The Birmingham age-herald., 1924-01-18
COOLIDGE SEES
 DOOM OF SURTAX
President Now Resigned To
 Compromise Of Mellon R. Tax Schedule
ss By RAYMOND CHAPTER
 neased Wire to The Age-Herald)


 WASHINGTON, Jan. 17.-Presi- dent Coolidge is resigned to compro. mise on the Mellon surtax schedules. He has made up his mind that rather than deprive the country of the bene- fits of some tax reduction, he will sign any measure which seems reasonable to the administration leaders in Con- gress.
 Obviously the President does not care to say this officially at this time. He is committed to the Mellon bill as it stands and he will do everything he can to bring about its enactment with the least possible modification.
 But his ieutenants in the House all ready have told him that the Mellon tax plan for maximum surtax of % per cent is doomed. The democrats and the extreme republican progress sives combined will be able to defeat this measure. Therefore, the leaders in tn House are trying to save as much of the Mellon bill as they can by a series of compromises.
 Knows Situation
 Coolidge Realizes this situation, and while he is is disappointed that the original plan cannot be saved, he feels that the best statesmanship calls for as much tax reduction as is possible. On this assumption, he will not oppose any bill which seems reasonable to re- publican members of Congress.
 While it is impossible to say what figure Congress finally will agree upon, the best judgment of informed leaders place the probable maximum surtax somewhere between 35 and 40 per cent. Democrats are advocating A per cent maximum. Farm bloc republi- cans want 3S or 40 per cent.
 A determined effort will be made to increase inheritance taxes and find some means for reaching out after stock dividends. But present indica- tions are that the Mellon bill, in its fundamental features, will not be changed materially, except in the mat ter of surtaxes. There will be minor allocations regarding exemptions and articles to be taxed, but administration leaders believe they can prevent any radical innovations.
 Statement Misconstrued
 Many republicans in Congress mis- construed a recent statement at the White House to the effect that Cool idge opposes any compromise in the Mellon plan. It is true that Coolidge prefers the treasury scheme, but at the same time, as was made plain by the White House spokesman, the President will not attempt to coerce Congress and he is confident that some reason able plan will be decided upon. Cool idge has no intention of trying to force Congress to sign on the dotted line. , He and Mellon have told Congress what they think should be done. But Coolidge realizes that it is the business of Congress to decide what shall be done.
 This has been made clear to admin istration leaders in the House and with that understanding, they are consider ing compromise proposals as they dis cuss the terms of the bill now being formulated.
 When the House ways and means committee settles down next week to draft its bill, democrats will be invited to participate in the discussion
 To Line Up Democrats
 The purpose of this method is to line up enough democratic support in- side the committee while the bill is being drafted to assure passage when the fight moves to the floors of the House.
 After all, what the republicans want IS tax reduction and they will consider their efforts successful if they can push some measure through, even though it contains certain features of democratic origin. It is a question of playing with the more conservative democrats, or else forcing a coalition of democrats and progressive republi- cans which would kill the whole propo- sition. The republicans figure that half loaf is better than none at all in this instance. And President Coolidge is of the same kind, as will appear when the tax bill goes to the White House for signature.