Evening star. [volume] (Washington, D.C.) 1854-1972, 1920-11-14
fearful Appeals to Federal
Treasury Made in Vain
Under Present Law.
PAYMENTS ARE REQUIRED
ON INCOME AND PROFITS
Only Hope of Industrial Interests
Is in Congress--Government,
However, Needs Money.

Serious financial difficulties threaten
some of the large business houses Of
this country. particularly In the textile
industries, because of the fourth and
final installment Of income and excess
profits taxes. which fall due December
Is; and must be paid at that time un-
less an extension Of time is given them
by Congress. which assemblies Decem-
ber s.
While the silk industry is the one
in which the situation is most acute, the
woolen. cotton and leather manufac-
turers and wholesalers are slightly less
affected, and there is no section of the
industrial field where firms have not
made representations to the Treasury
Department that full payment of the
balance Of the taxes due for the year
1919 will force them dangerously near
to bankruptcy.
To many who have called in person
at the Office Of the income tax unit and
to hundreds who have written to ask
II some relief may not be extended
them, omcals have replied that the law
is very plain and that the tax must Be
meantime
Certificates Issued.
On the other hand. any considerable
reduction in taxes payable one month
hence would place the Treasury De-
partment in An embarrassing position.
for an issue Of Treasury certificates Of
indebtedness amounting to $sS1.o1s,.
600, bearing interest at the rate Of ~
per cent. will mature on that data.
having been issued in anticipation Of
the collection of the final installment
Of the 1919 taxes.
To the fact that the bottom has
dropped out" of some OF the markets
within the last six months Is .ascribed
the condition which now confronts the
country.
When the inventosaes were made on
December 31-last prices were high,
but trade was brisk, and little difacu1>
ty was experienced by a majority ~
business men in paying first INSTALL
ment taxes on March Is. or the Sec
ond. which was payable June Is. But
by the latter date prices had begun 70
fail or rapidly. and the business that
many firms were depending on to en-
able them to meet their tax obliga-
lions ON September Is and December
Is has not materialized.
There is no provision Of law which
gives the officers Of the Treasury De-
pertment any authority to extend the
time in which federal taxes may be
paid" said Deputy Commissioner
George v. Newton. who is in charge
Of the income tax unit of the bureau
Of internal revenue. IF the tax is not
paid when due a penalty of S per cent
is added. and an interest charge of
one-half Of 1 per cent a month must
be collected.
THE collectors Of the bureau are
under bond. and they must enforce the
law rs it stands"
Eject ea suk Industry.
The aik industry is the one that
faces the greatest deficit on December
Is next. for trade in that commodity
has all but ceased and stocks Of silk
cannot Be sold for anything approach
ing the purchase price of a year ago.
Wooden, cotton and leather stocks also
are white elephants on the hands of
many holders, for the banks will not
loan any money on such inventories.
according to advices which are received
at the Treasury Department every day.
Secretary Houston OF the Treasury
Department is known to be giving the
situation very earnest attention, but
having predicated his financial program
on the assumption that the taxes would
be paid when due. he must balance the
demands of the government against the
unsettled condition in the business world
in making any recommendation for re-
lief
1t will not be left to him to take
the initiative when Congress meets
for the short session, in the opinion
of revenue officials. however. for
pressure will be brought to bear in
the legislative branch Of the govern
ment from outside sources as soon
as the Senate and House assemble.
II have seen men sit in this ONCE
with tears rolling down their cheeks
as they told Of business ruin that
faced them if they had to make
full payment of last years taxes on
December 49," said one government
official yesterday. They say that
heir stock Of goods, IL thrown on a
falling market. will hardly bring
enough to pay what is due the gov
,rnment, and that the banks will not
ADVANCE them the necessary funds
With such stock as security. But an
executive department has no author
ty to change letter of the law as
t is written, and their sole hope rests
With the Congress" :.