Burlington weekly free press. [volume] (Burlington, Vt.) 1866-1928, 1909-06-24

Washington, June 2o.-Presldent Taft
entertained at dinner tonight all Of the
republican members Of the Senate finance
committee and Senator Root and there
followed n conference on the subject of
the proposed tax on the net earnings of
corporations.
II had been expected that Secretary Of
state Knox and Attorney General
N-ickersham would be present but the
former was engaged with important State
matters and the latter had not returned
from New York, where inc mas been for
two days. On that account very little
was accomplished beyond general dis
cuss,on that LEFT no doubt that the Presi-
dent and the Senate leaders are IN
absolute harmony and are enthusiastically
IN favor Of the adoption Of the corpora
ton tax proposition as an amendment to
the tariff bill.
II was announced tonight that Mr.
N-ickersham was to leave New York at
midnight and that he would moot with
the President. Mr.. Knox and Mr. Root
tomorrow and that the proposed amend
ment would lre drafted and sent to Scna-
tor Aldrich for presentation to the
Senate This program, made it clear that
the drafts which had been In circulation
heretofore were only preliminary which
accounts for the failure Of the committee
to make them public.
While no details Of the amendments
were arranged definitely tonight, it can
he stated authoritatively that the amend
nlent viii apply to all corporate with
out regard to their capital stock II is
likely. however. that the tax will apply
only to earnings IN excess Of 5000 a
year This will remove the burden from
small corporations with subjectng the
measure to constitutional objections by
reasons Of the exemptions. The provis-
ION was worked ont by members OF the
finance committee today and was ex-
planned to President Taft The latter
recognized the wisdom Of the suggestion
and said that If It strikes his attorney
general and secretary OF state as favor
ably az II does himself tho amendment
will be drawn accordingly.
Another important feature discussed
tonight related to the interest on bonds
OF corporations. The consensus Of opin-
Ion was that the tax should not apply to
such interest for the reason that in
many cases It would amount to double
taxation Particularly would this be true
Of savings banks which hold the bonds
Of corporations. At the same time the
members Of the committee told President
Taft that II would be necessary 10 find
some way to prevent corporations from
30 manipulating their stocks and bonds
so as to evade tax on earnings
Senator Root suggested that the ex-
emption Of bonds should apply only
when they did not exceed the capital
stock of the corporation. President Taft
said that precautions had been taken
70 make Il Impossible to avoid payment
Of the tax on the part Of corporations
and It Is possible that the amendment
will stipuate the percentage of bonds
in relation TO the capital stock that a
corporation may Issue in order to re-
ccve the benefit Of the bond exemption.
The details Of this provision, II adopted.
will he left TO Attorney General Wick
ersham.
Senator kdrlch told the President that
a two per cent. tax on the earnings OF
| corporations. according to the best infor-
nation available would produce about
80 O6O, GO OF revenues annually. What
would be lost by the proposed exemption
o' 5000 for each corporation could not
be stated. II has been the thought of the
administration to have enacted mea-
sure that would raise about s0o on. 90
or So, 900 90 year and Mr.. Aldrich ex-
/ pressed the opinion that this would lie
the result II the exemption suggested
We're made
Several senators who attended the din
| ner and conference stated tonight that
! the administration plan for the enact
| mcnt for the amendment providing for n
| tag or earnings Of corpora tons and cub