Evening star., 1936-04-06
Junk TAX PLAN,
PATMAN PLEADS
Texan Wants Gold Held in
Treasury Used for New
Currency Instead.

BAChGROUND-
Passage OF cash bonus bill and
enactment OF new farm benefit
program added about 1920 900, 900
to needs of budget already ,DeH out
OF balance President Roosevelt,
hoDeDer, requested that tar reuenue
be proOtded to Offset these de-
nlands; his suggestion was for tar
on corporation SurpluSeS and on
indiutduat income from Dividends.
At same time he 10ould repeal cor
pordte income, ercess profits and
capital stock tdreS.
Subcommittee modified this plan
and jul Ways and Means Commit
tee IS noD preparing to draft bill.
By the Associated Press.
The House Ways and Means Com
mittee was urged today by Representa-
tive Patman, Democrat of Texas, to
scrap its tax program while the
Treasury holds gold which might be
used as q basis for issuing new cur
rency to meet Government expenses.
The leader of a House currency
expansion bloc told the committee. Il
do not think it's right, with all this
gold idle, to levy any taxes at all"
The country has the largest supply
OF gold on earth in the Treasury, with
title in the Government, and it should
be used, Patman said. within reason
able bounds and limitations, for the
issuance of currency. He placed the
amount of gold at s1o,lso, 100000.
Representative Vinson, Democrat of
Kentucky, reminded Patman. this
committee doesn't have jurisdiction
over currency legislation"
Would Tax Bank Profits.
But If this committee fails to
pass tax BILL Patman said, another
committee might act. However, the
new tax program, SO far as I know,
is all right. if you are going to have
a tax bill"
He proposed an amendment to tax
profits Of Federal Reserve banks.
Herman Oliphant, Treasury general
counsel, was to have been the first
witness today. but it was agreed that
Representatives would be heard first,
to let them attend regular commit
tee meetings and the session of the
House.
Representative Sauthoff, Progress
sive, of Wisconsin, spokesman for the
House dairy bloc. was shut off by
the committee when he sought to
urge a scent tax on oleomargerine,
and a 712-cent levy on all foreign
fats and Oil. The committee voted,
ls to 7, that its hearings should be
limited strictly to its new revenue
program.
Fears Excise Taxes.
Sauthof said that If he was pre-
vented from presenting the view of
members from dairy regions, he was
apprehensive that the Senate might
insert excise taxes on dairy products,
and that the dairy bloc would have
no opportunity to voice its views.
Committee members told Sauthoff
that in the event new processing taxes
are inserted in the tax bill in the
to have any information that the
dairy bloc might care to present.
Driving ahead to try to finish its
hearings tonight, some members of
the committee expected that Daniel
Bell. acting budget director, also might
testify.
Representative Treadway, Repub-
lican. of Massachusetts, said he
wanted to ask the officials for data
on Government finances and why the
Treasury needs the taxes.
Though parade of business men
and industrial spokesmen has flung
criticism at the plan, indications ap-
peared today that the program would
be pushed through the House without
major changes and that the real fight
over alterations would be staged in
the Senate.
Calls for Graduated Tax.
Though not yet drafted in bill form,
the committee program calls for
tax on corporation net income, gradu-
ated according to the percentage of
profits undistributed in dividends.
Another feature is a "windfall tax"
on professors who successfully fought
the collection Of A. A. A. processing
taxes since invalidated by the Supreme {.
Court.
The program does not include the
new system of processing levies, which
the President suggested be imposed,
but authoritative sources indicated
New Dealers. would fight to have these
taxes restored to the program when
it reaches the Senate.
Senate leaders indicated hearings
will begin on that side Of the Capitol
as soon as the House Ways and Means
Committee actually drafts the bill.
Some critics of the plan, notably the
Chamber of Commerce of the United
States. have delayed filing their
formal objections until the bill is
drawn.
Plan Range Tax.
In line with the administration
desire for processing levies, A. A. A.
experts have outlined a tentative
schedule which would apply the taxes
to larger range of commodities than
was the case under the old agricul-
ture adjustment act. They are esti-
mated to yield 1921 100000 to $780,
100000 year.
Chairman Doughton said yesterday
he would keep his House Ways and
Means Committee in session until
midnight if necessary to wind up the
hearings TODAY S0 that actual xvrifipo
Of the bill can be started tomorrow.
He intimated it would be ready for
introduction late in the week and