The sun., 1917-07-26
PAYING UP FOR DELAY
Billion Will Be Added to
Tax Bill Now Carrying
S1.670,000,000.
PROTEST ALREADY MADE
Excess Profits Sections of Rev.
enue Bill Especially Opposed,
by Railway Managers.

WASHINGTON, July 25.-National leg
| islators are puzzled at the tremendous
| financial demands which the first year
OF the war now promises to impose on
| the country.
The announcement Of Secretary Nc
Adoo yesterday that another s5.000.-
| 100000 would be needed by the Govern
| ment has brought the country face to
face with a projected expenditure wholly
| out OF proportion to the idea in most
| minds as to what the war would cost In
| dollars and cents.
The confusion is greater when 1t 10
emphasized that this latest demand of
the Government contemplates a total
war expenditure for the first year Of
more than $4,000. 100000, including
| $4,000. .o0O. 900 loaned to the Allies while
| the total war expenditures Of Great
Britain to date amount to only $25.700,-
| 100000 after three years of war.
Thus eliminating the money loaned,
the United States proposes to spend In
| the first year of the war more than two
| thirds what Great Britain has spent in
| three years.
S5,OOO,OOO,OOO for Baker.
The 5000. ooo. 900 asked by Secretary
1 McAdoo. the latter said to-day, Is needed
solely for the War Department. 1t does
| not include further projected loan of
$4,000. .000, 900 to the Allies.
Apparently the Department expects to
| spend large part OF this amount in
training. equipping and paying the pew
National Army of 100000 men.
| The needs of other departments for the
| rest of the fiscal year unquestionably
will boost the total another billion dol
| lars half Of that sum being needed for
the Shipping Board. The navy's needs,
aside from the $44.0O0,OOO asked for
aviation. have not been submitted.
That the tremendous initial expense
| so far outlined represents the cost of our
| unpreparedness through eighteen months
of the European war when prices OF
labor and material now needed were
| advancing by huge leaps is self-evident,
| according to Legislators here
1t is pointed out in connection with
| British comparisons that while Great
| Britain was largely unprepared her war
| control over prices commenced before
skyrocketing had set an entirely false
standard Of prices for labor and ma
| terial.
| OF the additional money, $1,000, ,oOO,-
|
which the Administration desires TO have
raised by taxation. The Senate Finance
| Committee Goes not profess to have any
| thing like united opinion In the COM
| mittee as to how this amount may be
adced to the bill II has been working on
for eight weeks. The measure now car
ries s1.670.000. 900.
Fight Over Tax BiII sure.
81
redistributed to include the additional
billion will be not only the cause OF
| much debate in the Finance Committee
| but unquestonably will give rise to a
| pointed conflict between the two houses
| The Senate is dsnclined TO impose at
the outset of the war as heavy a burden
of taxation on incomes and business as
| the House desires. The House IL
| strongly opposed to consumption taxes
while the Senate is not so strongly ad-
verse to them.
Several Senators predicted the ST.
| $40, 100000 total as the bill now stands
| would be increased to at least $1,000
| 900, with an authorization to cover
additional expenses by a new bond
| issue.
That the House will accept the SEN
ate's consumption taxes at their present
| level is not improbable in view of the
new demand but the House viii be in
| cllned to insist strongly on gathering
an additional billion from incomes and
| excess profits.
In the House the tendency is toward
complete revision of the income tax
law in the direction of the British plan.
which imposes a heavy surtax at the
start and lightens the increase as the
| higher grades are reached.
The Ways and Means Committee Is
! inclined to resent strongly the virtual
| abrogation OF the constitutional prerog-
| ative OF the House TO initiate revenue
| legislation seen In Secretary McAdoo's
appeal to the Senate committee not only
| for increasing tax returns, but for ad-
ditional bond issues as we'll The
Senate will not be permitted to initiate
the added bond issues desired
smoOt Warns Colleagues.
Senator smoot in the Senate to-day
said:
There will be deficiencies asked for
from the other departments OF Govern
ment amounting TO approximately $780,
900, 900. and request has already been
made for $500. 200, 900 additional appro-
priation for the shipping board. We
have also been told by the Secretary of
the Treasury that no doubt 81, 1000, ,000,-
600 more will be required to be loaned
to foreign countries engaged in war with
Germany.
with these amounts added to the an
preparation for the fiscal year ending
June 80, 1918, referred to by me yester-
day, the total appropriations required
will approximate $4,000, 200. 900"
Protests against various features of
the excess profits sections were received
by the committee at it's informal ses-
sion to-day. A delegation of railroad
representatives argued the country would
be more benefited, in view OF transpor-
tation needs, TO have the railroads Use
their surplus in betterments and exten-
sicns rather than to pay It in taxes.
Merchants and manufacturers urged
reduction from s to 6 per cent. of the
war excess profits tax.