The Montgomery advertiser., 1909-06-21
Corporations Subject of
 Discussion. !.
coNFERs AT WHITE HOUSE
Taft Entertains Senate Finance
 Committee at Dinner.
The President and Senate Leaders arc in Absolute Haraseny ss te Amenament to the
 Tariff BiIi.

W8sniu&ton, June %Vs--Ttesae~Ht Taft entertained at dinner tonight all of the Republican members of the Sen ate Finance Committee. and Senator Root, and there followed conference on the subject of the proposed tax on net earnings of corporations.
 It had been expected that Secretary of State Knox and Attorney -Generai wickersham would be present. but the former was engaged with important State matters and the latter was in New York. On that account. little was accomplished beyond general dis cussion, that left no doubt that the President and the Senate leaders are in absolute harmony and all in favor of the adoption of the corporation tax. as an amendment to the tarfff bill.
 1t was announced tonight that MT. Wickersham was to leave New fork at midnight and would meet with the President, Mir. Knox and MT. Root to- morrow, and that the proposed amend ment would be drafted and sent to Sem ator Aidrich for proclamation 10 the Senate. This program made il clear that the drafts which had been In cir- culation heretofore. were only pre- Iiminary which accounts for the faii- ure of the committee to make them public.
 While no details of the amendment were arranged definitely tonight can be stated authoritatively that the amendment will apply to all corpora tions without regard to their capital stock It is likely. however, that tue tax will apply only to earnings in ex- eeas of gb.OOo a year This VIII re- move the burden from small corpora tions. without subJectlng the measure to constitutional objections ny reasch of exemptions. This provision was worked out by members of the finsnes Committee today and was explained 10 Preaident Taft. The latter recog- nized the wisdom of the suggestion, and said if 1t strikes his Attorney Tsasasals and Secretary of State as Ia verahiv na 1t does himself. the amend unent will be drawn accordingly Another important featnre discuNsed tonight related to the Interest on bonds of corporations. The consensus oI oninion was that the tax should moi apply to such interest for the reason mat in many cases 1t would amount so double taxation. Particularly would this he true of savings banks which hold the bonds of corporations. At the same time, the members of the com mittee told President Taft that II would be necessary to ind some way to prevent corporations from so ma uipulating their stocks and bonds ss to eyade the tax on earnings.
 senator Root suggested that the taxation on bonds should apply only when they did not exceed the captkai stock of the corporation. Presiuehk Taft said that precautions should De taken to make it impossible to avoid payment of the tax, on the part or cor porations and 1t is possible that the Amendment will stipulate the per centage of bonds in relation to the eapItal stock, that corporation may issue in order to receive the benent or inc bond exemption. The details or this provision, if adopted, would be left to Attorney General Wickersnsh.
 WIm Net 2S,0Oo,00o.
 Senator Aldrtch told the President that per cent tax on the earntngs of corporations, according to the best Information available, would produce about $40 100000 of revenues annually. what would be lost by the proposed exemption of $5.000 for each corpora ton could not be stated. It has been the thought of the administration to have enacted a measure that would raise % about s2o. .Ooo, coo or 25.Ooo.0oo a wear and MT Aldrich expressed the opinion that this would be the result if the exemption suggested was mace.
 Several Senators. who attended the dinner and conference. stated tonight that the administration plan for the enactment of the amendment providing for A tax on earnings of corporations and submitting to the States the ques- tion of amending the constitution, 90 as to authorize Congress to levy tax on incomes. would be adopted.
 They said that when the proposed mea sures go to the Senate from the White House. they will be in form sat isfactory to party leaders. It was ad- mitted that the tax would be burden some, but they say it would not be more so than any other form of taxa ton.
 While they did not try to conceal the fact that all of those who attended the white House dinner had not been fa- vorable to the plan when it was sug- xeated for the first time. it was said tonight that 1t appeared to be neees- sary.
 This view was taken by Senators Aldrich and Penrose and several oth- CTS said they believed the plan was far safer than a direct tax on incomes, which might be again overturned by the Supreme Court.