The Birmingham age-herald. [volume] (Birmingham, Ala.) 1902-1950, 1922-12-20
Administration FavorsC Change
in Federal Constitution to
Prevent Tax Free Securities
From Entering Market-Hot
Fight Develops in House
DEMOCRATS SAY STATES
RIGHTS ARE ENDANGERED
Both Friends and Enemies of
Bill Claim Victory as First
Speeches Are Heard-Party
Lines to Be Broken in Final
Vote Wealth Being Dried Up

WASHINGTON, Dec. 19.-After
sharp preliminary skirmish the
House took up today a resolution
proposing an amendment to the
constitution under which issuance
of tax exempt securities by the fed
eral government and the states
would be prohibited.
Backed by the Endorsement of
President Harding and the treas
ury the proposal was the center of
hard fight, in which many repub-
licans opposed it. Passage of the
measure, offered by Representative
Green, Iowa, ranking republican of
the ways and means committee,
which reported it, will require
two thirds vote. Opponents claimed
tonight it would be defeated, al
though leaders who caused it to be
brought up, insisted it would go
through. Four hours of general de-
bate, allotted under special rule,
had not been concluded on adjourn
ment tonight.
Speak Against Measure
Republicans speaking against the
resolution We're: Representatives
Graham, Pennsylvania, ranking re-
publican of the judiciary committee;
Bacharach, New Jersey. member Of
the ways and means committed;
crago. Pennsylvania; Cable. Ohio. and
Norton. Ohio.
Representative Crisp, Georgia, DEM
ocratic member of the ways and
means COMMITTEES. spoke for it, and
the other speeches were along party
lines. Chairman Fordney OF the ways
and means committee. Mr.. Green and
Represenative Mills, republican,
New York, also of the committee,
urged passage of the measure. while
Representative Garner, Texas. rank
ling democrat or tho ways and means
committee directed the fight against
passage and made the principal
speech.
With less than 100 members in the
chamber, Mr.. Garner carried the fight
Into enemy ground" by dealing out
speaking time to republicans ON his
side Of the contest.
Invndes State Rights
Throughoutthe debate the question
continually hobbed up that the pro-
posal would invade the rights of the
states to control their own credit
Mr. Graham denied the statement
made by republican speakers that tax
exempt securities offered an avenue
through which the rich could escape
taxation declaring thousands OF
bonds issued by municipalities-and
which would be prohibited--were held
by poor people, who took that refuge
Of safety, content to accept a lesser
income"
Mr.. crisp said that he was con-
WINGED that il a stop was not put Cn
ltax exempt securities the income tax
| law would be nullified. Vast fortunes
were being diverted from the chan
nels of trade and industry, he said
putting a premium on idleness which
would tend to breed anarchy and dis
content, In addition. he asserted, the
result was difficulty for the farmer
and the home builder in borrowing,
ana an increase in the cost of living.
Mr. Fordney opposed the resolution
because, he said. he wanted the states
to have the right TO pass on the ques-
ton. He said he had doubts of the
wisdom OF the purpose sought by the
am endment.
Fortunes Dry Up
Issuance Of tax exempt securities
is uasound, whether we look at IL
from the fiscal, economic or social
standpoint" satd Mr.. Mills. From the
economic standpoint, he added. they
were indefeasible."
could there be anything mors I'M
fortunate from Il social standpoint
than this present situation" Mr..
Mills said. SAY what you will about
large American fortunes, they were
s(continued ON Page EighteeH.l