Evening star., 1935-10-20
EFFECTS Of FISCAL
!. POLICY STUDIED
c. of c. Group to Give Par
ticuIar Attention to
Taxing Methods.

Frankly agreed on the impossibility
of devising fair revenue system TO
support the present rate Of Govern
ment spending, the Federal Finance
Committee of the United States
Chamber of Commerce yesterday be-
gan a detailed investigation into the
general effect of the currency fiscal
policy on business recovery.
Members of the committee will give
particular attention to the new de-
parture Of taxing methods incorpo-
rated In the revenue act OF 1885 de-
signed to bring about social reform
rather than raising revenue.
The report, which will be completed
next month, is expected to recommend
changes both in the revenue system
and the spending policy of the Gov
eminent. In the course of a prelimi-
nary canvass of the whole field yes
terday, Fred H. Clausen of Horizon,
Wis, chairman of the committee, and
his associates had before them factual
material assembled by the chambers
staff as we'll as suggestions and criti-
cisms received from business firms and
organizations throughout the country.
Members of Group.
Other members of the committee
are Lamont du Pont, president Of
E. l. du Pont de Nemours & Co.; Ellis
worth c. Alvord, Washington tax ex-
pert; Raymond H. Berry, Detroit; w.
Dale Clark, Omaha banker; Fred r.
Fairchild, professor of political econ
omy, Yale University; H. B. Fernald,
New York; Edwin G.. Merrill, New
York banker, and Roy C. Osgood,
Chicago banker.
Calling generally for a balanced
budget and reduced taxes, the COM
mittee laid down six general prin-
ciples":
That the present excessive proper
ton Of the Nations total income eX-
acted by Federal, State and local gov
ernments should be substantially re-
duced.
That there should be immediate
steps taken to assure the establish
ment of well co-ordinated fiscal plar
looking to a balancing of the Fedora
budget in the near future.
That the fiscal plan should provide
for a balanced budget through re.
duction of expenditures and no
through adoption Of new or increased
taxes, which would retard business ex'
pansion and thus tend to continue un.
employment.
Would Reduce Taxes.
THAT the fiscal plan should con.
template a reduction in Fedora
taxation when Federal expenditure!
can be brought down to more reason.
able levels.
That expenditures during the next
fiscal year, beginning July /, 1886
beyond those necessary to defray the
ordinary expenditures Of the Govern.
ment on an economical scale. should
be limited to advances of a reim-
bursable nature"
This would mean that the disburse-
ments of the Government for direct
relief and for any work relief woulc
be limited to loans to States and pos
sibly local governments, with liberal
provisions as to interest and repay
ment
THAT the taxing power should moi
be utilized as a basis for regulatory
or prohibitory legislation or for sociaI
or economic changes by any Govern
ment process which, without the in
tervention of tax, would not be a
valid exercise of Federal authority"
Study Business Demands.
Demands of business groups that
Government funds not be used to
finance Government activities compet-
ing with them were being studied, as
were complaints against use of the
taxing power to obtain revenues ear
marked to special classes.
The committee examined numerous
proposals for revision of corporate and
individual income tax provisions, in
cluding "the unfortunate effects OF
the provisions relating to capital gains
and losses and to reorganizations and
mergers of corporations even when
undertaken to simplify corporate
structures"