Evening star., 1909-06-23
SENATE WILL PASS It
AIdrich'S Assurance as to Tax
Amendment.
ONE TOPIC AT CAPITOL
Opposition to the Program Of the
Administration.
LEADERS PROFESS CONFIDENCE
Attorney General Wickersham and
Senator Root Confer-Last Nights
White House Meeting.

crossed the attention OF StdteSHoh at
the Capitol today, the administration
proposed tax on corporations. the form
IT is taking and the prospect OF It's en-
actment into law part of the tdrii1
bill now pending. 1t was generally con-
ceded that the tax will pass the Sen
ate Senator Aldrich has told the Pres
ident il would, and his good faith is
not questioned
But will it be incorporated in the bill
as that measure comes from maj con-
ference? Will the leaders In the House
and Senate be able to hold the Two
bodies. or. rather. will it be possible TO
compose the differences OF opinions In
a way to command a majority vote on
a proposition? These questions are De-
ing earnestly discussed.
Word was passed around the Capitol
today that President Taft Is not IN IA
vor of postponing the tax question 70
the december session and that he will
insist upon its Incorporation In the
tariff bill 1t is questioned whether
Congress will agree with him upon tRls
point 1t is realized that in a way the
Presidents prestige is at stake, ana
this consideration may In the emu uis-
pose the legislators to yield their per
sonal views and acquiesce in his pro-
gram.
Opposition to Tax Amendment.
II is not denied that great many SEN
ators and representatives feel that the
inheritance tax of the House. the income
tax of the democrats and repuollcans
and the compromise Of the administrator
have no place in the revision of the tarln
The CORPORATION tax they contend. is an
economic proposition, and, with It's puo-
lcity features. an echo of RooseVe!isA-
we'll enough in its way. perhaps, Out 10
be considered on its own merits.
The business before Congress-, lhese
legislators contend. is revision of the tar
iff. and that at the earliest possfoie
moment The welfare of business
and and industry Tss ,tssiect,nn teey ms'st Of new
economic theory. they clain' is ao-
solutely certain to delay action. They as
sert that ii is not yet shown that the pro.
posed revised bill will not raise sufncient
revenue. Competent authority insists tndt
it will. Anyhow. trial of SIX months
would not be amiss. they claim.
Nevertheless and notwithstanding al
these objections and arguments urseo
among the rank and file OF legisiaiors on
the hill the House and Senate leaders
have assured the President that IT Will oe
possible TO agree upon corporation tax
amendment in the pending BILL
Income Tax Talk Dropped.
It will be observed that pending all this
commotion over the corporation tax
amendment there is complete cessation OF
talk about the income tax and the joint
resolution to submit to the states an
amendment to the Constitution. That IS
very pleasing to the republican leaders IN
Congress, and is exactly what they sought
TO bring about by projecting the corpora
ton tax amendment. Every one appears
TO, be assuming that by general consenI
the income tax proposition is to take the
course mapped out In this compromise.
But the leaders know that beneath the
surface the income tax Goals are stlll
smoldering; the fires have been only
activity at the first opportunity II 1t ap-
pears that good faith is lacking In the
plan to submit the amendment TO tne
states A hard and fast agreement 70
tax problems to the next session, with e 2
time set for their consideration might, II
is thought, be acceptable.
Provisions of Amendment.
AS legislators at the Capitol under
stand the pending corporation tax amend
ment agreed upon at last nights White
House conference which is being framed
by Attorney General Wickersham, Secre-
tary Knox and Senator Root. the great
corporation lawyers of the administration,
il provides in general way as folioWs.
A tax of per cent on the net earnings
OF all corporations organized Tor PROXY, ~.
with an exception to the amount or so'oOO
of net earnings of all corporations 50
as To exempt small industrial and trading
firms.
CORPORATIONS shall make returns to the
internal revenue bureau of the treasury
Depar .ment and shall suffer penalty for
making false statements. These returns
shall specify the gross receipts. the cap
ital stock. the bonded Indebtedness ana
other debts.
They shall report the amount OF their
net receipts which are to be ascertained
by deducting from gross receipts the gen.
eral and ordinary running expenses. m
terest on bonds up to the amount OF STOCK
Capitalization, interest on notes ana other
forms of tangible indebtedness and any
actual loss incurred in business not COW
cred by insurance. This actual loss Is
TO include all forms of loss chargeapie
TO profit and loss account
The tax shall be collectibe upon the
entire amount of funds applicable 10 pay
ment of dividends on preferred ana com
mon stock and funds to pay interest on
bonds where the outstanding bonds ex-
ceed the stock capitalization
To Avoid Annoying Inquisition.
In the administration of the tax the
government will proceed with the least
possible amount of inauisition into the
private affairs of corporations. The state
ments submitted by corporations will be
accepted upon their face except where
there is strong suspicion OF attempted
fraud This assurance will be made and
is required to aliay a strong flood of pro-
test which is pouring in upon senators
from corporations in all sections of the
country.
Indeed. the underlying ground of objec-
tion TO the plan is not the tax per Sc but
the publicity and apprehended govern
mental inquisitioR. In the long run the
consumer will pay the bill-that is. the
stockholder-and 1t will not fall heavily
on the individual.
But 1t will be recalled that II was stated
at the outset that one reason for the i'm
position Of the tax Is 70 facilitate the
future program for further governmental
supervision of corporations. The cor
porations were quick to see in this sug-
gestion a Trojan horse inclosing a pos
harass them, and they took alarm at
once Senator Aldrich will utter assur-
ances on the floor of the Senate that this
fear is exaggerated.
The White House Conference.
The Presidents guests last night at
the dinner which preceded the confer
ence were Attorney General Wicker
sham. Senator Roof. Secretary of State
Knox and Senators Aldrich, Burrows.
.Penrose. Cullom. McCumber, Flint.
Smoot and Lodge.
A draft OF the proposed amendment
wfckersham and Senator Root. who had
been charged with its preparation.
The conference following the dinner
resulted in a complete agreement upon
all of the details of the amendment.
Some changes in phraseology were made