Bisbee daily review., 1921-11-18
IGNORE HARDING
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 sessions tomorrow with the hope of reaching an agreement on the bill by Saturday night ' s1&l Intervention of the president in the tax revision fight-the second since the ways and means committee began drafting the measure three and a half months ago-folowed a visit to the White House today of Representative Mondel, Republican leader. The President then summoned Chairman Fordney and Representative Long : worth of Ohio, of the ways and means comKlittee, and expressed his views , on the surtax These were supple mented by letter to Fordney. During the three hours debate in the house, which was conducted un- der d special rule, the president was attacked for writing Fordney. Rep resentative Frear. Republican, Wis consin, said the presidents interven- tion "at the last minute" was unfair and unjust"
 Mondell Backs Harding Representative Garner, Democrat, Texas, declared that if the president had views to submit. he should have done so in person or in a message rather than in a letter. Representa- tive Sinnot, Republican, Oregon, de- i clared he grieved because the presi- | dent had been given bad advice on | this subject
 ! Supporting the presidents stand, i Representative Mondell and other Re | publican spokesmen said that the Re 1 publican party had promised to reduce i taxes and that the 50 per cent rate | should not be approved by the house. The letter written by President 4arding to Chairman Fordney fol- I lows:
 My dear Nr. Fordney:
 In response to your inquiry as to | tho wisest course in dealing with the 1 difference between the congress m l higher surtaX on incomes. I can say only that in view of our earlier con- | ferences on tax matters and the ulti- mate adoption of the higher surtax rate of 32 per cent, still believe the rate approved by the house to be the I nearer to a just levy and the more ! promising one in returns to the pub l lie treasury
 ''The responsible administration is anxious, first to limit taxation to the l demands of the treasury. There is moral obligation, however. on the par | ty in power to do everything possible to keep faith with promises made. Pleads For Capital We have been collecting the high l est surtax on incomes, levied at this time in the world The effect has been the restriction of the easy flow of capital in the channels most essen ! tial to our normal and very necessary 1 activities. No one challenges the ne 10 icrh in ! of war, but now we are struggling for the establishments of peace Where there is. so wide a differ ence in the judgment of the two houses l have thought it might be possible and wholly desirable to reach o"mpromise, say ft maximum surtax of 40 per cent. This would put. the | higher federal tax on incomes at AS per cent, which would measurably meet the expectations of those who are, above all else, concerned with | the return of helpful investment of capital and the application of our cap ital resources to profitable producti- vity. 1 am wholly confident that the ! helpful results spreading therefrom to every active participant in our in- dustrial and economic life, from man. | @gement to every wage earner, would be vastly more advantageous to sur i people than the maintenance of war time le1ies as peace-time penalties on , capital which are certain to hamper the restoration of dour activities for | which we all so much hope.
 Says Industry Halted
 "0ne eXperience will afford a con. vincing illustration. In seeking to
 hasten railway settlements, growing out of federal control. I authorized
 the director general to invite the co. operation of the war finance corpora ton to convert saleable securities in to the cash needed for the settlements
 in process Of making. During the
 period of public belief in 32 per cent surtax as provided by the house, tie sale of these bills receivable, was pro gressing in most promising way, In deed. we had converted more than | S100,0 ,000.00g- of railway notes into
 cash. The moment the higher surtaX
 became likely levy, these conver- sions ceased.
 "Manifestly, the prOhibitive surtay tends to divert our available and much 1 needed capital from employment in l our everyday activities to invest ments in tax free securities. The rec ords show that it is making a contin- ued diminution in our receipts from inconT taxes and it is making more difficult the. normal financing of every sort of essential activity and is emphasizing the tendency to turn to the government for that paternalistic relief of both industry and agriculture which hes no rightful place in peace time policy ,c 2sr
 q am we'll convinced that fair comproimse between sthe' rates adopt ed by either house will be the best possible solution of the situation; and an. early decision will put an end to existing anxiety, even though the larg CT expe ~ations of the country are not fully met.' "i
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