The Washington times., 1936-05-11
LEADERS SEEK
TO REFUTE
ATTACKS
Aoreenthau, OIiphant
to Be Heard BY
Senate GROUP
BY WILLIAM X. HUTCHINSON
international News Service

international News Service
In an effort to allay a Demo
cratic revolt against President
Roosevelt's 800 million dollar tax
bill, Administration leaders on
the Senate Finance Committee
today summoned Treasury experts
TO refute the charges of business
executives that the measure
would retard recovery.
Secretary of the Treasury Nor
genthau, Herman Oliphant, his
general counsel, and Secretary Of
Agriculture Wallace were invited
to appear before the committee
tomorrow to answer criticism Of
the bill. Morgenthau's presence
was requested by Senator Byrd
Cd of Virginia, who charged
the bill would allow rich cor
porations to escape Federal tax
alton.
New Plans Drawn
Senators are drafting new tax
plans as a substitute for the
Presidential program. 1t appeared
one of the substitutes would be
approved by the committee.
RFC Chairman Jesse Jones
also was asked to testify on sec
tons of the bill relating to rail-
roads and corporate Indebtedness.
There were reports that some
railroads and corporations would
be unable to repay RFC loans If
the new bill were enacted in its
. present form. Jones was to be
questioned on these reports.
Three Substitutes Studied
A group Of nine Democrats on
the committee was said to favor
RECESSION Of the provision placing
a heavy penalty tax on the undis-
tributed income of corporations.
Most of them met in private con-
ferenceS over the weekend, con.
Sulting experts and studying data
on the revenue that may be
yielded by compromise plans.
Three compromise plans were
under consideration.
One would increase existing
corporation taxes, place small
three-year trial tax ON undistrib-
uted income and eliminate all
other taxes proposed in the preSi-
Dental plan, including "windfall"
and processing taxes.
Another would place a flat tax
on corporation earnings, a grad.
uated penalty tax on undiStrib-
uted income and make dividends
subject to ordinary income taxes.
The third would substitute in
creased income and corporation
taxes for the whole presidential
plan.
Byrd Lists Big Firms
Senator Byrd wrote Secretary
Morgenthau pointing out that 40
giant corporations virtually
would escape Federal taxation if
their 1884 records were repeated
this year. In 1884, he pointed out,
II giant corporations, earning 1872
million dollars, paid out more
than that in dividends, hence
would go tax-free under the Pres
ident's bill. These he listed as
follows:
American Telephone and Tele-
graph Company, American To
bacco Company, American Smelt-
ing and Refining Company, Gen
eral Electric Company, Goodyear
Tire and Rubber Company. Inter
national Harvester, National Bis
cult Company, National Dairy
Products Company, Ohio Oil Com
pany, R. j. Reynolds Tobacco
Company, Texas Company.
He listed % others which paid
out almost all their earnings and
would pay less than 10 per cent
corporation tax under the Presi-
dents plan. He asked Morgen-
thau to report how many corpora
lions earning one million dollars
in 1885 would receive a 80 per
cent tax, reduction" under the
Presidents plan.
Although the Administration
has control of the Senate, the
rapidly spreading rebellion in
Democratic ranks indicated a re-
vision of the bill.