Evening journal., 1918-03-27
TAX TAX EXEMPTION IS
ASKED ASKED Or hlAHI
hIcAdoo Wants Congress to
Provide Same Provisions
AS Last Issue
EXTEND CREDIT
TO ALLIES ALSO

wAsHlNGToN. March 21.-Secretary
McAaoo has recommended to. Congress
mai the bonds Of Che third Liberty
osn carry the same taN features as
,hose III the second Liberty Loan I'D
addition to the cHisiiu- iaN FEATURES ne
sue,ypsts the same Frei1l te' rus
snd denomination as the Lest issue
n thc ne,N bond issue carries lht
como fox nrovisions ms ihe last one ana
tnera Is mo- doubt ihai DoHs.e ei, Nil
r,as, fhe Sscreiarys wishes tine bonus
x..ni he EXEMPT both as Go pi ncipai ana
,,israsf from an taxes moss o. nero
sfi.r inrose8 by ihc Jrited states any
state or ann possession oi tle h'teu
states as hr any local ilAins autnorll .
e,...n, o.tlt ur mherllanee taxes. ahh
oaadoated diiiona income lakes ,oh-
n'aals. known AS surtaNcs, ana excess
rroai. sua war profits. now or mere
ancr imoosed boy the United states
nron az income or profits oi nulNlu-
rai. rssinershlns. co poraiion- or as
4,Naiions The interest on on ainouhi
of bonds. the principal oi WHEN uoes
nai exceed in the agg eglte ,a.osN oWhea
b. an individual, partnership, assocls-
ffan or, Corporation. win be exempted
The taxation plan of secretary NE
,loo's is sure Go provoke p eoull GU ii
fnf House as strong element Is aDso-
nnelv opnosed 90 lhe issuance OF bonds
~ fhe ciaroricr of ihe last issue This
element holds that IN issuing ihes'
bonds. the Government deliberately
went back on an implied promise made
IN the purchasers OF the first issue. II
Is held bv many in Congress that inc
conversion privilege Of the first issue
which were tax free, clearly implied
f,at future issues would he equally
privileged TO make This conversion
riuht fair. Il is unfair 10 lst held, %
make distinction between bondhold-
ors. as the present plan does
on the other hand secretary Nc
Adoo's position is that % ihc bonds a"e
made exempt from su'i7Ncs they would
afford the wealthy opportunity OF eVad-
lne taxation without giving The poor
man equal opportunity.
The sinking fluid authorization TO be
asked will be made 'o apply to the
arsf two issues. as well a, "a future
issues. so that the Government can care
Cor forced sales of tl in bonds ano
maintain their parity
NtIIlIHIN
the 4 IA per cent bonds can he sold IN
competition with the previous issues
which are at present under par. hl
holds to the belief that tho periodic TAX
ing bv the Government investmen
capital has as much influence on IN
parity OF the bonds as the interes
rate. and It was this conviction Una
has led TO the Administration stan
aeainst further increase In the rate.
Payment on The bonds will sprea
over as broad a periQd io make the al
sorption Of the amount called for
cosy as possible In addition 10 y
bono authorization the Secretary asl
authority for temporary nnancir
plan through Treasury certificates Z
indebtedness. which, he believes, wi
put the next bond Issue or until Sci
tember or October lie asks necessar
authorization for thc issue Of $1,000
100000 additional iu treasury certit
Gates Of Indebtedness TO run up to
wear. Issue Of $1,000 100000 Of such cel
iificates Is already authorized.
The Secretary also asks authorit
FOR the extension OF further credits {
our allies TO a total of t500000OV
Credits totalling stmNoWO have 6
ready been authorized. and Of thl
amount S5.OO0,000O00 have been uti
lied The Secretary's request for a.
500,000000 additional is based upon tn
assumption that the previous author
izatlons will be exhausted by June 3
the end OF the fiscal year. The new al
thorization would carry for thr'
months at rate of S500O00O00
month, taking care Of the credits Of u
Allies up TO the approximate time
the next Liberty Loan The Allie
however, have not drawn up TO O
maximum estimated and there is 81
5000 100000 OF credits authorized
Il is Secretary Nc Adoos desire
keep the Liberty loans as far apart
possible to allow greater time betwe
for the absorption Of the issues tn
can be done. he believes, If Congre