The Birmingham age-herald., 1909-06-22
AGREEMENT IS REACHED
 ON FEATURES OF PLAN
Tax to Be Levied Will Be Per Cent and 1t Is Proposed to Col Iect This From all Banks
 and Corporations.


 will personally supervise putting the finishing touches upon the proposed amendment to the tariff bill providing for the imposition of per cent tax on the net earnings of corporations. This will be done tomorrow night at a con ference at the White House.
 There will be present Attorney General Wickersham and Senator Root, who are drafting the amendment; Secretary or State Knox and Senators Aldrich, Bur rows. Penrose, Hale. Cullom, Lodge, Me Cumber Shoot and Flint, constituting the republican membership of the Senate fnance committed The draft prepared by Messrs. Wickersham and Root VIII be discussed at the conference.
 Such changes as are agreed upon VIII be made by the Attorney General on Wednesday and 1t is expected the per fected amendments will be ready for ln- troduction in the Senate on Thursday. The Attorney General and MT. Root had a long session at the capitol today ana reached an agreement on practically every feature of the corporation tax plan. Ihe portion which is giving them the greatest trouble relates to the government con trol of corporation necessary to carry the law into successful operation. There has been no little opposition to subjecting the corporations to the amount ot pup licity that will be required in the en- forcement of the law and to prevent manipulations of stocks and bonds for the purpose of evasion
 Publicity Must Be Given.
 Members of the finance committee as well as MT. Root and MT. Wickersham agree with President Taft that such pub licity must be given that without it the corporation tax law would be failure. This feature, it was said today, certainly would be incorporated In the amendment. The authors of the draft are, however, experiencing difficulty in finding an effective way of reaching the situ- ation.
 Among the details of the bill determined today are the tax to be levied Will be at the rate of per cent and that II would be collected from all corporations. All banks will come within the range of the tax bill and deductions will be allowed national banks to the amount of taxes paid upon their circulation.
 An important provision to be included in the bill is a definition of net earnings. This will follow near as possible the definition of earnings contained in the interstate commerce act relating to rail- road corporations
 Taft Optimistic.
 President Taft is decidedly optimistic over the outlook for his corporation tax, but a number of senators who called at the White House today declared that the proposition would keep the Senate in session until long past August l.
 Senator Elkins was one Of the Presl- dents callers and he declared that he and a number of other senators would have some remarks to make to the Sen ate when the new scheme of taxation Is under consideration. The West Virginia senator believes that all corporations would attempt in some manner, to avoid payment of the tax. Additional salaries and all manner of expenditures would De resorted to- he thinks.
 President Taft, the other hand, does not believe that a per cent tax on net earnings is heavy enough to make any of the large corporations resort to evasive measures. As to bonds, it is possible, the President feels, to provide limit for the issuance of such securities, based on the capital stock that will prevent corpora tions from transferring all of their -se- curities into bonds, the interest on which always is paid from gross earnings. There seems to be no way in which the bond holders can be reached under the new tax except by double taxation on the corporation itself, which is not contem- plated. Some provision may be made as to the issuance of bonds in the future to provide that the interest shall be paid only from net earnings. Attorney Gen. eral Wickersham and Senator Root are jointly preparing a draft of the new law At conference of MT. Wickersham with the President today it was decided to call in MT. Roots services.
 Questions Do Not Disturb.
 Questions as to the constitutonality of the proposed corporation tax do not dis turb the President. The question has been distinctively upheld before the su- preme court-that of Spreckle5 against the United States. This Is point where the President believes his corporation tax plan should outweigh an attempt to pass an income tax at this time. If an income tax were passed injunctions against it's collection could be secured be- cause of the supreme court decision de- claring unconstitutional a former act of this character
 It would be years before any collec- tions could be made under such tax even If the court nndlly reversed ltSel1 and the treasury deficit might continue to exist. The President does not believe tffere Is any immediate way to stop col lections of the corporation tax. The courts must presume 1t to be constitutional under decisions of the past. and hence no in- junction would issue
 There seems now to be little doubt but that the corporation tax as passed will exempt net earnings of S5000, and less so as to take any undue burden off the smaller corporation. The collection of the proposed corporation tax would be