New-York tribune., 1910-02-17
ESCAPE PUBLICITY
CORPORATION TAX
LOSES FEATURE.
President Taft Suggests an
appropriation to Make
Records Public.
IFrnm The Tribune Bureau

From The Tribune Rureau.J
Washington. Feb. 16.-There will be
no publicity for the returns made under
the provisions of the corpora ton TAX
unless Congress shall enact special lesiS-
lation to that end and this Is regaroeu
as highly improbable. especially "hiie
the question of the constitutionallty ol
the law is pending in the courts.
Should the supreme Court affirm the
constitutionality of the law the Presl-
dent will doubtless make an earnest
effort to secure the necessary legislat'on'
although it is also probable that lie
would sanction some provision IN con-
nection Herewith whereby the business
affairs of the smaller corporations "ouio
be safeguarde from the knowledge OF
their larger competitors.
The Secretary of the Treasury has dis
covered that it will require a special ap-
preparation of $4,000 to make the re-
turns under the corporation tax matters
of public record. and furthermore, that
Congress has prohibited the use of any
part of the 100000 provided for the col
lection of the tax for the payment OF
persons within the District of Columbia
These facts Mr.. MacVeagh communicat-
ed to the Executive.
President Taft has replied. saying that
while he construes the law to mean that
Congress purposed to have the returns
OF corpora tions, original and corrected
but not the documents and evidence
taken upon investigation" open to IL
spection. he appreciates the difficulty pre-
sented by Mr.. MacNeagh: that he re-
CARDS the only course open TO the Sec
retary is to communicate the facts TO
the House and to suggest that II the
construction proposed by the President
be correct and is to be carried into exc
cution there must be appropriate
of $4,000 for the specific purpose; and
with the further statement that II no
such appropriation is made the only
course open 10 those who are executing
the law will be to treat the returns as
other internal revenue records; that Is.
they will he open to inspection only by
the taxpayer or his attorney. or by such
person as may he specially designated
bv the President or the Secretary of the
Treasury.
PRESIDENT To MACVEAGH.
Strong opposition had developed To the
publicity feature of the corporation tax
Law, and President Taft and his advisers
have frequently conferred OF the ques-
tionof reaching a basis of administration
of the act The issue now is squarely
before Congress. and much interest is
manifested as to whether that body, in
effect. will re enact the existing pub
licity provision by granting the. appro-
priation recommended President Taft's
attitude and views on the subject are
expressed in the following letter to the
Secretary of the Treasury:
The White House
Washington. February IS. 1910.
My Dear Mr.. Secretary: on the ques-
tion as 10 the meaning of Paragra pm or
the corporation excise law, In Section SO
of the tariff act OF August 5. 1909, have
very little doubt II seems 10 me that II
was intended by Congress that the re-
turns, original and corrected. but not
the documents and evidence taken upon
investiga ton, should be open 10 inspec-
ton as are court records.
/ understand the difficulty that pre-
sentS Itself to you, TO wit, that Congress,
in the urgent deficiency bill Of August D.
1903 appropriated 100000 for the eX-
pcnses of collecting the corporation tax,
and that il was assumed that this would
enable YOU to use d proper part of the
sum for increa sing your clerical and
other assistance needed To give the op-
portunity for the public inspection spe-
cifcally provided in the act 1t VIII re
ouire at least $4,000 properly TO index
and display the returns Of more than
400 600 corporations, to house them In
rooms convenient of access for the pub
lie, and to provide clerks for the care and
custody of them under such conditions
II now turns out, however, that by
Section of the act of August ), 1882,
the Secretary of the Treasury is express
lv prohibited from using any part OF the
appropriation OF 100000 made, IN the
words of the statute already quoted, for
the employment of persons within the
District of Columbia. In other words.
therefore, 10 appropriation exists with
which to make the returns OF corpora
tions public record available for public
inspection in any different manner from
that in which other Internal revenue rec
ords are public records
In nv Judgment the failure to make
specifc appropriation for the purpose
was an oversight, due to the supposltlon
that the 100000 might be applied IN
mart To the purpose under discussion, and
that it was as already said. the intention
of Congress to make these records differ
ent from the ordinary internal revenue
records and really subject TO general
uublic inspection.
R,,t with the situation as it is. nothing
remains to be done except FOR you TO
state the ease To the House OF Repre-
sentatiyes where appropriation bills are
nronerIv introduced, and 10 suggest that
iif +ha constructions which seems to me to
he the right one, is TO be carried into
nxacution there must be an appropria-
tion of $4,000 for the specific purpose;
and with further statement that II no
such appropriation Is mace, lhe oilly
o ,nen to those who are executing
the law in the department will be TO
treat the returns other internal rev.
onue records Sincerely yours,
WILLIAM II. TAFT.