The Bridgeport evening farmer., 1917-08-18
NJ ADOO FAv0RS
BOND ISSUE AT
four Per CENT.
Would Issue Huge Sum Sub
iect to Income SurtaXes
and Profits Taxes

Washington, Aug. 18-Issuance Of
1888, 900 worth of per cent
Federal bonds, subject only to income
surtaxes, war profits and excess profits
taxes and designed to provide $4,000
100000 for further allied loans and to
retire the s3,000,000,000 non-taxable
IL per cent. issue now authorized
to cover loans to the Allies is con-
templated in suggestions submitted by
Secretary McAdoo yesterday to the
House Ways and Means Committee.
Receipt Of the suggestions caused
immediate activity among both Demo
Gratis and Republicans Of the COM
mittee. many of whom are opposed
to the details of the Secretarys plan.
While taxing the bonds is generally
favored, something more concrete
than the Secretary suggests, such as a
fiat levy of per cent, on the interest
rate. or application of the income tax,
appears to be more generally desired
by House members.
The per cent. interest proposal
probably will be accepted by the COM
mittee. The Secretary has impress
ed members with the necessity OF
prompt disposal of the bonds and the
posi- bility of attaining this result by
an increased rate. Only most I'M
reasonable tax rate, it is agreed, can
prevent a lively demand for the bonds
at per cent.
The fact that they will be exempt
from all save Federal taxation is In
itself sufficient inducement to create
a. good market, and predictions OF
bond experts that per cent. rate
may carry the bonds above par is ex-
pected to increase the demand.
One of the principal arguments ad-
vanced for the Seeretary's plan is that
it would protect the small investor
Surfaces would not apply under the
on incomes OF less than $1,000. Few
except the very large investors would
be affected by the war and excess
profits taxes, it is believed.
Variations in war and excess profits
taxes are so great that 1t is difficult tc
present even general idea of what
sources. Calculations on supertax re-
turns. however, are easily made. I'm
der the proposed law, for instance
the supertax on $685. 600 worth OF
bonds would be $3.50 and $500 or
$500, 900 worth Thus the holder OF
$375,00O worth of 4 per cent. bonds
would receive net income Of 15-1d
per. cent while the holders of a $780,
600 allotment would receive a 8 9-10
per cent.
Members of both parties in the
House are demanding the establish
ment Of definite bond marketing
and retirement policy and this is like
ly to delay the passage Of the bill
somewhat It is predicted, however
that the bond issue bill will pass the
House within week after the Ways
and Means Committee meets August
rs.
One of the chief directors to the
secretary's plan urged at the capital
is that It proposes to leave the in
weston largely subject to the whirns OF
future congresses and the fortunes OF
war. Changes in the various tax levies
proposed are liable to ensue at any
time
Representative Moore of Pennsyl-
vania, who in the absence of Repre-
sentative Fsordney of Michigan is the
ranking Republican member of the
ways and means committee, issued q
statement yesterday indicating his be-
lief that Republicans would support
authorization of the bonds unreserv-
eddy.
.eThe disposition of congress for the
present. he said, sis the let the Presi-
dent have what he wants for the pur-
poses of the war The administration
believes it to be its bounded duty te
help the allies to the limit. We are
in the war, it is said. and we cannot
back out. We must help sustain the
allies as they go into winter quarters
and to prepare for their usual spring
drive" &