUMMONED BY
THE PRESIDENT
CONSERVATION P0LICYSPEECH
AGAIN DELAYED
EXECUTIVE TALKS ON INCOME
TAX AT DENVER
Subject Of Natural Resources Will Be
Taken Up Further at salt
Lake City or at
Seattle
rBy Associated Press.l

II ENVER, Sept. 21.-Making his way
stiu farther to the west, President
~ Taft arrived in Denver this after
nOon and tonight, in the Denver auol-
torium, where a year ago MI Brydn
was nominated as his opponent IN the
presidential race, faced crowd OF
thousands that in its noisy welcome
and continuing enthusiasm recalleu
some of the scenes of convention Week
President Taft, switching from MS
purpose to discuss the conservation oI
natural resources, elected to take up
the corporation tax passed as part OF
the Payne tariff law and to defend II
as against the proposition to impose a
direct income tax. The president
strongly urged that all the states
should adopt the proposed amendment
TO the constitution to make an IN
come tax possible in time of need.
Mr.. Taft was Joined here today by
the secretary Of the INTERIOR MT
Ballinger.
It is probable that the president de-
sired a further conference with Mr..
Ballinger, whose conduct of the in
terror department he recently up
held. before making a final exposition
of the aims and objects of this ad-
ministration as to the conservation OF
natural resources.
Subject Not Closed
Mr.. Taft probably will not take up
the subject now until he reaches Salt
Lake City, where he will pass Friday
and Saturday; or he may wait until
he arrives at Spokane, Wash, where
at the Irrigation congress, the
Ballinger- -Pinchot controversy really
had its first public airing.
The president tonight declared that
the corporation tax was in itself the
best form of income tax that could be
levied, and pointed out that 1t con-
tained many of the best features of the
income tax law of England. In urging
that the states should vote for the
amendment to the constitution permit
ting the levy of a direct income tax
the president declared that it would
be possible to amend the corporation
tax to include within its scope every
desired feature of an income tax ex-
cept the levy upon incomes derived
from actual salary and professional
services,
The president said he opposed a
direct income tax except in cases OF
emergency, and he believed it to be a
prime fault in the federal constitution
that no provision IS made for a direct
levy to meet war time or other ex-
traordinary expenses.
5ames Court Decision
Mr.. Taft said that the supreme court
decision declaring unconstitutional the
income tax law, passed by a Demo
cratic congress some years ago, had
prevented the leaders in congress dur
ing the session recently closed from
including in the corporation tax meas
ure a provision for a levy upon bonds
and bondholders. To tax bonds would
result in the reduction of the rate
of interest and hence would be a direct
tax upon the individual holders of the
bonds
The president bases his argument In
favor of the corporation tax, as COM
pared with the direct income tax, al
most entirely upon the results of the
income tax in England.
He pointed out that the tax there is
not a direct levy, such as was defeated
recently in the senate only through a
compromise, but that it laid the tax
upon the income before it came into
the hands of the individual. being
levied first on the declared dividends
of corporations, secondly on rents in
the hands of the tenants and thirdly on
the individual directly.
1t was found in England that q
direct income tax at 10 per cent would
not pIOuuCe dS IlluCn revenue as Lu6
present method of taxation of 5 per
cent. This, he declared, illustrated the
premium that the direct tax places
upon perjury and concealment.
Welcome Enthusiastic
tt president received a most en-
thusiastic welcome to Denver. Signs
were hung at intervals all over the city
reading, welcome to Denver, the
Summer Capital"
While here the president is the house
guest of United States Senator Hughes
a Democrat. He held a public reception
Of two hours this afternoon at the
state capital.
At the auditorium tonight Mr.. Taft
touched briefly on the tariff, saying
that while a revision had seemed
essential there also was a deficit in
the treasury to be met. This partly
will be met by a cut Of S40,000,000 to
S50000,000 in the appropriations to be
made by congress and partly by the
income from the new corporation tax
law. The president then said in part:
"A part of the Republicans and all
of the Democrats of the senate united
in pressing for consideration a general
income tax on individuals throughout
the United States. The law was as
near as it could be made to that in
come tax law which had been held
unconstitutional by the supreme court
by vote Of five to four.
Too Much Revenue
1t was conceded that the tax would prob
ably raise S150,OOO,O0O to 5000, ,O0O, 900, which
was far in excess of the needs Of the gov
ernment if the tariff bill was to retain its
general form proposed. Our friends, the
Democrats favored substituting the income
tax for the tariff as an income-producing
measure.
In other words, the passage of the income
tax bill would have lent support probably to
the proposition to have tariff for revenue
only, and would have interfered with the
protective policy to which the Republican
party Is pledged.
zone further objection to the income
tax amendment was that it had been
declared unconstitutional by the
supreme court, and to invoke a second
decision upon that issue was to ques-
ton the uniformity of the decisions Of
the supreme court and to drag the
court into a political discussion which
would not make for its standing as an
impartial tribunal before the people.
Compromise Discovered
But the income tax amendment
seemed quite likely to pass by vote of
all the Democrats and sufficient
number of Republicans. Therefore,
those opposed to the income tax amend
ment looked about for a compromise
less Objectionable than the income tax
amendment to satisfy enough Repub-
licans who were inclined to favor the
income tax and prevent the passage
of that amendment. Such a compro-
-.