The Washington herald., 1918-09-11
M'ADOO URGES
LIBERTY BOND
/ SURTAXES CUT
Secretary Asks Congress to
Revise Levy Against
War Incomes.

Legislation to exempt from sur
taxes a portion OF the income from
liberty bonds has been recommended
to Congress by Secretary McAdoo.
Immediate enactment of the meas
ure in order to stimulate the sale OF
the bonds OF the fourth liberty is
sue is urged, Secretary McAdoo say
ing that IL materially Affects the
prospects OF the loan.
Secretary McAdoo's letter to
Chairman Kitchin. OF the Ways and
Means Committee. recommending
this legislation. was made public at
the Treasury Department yesterday.
A draft OF the desired bill was
transmitted to Mr.. Kitehin with the
reasons for its immediate passage.
and similar copies were sent to SEN
ator Simmons, chairman of the Sem
ats Finance Committee.
Affects Small Investors.
The proposed bill provides that
until after the expiration OF the
calendar year ending December 81
next following the calendar year in
which the war ends, the interest on
an amount Of bonds of the Fourth
Liberty Loan. the principal Of which
does not exceed $4,000. owned by
any Individual partnership. associ-
ation or corporation. shall be ex-
empt from the surtaxes in the rev.
enus bill now pending in the House;
the same exemption is to be applied
in respect to the interest on first
liberty bonds. second liberty bonds
ana third liberty bonds in an
amount not exceeding $4,000. The
srxNH ka 10 a n
those in the second liberty loan act.
In Recommending the legislation
Secretary McAdoo calls attention to
the fact that the market for liberty
bonds has been greatly depressed by
reports OF the imposition OF heavy
surtaxes to which the interest on the
bonds will be subject He says that
he believes the country owes 1t to
the millions OF purchas sers OF liberty
bonds 10 see to II that measures are
taken to keep the bonds as near par
az possible.
Makes other Pieas-
Secretary McAdoo also Incorporated
other matters, which he asks Con-
gress TO pass Immediately. so that the
status Of the fourth liberty bonds may
be known These are:
Extending the limit on the holdings
of war saving certificates so that one
person may hold 81 900 of the issues Of
1873 In addition to 1900 OF the 1918
issue
Authorizing the President to regu-
late Or prohibit the exporting, hoard
ing and melting OF gold.
Authorizing the Secretary OF the
Treasury to negotiate with foreign
countries for the purpose of stabiliz-
ing foreign exchange.
Limiting the amounts Of loans
which national banks may make to
any one borrower.
DistIIlers Surprise Senate
Levi Mayer, the Chicago attorney,
representing the organized dIstillers
of the country, appeared before the
Finance Committee OF the Senate yes
terday and impaired the rather
alarming information that under the
provisions of the bill, as drawn. the
a. G 1'Itilled spirits will yield not
r7r7- Do. So 81 - instead OF the
H-a ~ s~--e'a. the trainers Of
b
J.- s.E s.~ Nr Mayors state
EsFaL .sz r. ra5 exceeding high
tax would .0- Ier sely to curtail
WllnuI dHal OF spltlNS IIOn Dohu Mhiio
a lower and more elastic provision
would empty the bonded warehouses
Of spirits and give the government
the full benefit of taxation on spirits
already manufactured for beverage
purposes.
Several members Of the committee
seemed impressed with Mr.. Mayors
argument but the committee as a
whole was not convinced. The seed
Of doubt was sown, however. and the
committee will make a thorough
study Of the situation before approv-
ing the provisions OF the bill because
II Is their purpose to get every cent
possible out Of the taxes on intoxi-
eating liquors before the country goes