Evening public ledger. [volume] (Philadelphia [Pa.]) 1914-1942, 1918-03-30
LIBERTY LOAN BILL
UNDER FIRE IN HOUSE
McFadden. of Pennsylvania,
Attacks Section ) as Unduly
Favoring Banks
CHANCE TO EVADE TAN
kitchin. of North Carolina. Predicts
Huge Increase in General
Taxation

Washington. March Su

Warrington. MARCH 90,
section i've of he third Liberty Loan
bin was made the target of vigorous
criticism by Congressman Louis - Me
taddcn of Canton, Pa, in q speech in
tic House Of Representatives today, iu
which lac said It encouraged state and
national banks to avoid paying taxes
To- the state.
Mr.. McFaddcn urged the elimination
of the section named, because. lie as.
serted, II would deprive the state of
Pennsylvania Of more than $1,000 .Ooo in
taxes from the banks IN the state and
deprive other States OF corresponding
revenues.
Section five reads a. follows:
In determining the value 90, the
bank. trust company or other bank
ing institution FOR the purpose Of
taxation by any state or any l,cal tax
ing authority, tho par value OF amy
bonds or other interest hearing obliga
JIous Of the United States owned by
such institutions shalt hc deducted from
its assets"
Mr.. McFaddcn admitted the section
would be a iue thing to assist the sale
of Liberty Bonds among the banks. hut
said it's effect would De Very harmful,
to the states.
This scctiou. No. s.. provide, 10 20
practical working wa! for exemption
from taxation ot national and state
banks by the various states said con.
gresham Nctadden.
For instance t,kc Oh" of either uC
the state or national banks IN penusyI
yania with capital of s5oo, zoe. surplus
of S250.oO0, and total assets Of S1o.-
Uo0.o .ou0. Tndcr the charter granted t.,
the state it can do "A general banking
business. act as trustee, executor or adj
miustrator, aud perform utlrr function.
Of trust, giving it Il good earning capac-
ity BY investing $3.50 600 ia Librrt y
bonds, which is the value of it's capital
and surplus the bank would hr cNerpj
from state taxation under this section
and the state will be deprived of all right
to taN II.
"Pcunsylvlnia will l., deprived of %.
least 81 100000 annual income and tn,
banks can avoid that amount of taS.
atiou.
Viewed from tho standpoint of thC
sale Of Liberty Bonds It is It tirc thing
but from the standpoint of stat" r"Nc-
uues il Is a serious question. The amount
of taxation lost to the States from tho
hanks must be made up by the people in
the state" said the Pennsylvania Con
gresham.
Representative Kitchen Of North Caro-
lima. chairman of the ways and Means
committee, predicted an increase in gen.
cral taxation of from - to 80 per cent
before the end of the war. ut may no'
come in this Congress or even I'll" nest
he said. hut IL IL bound To come witt
the enormous increases in profits IiC
opposed. however. any immediate 'uu-
necessary Increases as likely further ii
/ initiate prices.
Mr. Kitchin emphasized the ~ pei
cent interest rate provision provided fol
/ the $4,000 900. 600 In bonds authorized
by the measure was to he the permanent
rate for all future war loans.
Tile Government must take Il stand
against this continuous demand FOL
, higher interest with each succeeding
loan he said.
THAT is why We made this issue tC
he sold at AZ per cent nOnconvertible
other Liberty Bonds may he exchanged
for those Of this issue. putting all wal
bonds on the !. per cent basic
This, moreover. We believe. will sta
bilize the Liberty Bond market, which
has sagged lately. due mainly TO spec
ulation that Il higher interest would br
paid on this coming issue.
Secretary McAdOo, under the bill
j. authorizczd to buy In Liberty Bond.
in the open market Whenever he deems
such action likely To- restore par value