The Washington herald., 1909-06-20
Congressional.

OOftEf CSotOIlLt.
The expected Presidential factor en-
tered the tariff problem before Congress
Wednesday, when message from Presi-
dent Tat was received by both Houses
definitely advocating a per cent tax on
the net earnings Of corporations doing an
interstate business. and suggesting that
steps be taken TO have the Constitution
amended before attempting TO pass an
income tax. This message was sent after
e full Cabinet consideration Of the deli
cate legal questions involved. Senator
Root also being present as adviser The
night before Senator Cummins In a long
conference with the President had failed
10 convince him that it would be best
20 pass the income tax now, notwith-
standing the decision Of the Supreme
Court against the last act OF that char
acter.
IN his message the President does not
hesitate 20 say that the power 10 tax
incomes is one that the government ought
10 have, and he IS convinced that an
amendment to the Constitution is the
only proper course for the full establish
ment of this power. thus accepting the
dictum OF the court and applying the
regular remedy. He points out that
owing 10 the litigation sure 10 arise over
the proposed law. no money would be
brought IN for long time or until the
court should reverse itself The belief
IS expressed that a majority Of the peo-
pie are IN favor Of the income tax, and
that. therefore. there win be no trouble
n getting an amendment through three
fourths of the States. He Is informed
that . per cent tax upon the earnings
OF corporations viii produce not less than
S25,OO0 coo. He regards il as IAN excise
tax. upon the privilege Of doing business
as an artificial entity. and Of freedom
from a general partnership liability en-
ioyed by those who own stock II Is
regarded as a tax upon success rather
than upon failure. The President men
tions another merit of the plan Is that
Il involves the Federal supervision OF the
accounts Of an interstate corporations.
thus giving the government knowledge
of the transactions, the gains and the
profits OF such corporations, and prevent
ing further abuse Of power.
Pursuant 10 a prearranged plan, the
Finance Committee OF the Senate al once
proceeded TO prepare a joint resolution
proposing an amendment 10 the COnstitu-
ton, authorizing the passage OF income
tax legislation, and 10 offer the corpora
ton tax Of . per cent as an amendment
10 the pending tariff bill. A majority for
This programme was believed TO be as
sured Notwithstanding that most Of the
Republican insurgent were disposed 10
hold out for an income tax amendment
at once. and likewise most of the minor
ity Hepburn at once bolted from the
Aldrich camp, saying that as the bill
stood. il would produce revenue enough,
and he saw no necessity for other forms
OF taxation.
Right there is the crux OF the matter.
for IL was understood that the President
had received assurances that in confer
ence many reductions IN the tariff rates
as passed by the Senate would be made
IN view OF the additional revenue from
the corporation tax II was admitted on
all sides that one effect Of the message
would be to prolong the debate for sew
eral weeks One OF the principal argu-
lnents TO be used against the new tax
plan is that il cannot be collected as the
corporations would find a way TO elimi-
nate net profits.
At the end OF the preceding week the
free list had been completed, radlum and
art being notable items included therein
On Monday the Senate took up the con-
sideration Of the Philippines and night
sessions were abandoned. Two amend
ments offered by BTistGw toward free
trade with the islands We're voted down,
and the proposal Of Stone that the Fill
pinos be promised independence in fifteen
years was defeated. a to lS This vote
followed q stirring speech by Newlands.
IN which he argued that the granting OF the
proposed subsidies on Philippine sugar
and tobacco Il would bind the islands 10
US forever. a condition whiclehe regarded
as highly undesirable. He said there was
neither glory nor profit in the conquest OF
these people. and that the relation would
Eooner or later involve us in an Oriental
war more costly than the BOer war 20
the English The committee proposed 10
let In free $4,000 tons OF sugar from the
Philippines annually and same weight Of
tobacco free. and Il was virtually ap-
proved. a. 10 Il On Tuesday Owen, OF
Oklahoma. bitterly attacked the New
England ring. which he said controlled the
Senate. and complained that the bill was
in no sense protective 20 American labor
He gave government statistics 10 show
that wages paid in protected industries
are little more than 80 per cent OF those
paid in the nonprOtected ones.
Wednesday the Senate voted 20 reduce
from 10000 20 1000 the number OF cigars
which could be admitted free from the
Philippines each year, this being con-
oession to la Toilette. although he want
ed the number stiu less or none at all
All the Democrats opposed the change
which came from the committee on mo-
tion OF SmOot. Gore declared that the
free sugar meant a gift Of $10.0O00oG q
year TO the sugar trust The committee
@ moved a graduated tax on zinc ores from
one-quarter OF a cept to 1 cent & pound
on ores having over 20 per cent OF zinc
those below that, being admitted free
This was adopted.
on Friday the Senate voted down
motion 10 put print paper on the free
list, 50 10 g.