New Britain herald., 1924-04-02
MELLON DENOUNCES
 LARGER ESTATE TAX
Says Such a Measure Would Re. suit in Economic Suicide"
COMPARES IT WITH RUSSIA
Insists There Is No Social Necessity for Breaking Up Large Fortunes iu This Country and Capital Would Be Destroyed.

Washington, April a.---The in- crease in the state taxes made in the revenue bill by the house was de- nounced today by Secretary Mellon before the senate finance committee as economic suicide.'
 "'rhe estate tax is levy on capital primarily and carried to an excess differs in no way from the revolution ists of Russia" Mir. Mellon said. He argued this form of taxation should be left principally 10 the states.
 Defends Large Fortunes.
 "The social necessity of breaking lip large fortunes in this country does not exist" MT. Mellon argued. Under our American law 1t is cus- tomary for estate 10 be divided equally among the children and in few generations and single large fortune is split into many moderate inhcritances and the continuation through generations of a single tor tuno has been proved 10 be impos- sble.
 React on Finances.
 Tt should always be borne in mind that estate taxes are levied up on capital that they are used for current operating expenses; and that they amount. therrfore. 10 de- struction of capital in the country. Yet the house amendment would make this inherently unsound in crease in taxes for the sake of a mere sie,000,000 of additional rev. enue. In the course Of few years this additional revenue vii! disappear and oven the original revenue will | be depleted.
 Whole Amount Snsll.
 The whole thing from the estate taxes some sl0o,0oo.O00 under pres : ent artes is insignificant in compari- ! son with the general receipts Of the , government. If is but slight DOT ton of the government revenue. but it is n large and important part of the state revenue. To destroy values from which the states receive in come is to force them Co resort to higher taxes on land. The federal government should keep estate taxes ss a reserve in times of national dis tross. All prior inheritance taxes have been war taxes. Ii is only now that congress proposes 10 destroy his reserve in time whom revenue from other sources arc not only ade- luate, but in excess Of the nations needs" s
 Cites Examples.
 "when a man dies" Secretary Mel on continued. his property does not |, ,fien consist of cash or marketable , counties. The effect is immediately , o give notice to all possible pur- [, .hascrs that a forced sale will soon aie place. This has inc effect of f the price al which securi- ies can be sold. 't Tn ifs practical effect 40 per c ont rate requires for it's satisfac- $ ion 50 per cent or more Of the nor , nal value of the estate, and in cases q shere nn estate is burdencd with Ii indebtedness, the de- Il effect is still greater. f Assuming that all inhcritances C urge and small were faS.d al 40 CT cent. il would be,only two or c hrcc generations until private own D isiiip of property would cease 10 N Nist Since these taxes arc used in il he current operation Of tho govern tl icnt The result would Dc not that t, le government had absorbed tho q edith of Inc country bit that thc edith had been spent and none was |. .ft." g Secretary Mellon will continue his ti tomorrow. 2,
 Vote Was a Tic. ci Chairman smoot announced today rat the motion of Senator Reed, re- G 1b1ican. Pennsylvania. 10 amend tho A" ll making incomes from state and uniciDal securities taxable would '' } reconsidercd, because 1t had been Q scoyered the vote by shich if ap- ~ ,rently vas adopted Monday night q as tie.