davidaulloa/AmericanStories huggingface dataset:
Evening star., 1921-09-25

Tax-exempt securities are held by
men of great welath these days. and
by large estates. 1t is Of interest to
note that in New York state in 1917
there were eighty-one persons paying
income taxes on incomes amounting
to a million dollars a year or more.
But when 1919 had rolled around, only
twenty-five persons were paying taxes
on incomes in that state of a million
dollars or more. 1t is beyond reason
to believe that there were less men
with incomes Of million dollars in
New York in 1919 than in 1917. In
fact, the war gave opportunity for the
development Of many large fortunes
The answer is that when the high
surtaxes on incomes were levied by
Congress, these big moneyed men i'm
mediately sought to avoid these heavy
taxes by the simple expedient Of in
vesting their funds In tax-exempt Sc
curities.
Escape AL Taxation.
Under the existing law the income
tax rate on large incomes runs as
high as IS per cent. BY investing in
tax-exempt securities the owners OF
these big fortunes avoid paying these
high taxes, and in fact, pay no taxes
at all on that part of their money in
vested in tax-exempt securities.
The pending tax revision bill. as
passed by the House, reduced the
surtaxes on incomes so that the high
est surtax is 80 per cent. The Senate
finance committee has followed suit
and made 80 per cent the highest sur
tax on incomes. The reason given
for this reduction was that more
money would be invested in indus
tries, and taken out of tax-free Sc
curities, and that business and the
entire country would necessarily
benefit by the impetus given to com
merce. 49, -
The action Of the House and Senate
committees in reducing the surtaxes
upon big incomes has been criticised
in a number of quarters on the.
ground that it was taking the tax
burden off Of wealth and letting It
fall more heavily upon the people of
moderate means ~~ : :.
Notwithstanding. the efforts Of the
administration, to curtail government
expenditures. it seems inevitable that
for many years very large revenues
will be required by the government
to meet the interest and principal Of
the war debt and to run the govern
ment. This revenue must be obtained
from the taxpayers. Therefore. to
take from the field Of federal taxa
ton ten or twelve billions Of dollars
now invested in state, county and
municipal securities and many bill
lions of dollars invested in, goyern-
ment bonds. necessarily. places .
heavier burden upon the rest Of the
Evening star., 1921-09-25

of young men and women for all sorts
Of commercial jobs and to meet the
need for intelligent and efficient
workers in domestic and foreign
trade, where the country is entering
a new commercial era.
Co.Operation With States.
In vocational education work the
federal board is now cooperating
with forty-eight states. and in indus
trial rehabilitation with thirty-three
states. Demands for service are now
coming in from all of these states
greater than the federal board can
supply.
Those members of Congress, such
as Dr. Simeon D. Fess, chairman of
the House committee on education,
who have given this phase Of federal
activity closest study. and who are in
sympathetic touch with the educa-
ttional interests of the country, point
out that:
AS regards vocational education the
need for an increase in the annual ap-
preparation fixed at 100000 for ad-
ministration and for making studies,
Investigations and reports is urgent
and imperative on the assumption
that Congress proposes to continue
undiminished its provisions made in
the act of 1917. They emphasize that
in education, as in practically every
thing else, the purchasing power Of
the dollar has dwindled, SO that the
fixed annual appropriation Of 100000
has shrunk more than one-half in the
period during and since the war. The
vocational education program must
be in large measure abandoned, they
say, unless current appropriation is
adjusted to present needs rather than
to the needs of 1917.
AS regards vocational rehabilita-
ton of the civilian disabled, these
leaders in Congress are urging that
additional provision must be made for
undertaking work with reference to
the blind and tuberculous.
Need Greater Today.
There is more urgent need today
than there was in 1914 for vocational
training, those behind the program
contend. One direct consequence Of
the war has been to throw nations
more keenly into competition with one
another. Today, as never before, it
is true that industrial, agricultural
and commercial prosperity for any
nation must be won in open /compe-
tition with other nations. and in this
competition no nation which avoids
the responsibility Of training its
workers can hold its own. The cost
Of living has advanced sharply. and
trained efficiency for useful labor is
the only means Of maintaining and
improving standards Of living under
Evening star., 1921-09-25

ments Of senators upon their countries
and policies.
The Senate will have to be in the
limelight until October 4, as the
House, by a gentlemen's agreement.
will take recesses Of three days dura-
tton at a time until that date. This
means that the attention Of the coun-
try will be focused upon the upper
chamber and its speed or delay in
handling the important legislation
awaiting action subject to constant
notice by the people. This prospect
does not dismay the Senate. however,
whose tradition might be paraphrased
as Don't hurry me-" In fact, expert
ence has shown that the more the
Senate Is nagged the slower it moves.
That sense Of security in Office arising
from a six-year term is a powerful
sedative.
The political leaders in the admin
istration take note of the fact that
politically things, seem to be break
ing favorably for the republicans.
The election of Senator Bursum in
New Mexico was hailed as a DEM
onstration Of genuine support Of the
administration by the voters, Prior
to that. an election in Iowa for the
House Of Representatives to fill the
vacancy. caused by the retirement OF
Representative Good had given the
republicans great Joy from the fact
that the democratic national commit
tee had built great hopes upon re-
ducing the normal republican major
ity in that district, but had not sue
ceeded, although they had net hoped
to carry the district.
The republican effort from now on
will be to hold the support of the
electorate a year from next Novem-
Der. when nationwide opportunity
will be given to indorse or rebuke
the party in power. in the congress
sional elections. The republican
leaders feel that the tide is running
with them now in practically the
same volume which swept them into
power and that their chief RESPONSE
bility is to see that no unwise leg
islation shall check it.
X X +
President Harding resents sugges-
tions which would place him in the
attitude of exercising overlordship Of
Congress or driving the legislative
body. He scrupulously avoids giving
ground for any such intimation. But
as t.tular head Of the party he is
interested in the success Of the party.
At present his concern over. leEisla-
ton Is based upon higher 'tnaX p61iti-
cal considerations. however As
President of all the people, he is in
terested in the passage OF the bills
PROPOSED for the public good. the rail-
road bill, the foreign debt funding
bill, the new tax bill and the tariff
bill.
The President, it is said, can ex-.
press his solicitude for these meas
ures to the statesmen. on the hill
without being open to the charge of
interfering with a coordinate branch
Of the government.
Evening star., 1921-09-25
The Language of Violence
And the European Crisis

of steadily worse % dur
said that the moral conditions have improved
continuation of the be summed up as follows: o
the vanaushed
result of the
Of these a oS their at
slowly
while asmsnains higher wages
and @ hes Existing
Com
sns Of the
so of what they before the
****
greatly while has greatly
dscredit Of
currency and securities in all European countries
The having in forcing the to to M M
The
ass,hs. a ms ht .me WIN 81 % the % morld eona ~ ~ ~ ~ 'A0'
point of a
S an faet a the The
ari
rather ns< ss pay ''A'"s and are
any Rsum Poland
settle the whole bill of the war
"A has s up her hip
% sS h
Germany must maintain Of occupation the Rhine and
Before the imports and exports about equal with the
in
a
a Of anxiety
nreauns production
centuy-one organization which permits
fraction Of of
world rendered iustrous by its
changes stopped almost insurmountabe
on PageJ
Evening star., 1921-09-25
BY WILL p, KENNEDY.

BY WILL p. KENNEDY.
" WO big developments and ex-
tensions of the work of the
federal board of vocational
a education are being consid-
cred by Congress. The current fiscal
year ending June 80, 1922, is the
fifth year of operation under the vo-
cational education act and the second
year Of operation under the act pro-
viding for the vocational rehabilita-
tion of persons disabled in industry
or otherwise.
Since the war the board has been
obliged to give much of its attention
to the work Of retraining disabled
soldiers, sailors and marines. 1t has
been natural that great publicity
should be given to this humanitarian
work, with the result that the public
has lost sight to considerable ex-
tent of the intent for which the
board was originally instituted
namely, the promotion of vocational
education. With the taking over of
the work of soldier rehabilitation by
the Veterans Bureau, the federal
original purpose.
Long Interested in Work.
The appointment Of Lewis H. Car
ris to be administrative head Of the
federal boards cooperative work
with the states, has also focused pub
lie attention on the extension pro-
gram. Mr.. Carris is sometimes call
ed the father of vocational educa-
tion," having been from the first an
active worker for establishment and
development of such a new system in
education, and having helped to write
the new laws passed by the several
states to allow them to share in the
federal aid extended through the
board.
Members of Congress interested in
the development of the federal boards
activities in cooperation with the
states, leaders in industry, organized
business men and associations of edu-
Gators and of social workers are
urging new legislation to enable the
federal board to develop and extend
its operations. The two principal
new efforts are:
"a The vocational education in
terests of the country are urging the
passage of the Kenyon-Fess amend
ment to the vocational education act
for promotion of home economics edu-
cation.
(e) The merchants and commercial
people, including chambers Of COM
merce and trade associations in prac-
tically all the states are agitating
similar fund for the promotion of
commercial education. the training
Evening star., 1921-09-25
BY G. GOULD LINCOLN.

Y Y YHILE the Congress is strug-
n CLING with the revision OF
" " the Internal revenue taxes,
trying to determine what
to tax and what not TO tax, there
is a growing demand from all parts
of the country that an end De put
to the exemption of federal and state.
county and municipal securities
Members of the Senate. which is the
body now considering the tax bill. are
receiving communications from many
citizens-not the least of them lne
Secretary Of the Treasury-ursinG
that something be done to allow the
taxes to fall upon the dollars OF the
man who has put his hundreds OF
thousands into these securities now
exempt. as well as upon the man
who has invested in Industrial Sc
curities.
These demands are bringing about
a serious agitation of the question IN
=" Congress. The bonds issued by the
federal government and representing
the public debt amount to some VA
ooo, 900, 900. They are, to very large
extent, exempt from taXation-the in
terest upon them goes into the In
comes of the holders and that por-
ton of their incomes is not TAX
able. 1t is estimated that the total
of securities issued by states, coun-
ties and municipalities now exempt
from taxation total between $4,000
100000 and $4,000. 100000.
Find a Ready Market.
With the present high surtaxes upon
incomes, the tax exempt securities are
in the very heyday of their life. Many
of them pay as high as y and even
2 per cent. They are gobbled up by
the people of large incomes. with a
result that tremendous sums of money
are free from taxation that other
wise would be taxable. The result Is
that the tax burden falls heavier than
ever. upon the people whose money is
invested in industrials, upon the -peo-
pie with moderate incomes.
So far as the federal securities are
concerned, it is likely that Congress
can do as it desires about repeating
exemption clauses. But when it
comes to the tax exempt securities
issued by the states and by the va
rious subdivisions of the states. it
Is another matter. An amendment to
the Constitution of the United States.
it is contended. is necessary to make
it possible to compel income derived
from these securities to pay the in
come taxes.
Senator Smoot Of Utah, republican
member Of the finance committee, and
Representative McFadden Of Pennsyl-
vania, republican chairman Of the
House banking and currency commit
Evening star., 1921-09-25

is on liberty bond loans: $s.16s,-
6S7.29 on relief administration sales;
$l0,929,13O.39 on sales of surplus war
materials, and s1.ss6,7s5.09 on sales
by the grain corporation.
X x x x
Under existing law the Treasury
has no authority to fund any part Of
this debt except the loans made from
the proceeds of liberty bonds. For
loans made under the first liberty
bond act it may accept bonds of the
borrowing nations, maturing not later
than June Is, 1S47, and for loans
made from subsequent liberty issues
the maturity date shall not be later
than October 15, 1888. There is no
authority in law for deferring pay
ment of any interest charges nor for
deferring payment of the principal
of Indebtedness due for the purchase
of surplus war materials, relief ad-
ministration supplies or grain cor
poration -four. The Treasury has no
authority to do anything but insist
upon prompt payment, and when the
debtor nations are unable to make
payment, this government has no al
Tentative but to hold them in default,
a situation which is intolerable from
the standpoint of international amity
and not less unfortunate in it's eff
fects on exchange and foreign trade.
X X x
1t was to place it within the power
of the government to correct this
unfortunate situation that the fund
ing bill now pending in the Senate
was drafted by the Treasury and SUBJ
mitted to Congress.
The bill gives the Secretary of the
Treasury, with the approval of the Pres
ident. broad authority to refund or con-
vert and to extend the time OF payment
of the principal or the interest, or both.
Of any obligation of any foreign govern
any obligation Of any foreign govern
ment hereafter received by The United
States Gncluding obligations held by
the United States Grain Corporation)
arising out of the European war. into
bonds or other obligations of such, or of
any foreign government, and to receive
bonds and obligations of any foreign
government in substitution for those
now or hereafter held by the United
States
The bill provides that the obliga-
tions received under its provisions
shall be in such form and Of such
terms, conditions, date or dates of ma
turity and rate or rates of interest.
and with such security, if any, as shall
be deemed by the Secretary Of the
| Treasury, with the approval of the
President, for the best interests of the
United States.
The bill also authorizes the Secre-
| tary of the Treasury, with the APP
provaf of the President, to adjust and
settle any and all claims, not now rep
resented by bonds or obligations
which the United States now has or
! hereafter may have against any for
eign government and to accept Sc
curities therefor.
x = * <
1t is the contention of the Treasury,
which contention has the support Of a
majority of the Senate finance COM
mittee, that the Treasury must be CIV
en- a free hand in dealing with this
Evening star., 1921-09-25

~ ASSAGE of the bill giving the
l. Secretary Of the Treasury au-
tllority to fund the debt owed
= this government by the govern
ments Of Europe is rapidly coming to
be recognized as one of the things
| most necessary to the return of pros
perity. Uncertainty as to the status
of eleven billions of dollars. most of
II in the form of demand or overdue
paper, hangs like a black cloud over
every financial center in the world.
ing that until something like settle
ment Of this problem is in sight there
| can be no stability in the foreign ex-
! change situation. and until foreign ex-
change is made more stable the rest
| Of the world is not going to buy any
American goods it can get along with
out
After exhaustive hearings before the
Senate finance committee, the funding
bill now Is before the Senate with
, majority committee report favorable
! to its passage and an adverse minor
| ity report signed by Senator La Fol-
lette and five democratic members of
the committee. The majority report ia
vors passage OF the bill as drafted by
the Treasury with a single amendment,
| the amendment providing that the au-
| thority granted by the measure shall
| terminate at the end Of five years.
| That it is necessary that the Sec
retary of the Treasury should be CIV
en- broad powers in the operation Of
funding this debt Is apparent from its
! complicated and unsatisfactory pres
ent form. The debt owed this country
by Europe comes under five distinct
| headings. First. there are the ad-
vances made under the various liber-
| ty loan acts, amounting in the aggre-
gate to $s.435,225,a2s.24. This indebt-
edness is evidenced by demand notes
or notes which now are past due. all
| bearing interest at the rate of 5 per
cent.
| The second class consists of notes
given the War and Navy departments
materials and amount to s565.04S,-
1880. These also bear a uniform in
terest rate of 5 per cent and have ma
turity dates ranging from April 10,
1929. to August 1, 1929.
! Next come the obligations which
Herbert Hoover turned into the Treas
ury representing sales of supplies to
the European governments by the
American Relief Administration. They
total ss4,0ss, 1886 and bear per cent
interest. Their maturity dates are
from June 80, 1891. to June 80, 1928.
Glass four consists Of obligations
taken from European governments
| by the United States Grain Corpora
| ton in. exchange for -four. They
total 56,8ss.s7s:09. mostly at per
| cent, though a few carry s per cent
! interest Most Of these obligations
are past due, but Czechoslovakia owes
S2,S73,23s25, due January !. 1925;
hungary, $1,6s5.835.61, due January
/, 1925, and Austria, 4,055, ,7oS.s2, due
Class Ave totals $s4s.534,755.ss and
represents interest due and unpaid:
OF the unpaid interest. ss22.55o.143.22
Evening star., 1921-09-25
Danger In Expecting Too Much
From Coming Conference on Arms

so call it. do not lend themselves to
eSuberance Of spirit over the confer
ence. They realize that the results
In limitation of ornaments must nee
essarily be limited and doubtless fall
short of overzealous expectation.
They know also that one feature OF
the meeting will be very practical
dealings with great questions of ter
ritory and commercial advantage; that
and that diplomatic finesse and strategy
will be employed in a game where the
stakes are heavy.
i, X y
Some of the higher officials Of the
government do not wish that the
impression should get abroad that
upon this conference hangs the fate
of the world and that failure to score
100 per cent of the expectations of
the public will spell disaster. to the
United States. Such is not the case
by any means. in their estimate.
Good will be accomplished beyond
peradventure. but not the revolution
of mankind or the ways of the world.
To the United States will accrue its
proportion of whatever benefit re-
suits. and in case Of short measure
well, the government at Washington
will still live and the United States
will pursue the even tenor of its
way.
President Harding feels very COM
Portable over the personnel of the
United States delegation to the con-
ference and is standing pat on his
hand in the game, confident that this
, country has as many high cards in
the way of personal ability and fit
ness of its delegates as any other.
Senator Oscar Underwood, the demo-
crat. has made a great hit by his
the aims of the conference and his
intention to be all American and no
partisan in dealing with the interna-
tional questions which are to arise.
President Harding, the day Congress
reassembles from it's months recess,
pumped the peace treaties into the
Senate. Senator Lodge. the repub-
lican leader in that body, strolled into
the White House that morning unan-
nounced and had audience with the
President in advance of the appoint
ments made for the day. The Presi-
dent apprised him of his desire thet
action on the treaties should be ex-
pedited. and he stated his determine
ton to push them as rapidly as pos
sible.
StatesmenGand politicians recognize
the embarrassment which might
arise if there should be partisan or
factionaI debate over the peace trea-
ties. bringing in collateral questions
of relation with foreign countries, the
while the delegates to the conference
are on the scene. Whether the trea-
ties are considered in open executive
session or behind closed doors, it is a
foregone conclusion that the public
will be daily informed of the trend of
the debate, especially should it be ac-
rimonious. and the visitors will read
in the public prints outspoken COM
Evening star., 1921-09-25
BY SHELDON .. CLINE.

~ ASSAGE of the bill giving the
- Secretary Of the Treasury au-
thority to fund the debt owed
Evening star., 1921-09-25

Y Y YHILE the Congress is strug-
Cling with the revision OF
" " the Internal revenue taxes,
irving to determine what
Evening star., 1921-09-25
Big Fortunes Find Refuge From Taxation
In Great Volume of Tax-Free Securities

wealth Of the country. 1t is esti-
mated that the government might
realize a billion dollars more from
the income tax IL an end was put to
these \tax-exempt securities and the
income from all sources in this coun-
try were taxed alike.
An Orgy. of Spending.
In all parts of the country. the
states and municipalities are putting
out securities today. They find them
easier to dispose of, it is said, than
ever before, because people with
money to invest prefer to buy them
and have their incomes tax free than
to invest their funds elsewhere.
This is leading, according to Senator
by the states and municipalities. an
orgy that is running these subdivisions
OF the country into debt from which
they cannot hope to emerge for many
generations. 1t is resulting in an -ex-
penditure of funds at a time when the
penditures for state as well as national
government .. ......-.
Before the war the United States gov
ernment had outstanding the old 4 per
cent bonds and 2 per cent bonds, not to
mention the Panama Canal bonds, which
all of the 31s per cent liberty bonds and
the ~, per cent liberty bonds are tax
free also, and also all the other liberty
bonds are to a certain extent exempt
from taxation Of various kinds. 1t has
been estimated that a man may pur-
chase various issues Of the liberty
bonds-not including the 81 and AZ
per cents-and so arrange his holdings
that he may have total Of $150.0o0
worth Of these liberty bonds upon which
he does not have to pay any income tax.
It is easy to see therefore that billions
upon billions of dollars worth Of these
liberty bonds-many held by very
wealthy persons, are paying no taxes
today.
Other Exempt Securities.
In addition to these federal securities
that are exempt from taxation, are the
federal farm loan bonds and the War
Finance Corporation securities recently
authorized to the tune Of billion dol
lars to aid the agriculturists Of the
country. As matter Of fact. the coun-
try seems to have entered an era of
tax-exempt securities the like Of which
has never been dreamed of.
The argument has been made that
the exemption Of state. country and
municipal bonds from taxation has
made 1t easier to finance needed i'm
provements. Undoubtedly this is true.
But when these securities are paying
a good rate Of interest anyway, and
have the additional advantage Of gilt
edge security. 1t. does not seem that it
will be impossible to dispose Of them
whom q community needs money to
make improvements.