Evening star., 1923-12-20
COMMITTEE BEGINS
WORK ON TAX BILL
Administration Features Will
Be Given Precedence
in House.

istrative provisions of the Treasury's s
tax bill.
Under an agreement reached yes
terday, the committee, once il has
passed on the administrative features.
Will postpone action on tax rates
until a decision is reached as to
whether a bonus bill is to be re-
ported to the House. The committee,
after refusing to give the bonus
right of way over all other legisla-
ton, frowned also on a suggestion
that action first be completed on the
entire tax bill
Present plans call for committee
sessions until the end of this week,
then adjournment until after the
Christmas holidays. During the two
weeks congressional! recess, how
ever. Chairman Green expects to have
a subcommittee at work on some
Of the technical features Of the
revenue bill. He estimates that on
reassembling in January the COM
nlittee will need about two weeks TO
wind up its work on the adminiStra-
tive features, and will then be in
position to decide the fate of the
bonus.
Plan to Force Issue.
Proponents OF the cOmpen Satlon
measure, however. are making plans
10 force the issue by calling a re-
publican party conference after the
House reconvenes two weeks hence.
with view of instructing the ways
anu means committee to report a
bill. Mr.. Green has predicted that
this probably would be done, as
petitions are in circulation providin &
for the issuance of a conference call.
The ways and means committee not
only has SidetraCked the bonus bill
but has deferred action on the pro-
pCsed constitutional amendment to
prohibit further issuance Of taX-eX-
empt securities until an opinion can
he obtained from the Treasury as TO
whether such an amendment is nee
eSSary. Bonus proponents in the COM
mIttee yesterday made several un-
successful efforts to have that lCgiS-
lation given priority. At the outset
Representative Frear, republican in
Surgent Wisconsin. proposed that the
committee proceed to consideration
of the bonus bill After his motion
had been rejected Representative Old
field, democrat. Arkansas. suggested
that it be taken up by the committee
other on January 4 or -, while Rep
resentatlve carcW. democrat. New
York. proposed that consideration
should begin by January 10. All three
resolutoins We're voted down, and the
committee then rejected motion by
Representative Dickinson. democrat.
Missouri. that a bonus bill should be
reported to the House by February 10.
On Administrations Features First.
The motion to defer action on the
bonus until after all provisions OF the
tax bill had heen considered was of
fered by Representative Tilson. re-
publican, Connecticut. but majority
preferred the plan to pass first on
the administration features, then TO
reach a decision as to bonus and
finally to determine what reductions
should be made in tax schedules.
In the voting on resolutions to
give the bonus priority the repub-
lican committee members, with the
exception of Mr Frear. voted In the
negative. They had the support of
two democratS-Repres tatives Car
ner of Texas, ranking minority mem
Der of the committee, and Collier OF
Mississippi. This lineup resulted in
the rejection Of the various motions
by a 15-to-S vote, as one republican,
democrats. TaGue of Massachusetts
and Casey of Pennsylvania, Were
absent.
The bonus was given another jolt
declared in a letter to Representative
Andrew, republican. Massachusetts,
that if the compensation measure
vetoed by President Harding were
s5.4oo.526.444. and would average
1925. 900 600 for first four years.
Mr.. Melons letter. in which he
reiterated that passage. or bonus
bill probably would prevent ANY re-
duction of federal taxes upon a COM
prshensive plan in this generation"
was in reply to all inquiry from Mr..
Andrew as to whether previous esti-
mates of Treasury experts of the
probable cost were accurate.
Two Estimates Vary.
After receiving Mr.. MELONS letter
Mr.. Andrew. who formerly was
assistant secretary of the Treasury,
declared in a statement that the
Secretary's estimates of the cost Of
adjusted compensation are greatly in
excess of the previous estimates of
his own actuary which were pub
lished by a Senate committee a year
and half ago. and which have not
been questioned heretofore.
They remind me-" continued Mr.
Andrew, "of the estimated deficit of
Harding's veto of the adjusted com
pensation bill, and which proved after
the veto to be one billion dollars in
error, as the deficit was transformed
into an actual surplus of more than
$500, 100000.
According to the estimates of the
government actuary. the Treasury
Official, who is charged with such
ton bill will not cost more than
sS1,000.000 yearly for the next three
years, or less than a quarter of the
Secretary's proposed reduction in
taxes.
1T will allow the whole proposed re-
duction of 25 per cent in the. tax on
earned incomes. the whole reduction in
the normal income tax. the repeal of all
admission taxes, the repeal of all tele.-
graph and telephone taxes. and some
readjustment of surtaX rates although
not all that the Secretary proposed.
Mr.. Melons Statement.
In his letter Mr. Mellon declared
1T must be obvious to any impartial
mind that new obligation of the United
States made in time of peace to nav
over five billion dollars. of which one
billion dollars comes in the first four
years and an average drain on the
Treasury for twenty years of S2ll,OOO,-
600 year. which is one-ffth of the
total prewar cost OF government, can
not be undertaken without serious
economic consequences. If such a COM
mitment is made. any reduction of fed
eral taxes upon a comprehensive plan
will probably not be seen in this genera
tion.
The bonus bill vetoed by President
Harding gives the right for the first
three years to borrow from banks OF
the country. and that this right would
he exercised by the great majority of
certificate holders none deny The con-
sequent demand for credit would raise
the interest rate which the government
as well as the general public will have
TO pay on borrowed money. At the
same time the mere passage of the bill
would depreSS the price of government