New-York tribune., 1918-09-10
Flaws in Revenue Bill
Charged to Democrats

- - ~ ~~$ ~ - 49, ~ ~
panther, wolf and lamb together in
cage. Some days later one of the
friends asked Mr.. Barnum how the
experiment was getting along. "Fine
" answered Barnum, "but it is tax
ing hell Of lot Of lambs
Calls Loan Too Large
After paying n handsome tribute to
My good friend Kitchln," whom Mr..
Fordney described as working ardu-
ously and uninterruptcdly to frame a
blll that would meet the requirements
Mr.. Fordncy said that, though he would
support the bill, he felt that he must
record hts objections to it.
In the first place. he pointed out that
as S6,000,00 900 of the $24, 700, ,000,-
600 that are to be spent in 19l7-1S
will be loans to the allies, which will
be paid back with interest, presuma-
bly,, the real expenditures would be
$4,000, 100000, and that therefore the
hill proposes to raise As per cent in
stead of one-third by taxation. which
he held was entirely too large. Great
| Britain was raising only 2S per cent of
war expenses by taxation, Canada 1917,
France II and Italy 8.
He conceded that prices would go
down after the war, but he maintained
that the margin of profit i'll business
would still be ample to stand large
burden of deferred costs. The Civil
War had been fought bv raising $3.50
IN loans for every dollar IN current
taxes. he said.
Mr.. Kitchin interrupted here to make
the point that if the Civil War had
been fought throughout on the basis
Of the revenue act of 1864 about half
the expenditures would have been met
| from taxation at the time.
: Nation Doing Too Much
Mr.. Fordney argued that to fight the
greatest war III history, with ali the
sacrifices it involved, and at the same
time to pay the bills, was too much.
For the people of the day to win the
the costs as they fought was enough
for them.
IN answer TO an inquiry Mr. Fordney
said that he did not think it possible to
spend $4,000, 900 600 in & year, because
the country could not produce the
goods, to say nothing of the terrible
waste of public funds that was go
! inc on.
Vast sums We're being expended use
j lessly. The committee knew OF gov
ernmenl contracts on which 1000 per
cent profit had been made.
Hog Island was cited as an example
of inexcusable wastefulness. The
charge was made that the company
having the contract had made a profit
Of Sl1, 100000 on q capitalization OF
81 900. The government had erected q
$50 100000 plant for it and had then
given it $1S7 100000 worth of CON
/ tracts at 6 per cent profit.
The War Department had actually
let contracts by which the government
undertook to relieve contractors of
their liability to pay income and ex-
cess profits by providing that they
should be treated as part of the costs
on cost plus contracts.
Statement Challenged
This statement was challenged by
Democratic members, who contended
that the only taxes included were the
state and local taxes, which were ex-
empt by law in making income tax re-
turns. However, Mr. Fordney showed
that certain form contracts read "all
taxes" while others exempted the Fed
eral taxes, and that therefore there was
only one construction to be placed on
the former.
Fault was found by Mr.. Fordney with
the 6 per cent ditferential in the normal
corporation income tax as between dis
tributed and undistributed profits
Referring to a recent statement OF
Representative Ferris, Of Oklahoma
that any one who did not stand by the
Adm inistration "would get he'll on
earth," Mr.. Fordney said that he re
grettrd to say that while the President
had declared that politics was ad-
journed during the war (and that state
ment was true as far so the House was
! concerned), che alone of all men in
the land has shown partisan politics by
his activities in the campaigns that
have taken place throughout the coun-
try"
Charges Waste to Creei
The attempt to force Henry Ford on
the people of Michigan was cited as
an example of the Presidents political
activity.
AS an instance Of the waste of public
funds and political activity George
Creel was cited. MIR. Fordney accused
him of having put out free trade
booklet and other political matter ant