New-York tribune., 1909-06-23
CONFERENCE AGREES
ON CORPORATION TAX
PARTY LEADERS MEET
THE PRESIDENT.
Cabinet, Senators and Representa-
tires at Uhite House-4doption
of Amendment Predicted.
rFrom The Tribune Rrr.au-I

White House. composed OF the President Secre-
tary Knox. the Attorney General Senator Root.
Speaker Cannon. Representative Payne. Repre-
sentative Dwight. the Republican whip. and the
Republican members Of the Finance Committee
of the Senate considered the draft Of the pro
posed amendment TO the tariff BILL providing for
a tax of per cent on the net earnings OF cor
porations. this evening. and gave il their cordial
and unanimous approval The measure. all the
principal features OF which were outlined in
these dispatches this morning. will require no
changes and will be. it is expected. submitted
to the Senate on Thursday. The only features
in addition 20 those already told in The Trto-
une are the publicity provision. which empowers
the Secretary of the Treasury TO order an in
vestigation into the affairs of any corporation
which is suspected of attempt to evade the
tax. All returns made by corporations must as
has been told. show the gross and net earnings
of the corporation. and any interest due on
bonds. and must be sworn TO.
As has been told. the tax applies to al cor
porations each Of which is required 70 submit
| a complete statement Of its gross and net earn
ings interest due bonds. etc. except that the
first s5 900 Of such net earnings shall be exempt
from taxation
Corporations will be allowed to deduct from
| their net earnings funds sufficient TO pay the
interest on bonds not in excess Of their capital
/ stock except that this does not apply to deoen-
Il
| the capital stock has obviously been converted
| National and state banks are subject to the
| tax except that in the case Of national banks
| there shall be deducted from the income tax
| they are required TO pay such amount as they
/ have already paid taxes their circulation
| The corporation tax will become effective i'm
| mediately and there will. Of course. be no time
! limitation. as was proposed some time ago
| All the members Of the conference, which in
I of
| gave the President the most positive assurance
| that their respective bodies would adopt his
| proposition and expressed the belief that once
| the measure was properly understood it would
prove extremely popular
SHOULD PLEASE CORPORATIONS
/ The view was expressed that If corporations
| and others realized that the only alternative to
| this proposition was the income tax. which
would include all the features Of this measure
as we'll as a similar tax on private incomes.
they would be actually reluctant TO place any
obstacles in the way Of this measure
There was no suggestion OF posrponing the
| adoption of this tax until next session which
| would be obviously impraCtiCable in view OF the
temper Of those Republicans who formerly ad-
| vocated an income tax and who have given their
| support to the Presidents proposition only be-
| cause they realize the possibility Of an income
| tax being pronounced unconstitutional. while
4
to be upheld by the courts should any one care
| to test its constitutionality.
| The President expressed to his callers the
utmost gratitude at their cordial support. and his
| pleasure at their confident predictions that the
| corporation tax would be adopted by practi-
| caIly unanimous Republican vote in both houses
| Speaker Cannon and Representative Payne were
| as loud in their praises of the Presidents prop
| osition as any member Of the Senate. and all
| oFNGra rarTa n a
| adoption of the amendment would be presented.
| The highest encomiums were passed on the
| work of the Attorney General. who is regarded
| as lawyer Of commanding ability. and the
| Endorsement of his proposition by so large a
| number Of able lawyers is held by the Senate
leaders to remove all possibility Of doubt as to
the constitutionaIity OF the measure
| Mr Wickersham has caused to be prepared
sufficient number Of original copies TO furnish
| one TO each member OF the conference. that
| all might study a clear copy at his pleasure
| II is expected that some minor alterations in
phraseoIogy will be made by the Attorney Gen
| eraI tomorrow, that the Republican members
| of the Finance Committee will then take formal
| action on the amendment. and that on Thursday
! it will be submitted 10 the full membership OF
| the Finance Committee after which il will be
| submitted TO the Senate The manner IN which
the debate on the schedules is dragging on the
! floor of the Senate. however. makes the consid-
| Grafton Of the amendment before Monday I'M
| possible and there are many who fear II will be
| still further delayed
| Some of the published reports Of lack OF
| harmony fnsurmountable obstacles. etc. proved
| a new incentive to the advocates OF an income
| tax this morning. but on investigation they
found all such reports to be unfoundsd. and this
| evening they admit their complete defeat at ths
| hands Of the President and the Republican or
| ganizatfon in the Upper House OF Congress
| DRAFT OF AMENDMENT SUBMITTED
| The Attorney General completed his draft OF
the CORPORATION tax amendment in time to sub
/ nit II to the Cabinet when IL met. at II o'clock
| this forenoon. The President and the members
| of the Cabinet were greatly pleased with the
| result and later expressed their confidence that
| Mr. Wickersham's work would meet with the
entire approval of the Republican members Of
| the Finance Conittee and ultimately OF the
| Republican membership Of the Senate and the
| House A member of the Finance Committee
| said this afternoon that the forecast OF the
| amendment which appeared in The Tribune this
| morning was correct in every detail He
| added that the completed draft would also con-
| tain further details regarding the publicity
| features of the measure
II Is unlikely that the special agents OF the De-
| partnaent of Commerce and Labor will be used
| to conduct the proposed Investigations into the
| operations and finances Of the corporations. not
| because they could not be used. but because
| II is Questionable If such would be good policy.
| When Congress created the Bureau Of Corpora
| tions IL purposed to make it instrument for
| the procuration of facts not otherwise obtain
| able by the government. These facts were to be
secured under pledge Of absolute confidence.