New-York tribune., 1909-06-22
THE TAFT AMENDMENT
TAKING FORM.
Final Touches To Be Giuen at
White House Conference To-
nicht-ItS Provisions.
iron me tribune Bureau I

been solved as a result Of the series Of confer
ences which began last night at the White
House and continued throughout the day. While
it is explained that the solutions are not abso-
lutely final. they so far command the support OF
the President and his advisers and of the Re
publican members Of the Finance COMMITTEES
that it is hardly expected they viii undergo any
material change. Tomorrow the Attorney Cen
eral will draft the new amendment. and to-
morrow evening the Republican members Of the
Finance Committee will hold what they expect
to be their final conference at the White House.
with the Attorney General and Senator Root
present.
HOW THE AMENDMENT NOW STANDS
The provisions Of the Taft amendment may
now be summarized as follows:
All corporations will be subjected TO tax Of
2 per cent on their net earnings above 5000
year, except that the funds necessary 70 pay
interest on bonds shall be deducted from such
net earnings.
Bonds. defined in the provision exempting
the funds necessary to pay the interest thereon.
do not include income or debenture bonds. or
| bonds into which the capital stock has been OBJ
viousIy converted. or any bonds in excess Of the
capital stock of the issuing company
National and state banks will be subject 20
the same tax as other corporations. except that
in the case OF national banks there shall be de-
Quoted from the income tax they are required to
pay the amount Of the tax they pay on their
circulation
All corporations will be required TO submit 20
the collector Of internal revenue detailed state
-nent Of their gross receipts. operating expenses
| and any interest they are required TO pay on
bonds OF course. where the net earnings fall
| below $4,000 no tax will be imposed This feat
I ure fnsures the opportunity for federal inspec-
| tion which the President deems so important
| tax Of 2 per cent on the net earnings OF
| corporations would il is estimated. yield total
| revenue Of s40.OoO.O00. From this sum IL is
| tirated that s15.000,o00 must be deducted be-
| cause Of the exemption Of funds required 70 pay
| the interest on bonds under the provisions OF
| the proposed amendment, so that the total reve-
| nue. TO the government is estimated az S25.-
/ 600 600
| II is estimated that the bonds Of corporations
/ in this country stand to the amount OF their
capital stock in the proportion Of 20 8. 50 that
i under the provision exempting from taxation
! the funds required to pay interest on bonds no<
in excess Of the capital stock. the funds neces-
| sary to pay interest on one-seventh OF the out
standing bonds would be taxable
MAY GO TO SENATE WEDNESDAY
The dav began With long conference at the
| White House between the President and the At
+ornev General who arrived here from New
York early this morning. Mr. Wickersham
then went TO the Senate and held protracted
conference with Senator Root. after which they
were fotned by Senator AIdrich. and the con-
ference continued for some time Tentative
agreements having been reached on all points IN
5fs7,,te the Attorney General viii redraw the
amendment and it will be submitted to the Re-
nublican members OF the Finance COMMITTEES az
rha White House conference tomorrow night
II no further changes are decided on it viii be
nossibIe 10 submit the amendment TO the Sen
ate on Wednesday. although as Mr.. Adricn de-
sirss first TO go through the form OF submitting
e. ~ the full committee. it is more likely II VIII
not he submitted TO the Senate until Thursday
This delav causes no anxiety 70 the leaders,
as the debate on the tariff schedules is dragging
s rat II IS now expected they will not be COM
1a+ad until the end Of this week. and considera-
+for Of the corporation tax amendment VIII %
necessarily deferred until next week The lead
a~s bona m he able to take it up next Monday
and TO dispose Of II and the administrative feat-
ures Of the bill in a week which WOULD mean
s.r7tr,, the measure back to the House BY July
s. but their plans have SO far gone aWrT tns<
they are now reluctant to make predictions
Tbe 5sba+e on the schedules is taking far longer
thar VAS expected. and there Is no real sign of
the end this week
PROGRAMME IN THE SENATE
There will be comparatively little speechmaks
ine on the corporation tax amendment On the
pe,rbIjcan side Of the chamber, although IL -
,,,nossibIe TO foresee the amount OF eloquepce
the Democrats may deem IL necessary TO expezd
IN r. Senator Root will conduct the legal sup
mort OF the measure for the Republicans. Tbs
leaders are determined that the amendment
sbau bA a straight administration measu1e and
shall enter the Senate with the entire and cor
dial approval OF the President The President
will furnish all assistance possible in bringing
the RepubIican Senators into line. and the pres
emf purpose is as soon as the provisions OF ths
amendment have been duly explained. to per-
nit the Democrats to talk themselves out and
not 10 reply to their attacks In this way Mr..
AIdrich believes the debate cannot last longer
than a week 1t is confidently expected that.
with the income tax out OF the way. the cor
poration tax amendment will be adopted BY a
practically unanimous vote Of the Senate
Secretary Knox is authority for the state
nent. by the way. that the Supreme Court Of
the United States has defined net earnings TO
be gross receipts less the operating expenses.
interest on bonds being excluded from opera
ting expenses
has been called to certain reports OF the con-
ference at the White House OF last night. in
which the President is represented having
warned Senators that they must revise the tariff
downward. and that he would consider his
sistance in preventing the adoption OF the IN
come tax amendment emitting him 20 their
support for material reductions. II is authori-
tatively stated that the schedules were not once
referred to at the White House last night and
that the President made such demand but.
he contrary he adhered rizidIy his