Evening star. [volume] (Washington, D.C.) 1854-1972, 1936-05-11
SENATORS TOASK
TAXB|LL DEFENSE
BY MORGENTHAU
Wallace and Jones Also to
Testify Before Finance
Committee.
BYRD ASKS REPLY
By TREASURY HEAD
Virginian Says Larger Corpora.
lions Escape All Levy I'm
der Plan.

BACKGROUND
House agreed to President RooSe-
Delt's proposal that corporate tar
structure be revised, Nth Levy on
undiStrtbuted profits becoming
principal provision of neW tar pro-
gram.
Business has voiced consistent
opposition to legislation, and more
Independent Democratic members
OF Senate Finance Committee haze
indicated doubts about supporting
plan. Amount of reuenue yield
and probable effects on industry
haze been uncertain throughout.
BY the Associated Press.
The Senate Finance Committee de-
cided today 70 call Secretary Morgen-
thau and Treasury experts tomorrow
to answer criticisms of the House
tax bill before getting down to serious
consideration of the measure.
Secretary Wallace and Jesse H.
Jones, chairman of the Reconstruct
ton Finance Corp, also will testify.
Chairman Harrison said the appear
ance of Wallace did not necessarily
mean revival of the plan for impos-
ing new processing taxes.
Senator Byrd, Democrat, of Vir-
ginia asked to have Morgenthau APP
pear to answer his contention that
the proposed tax on undistributed
profits would permit many giant cor
porations to operate without paying
any taxes.
Harrison said Herman Oliphant,
Treasury general counsel. would I'M
dertake to give the administration
reply to the protests voiced in open
hearings to the House bill.
The committees decision to recall
Treasury experts was considered a
further indication of doubts about
the House bill.
Procedure Discussed.
At the closed session today. lasting
about two hours, there was little effort
to debate the merits of the proposal,
committee members said Most of the
discussion was about procedure.
After the executive session Harrison
still contended the general theory"
Of President Roosevelt's tax recon-
mendations would be approved, but
conceded there would be changes in
the House bill.
For the first time he took cognizance
of proposals for compromise to con-
tinue present corporate taxes with
levies on SURPRISES superimposed
Without committing himself to this
proposal, which has been widely dis
cussed among committee members,
Harrison said it would carry out the
theory of the Presidents recon-
mendations and could be easily SUBJ
stituted for the House bill.
1.-THE general theory the President
had in mind. of increasing revenue and
providing a wider distribution of earn.
ings, will be enacted" Harrison said.
Jesse Jones Called.
Harrison said Jones was being called
for questioning in connection with COR
poration indebtedness and the bills
cUcCI VII ~.
I'VE felt the r. F. C's view, since
it has made so many loans, would be
very much worth while in this con-
nection," Harrison said, adding that
the r. F. c. had made many loans
to railroads which have pleaded for
exemption from the undistributed prof.
its tax proposal.
Wallace, Harrison said, would be
asked not only about processing taxes,
which we're recommended by the Presi-
dent, but also about the House bills
provision for a windfall tax on re-
funded processing taxes.
If the Presidents recommendation
for new processing taxes should be
seriously considered, Harrison said,
the committee would have to hold
brief hearings on the subject.
The testimony of the administra-
ton officials tomorrow. the committee
chairman said, will be in executive
session.
Harrison disclosed that Treasury
experts had worked out a simplifica-
(See TAXES, Page %