Evening star., 1909-06-24
Antagonism by Corporations.


The fact has already become known to
the committee that many of the strongest
corporations in. the country will not only
antagonize the provision before it goes on
the statute books, but will do their utmost
afterward to overthrow it, in case it
should be SO successful as to become a
law. The committee is, therefore, all the
more desirous of perfecting the amend
ment before presenting it to the Senate so
as to cause il to carry with 1t not only its
recommendation from the viewpoint of
policy but also from the point of legisla-
ton which will stand the tests of the
courts.
1t was not believed by those who par
tcpated in the morning session of the
committee that the work would be COM
pleted today, and it was therefore con-
sidered probable that the provision would
be withheld from the Senate until tomor-
row or Saturday. Night sessions will
ment is taken UP for consideration by the
Senate Many speeches are expected and
there will be an effort to work them off
as rapidly as possible.
At their meeting today the members
gave especial attention to the determina-
ton of the exact thing to be taxed. and
they practically reached a conclusion to
confine the levy TO net earnings, capable
of being used for the payment of divi-
dends. 1t is believed by the members of
the committee that in imposing the pro-
posed tax it should be confined to actual
profits going to the stockholders in the
shape of money payments, and that.
therefore, money set aside for repairs,
for the improvement of property or for
| the payment of interest on bonds should
| be exempted from the requirements of the
proposed amendment.
Estimate of Revenue
There was also much discussion as to
the revenue that would be produced by
the operation of the provision and esti-
mates varied all the way from S2j,OOO,O 900
| to $40, 100000 annually. There was some
| talk of increasing TO $4,000 the earnings
of small corporations to be exempted
/ from the operation of the law Hereto
| fore the suggestion has been that con-
| Germs whose earnings do not exceed
| $1,000 should not be required to make
any payment, but at today's meeting one
or two members expressed the opinion
| that the figure should be doubled. No
! action was, however, taken on the sug-
| gestionS.
| 1t is not intended that the law should
| be so inquisitorial in character as to an
noy legitimate corporations. but at the
! same time it is looked upon affordng
| an opportunity to exercise such supervis-
/ ion over corporate concerns as may have
/ a wholesome effect in preventing what
| is known as wild eating
| 1t is believed by some of the members
| OF the committee that the law can be so
! framed as to authorize an investigation
/ into the affairs of the pretentiOus com
| panies which have no legitimate excuse
/ for existence except the taking in of the
money of the purchasers of stock. 1t is
also intended to frame the provision SO
as 10 prevent the overbonding of corpo-
/ rations, which might be used in a way
/ to consume all the income and thus leave
! nothing for the tax collector.
! The law will be applied strictly along
\ the lines of the internal revenue statutes,
and no cooperation with state authorities
! is row contemplated.
There is difference of opinion among
members of the committee whether the
punishment to be provided for making
| false returns shall include impris0nme mt
| as well as fine, and this formed a SUBJ
| iect of discussion this morning.