Evening star., 1937-11-07
III. COOLIDGE ASKS.
U.S.SPEND|NCCURB.
Former New Deal Official
Fears Capitalization
of Power.
BY the Associated Press.

BY the Associated Press.
WHITE SULPHUR SPRINGS, Va.
Nov. 6.-The Investment Bankers As
sociation OF America today blamed the
autumn collapse in the securities mar
ket partly on Federal tax laws and
heard former New Deal Treasury
Undersecretary condemned admins
tration spending policies as "destruc-
tive of self-government and contrary
to the welfare and happiness of the
people"
In his first public address since he
left his Treasury post in February,
1885, Thomas Jefferson Coolidge as
serted that the apportioning Of huge
Government funds by Washington
bureaucracy" was causing a "centrali-
zation Of power in remote govern
ment." which was exactly what our
ancestors tried to prevent through the
Constitution"
Frequentl.' quoting the sage Of Mon
ticello for whom he was named, the
Boston banker urged that the Federal
Government at once give up the direc-
ton OF all this varied welfare work
having to do with the individual, and
turn the full responsibility back to the
States and local governments"
Would Apportion Revenues.
He said it could be done without
financial difficulties and suggested
that the Federal Government appor-
finv1 a. Of r. tho
States on population or Oyer-fixed
basis.
The association adopted resolutions
advocating repeal or substantial mod
ification Of both the capital gains and
undistributed profits taxes.
Ellsworth c. Alvord, Washington
lawyer and Special Assistant to the
Secretary of the Treasury during the
Hoover administration, raised hopes
Of the bankers for early action in Con-
gress on the capital gains tax.
1T seems to be generally agreed
by tax and financial authorities both
within and without the administra-
tion-that the present method taxing
capital gains must be scrapped," he
declared. Alvord said he did not favor
abolition OF the tax, but rather
thought 1t should be retained with
relatively low rates"
Principle Held FaIIacious.
With respect to the undivided
profits tax, Alvord said the admins
tration was still vigorously support
ing the principle of it, despite its
direct conflict with its stated pur-
poses."
He said the principle of the tax de-
veloped by ReXford G. Tugwell and
other New Deal economists, was not
concerned with revenue raising, but
with preventing corporations from un-
wise use Of their savings. He ex-
pressed full agreement with former
S. E. C. Chairman Joseph P. Ken
nedy. now chairman of the Maritime
Commission, that the tax was based
"on fallacious economic principle. /"
Alvord told the bankers he under
stood the Treasury was prepared to
recomemnd to Congress the abolition
OF the Federal Board of Tax Appeals,
and expressed the opinion that such
action would seriously jeopardize the
rights Of the taxpayer He said that
over the last several years, the board
had found for the Government in only
about 30 per cent Of the cases heard.
Coelidge's First Speech Since 1896.
Coolidge, after his address, told re-
porters he had previously expressed
his dissatisfaction with New Deal
financial matter since leaving WASH
ington only in magazine article and
in letter to the Jeffersonian Demo-
cratic Society. This is my first public
speech since leaving Washington" he
said.
The flve-day annual session of the
Investment Bankers Association will
end tomorrow with the induction of
the new president. Francis E. Froth-
ingham of Coffin g. Burr, Inc, Boston.
The associations Committee on Pub
lie Service Securities, headed by
rockingham. in its annual report re-
newed its suggestion of last year that
the administration appoint a nom
political commission to review all sides
OF the electric power problem.