The sun., 1917-08-18
'M'ADOO FAVORS
BOND ISSUE AT
FOUR PER CENT.
Would Issue $685. ,945, 900
Subject to Income Surtaxes
and Profits Taxes.
TO RETIRE NON-TAXABLES
Plan Is to Provide Also Four
Billions for Future Al
lied Loans.

wAsHIoroN. Aug. 17.-Issuance Of 81
6sS.94S.000 worth Of I per cent. Federal
bonds. subject only to income surtaxes,
war profits and excess profits taxes and
designed to provide $4,000. 1000 900 for
further allied loans and TO retire the
$4,000, ,o00. 900 non-taxable 3h per cent.
issue now authorized to cover loans to
the Allies is contemplated in suggestions
submitted by Secretary McAdoo to-csy
to the House Ways and Means COM
mittee.
Receipt OF the suggestions caused Inn
mediate activity among both Democrats
and Republicans Of the committee. many
Of whom are opposed to the details Of
the Ssoretarys plan. While taxing the
bonds 10 generally favored. somsthihs
more concrete than the Secretary sus-
gests. such as nat levy OF, 6 per cent.
on the interest rate. or application Of
the income tax. appears to be more gen
orally desired by House members.
The 4 per cent interest proposal prob
ably will be accepted by the committee.
with the necessity OF prompt disposal
Of the bonds and the possibility of at
tanning this result by an increased rate.
Only q most unreasonable tax rate. 1t
"a agreed. can prevent a lively demand
for the bonds at I per cent.
Preaiction Of Experts.
The fact that they will be exempt
III EAAn SA~ e. Av,
itself sufficient inducement to create q
good market. and prediction Of bond
experts that per cent. rate may
carry the bonds above par 10 expected
to increase the demand.
One OF the principal arguments ad-
vanced for the Secretarys plan is that
It would protec, the small investor.
Surtaxes would not apply under the
revenue bill now before the Senate on
incomes Of less than $4,000. Few except
thu very large investors would be af-
fected by the war and excess profits
taxes, it II believed.
Variations in war and excess profits
taxes ara 20 great that It Is difYicult "a
present even q general idea of what
rates might be collected through such
sources. Calculations on supertax re.
turns, however. are easily made. Under
kue pEopusco IN loL iuStdnCts tn6 bupcI
tax on $275.000 worth Of bonds would b<
$3.50 and $500 on 5000 worth Thu,
the holder Of $375,000 worth Of pei
cent. bonds would receive q net income
Of . 1915 per cent, whAe the holders 0i
. 100000 allotment would receive
S-i0 per cent.
Members Of both parties in the Hous,
are demanding the establishment Of 9
definite bond marketing and retirement
policy. and this is likely to delay tn,
passage Of the bill somewhat. It II
predicted, however. that the bond issu,
bill will pass the House within a wsel
after the Ways and Means COMMITTEES
meets August Is.
One of Chief Objections.
One of the chief objectors to the secre'
tary's plan urged at the capital IL that II
proposes to leave the investor largely
subject to the whims Of future Con
crosses and the fortunes Of war. Change.
In the various tax levies Doposed are
liable to ensue at any time.
Representative Moore of Pennsylvania
who In the absence Of Representativ,
FOrdney Of Michigan is the ranking Re
publican member of the Ways and Meanl
Committee. issued a statement to-da,
indicating his belief that Republican,
would support authorization Of the bond
unreservedly.
'"The disposition Of Congress for tn,
present" he said. "is let the Presi
! dent have what he wants for the pur
poses Of the war. The Administratio,
believes it to be it's bounded duty to hei,
the Allies to the limit. We are in tn
war, u II said. and we cannot back out
We must help sustaip the Allies as the!
| 70 into winter quarters and to prepary
| for their usual spring drive"