Evening star., 1935-08-17

McCsrran amendment in the Senate
by which certain sections OF the silver
purchase act Of 1884 would be re-
pealed: third. substitution in the Sen
ate of heavily increased estate tax
rates for the inheritance tax schedule
approved by the Hou1e
Without much doubt the first Of
these is a matter Of some embarrass-
ment to administration leaders.
Throughout debate on the tax bill,
Democrats, and Republicans alike
agreed with the principle OF shutting
of the flow of tax-eXempt securities.
Nothing was done about it. however,
until the Idaho Republican submitted
his amendment in the Senate and ap-
proval was given by the narrow mar
gin of 40 to 80.
Immediately the protest arose that
this form of discrimination against
Federal securities while making no
comparable provision for State and
local securities would place the Gov
ernment in an unfavorable position
for future financing operations. Fur
thermore, it was argued, the action
would give an inflated value to out
standing Government issues, but would
have an opposite effect on future
issues.
Even assuming the validity OF these
arguments. however, the fact remains
that the Republicans have benefited
trategically by the action of the Idaho
Senator and his supporters. If the
amendment is thrown out in confer
ence. on grounds however logical, the
attempt to force the Government ito
clean its own house" of what long has
been regarded as an evil will give the
Republican SpokeSmen a talking point
they will not overlook during the
coming IS months.
In spite of these complications, 1t
is expected that the amendment will
lose out in conference
On the McCarran amendment less
trouble is likely, particularly in view
of the finality with which the House
yesterday voted down motion by
Representative White, Democrat of
Idaho to bind the House conferees to
agree to the silver proposal. The
personnel Of neither conference group
contains any outstanding supporters Of
the program of the so-called silver
bloc. The amendment probably will
be abandoned.
The inheritance VS.. the estate tax
issue seems certain to force drawn
Hl11I
Dental recommendations in including
an inheritance tax section in the orig
inal bill, the House Democratic con-
ferees will be bound to stand by this
provision for a reasonable length Of
time at least. On the other hand,
the Senate conferees are aware that
return to this provision in the bill
probably would precipitate fight on
the Senate floor when they report
back. the minimum result being delay
in Senate approval with consequent
delay in ef1oEs to clean up and ad-
journ the Congress.
On other provisions Of the bill in
its present form, it is likely that
trades can be arranged. The Senate,
for instance. has increased the gradu-
ation of corporation income taxes but
decreased the graduation of excess
profits taxes. It increased capital
stock taxes, although the President
made no such request. but it followed
his wishes in imposing an intercom-
pany dividend tax. Middle ground
agreements on all Of these revisions
are not looked upon as potential
dynamite when the conferees report
back to their respective bodies.
The three issues mentioned earlier.
however, contain this dangerous quail
ity. and all or any one Of them prob
ably win cause some delay in adop-
ton of the conference decisions. The
extent Of this delay will depend upon
the nature Of the agreement-andt the
temper Of their proponents or oppo-
nents when the reports reach the
floor.
Conferees for the Senate are Sen
ators Harrison, George and King.
Democrats; La Toilette. Progressive,
and Metcalf, Republican. Those for
the House are Representatives Dough-
ton, Hilleand Cullen. Democrats, and
Treadway and Bacharach, Republi-
cans.
While the legislation has reached
this stage Of near-enactment, oppo-
nents of it outside the conference
group continue to attack it. Speaking
last night over a National Broadcast
ing Co. network, Representative Edith
NJ Rogers, Republican. of MasSachu-
sets, sssailed particularly the in
creased death tax and graduated cor
poration tax provisions Of the meas
ure.