New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1913-05-31
TARIFF TIMERS HEDGE
ON TAKING BOND ISSUES
Excess of Capitalization Pro-
vision FIatIy Rejected by
One Committeeman.
IN LINE WITH lNTERBOR0
Hope of Compromise on Free
Sugar and Wool Abandoned
Three Weeks Yet
Before Debate.
From The Tribune Bureau J

Washington. May 3O.-Democratic mem
bers Of the Finance Committee. during a
lull in their wrestlc with the tann bill
admitted to-day that the provision I'm the
income tax section aimed at the proven
ton OF bond issues in excess OF capitalize
ton was open to criticism. and there was
probability that the question Of chang
ing the bill in this respect would come
up for discussion in the full committee
if the subcommittee failed to make any
recommendation to that effect
The clause provides that income de-
voted to the payment Of interest on bond
ed Indebtedness I'm excess OF capitalize
ton shall not be exempt from the tax
Tie idea that there Is anything repre-
hcnsible in the issuance Of bonds in eN-
cess Of capitalization was rejected ~
specific terms by one Democratic member
Of tho Finance committee. who added
that income devoted TO the payment OF
interest on such bonds could not on any
reasonable basis be classified as net IN
come subject TO the tax.
The subcommittee. consisting Of Sena
tors Williams. shively and Gore. dis
cussed various phases Of the income tax
section to-day. but did not take MP this
question The Intcrborough and the
Brooklyn Rapid Transit companies OF New
York city have hlel briefs with the sub
committee obiectInG to this and other
phases OF the income tax section.
The sub-committces or the Finance
Committee have also definitely decided to
stand back Of the Presidents ultimatum
FOR free wool and free sugar. and all hope
Of reaching a compromise has been finally
abandoned by the Senators from the
sugar and wool states The Democrats
take the view that the beet sugar indus
try will not be impaired, but that the
cane sugar industry IN Louisiana must
10. Free wool will pc defended on the
ground that the interests Of the people
demand a.
II was admitted by members Of the FL
nance Committee to-day that the bill
would not be ready for submission 90 the
Senate for three weeks. u IS doubtful
whether general debate on the measure
will begin before June %. Tho members
Of the Subcommittee are working strenu-
ously 20 revise the House bin. and their
activity indicates that q viii make IT'S
appearance with scores. ~ not hundreds.
of amendments when 81 energies from the
Finance Committee.
Diamond importers have scored a vic
tory. the Senate Finance subcommittee
having decided upon a reduction In the
proposed Underwood rate OF - per cent
I'd valorcm on cut diamonds. The pres
ont 10 per cent rate may be restored. but
IL seems more probable that a 10 per cent
rate eventually will he determined upon.
When importer after importer appeared
before the committee and declared that
any rate I'm excess of 10 per cent on cut
diamonds would Increase and greatly en-
courage smuggling, tho members of the
committee began 90 investigate their
statements Members Of the Diamond
Trade Tariff LEAGUE OF New York assert
cd that 20 per cent duty would force
dealers to buy from smuggI"rs despite
their unwilnngness TO DO SO. and that Joe
many cases they would buy Struggled
goods unknowiuGlv Customs officials
were inclined 10 verify this view.
Upon this information tho suh-commit-
tee decided 10 change the rate In its re-
port. which viii boz made next week.