Evening star., 1937-10-23
ROOSEVELT GIVES
NEW TAX WARNING
ON CROP CONTROL
Legislation Must Not Un-
balance Balancing of
Budget, Jones Told.
CREATION OF SURPLUS
FEARED WITH LOANS
Requests Effective Provisions to
Prevent Repetition of G. o. P.
Farm Board Experiment.
2, The Associated Press


President Roosevelt notified Congress
today that new taxes should be levied
to meet any increase in costs OF
Federal farm control
In identical letters to Chairman
Smith and Chairman Jones Of the
Senate and House Agriculture Com-
mittees. respectively. now engaged In
drafting farm legislation for the spe-
cial session of Congress convening
next month. Mr., Roosevelt said:
1t is. Of course. especially important
that any new legislation should not
unbalance the expected balancing Of
the budget In other words, no addi-
tional Federal expenditures from the
general fund of the Treasury should
be made over and above existing (
planned expenditures. The only excep-I
ton to this would be the mourning of
additional obligations on the part on
the Treasury, backed 100 per cent b1
additional receipts from new taxes.
In other words, whatever goes ots
must be balanced by an equivalerf
amount coming in"
Mr.. Roosevelts letter did not refeg
specifically to proposals for corl
crop loan which are being studied "a
the Treasury and Agriculture Depart
ments. Some on Capitol Hill pre-
sumed that, in view of his letter, the
Chief Executive also would expect
Congress to raise funds to meet the
cost of such loans, If they are made.
Would Keep Conservation Plan.
The Presidents letter also urged
that the present soil conservation pro-
gram, although mot entirely adequate
to keep farm surpluses from wreck
ing prices and farm income" be
retained as part Of the new program.
Jones, who made public the letter,
said: Il feel confident that legislation
can be worked en1bodying these prin-
ciples." He added he was hopeful
that we may have bill ready for
consideration in the early part of the
session
The Presidents letter warned against
repetition of the Republican Farm
Board experiment with control of farm
surpluses.
Il wish to emphasize especially" he
said. that any price stabilizing fea-
lures, through loans or other devices,
should be re-enforced by effective pro-
vision against the piling up of unman-
ageable supplies. We must never again
invite the collapse Of farm prices, the
stoppage of farm buying and the de-
moralization of business that followed
the Federal Farm Boards attempts
to maintain farm prices without con-
troll of farm surpluses."
Summarizes Wanted Aims.
In summarizing the features that
he said he believed should be incor-
porated in new farm legislation at the
special session, Mr.. Roosevelt said:
The new national farm act should
safeguard farmers income as well as
their soil fertility. 1t should provide
for storage of reserve food supplies
in an ever-normal granary. so that if
severe and widespread drought re-
ours, consumers will be assured of
more adequate supplies with less
drastic increases in price than would
otherwise be the case.
1T should provide for control Of
surpluses when and as necessary. but
at the same time it should preserve
the export markets that still are open
to our farmers. 1t should protect
both farmers and consumers against
extreme ups and downs in the prices
of farm products. 1t should be
financed by sound fiscal methods.
Local administration should be kept
in the farmers hands"
Mr.. Roosevelt left the way open for
new taxes in statement at his press
conference yesterday, declining to say
fatty they were out
Sees Cut In Profits Tax.
A forecast on the legislation made
by Senator George, Democrat, Of
Georgia was that the next revenue bill
will greatly modify the capital gains
and losses tax and the surtax on un-
distributed profits
He contended the two levies have
been a serious check" on expansion
of business, criticism voiced by in
dustrialists and some other legis-
lators.
otAdOOA van fuJo, DoiilONAdO, VI
Indiana said he has prepared amend
ments to the undistributed profits tax
which would enable corporations to
maintain reserves for expansions and
improvements without being subject
to tax.
George termed the capital gains tax
and the surplus tax "unscientific" be-
cause, he said, they we're not levies on
real income"
He suggested that If the capital
gains levy could not be eliminated en-
tirely, it might be possible to provide
for no tax on securities held 10 or Is
years, with a reduction of taxes on
gains from securities or property held
for shorter periods.