New-York tribune., 1918-09-12
McAdoo's Demand for Loan
Changes Stirs Up Objec-
tions to the Measure
Cut i'm Coal and Food
Output Is Expected
United Action on Amend
ment Looked For From
Administration Agencies
By Theodore M. knappen

w N<\HAiiA>N " OAN' ~ Wv 49, '~NNN >N''N
McAdoo's letter to Chairman kitchin
of the Ways and Means Committee and
10 Chairman Simmons of the Senate
Finance Committee recommending,
among other things. the exemption of
individual holdings of $4,000 to $45,-
geo of Liberty Loan bonds from the
surtaxes has resulted in surrounding
the new revenue bill with something
like cloud of gloom. 1t is realized
that if the bill is likely to endanger
the success of Liberty Loans by rca-
son Of its drastic provisions it may
likewise adversely affect many eco
nomic interests whose continued vigor
is indispensable TO the successful pros
ecution of the war.
The fuel administration has already
been reminded that the application of
the excess and war profits provisions
to the coal mines viii tend to reduce
production and make for higher prices
of coal.
The War Industries Board is per-
turbed over the effect of these pro-
visions on the general productiveness
of the country. and is considering
statement of the disastrous conse-
passage of the bill without consider
able amendment. This statement will
likely be addressed to the Senate FL
nance Committee.
The food administration is likewise
reported to be concerned over some Of
the possible consequences of the bill.
United Action for Amendments
1t is not unlikely that there Will be
Il conference of all the government
agencies interested in stimulating pro-
0uction to consider the advisabiity Of
taking united action with view to
amending the bill.
1t is realized now. more than ever
before, that legislation intended to
raise $4,000. 100000 in taxes in one year
Is full of untoward possibilities, some
that are, perhaps, not now foreseen at
all. Mr. McAdoo was evidently not
concerned over the sur taxes except
in the higher classifcations when he
appeared before the Ways and Means
Committee on August IA. His argu-
ment then was chiefly for a high, nor
nal income tax as means of stabiz-
ing Liberty Loan bonds. The com
mlttee granted him his high rates ex-
cept as to unearned income, yet the
bill had been printed only two days be-
fore he discovered that the sur taxes
IN the lower grades would seriously
leopard the stability of the bonds and
their f1otation.
The Ways and Means Committee met
THIS morning and listened to the read
nag OF Mr. McAdoo's letter and then ad-
journed until tomorrow morning to
consider 1t further and hear Assistant
Secretary Leffngwell explain the sit
ua inore tuly. 1t is the intention
to introduce the bill embodying the Sec
rceot reques s ana pass it Friday
10 that end, the House will meet at
II tomorrow morning, instead of
noon, with view to concluding the
general debate on the revenue bill and
clearing the way for action on Secre-
tary McAdoo's suggestion the follow
inc day. Consideration of the revenue
bill will be resumed Saturday and its
passage is expected by the end of next
week.
Senator Simmons said that the Fl
nance Committee could take no action
on the matter until the House had
passed the bill, but he thought there
would be ne disposition to DELAY it in
the Senate. He conceded that the Sec
retary's suggestion in regard to the
surtaNes was something of a surprise.
in view of his previous position. but
said that in these times officials must
be governed by facts rather than theo
rIes.
Loss by Bond Exemption
The exemption from the surtaxes of
the amounts of Liberty bonds men
toned would result. Chairman Kitchin
said, In another gap of $5000O.OO in
the estimated revenues under the bill.
This was not enough in itself to call
for any remedial amendments of the
bill, but would add so much to the
shortage created by the elimination of
beer on December |.
The developments Of criticism Of the
bill IN the administrative departments
concerned IN stimulating and keeping
dp production and in the finance com
mittee hearings point to the conclusion
hat it viii be greatly altered in the
Senate.
Evidence accumulates that the defni-
tion of invested capital is incapable of
equitable application in practice with
out such a degree Of administrative