The sun. [volume] (New York [N.Y.]) 1916-1920, 1917-09-28
WILL REPORT TO-DAY
Exemption Rates of Profits
Tax Subjects Set at Z
and 8 Per Cent.
NEW PRINCIPLE IS USED
Senate Yields and Puts Second
Glass Mail Rates on Zone
System.
Special Despatch TO THE suN.

Specfh Deepdfch 70 The Sun.
WARRINGTON, Sept. 27.-The deadlock
ever the war revenue bill between the
oonferees Of the House and Senate at
last has been broken. Tonight both
sides announced they had reached
an agreement whereunder their joint
product might be presented at once to
the two houses for approval in order
that the war revenue bill may go to Ahe
White House for the Executive sigma
ture.
The revised draft Of the bill was sent
to the printer tonight. Presentation Of
the conference report to the House late
tomorrow is planned. 1t will be con-
sidered first by the House, but the total
time required is expected to be brief, and
the enactment of the measure next week
u regarded as assured.
e2SO.OOO,OOO Over senate Total.
The bill has been increased to raise
about $2,70o,000,o00 Federal revenue In
addition to $l,333. 100000 to be obtained
under existing law. Additional taxes of
between $25o,ooo.ooo and $500. .ooO. 900
over those Of the Senate measure which
totalled $2.416.000.O 900. were added by the
conferees. As passed by the House. the
total was S1.S68. 100000.
The principal REIMBURSEMENT on the
part OF the House came In acceptance of
the Senste's dictation that the rate DER
cent. Of exemption Of individuals, Arms
and corporations subjected to the war
profits tax should not be upon the nat
rate OF per cent. in all cases. but that
there should be q differentiation
The Senate bill had provided that cor
porations and others subject to the tax
should be exempted 10 per cent where
the pre-war incomes had been normal or
abnormal. and that the weaker concerns
which had made subnormal profits in
the pre-war period should have per
cent. exemption accorded. The con-
ferees split the difference and agreed
that the concerns OF subnormal income
should enjoy an exemption OF per cent.
OF profits and that the normal and abb
normal concerns should be exempted up
to 9 per cent
This agreement was purely and simply
q surrender on the part Of both houses,
effected In the interest Of harmony and
based upon no scientific principle what
soever. This fact was admitted by all
ground and the conferees welcomed the
opportunity for an agreement regardless
Of fundamental facts.
New War Pronts Tax Basis.
The war profits schedule has been
changed In It's general principles from a
tax based upon the percentage OF gains
over pre-war prohts-and by pre-war
profits is meant under the terms of the
proposed law profits OF the years 1911.
1912 and 1914 percentage OF the
gains upon the capital Invested.
modified definition of Capital has
been adopted by the conferees. It Is in
point OF fact the Senate's definition. but
In calculating actual capital 1t provides
that the actual cash value Of patents
and copyrights paid In for shares OF
stock must be considered and that good
viii. including trade marks and trade
Brands and other intangible property of
The corporation or company, must be
calculated as of value on January /,
1914
The Senate levies OF 1850 600, 900 on
war excess profits and ss42, 200. 900 on
Incomes were substantially unchanged,
the conference increases being divided
among many items. with a few new
taxes added. and many eliminated
'''us- pToNlSlOHS restored.
The only change in the Senate income
TAX section was to rearrange and har-
monize a few graduated surtaxes on in
comes over $4,000, without substantial
change In revenue returns or individual
taxation. Normal taxes on individuals
ana corporations and the lowered indi-
Vldual exemptions as revised in the Sem
ate were approved.
second Glass Mail Zone Rates.
The Senate yielded to the House in
principle with regard to the postal
schedule. The second class mail rates
uhder the agreed revision Of the con-
rerees will be upon a zone system of
charges, The minimum rate for second
class matter under the compromise pro-
vision Will be l cent per pound or
traction thereof for transportation for a
radius Of $50 miles from the point Of
Publication. The rate for the second
zone VIII be y cent higher and for sub
eenuent zones. the radius Of which re-
mains To he defined. the ratio will be in
creased up to 6 cents per pound.
The Increases in tho postal rates un-
ger the terms OF the revised law will go
mo effect completely within four years
from the date Of the present enactment
ne nrst increase i'm second class rates
VIII not become effective until July l.,
1919
of tho $3.50, 900. 900 TO $500. O00, 900
anait'onal agreed TO by the conferees
snout one-thrd was placed upon pos
tage' The House cent letter tax, esti-
mated to raise $4,000, 900. which was
stricken out by the Senate, was re-
stored by the conferees, and the gradu-
s'ed zone increase on second class mail
rates ls estimated to raise some millions
more.
Another large increase ordered was In
passenger transportation and Pullman
accommodation taxes Amusement adv
missions also hear n considerable in
crease, with Senate exceptions Of out
door parks and their attractions re.