Evening star., 1921-05-10
urges REVISION
| Of j. S. TAXLAWS
Exempting Federal and Mu-
nicipaI Securities Burdens
Utilities, Witness Says.

Speaking for many OF the public
utilities Of the country. Phillip II.
Gadsden OF Philadelphia urged revi-
sion OF the federal tax laws to include
prohibition of tax-excmpt govern
ment securities. including municipal
securities, so as TO enable regulated
industries to dispose of their securi-
ties and raise badly needed money.
when he appeared before the senate
finance committee today. Mr.. Gads-
den appeared as chairman of the JOINT
tax committee representing the Amer
lean Electric Railway Association.
American Gas Association and Ma
tional Electric Light Association.
He declared emphatically that pub
lie utilities do not seek to evade tax
alton, but merely desire better condi-
tions under which to market their
securities that they may be able to
provide badly needed extensions and
betterments for their properties
should BE in Separate Class.
Since public utilities are regulated
as to operation as a class and com
PEELED TO give service at fixed prices.
regardless of economic conditions. it
is only fair, Mr.. Gadsden said, that
they be considered as a separate class
in taxation legislation. He urged tn"
appointment of special sub com :
InlItte lp Ildhe d SAots va
the public utility tax situation.
Two features of the securities sit
uation which Mr.. Gadsden declared
vital to the continued operation of
public utilities are:
Persons upon whom public utilities
must depend very largely for money
those subject to a surtax of over
3 per cent-no longer will buy public
utility securities, because they find
| tax exempt per cent government Sc
cutit es better investments.
The only persons who. under the
present tax laws, find it profitable
to buy public utility securities are
those whose incomes are less than
$1,000 a year. Their combined saw
ings are only $116o00,00o. or about
81 SS4,000,000 less than Is required
by the public utilities. including
steam railroads, electric railways,
gas electric light and power plants.
annually to make their betterments
and extensions.
Tends to Socialism. Witness Says.
Unless this policy of exempting
municipal securities is discontinued.
socialism. which in it's essence means
ownership of everything by the
public
Mr.. Gadsden said there are now
$14 100000, 900 tax exempt securities
outstanding.
IL tHo utIllLlcS 10 ue-
velop as they should, some relief
from the heavy burden Of taxation
of their securities must be had" he
continued. Il do not want our posi-
tion misunderstood. Public utilities
are not asking any relief from tax
alton. They propose to pay the full
measure of taxation, but think some
plan will have to be devised by which
their securities can be put into a
position where they can compete sue
cessfully with municipalities
1t would be very diffioult Mr.. Gads-
den said, to apply a sales tax to the
public utilities. Instancing thia he
pointed out that every prepayment
gas meter in the country would have
! to be changed in order to pass such
| a tax along to the consumer and also
that it would be virtually impossible
| to pass along sales tax on street
car fares because Of the small
amount paid by the individual rider.
The sales taxes now in operation in
France. Canada and the Philippine
Islands do not apply to public utili-
| ties for this reason.