The sun. [volume] (New York [N.Y.]) 1916-1920, 1918-11-16
REPUBLICANS WILL
FIGHT M'ADOO PLAN
Contend Financial Scheme
Robs Them Of Their Rights
in Next Congress.
REPEAL BILL USELESS
Democrats Intend to Go Ahead
With Revenue Measure and
Override Objections.
REPEAL BILL USELESS
Special Despatch 10 THE suS.

WASHINGTON, NOV. l0.-ASSuranco or
a strong Republican fight to prevent
Congress from following the financial
olsn laid before it by the Secretary of
ths Treasury was given to-day when
Secretary McAdoo appeared before the
Finance Committee TO explain his sug-
gsstions.
Objection by the Republicans, 1t was
plainly indicated. Is limited almost ex-
e,ustyely to the provision for reducing
the taxes in the bill to $4,000. 900 900
next year. The objection is not to the
reduction but to the way in which 1t is
planned TO do II.
The Republicans contend that the
financial plan will formulate in advance
the peace time revenue law which should
be the prerogative of the Republican ma
tcrity in the next Congress. Not even
a bill to repeal tho Democratic tax law.
they pointed out. could succeed. once the
taxes are made law. The President
could veto the repeating bill and leave
the Democratic revenue law in effect.
VIII Override Objections.
Regardless OF Republican objections.
the bill embodying the McAdoo sugges-
tons for a $1,000, 00O, 900 tax bill for the
calendar year 1918 and a $4,000. 90 900
revenue bill for the calendar year 1919
will be put through. A majority of the
Finance Committee are in accord with
the Treasury Departments suggestions,
80 the committee will start to work to-
morrow TO revise the measure.
=. - 4.
committee meeting that according to the
estimate Of Secretary McAdoo the ratio
Of paying one-third in taxes and two
thirds In bonds is not being maintained
Out OF the $4,000. 900, 900 estimated as
the nations needs for the fiscal year end
ing June 80 next It Is the plan to lend
at least S4,000,000,0 900 to the Allies.
These loans cannot be counted as ex-
penditures. as they are to be repaid and
are actually simple investments.
Making allowances for this fact, the
actual expenditures. taking the Treasury
estimate as accurate. will be $4,000
600, 600 for the fiscal year. As the reve-
rue bill is to be revised to raise $4,000
e,Oo0 and as the standard receipts of
the Government In addition 20 this
amount are about $500. 1000 900, It will
mean. according to the Republicans, that
instead OF the ratio of one-third of
needed Government funds being raised in
taxes and two-thirds through bond sales
very close to one-half of the war ex-
pend.tures and expenditures during the
transition period will he taken out Of the
people and the business of the country
In taxes.
Secretary McAdoo's Position.
Mr. McAdoo takes the view that the
4 L., RAI fAr
economic reasons entirely apart from
the ratio which IL may bear TO the loans
that may have to be issued. 1t was not
the idea OF the Secretary OF the Treas
ury. 1t was said TO fix on the one-third
proportion as a hard and fast ratio. The
idea OF the Treasury. IL is represented,
WAS TO take care OF the certainties in the
situation largely by taxation leaving the
uncertainties 10 be met by loans.
The $4,000. 100000 estimate Of the
expenses OF this fiscal year. II was ex-
planned, was pred!cated on few known
facts one OF the greatest factors OF un-
certainty being the cost of liqudating
contracts of which no estimate has as
vet been reached. Other factors are the
expenditures for the army dependent
upon the plans in France and the loans
TO the Allies.
Aside from the general objection to
having the present Democratic Congress
write a revenue bill for the period when
he Republicans will he in control many
Of the McAdoo suggestions were heartily
approved by the Republicans on the
committee. The suggestion for dropping
the war profits and excess profits taxes
after this year was particularly pleas
ing to the majority of the members OF
the committee of both parties The pay
ment OF income and excess profits taxes
by instruments was we'll received by the
committee also.
Income Tax Increase Opposed.
The suggestion that II It is necessary
In order to raise $4,000, 900, 900 In taxes
for the calendar year 1919 to Increase
the Income normal taxes after the profits
;aXes are abandoned was not approved
by the Republicans. They have been
fighting for the substitution OF a sales
tax for some Of the taxes now in the
bill and are set against making the in
come tax heavier after the war than
during the war.
The liberal amortization allowances
FER war plants suggested by Mr.. McAdoo
was regarded by the committee as only
fair and met with full approval. The
committee members indicated their will
!ngness to grant authority to the Gov
eminent to continue loans to the Allies
ami the extension OF credits, but the
committee Is seeking more definite In
formation on just how much money the
Allies will need now and how badly they
need it. Figures on this situation are
expected from the Treasury.