The Birmingham age-herald., 1909-06-21
Informal Conference Is Held After Dinner H the
 White House
AMENDMENT WILL BE
 DRAFTED AT ONCE
President Taft's Plan Will Produce Something Like $4o,oo0,ooo of Revenue Every Year On
 Per Cent Basis.

Washington. June 2O.-President Taft en- tertained at dinner tonight all of the re- publican members of the Senate finance committee and Senator Root and there followed a conference on the subject of the proposed tax on net earnings of cor porations.
 It had been expected that Secretary Knox and Attorney General Wickersham would be present, but the former was engaged with important state matters and the latter was in New York.
 On that account little was accomplished beyond a general discussion that left no doubt that the President and the Senate leaders are in absolute harmony, and all in favor of the adoption of the corpora ton tax as an amendment to the tariff bill.
 It was announced tonight that MT. Wickersham was to leave New York at midnight and would meet with the Pres ident, MT. Knox and MT. Root tomor- row. and that the proposed amendment would be drafted and sent to Senator Aldrich for presentation to the Senate. This programme made it clear that the drafts which had been in circulation here tofore were only preliminary which ac- counts for the failure Of the committee to make them public.
 Important Feature.
 An important feature discussed tonight related to the internst on bonds of cor poratons The concensus of opinion was | that the tax should not apply to such 1 interest for the reason that in many cases 1t would amount to double taxation. Particularly would this be true of sav- ings banks which hold the bonds of cor porations. At the same time the mem bers of the committee told President Taft that 1t would be necessary to find some way to prevent corporations from so manipulating their stocks and bonds as to evade the tax on earnings. Senator Root suggested that the taxa ton on bonds should apply only when they did not exceed the capital stock of the corporation. President Taft said that precautions should be taken to make 1t impossible to avoid payment of the tax on the part of the corporations, and 1t Is possible that the amendment will stipu- late the percentage of bonds in relation to the capital stock that a corporation may issue in order to receive the benefit of the bond exemption. The details of this provision, if adopted, will be left to At torney General Wickersham.
 Will Produce $4o,o00,ooo.
 Senator Aldrich told the President that ? per cent tax on the earnings of cor porations, according to the best informa- ton available, would produce about S4O,- O00000 of revenues annually. What would be lost by the proposed exemption of $5000 for each corporation could not be stated. It has been the thought of the admins tration to have enacted a measure that would raise about S20,OO0,00O or s25,000, ,0c0 a year, and MT. Aldrich expressed the opinion that this would be the result if the exemption suggested was made.
 Several senators who attended the din- ner and conference stated tonight that the administration plan for the enactment providing for tax on earnings of corpor- ations and submitting to the states the question of amending the constitution so as to authorize Congress to levy a tax on incomes, would be adopted.
 They said that when the proposed measures go to the Senate from the White House they will be in form satis- factory to party leaders. It was admitted that the tax would be burdensome, but they say 1t would not be more so than any other form of taxation.
 While they did not try to conceal the fact that all of those who attended the White House dinner had not been favor able to the plan when 1t was suggested for the first time, 1t was said tonight that it appeared to be necessary.
 This view was taken by Senators AL drich and Penrose, and several others said they believed the plan was far safer than direct tax on incomes which might be again overturned by the supreme court