New-York tribune., 1909-06-12
PRESIDENT TAFT CONSID-
ERING NEW PLAN.
udy Be offered as amendment to
Tariff BW-U'hat It's
4dUOcates Sag.
LFrom The Tribune Bursau.I


most farreaChng reforms enacted since the
Sherman antitrust law was placed on the stat
ute books. Since Senator AIdrtch informed the
President that the Republican organization was
still three votes short OF the number necessary
TO send the income tax amendments to the Judi
ciary Committee. and Mr. Taft urged the Repub-
lcan leader to offer as substitute provision
for a tax on the dividends Of corporations. the
President has evolved a substitute which is con-
sidered by it's friends Of infinitely greater i'm
pOrtance and he is seriously considering urging
the Republican leaders and possibly the entire
Republican party in the Senate 70 adopt It. This
is a tax on the net profits Of corporations
President Taft has all along given sons
thought 10 the advisabiIity Of assessing the pro-
posed tax on the net profits Of corporations. but
the more he has thought Of the proposition the
larger its advantages have seemed TO him. not .
primarily revenue producing measure. but
as a method of obtaining that federal super
vision of corporations which was one Of the
cherished policies Of the Roosevelt administra-
ton. and one TO which the Taft administration
stands committed.
Consideration Of the proposition has con-
vnced the President and others whom he has
consulted that in order TO collect such a tax il
would be necessary for the federal government
10 exercise a supervision over the corporations
liable thereto which they believe would effect
stock. SeCre-
ton of profits and enhanced assets. which many
flnanciers believe to be the bane Of corporate
methods in this country
INCOME TAX WORRIES LEADERS.
The situation in the Senate is obviously such
that the President should he deem it wise TO
exert his influence in favor Of this proposition
could effect its adoption The Republican Lead
ers no longer attempt to conceal the fact that
the strength Of the income tax movement is to
them the cause Of no little anxiety Many OF
them believe that only the presentation Of a
meritorious substitute viii prevent the adoption
of the CUmmins- Bailey income tax amendment
Such a substitute the President has now
under consideration would it is believed by its
advocates. completely dispose Of the income tax
proposition and greatly promote the popularity
Of the tariff bin
1t Is asserted that the proposed tax on the
net profits OF corporations could work no hard
ship to any concern doing legitimate busi-
ness. and would in fact greatly promote public
confidence in all such. 1t is also said that the
chief method of defrauding minority stock
holders is the concealment Of profits or the
increased value Of assets Inscriptions man
ayers Of corpora tions. IT - further said secrets
profits, either pass or decrease below normal a
regular dividend. and then taking advantage
Of the depressing tendency which such course
has on the market value Of the stock, acquire
large holdings. and when they have done 50
either declare double dividends or issue large
stock dividends other Inscriptions managers
Of corporations pay dividends from assets when
no profits have been made. and then. on the
basis Of such dividends float large quantities
of worthless OF comparatively worthless stock
All OF these evils. it is maintained by the advo-
Gates OF the proposition. would be pre-
vented by supervision which the collection OF a
tax on the net profits Of corporations would
render necessary
SENTIMENT IN THE SENATE
So far as can be ascertained. the Senate Lead
ers are opposed TO a tax on the net profits %
corporations and would greatly prefer a tax on
the declared dividends and that with a two-year
Limitation. while the suggestion IS also made
that coupled with the, amendment for such
tax there should be provision for constitu-
tional amendment such as was offered by Sen
ator Brown to-day. authorizing congress 70 col
Iect an income tax. this amendment 20 be su5-
mftted 70 the states for approval on the pre-
s,,nption that such approval could be had
within the two years the corporation tax would
run IT. however. as now seems probable. the
Senate leaders are compelled TO obtain the as
sstance of the President il order 70 head of tho
income tax proposition, they viii doubtless be.
ready 70 adopt any suggestion the President
NAV make with sufficient emphasis.
The President has not carried his cOnsidera-
tion far enough 10 make It possible 70 assert
that he will exert such influence. but the fact
that he is seriously considering it adds nate
rialIy 10 the interest CT the situation. OS course
the President also feels the necessity Of con-
serving to some extent his influence. in order to
obtain certain notifications IN the schedules.
but in the opinion Of s0Tae Of his advisers Tho
net profit tax proposition IS Ct such paramount
importance that the Executive could Wen Afford
TO devote his entire influence to its promotion
They believe that il would add greatly to tks
popularity Of the tariff bill ard would eEec- I
reform Of far greater iInI 'rtarce than suci
scaling Of the tariff schedules as can De eEected
in conference
PRESIDENT FOR PUBLICITT
The extent to which President Taft is cor,-
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