, 1935-08-14
WASHINGTON
by Ray Tucker

Barren - Despite the administra-
tons excitement over tax exempt
issues as an avenue OF escape for the
wealthy, the demand for q consti-
tutional amendment TO plug the hole
has simmered down. The House Ju-
dietary Committee has cancelled
hearings on the matter. and the or
der came down from high UP.
Private studies indicate that tax
alton OF these federal and state Sc
curities will produce n sizeable
revenue for many years, II ever. 1t
IL estimated that about $47, 000. 00O.-
900 worth OF federal and state 'ex-
empts" X outstanding. and that
only 500, OF $28, 600. 000. 900, would be
subject 10 taxation. the balance be-
ing held by eleemosynary institu-
tons, etc.
Surprising that this amount bears
3h% interest, the taxable income
would amount TO approximately tl,-
0O0,000.O00. II taxed at l5% the re-
turn to the government would be
only $l50.000.000 and only $780,
100000 at 500, which u a generous
average of the tax. The government
would haze to pay higher interest
On non-axempt bonds - possibly
Sl00, 900 .0J0 ON this batch - thus
the added return in revenue would
be negligible. So some Of the gov
ernments own accountants admit.
But it's a good campaign talk.
Essential Definite financial
considerations are held responsible
by insiders for the sudden GOODNESS
toward the crusade against tax ex-
empts.
The treasury must do a great deal
Of financing and refunding within
the next few years. With q rising
bond market, and with the admin
istration committed TO elimination of
tax exempt features for its issues, 1t
might not find buyers for its bonds.
There have been signs Of weakness
in some recent issues. Such a psy-
Geological factor as official preju-
dice against the exemption privilege
would disturb the situation seriously.
Washington still has hopes that
Recovery will arrive before the ga
900, 000,0 900 work relief fund Is ex-
pended. But the administration Is
already considering budget esti-
mates mounting into the billions for
the 1887 fiscal year. Tax exemptS
will stay for the present
Choice - MI. Ickes' flying cir
Gus" has brought back good news TO
the haraSsed PWA chief. SO Harold
Is smiling again.
After travelling $4,000 miles the
Interior Departments engineers,
lawyers and publicists report that
the states prefer Ickes TO Hopkins
projects. They want TO spend fed
eral money and their own contribu-
tions for useful and permanent
projects" rather than for boon
doggling." This prejudice was par
ticularly strong in the Far West,
where numerous state governors pro-
tested bitterly against the Hopkins
theory Of quick spending.
Although Mr.. Ickes' scouts may be
suspected Of partisanship. other
signs reflect dissatisfaction with the
Hopkins regime. Labor groups are
striking against his wage scale. In
the Northwest the needy refuse TO
20 ON relief 800 sign a pauPer'S oath
to qualify for the works progress
rolls. President Roosevelt Is hearing
plenty about these troubles and may
do something about 1t soon.
D.ua nracfdart Craan ~ AET
says his organization Is pursuing a
hands-off policy in the matter OF
union strikers against PWA wages.
This doesn't jibe with Green's de-
termined fight in the senate TO
knock out the security wage" pro-
vlsion Of the works relief resolution.
It's well known that the Federation
sympathizes with kickers against Sc
cuFity wages. Green himself pre-
oicts that strikes will spread.
Harry Hopkins renewB his threat TO
deny relief to everybody who strikes.
That goes contrary to his policy last
year, when he gave relief to strikers
in industry. Success of the strike
would demoralize work relief plans
and make impossible the hiring Of
$500, 900 employables. But 1t has
already been made known that this
rumber will not and cannot be hir-
ed. Outside Of CCC only lbs, 900 are
employed at present.
Some of the states are not taking
steps 10 care for the unemployables
now on relief. but Hopkins says they
will surely be dumped on the states
on Nov. /.
Boys Carter Glass apparent
victory IN the banking bill contro-
versy demonstrates the supremacy Of
mind over matter - or physical
WEAKNESS.
Behind the scenes House conferees
took a mean advantage OF the rs
year-old senator. Wise to the fact
that excitement upsets the choleric
Virginian- Representative Henry