Evening star., 1936-03-23

The tax change, they say. was
written particularly to get at 200 cor
porations, the big 200, the high So
ciety of the corporate world. The 200
would be forced to pay a larger per-
than they do now. All other cor
porationS dhey contendD would pay
less. Also The proposal would tend TO
freeze the 200 at their existing size.
The others would be permitted TO
grow.
This sales talk is having an effect.
Not more than few dozen Congress
men come from districts where the
200 are. The others are being per-
suaded that il would be politically
wise TO soak high corporate society.
Good non- partisan tar techni-
clans laugh at the argument. They
say that Treasury Counsel Oltphant
and 1UhoeUer else 1Uas behind the
program did not giUe eTtensiUe con-
Sideration to uhnt it Mould do.
For one thing. the big fellows al
ready have their reserves. These
would not be affected by the new pro-
gram. President Roosevelt specifically
stated that he wanted distribution
only of future earnings.
The little fellows generally have no
such reserves. Theirs were dissipated
fighting the depression, il they ever
had any. They are entering now upon
a period OF business expansion. II all
their coming earnings are to be dis
tributed, they will never have any
thing for rainy day.
Thus they will droop at the first
rainfall, even though their stockhold-
ers meanwhile pay somewhat less
taxes.
Weakness Admitted.
Even more revealing is the inside
promise being made by members OF
the tax squad that they would re-
peal their plan at the first sign OF
a rainy day. They will not admit it
in print, but they recognize that the
bad point is that their program in
duces corporations TO save nothing for
times of stress.
Some Congressman TO whom this
promise has been advanced noticed
that it seemed to be confession OF
the economic weakness of the program.
Also they wonder whether repeater
would do any good after the rain
has started. The only time you can
lay aside earnings is when earnings
are coming in
what ,0iIt happen is this: The
teW tar-DiSe CongreSSmen IN
charge WiH re,Orite the program.
soften it NTH exemptions, make it
'Uorkable" The result aUiH be
based on an entirely different
theory from the attack against bio-
ness upon 10hich the original tar
suggestion lOas based, although it
,OiH bear facial resemblance to
the original program.
For some days now these wise ones
have beeen working toward retention
of the existing corporate tax struc-
ture, with something like an earnings
tax on top OF it.
Something like tnat will come out
Of Congress in the end.
Hoover Graves Argument.
4 person very close to Mr.. Hoover
says the Palo Alto political promoter
is not exactly pleased with the way
Gov. Landon is conducting his cam
paign. The friend says Mr. Hoover
clearly implied as much out on the
coast recently 1t is unouestiona bly,
true.
The Hoover view is that now is
the time for all good men to come
TO the aid of their party. He thinks
COL Knox is making q good fight by
touring the country and delivering
speeches, thus keeping the political
contest alive. He thought Iandon
should have done likewise and is
understood to have counSeled the
Kansas Governor to that effect, di-
rectly or indirectly, some weeks ago.
incidentally, as all Mr.. Hoover's
friends know. he believes that all
prominent Republican speakers will
become second-string men as soon as
the candidate is selected This in
cludes himself
I,O00 Banks Stiii Weak.
Senators lifted their eyebrows the
other day at a confidential report
stating there are still upward of
1000 banks in the country which
are not strong. The report came
from highly capable Chairman Crow
ley of Federal Deposit Insurance. who
knows, if any one does.
Mr.. Crowley's position was that
there are too many people in the
banking business who should be SELL
ing knickknacks on the corner. He
wanted authority to continue encour-
aoinO YoarparS ond will esst II