The Omaha morning bee., 1924-01-13
COuzens Hurls
Defy at Mellon
to Debate Tax
Richest Congressman Denies
Surtax Drives Wealth Into
Hiding-Opposes Sur
tax Reduction.
by International News Service.

challenged Andrew w. Mellon. sec.
retary OF the treasury. to public
debate on the merits of the Mellon
tax reduction program.
The challenge was issued by Sena-
tor James Couzens. republican. Of
Michigan. who in a letter to the sec
retary of the treas admitted that
he, Couxens. paid an income tax of
$7.22a. 1915 in 1919.
Notwithstanding this, and the great
amount of money he personally
would save under the reduction of
surtaxes on big incomes, the Michi-
san senator declared he was opposed
to lessening materially the surfaces
on the rich.
Senator Couzens' letter to Secre-
tary Mellon today was the fourth In
their exchange Of views on tax reduc-
ffon. MFR. Mellon has defended his
tax plan. asserting it would draw
wealth from its hiding place and into
the field OF productive enterprise a
contention which Senator Couzens
will not grant.
In his communication today. Sena-
tor Couzens said:
II think the best way to settle this
apparent difference OF opinion be-
tween US In to perhaps debate the sub
5ect before an audience. where both of
us will be required to rely upon our
knowledge OF the subject rather than
rely upon statisticians who can make
figures tell any kind of a story. or
clever lawyers. who can argue from
any side.
Both Business Men,"
I'VE are both business men. so /
test Of our knowledge of the subject
and enable the people OF the country
TO get At the truth Therefore, In a
perfectly friendly manner, I suggest
that we engage some large hall, divide
the expense. and invite the public to
hear the discussion"
The Michigan senator Il probably
tho richest man in the sSth congress.
He made his money as 4 partner Of
Henry Ford.
Several years ago." said Couzens'
letter. II had many investments
which, on the basis OF tho money ]
put into the investments returned me
from 20 to 40 per cent, but on the
basis Of market value for these IN
vestments. they only returned sbou,
s1-2 per cent. 1. therefore. believe
that your statement that the proper
basis IL the market value Of securi
ties, 10 not well founded
I'm 1920. based on 1919 income.
paid IS per cent surtax, or a total
of 1929. .1S1.75. to the federal treas
ury.
This resulted entirely from a trans
fer of ownership Of certain property
had and In no way had any effect
whatever upon the industry Of the
country.
Had the present law been in force
I would have saved nearly $1,000, 900,
and II your present proposal Of q
maximum of rs per cent surtax had
been law / would have saved nearly
$4,000, 200. 30 do not see where the
country gains by creating these enor.
nous savings for those well able tc
pay.
III your proposal IL enacted. into
law there will be a deluge of dividends
out of industry to private individuals
many of whom undoubtedly have
adopted the plan that you SO wei
know about-namely, that Of dividing
estates among members Of a family
20 as to reduce the high bracket in
comes, and. of course. the percentage
Of surtax.'
Challenges Statement.
Senator Couzens challenged Mr.
MELONS statement that billions o.
in tax exempt securities. He declared
that tho wealth invested in this clasi
Of securities represents only per cen
Of the wealth In the American invest
ment field, and he further ASSERTED
that II was all working" because Il
was largely put into municipal enter
prises and public Improvements. "Yol
refer to the tar exempt securities
With great frequency" continued Sen
ator Couzens. "and greatly ovsrplal
the effect they have on government
revenue.
I'm this connection. ! might add tina
such men A. the late Mr.. Rockefeller
who are quite familiar, as you poin
opt, with the possibilities of the bes
Industrial stocks. yet who inye~
largely In tax exempt securities. d'
30 very often not from any desire L
escape taxes. but rather from a de
sire TO escape business responsibilities
and risks and to insure the futur
INCOME Of their families. This is m!
own experience as / have largely In
vested my capital In state. county an
municipal bonds. on which l reall.
prepaid the taxes by taking a great.
reduced return from what l could hay
secured, had ! taken Investments Il
new Industries. with the possibilit.
dt securing returns such RS are mad
u original investors in motor stocks
hank stocks. and other more or les
ltazardous undertakings.
"Judging from evidences take
from publications Of your own depart
Inent. II would appear receivers o
large incomer are not escaping an
slich large amount OF taxes throug
ownership OF tax.exempt securities a
would make Il desirable for the go,
eminent to lower surtaes in order :
secure moro revenue for Itself or +
release capital for business invest
Inents."
"The market basis II fixed becaus
Of the earning capacity Of industr,
and has no weight with the origina
investor except when he wants TO sci
his securities.
Paid S8,.cs,679 In Taxes.
"As personal experiences in thi