New-York tribune., 1918-09-17
All City Representatives
Except London Avoid Rev
enue Bill Hearing
States Fighters
Claims Rejected
Tax Definition Amend
ments and Move to Ex-
empt Official Incomes
Beaten
By Theodore NJ. knappen

WASHINGTON, Sept. 16-1hc
Ways ard Means COMMITTEES scored a
preliminary victory to-day ov.r. the
states Fighters on the proposal incor-
rorated into the bill to tax the in
come from state, county and municipal
securities. and the indications were
that flnal victory on this contentious
SUBJECT would be attained tomorrow.
The net result of the days advance
was mat income tax definitions. basis
ior de'crmlnlng gain or loss and the
inNeh'ofles provision. the normal tax.
me surfaces, the definition Of net in
come ana the definition of gross in
come, stand AS written. The only
amendments adopted we're merely
verbal and corrective ones desired bv
'he ways and Means Committee.
Representative Hardy, of Texas.
lought hard to have the inventorie =
paragraph eliminated. This paragraph
PROVIDES that whenever. in the oninion
OF the Commissioner of Internal Reve-
nue. the use of inventories is neces-
sary In order clearly to determine the
income OF any taxpayer, inventories .
shall be taken upon such basis as the
commissioner, with, the approval of the
oeoie'arv OF the Treasury, shall pre-
scribe as most clearly refectine tho
income of the taxpayer Mr.. Kitch;n
declared that without this inventories es
provision the government would lose
S-'ooo ooo,ooc of the revenue il would
be entitled to under She bill.
States Rights Championed
The main battles of the dav voro
over the two sections considcred ~
conhlct with the traditional views of
'ne rights of states. The leader of the
opposition IN both instances was Ren.
resentative Montague. of virginia. On
the Republican side he was supnorted
among others, by Representative era,
nam OF pennsylvania, and Uncle Joe
cannon. One of the disputed sections
vas tAat relating to the salaries of
federal, judicial, executive and admin
'sIratlve ofi1cers and all state and local
olloeis ana the other TO the taxing of
the incomes from state and munic;nal
securities ~ 'P"i
The arguments fo~ and against taxa-
ton were substantially the same in
polh cases. The states Fighters and
strict interpreters Of the Consti+ut;on
argued that for the nation to tax tbo
lnstrumentalities of the states and
wee versa. was to defy the prjncinle
mat tins IS IAN indissoluble union of
1ndestructible states" 1t was also
n,ainIalned that to tax the incomes of
the President and Federal Judges was
d'rect violation of the constitutional
p'oVIsos that their emoluments shall
not be increased or diminished in the
case of the former or diminished in
the case of the latter durinq the;r
tenure o. office.
Most New Workers Absent
New I iork had written a letter to ali
members OF the New York State delega-
tlon urging them to vote against the
alleged aston of states rights. The
conspicuous absence of New York CITY
members caused Representative Never
LONDON to assert that in voting for the
amendments the Socialist member ri
me delegation was the only one who
vas really representing the city, A though
representative Farchild made the
point that part of The Bronx was ir
his dstrc. -
Representative Moore. of Pepnsvlva.
MIA called attention to the fact thst tb, %
only class IN the nation which stooc
loo per cent in their income returns
were the members of Congress. where
as out of 3S2.l3 public officials ONLY
-''9Sz made any returns at all for the
year 1916 W. '"e
The Walsh amendment was beaten
- to II, and the Montague main
amendment, 70 to 32
On the amendment offered bv Mr.
alsn, TO exclude state and municina'
securities hereafter issued from tara,
Non' the vote stood 26 in favor and as
against, but the point of no quorum
was made. Adjournment was ther
taken. and the fight on this point will
be resumed tomorrow.