New-York tribune., 1921-11-18
House, by 2Ol TO 173,
Votes to Accept Senate
Maximum Rate, Despite
Requestfor Compromise
Farm s'Bloc'' and
Democrats for Tt
President Urged 40 p. C.
Limit to Release Capital
for Necessary Industry
From The Tribune's Washington Bursou

From The Tribunes Washington Bureau
WASHINGTON, Nov. 17.-Disre-
garding an appeal from President Har.
ding to fix the maximum surtax rate
at 40 per cent, the House this after
noon unexpectedly agreed to the Sen
ate amendment to the revenue bill
| calling for maximum of SO per cent
The vote was 201 to 173 and disposed
finally of the many cornered contro-
versy over the rate which should
supplant the present levy of 65 pc,
cent. The original House provision
was for a so per cent tax.
The change of sentiment in the
House on this important point in the
tax bill was somewhat of surprise
When the measure was originally con.
sidercd in that body the vote on the
surtax maximum was cmphaticaily 70,
Secretary MELONS recommendation OF
80 per cent plus, OF course, the al
s per cent tax. The Senate subse-
quently increased the rate to 30 pei
cent, and it was expected that when
the House took direct vote on the
question to-day the deadlock would
In anticipation Of such an outcome
President Harding intcrvened with 4
compromise suggestion just before the
House met. The President expressed
the Administrations views on the
problem in letter to Chairman Ford
ney of the Ways and Means Commit
tee, which was presented to him at a
White House conference attended by
the other House conferees, Represent
atives Longworth,> Of Ohio, and Green,
of Iowa.
Harding's Letter to Fordney
President Harding's letter to Chair
man Fordney said:
my Dear Mr.. Fordney:
In response to your inquiry as to
the wisest course in dealing with the
differences between the two houses of
Congress in the matter of higher sur
tax on incomes, I can say only that, in
view OF our earlier conference on tax
matters and the ultimate adoption of
the higher surtax rate Of 30 per cent,
still believe the rate approved by
the House to be the nearer to a lust
levy and the more promising one in
returns to the public treasury.
The responsible Administration is
- AAA' VI <@4l, w lcVy CHc ncceS-
sary taxes to meet the demands of
the. Treasury. There is a moral obli-
cation, however. on the party in power
to do everything to keep faith with
promises made to the public.
we nave been collecting the high
est surtax on incomes levied at this
tune In all the world. The effect has
been the restriction of the easy flow Of
capital IN the channels most essential
70 our normal and very necessary ac-
tlvltles; NO one challenges the levy
OF the higher tax in the stress Of war,
Dut now we are struggling for the
readjustments of peace.
Suggests Equitable Compromise
where there is so wide difference
in the judgment of the two houses I
have thought it might be possible, and
wholly desirable, to reach an equitable
compromise, say maximum surtax
levy of 40 per cent. This would put
the higher Federal tax on income at
a total OF 48 per cent, which would
measurably meet the expectations of
those who are, above all else, concerned
with the return of hopeful investment
of capital and the application of our
capital resources to profitable pro-
ductivity. | am wholly confident that
the helpful results spreading there
from to every active participant in our
industrial and economic life, from
management to every wage Garner,
would be vastly more advantageous to
our people than the maintenance of
wartime levies as peace-time penal
ties on capital, which are certain to
(Continuod on uaaa foirl