Evening journal., 1918-07-01
JUMP IN Taxes TO
HIT PROf|TEER|kC
Some Senators Say Trade
Commission Reveals
Laws Weakness
COORDINATION
SEEMS LACKING

SEEmS LASNllNO
WASHINGTON, July i.-Greater CO.
ordination between the price fixing and
taxation program Of the government
is almost certain to result from the dis
closures made in the report Of the Fed
eral Trade Commission on war prof.
tesring. The need OF such co-ordina-
tion has been shown by some OF the
stupendous profit reaped as the re-
suit Of fixing prices largely on the basis
Of the highest costs Of production, ac-
cording TO the opinions Of Senators and
others given today.
At teh time the government first
started 10 fix prices many here in touch
with the matter believed that pro1teer-
ing was bound 10 result unless the war
revenue bill was framed largely as a CO.
ordinate measure and with the idea Of
levelling profits through the imposition
OF taxes on a scientific and systematic
plan.
The price fixing plan initiated by the
War Industries Board last summer
under Chairman Scott. had two princi-
pal objects-the stabilizing OF prices
and accurance OF maximum production.
Recognizing that TO preclude any cur
lallment Of production 10 was necessary
TO fix prices based on the highest pro-
duction costs and that this would mean
large profits for some manufacturers
whose costs were low compared with
some competitors, it was the idea OF
men like Director Clifford Of the Coun-
oil Of National nefense and other franz |
ers OF this policy that an excess pro-
iis law could be framed that would in 1
effect reduce all profits to a common |
level.
Il was pointed out that Great Brit
ain had framed her tax law TO meet !,
her price fixing program and had Writ
ually accomplished this.
Those who Initiated the price flXlng
policy Of the government are charging
therefore, that much prohteering shown
must be laid 30 an unscientifc tax law
rather than 10 a wrong price fixing |
policy.
After a second day review Of the re-
port Senators and members of The
House who think consistently on ques-
tions OF economics incline TO the opin-
lon that little II anything is In the re-
port which discloses criminality or
fraud. It Is remarked that the report
itself only hints at the suspicion of
fraud and falsincation Of receipts and
expenditures by concerns engaged In
the various industries. While there
will be a prompt demand for elucido-
tion of the suspicious Of the commits
sioners, It is not expected that immedi-
ate developments looking TO The prose-
cution Of producers, manufacturers or
purveyors will result.
on the other hand, Il Is certain that
many Of the discoveries made by the
Federal Trade Commission will furnish
\material upon which TO base the re-
traft OF the excess profits sections Of
ihe revenue laws. 10 VIII mean that
the proponents OF a larger conscription
of wealth than that provided by exist
ing statutes Will have a great disad-
vantage in the arguments they VIII
have 10 present when the new revenue
bill is under consideration.
It means also that the trainers Of the
new law I'm the Committee on Ways and
Means in the House and the Finance
Committee in the Senate viii have back /
ing for their arguments for advancing /
the excess profits rates and the income /
tax rates along the lines sketched by
the President in his address to Con
gress on the need for a revenue bill at
the present session and more definitely
presented almost a year ago by the
then such radicals as Senators Borah
fldal. Republican: Hollis N. H.), and
Underwood. and Representative Len
root. now Senator (Wis.l. in the House.
II was upon the resolution introduced
more than a fortnight ago by Senator
Borah that the Trade Commission So
called proflteering report was made.
Senator Borah said that he had /
reviewed the repor. with great inter- /
est and not a little satisfaction so far /
as his earlier contentious were con- /
cerned. He had not been convinced |
whether the commissioners believed |
they had discovered basis for criminal |
prosecutions or other legal actions, /
but said that with the consummation /
OF the present fight In the Senate over
the elimination Of the $3.50 wheat guar
antee he intended to discuss this phase /
OF the situation with the commission /
ers.
But" said Senator Borah. what this /
report has shown Is that there must be /
In the future cooperative action be- /
tween the trainers Of taxation legisla- !
tion and the agencies Of the government /
empowered TO regulate prices. The leg
islstion which viii form the basis Of
regulating the income Of the Federal
Treasury should not be drafted without
adequate consideration being given to
The conditions In industry with which
must come to deal.
The regulation Of prices works in
two ways. II the prices are regulated
on the basis Of the maximum cost Of
production by any particular concern /
or group OF concerns in any particular I
Industry, then It is a self-evident fact /