Evening star., 1938-08-25
; j. s. AGENCIES
NOTE UPTURNS
Reserve Board, Customs
and Income Reports
Show Gains.
BY the Associated Press.

py the ASSOClAteo freSS.
Three Federal agencies offered today
statistical evidence OF substantial busi-
ness improvement In recent weeks.
The Federal Reserve Board calculat-
ed that the upswing in steel, textiles,
petroleum, shoe and other industries
had won back in the last seven weeks
all the ground lost In the previous
seven months.
At the Treasury, a rs per cent squirt
in customs collections indicated to
ohicials that conditions had improved
to the point where purchases Of
foreign raw materials and other mer-
chandise were affected. Since many
basic raw materials imported by Amer
ican industry are duty-free, of1lcials
regarded the customs gains as par
ticularly significant.
The Commerce Department reported
the first favorable turn in its index
Of national income In nearly a year.
July income declined less than the
usual seasonal amount, and the
Nations income from wages. dividends
and other sources was estimated at
SIS, 800, 900, 900 for the first seven
months Of the year.
Further Gains Expected.
Because this was not far from the
$39, 900 900, 900 income in the similar
of cfofiSfinionS in.
dicated a belief that continued busi-
ness Improvement might bring the
1898 total close to last years $50 ,300,-
000, 900, which was the highest since
1929.
The Reserve Board said its index
Of industrial production rose from II
per cent of the 1925 average In
June to SO per cent In July and gained
further in the first three weeks OF
August.
The July average was the highest
since last December's "a per cent, and
the board report indicated the August
figure might be close to last Novem-
ber's SO per cent index November
was the third month of the unpre-
cedented decline which carried the
boards index steadily downward from
1T in August, 1887, to rs in May, 1888.
Senator Brown, Democrat, of Michi-
gan, discussing the relation Of business
to government, predicted substantial
influx of capital into productive enter
prise would follow enactment of law
permitting Federal and State taxa
ton of incomes from all governmental
securities and salaries.
Exemption Assailed.
Senator Brown, chairman OF Sen
ate subcommittee studying tax-exempt
securities, indicated the group would
recommend passage of such law by
the next Congress, in line with Pres1-
dent Roosevelt's recommendations last
year.
II think it is most unfortunate" the
Senator said, Ito permit wealthy men
to sterilze money by putting it into
tax-exempt bonds"
The proposed bill, he explained,
would bring into the taxing field about
$50, 900 900 900 in Federal and State
obligations which now are wholly or
partly exempt. Senator Brown said
he had no figures on the amount OF
salaries involved.
At present, States can tax their own
securities and the salaries Of their own
officials but not Federal securities or
the salaries of Federal officials. Like
wise, the Federal Government cannot
tax State securities or salaries, but
may levy upon its own.
Legislation Suggested.
Senator Brown said it was the genA
eral opinion of Treasury and Justice
Department officials that a suggested
business privilege tax would not be
sustained by the courts.
I'VE might legislate to the effect
that no State or municipal bond which
is declared to be tax exempt could be
transported In interstate channels or
carried in the United States mails" +"
the Senator added.
II all other methods fail, then Con-
gress could resort to submission Of .
constitutional amendment in an effort
to reach the estimated 0,000, 900 900
In tax-exempt securities in this country
and the unestimated amount Of Federal
and State salaries involved, he said.