Evening star. [volume] (Washington, D.C.) 1854-1972, 1930-10-22
TAX RELIEF HELD
NATIONAL PROBLEM
Experts and Political Leaders
Plan Methods at Kansas
City Conference.
BY DON 8. WARREN,
STAFF Correspondent Of The Star


KANSAS CITY, Mo-, October "a
Six hundred delegates to the National
Tax Conference, Including tax officials
from eyerv state of the Union and the
District Of Columbia, In session here this
week. are attacking the universal Ques.
ton of rising tax burdens, which Is de-
scribed as the most serious problem
confronting the Nation today.
Experts and political leaders here are
proposing relief through q variety OF
measures, some fostering new forms OF
taxation and others seeking to increase
revenue from certain sources, but the
keynote struck at the opening session
was O demand for elimination OF ex-
travangance and waste in the expendi-
ture of public funds.
A hot fight, brewing for q number OF
years, however, promises to come up Tor
decisive discussion here, and which will
have O rebound in the halls Of Con-
gress, over proposals that pack certain
punch for stockholders and owners OF
banks In every State and the District
of Columbia. This Is the demanded
modification Of the congressional act
regulating taxation Of national banks.
This involves principles that go back
to the earlier days Of the national bank
system, and Is based on the old cry OF
State rights and the powers OF the
central National Government.
Hits Banking Association.
Gov. Clyde M. Reed Of Kansas, whose
practice Of outspoken speech already
has brought him national publicity
more than once, touched OF this deoate
In an assault he made on congressional
committees and the American Bankers
Association, In welcoming the delegates
at the flrSt session Of the tax confer
ence. He assailed the bankers aSsocia-
ton for its alleged Ownership" OF the
banking committees Of the House and
Senate, finding evidence OF the owner
ship" In the fact that these commiCtees
last session declined to approve 9 plan
he urged for allowing the States 70 tax
national banks to the extent that In
dividual States might tax State banks.
This debate, though now rather dry
and exceedingly technical to the lay
man at this stage, Is seen here as one
of great importance to the public, since
the means of taxing national banks Is
scheduled for some action by Congress
this Winter and its decision. one way
or another, Is calculated to affect bank
stockholders throughout the country.
Gov. Reed, something Of q wit and
an accomplished platform orator, was
nomination for the governorship OF
Kansas. He achieved prominence sew
ereal months ago In his declaration
that Kansas farmers would and should
plant all the wheat they could, in an
Swering q suggestion by Secretary Hyde
of the Agriculture Department that
farmers would be benefited by limiting
acreage paintings in order to curtail
surplus wheat production.
Gov. Reed launched his assault on
the existing system of bank taxatlon
by reciting that while the wealth o.
the Nation increased 80 per cent IN the
last ia years the tax burden during the
same period more than tripled.
Kansas Among Backward.
Kansas. he said with candor, is as
backward as any State OF the Union
in taxation methods, reporting that
while its wealth increased but 40 per
cent in the past IS years, its taxes rose
800 per cent, not including gaSoLine
and income taxes, which would orns
the increase to 400 per cent.
kansas is backward in this regard, ne
said. because it has chung to the OLD
theory that revenues should come prl-
marily from the general property tax.
This. he declared, is crime against the
man who owns real property.
Seeking to increase revenues from
other sources Gov. Reed recited how he
went down to Washington" to get the
right for States to place q higher TAX
on bank stocks and earnings. Because
the House and Senate Banking Com
mittees declined to permit this last ses-
sion, Gov. Reed In his opening address
at the tax conference "compltmented''
the American Bankers Association on
its Ownership" of these committees.
Having failed at Congress, Gov. Reed
fastened back to Kansas, called spe-
cial session of the legislature and had
the Intangible tax law there repealed.
The old States rights cry was then
raised by Reed in declaring that the
United States Government has no right
to say how much q State may tax the
banks, so long as the State taxes Ma
tional and State banks alike.
Gov. Reeds position is that OF num-
Der of leading State tax officials here.
In this body, also. are representatives
of the American Bankers Association,
who point to the decision Of the Su-
prenne Court of the United States up
holding the right of Congress to limit
the amount of taxes a State can place
on national banks. They point also to
the cardinal principle of government
that "the power to tax is the power to
destroy" In unfolding the right OF the
Central Government to limit the tax
power of States over national banking
institutions.
Johnson Answers Reed.
Milbank johnson, chairman OF the
board of directors of the California TAX
payers Association, also speaker at
the opening session of the conference,
quickly answered Gov. Reed by stating
that the American Bankers Association
at its convention this Summer Endorsed
the bill of Representative Goodwin Of
Minnesota, which would liberalize the
existing power of the States to tax
national banks. though still retaining a
definite limitation.
The question definitely arose in 1921
when the Supreme Court decided that
the State of Virginia violated section
521o OF the Revised Statutes by taxing
national banks there at higher rate
than "other money capital" in the hands
of individuals coming into competition
with nataional banks Is taxed. This
decision, it is explained here, virtually
set a prairie fire" throughout the
country as other State tax bodies found
that they had been taxing banks in q
measure coming under this high court
ruling Other litigation piled up.
Seeking to straighten out the tangle
tax commissions and the American
Bankers Association, have been at work
on a proposed modification of the con-