Evening star., 1938-04-21
The Byrnes Report.

Ao - AANo
After an intensive investigation of un-
employment and relief in this country,
a special committee of the Senate re-
ported yesterday in favor Of tax relief
for business and industry as major
and immediate step toward recovery.
The tax relief recommended included
the elimination of the undistributed
profits tax and material modification
of the capital gains tax. Once again
a committee of the Senate has gone on
record as favoring a new revenue bill
designed to restore confidence and to
get away from the punitive tax theories
Of President Roosevelt.
The report of the special committee,
submitted by Senator Byrnes of South
Carolina, its chairman, comes while
the conferees of the House and Senate
are deadlocked over the revenue bill,
with the House members backing the
President and the Senate members
standing firm for the Senate bill.
What influence the report has will be
in support of the Senate measure.
The special committee called atten-
ton to the fact that only one specific
recommendation was made by represent
atives Of the major industries of the
country, who appeared to discuss un-
employment and relief. That recon-
mendation was for the repeal or modi-
flcation of the undistributed profits
tax and the modification of the capital
gains tax. This was the answer of
men engaged in industry and fully cog
infant of the lack of confidence with
which the business world has viewed
the situation and the present admin
istration.
How much longer the administration
will hold out against the salutary pro-
posals of the Senate revenue bill re-
mains to be seen. Some of the ad-
ministration leaders are seeking eagerly
to find some compromise that will save
face for the President. But how much
the President himself is willing to yield
only time will tell. He has it in his
power to block all revenue legislation
at this time unless 1t conforms to his
views-provided he is willing to 60 to
that length after telling the country
that legislation revising the tax laws
is needed. At his insistence the bill
may die in -deadlocked-or
it might be allowed to pass and go to
the President for veto, which prob
ably could not be overridden.
The report of the special committee
on unemployment and relief, in addi-
ton TO dealing trenchantly with the
tax revision issue, points out some glar-
ing deficiencies in the manner in which
work relief has been administered Its
findings and recommendations may we'll
be considered in connection with the
Presidents new spending program for
relief and recovery.
A truly amazing discovery was de-
veloped in five large cities where 26,-
736 workers, classed as skilled workers,
were engaged on work relief projects.
Nearly 5000 of these workers were in
terviewed and SO per cent of them ad-
mitted that they had other and pri-
vate employment. Not only were these
workers able to obtain security wage"
from the relief funds, but they were
able to compete successfully against
other labor for private jobs. The Sem
ate committee very properly recon-
mends that worker on relief be re-
quired to state, when he receives his
check from relief funds, what he has
earned from outside employment during
the period for which he is paid.
There Is, indeed, far more in this
matter Of relief and work relief than
meets the eye. And yet the President
has recommended that the system which
has been in operation be continued
and that billions of dollars more be
made available for expenditure. The
Senate and House, in acting upon the
proposed legislation, should give care
full consideration to this very timely, al
though preliminary, report of the spe-
cial Senate committee.