Evening star., 1938-05-02
THE EVENING STAR. WASHINGTON, D. MONDAY 2 1885,
TRADE OFFICIALS
OPEN NCONVENT|ON
Tax Bill Changes Will Aid
Business, Lawyer Tells
Executives.

Changes in the undistributed cor
porate profits and capital gains taxes,
as proposed in the pending 1888 reve-
nue bill, should aid business recovery,
Claude w. Dudley, tax counsel of the
Millers' National Federation, told the
American Trade Association executives
in session here today.
More important than reduction
in tax rates, or even of tax policies is a
realization Of the need for reduction in
Government expense" he added in an
address at the morning meeting Of the
annual convention, held in the United
States Chamber of Commerce Build
ing.
Richard P. Whitley, assistant chief
counsel of the Federal Trade Commis-
sion, told the trade executives at their
afternoon session in the MayfloWer
Hotel that the F. T. c. administers the
law against unfair trade practices
with full sympathy for the problems
Of business" but takes pains at the
same time to protect the interests
of the public.
The administrations reciprocal trade
agreement program was described as
"the only practical way to rebuild
our foreign trade, so necessary for
the general welfare of the United
States" by Henry F. Grady. vice chair
man of the Federal Tariff Commission.
another speaker at the afternoon ses-
sion.
Business Relief Seen.
Business will be relieved Of the
high undistributed profits
taxes which have been levied, the rates
varying from per cent to 27 per cent
under the present law" Mr.. Dudley
said. The maximum rate Of undis-
tributed profits tax is 2l2 per cent
under the new plan adopted by the
Conference Committee.
use Of corporate profits in the ex-
tension and Improvement Of plant
facilities should be encouraged by this
substantial reduction in the rate of
tax on undistributed profits. The re-
duction should be a substantial factor
III VI q SCIlCl al
ment in business conditions.
For the first time in four years a
reasonably consistent policy with re-
spect to capital gains and losses is to
be adopted. The result should be to
encourage the investment of private
capital in business enterprise Under
the 1884 and 1886 acts, capital gains
were heavily taxed. but the deduction
of capital losses was so restricted as
to be useless in many cases. Under
the new bill, long-term capital gains
and losses. being those realized ON the
sale of assets held more than two
years. are treated with absolute con-
sistency.
The new revenue bill will fail to
provide any relief from the excessively
high rates Of individual surtaxes.
These high rates operate as an abso-
lutte bar to the investment of funds in
business enterprise by persons having
large income
Government Expense.
1T is necessary that the people
be enlightened as to the tax burden
which they are now paying in various
and sundry forms OF hidden taxes.
This is the only approach by which
a reduction in Government expense
can be accomplished. Industry should
do its part in bringing about full
realization Of the facts as to the tax
burden and should work necessarily
to that end. Once that is accom-
plished, economy in Government ex-
pense will soon follow"
In explaining the administration Of
the law by the Trade Commission. Mr..
Whitley dealt particularly with its
trade practice conference procedure,
with the Robinson -Patman Act, and
with the recent Wheeler-Lea amend
ment Of the original act creating the
commission. The trade practice con-
ference, he said, was set up more than
a decade ago, the commission realizing
that "the vast majority of business is
inherently honest and that the prose-
cution Of many individual complaints
SouiO pc dEOiOco CllIOueIl liIS voluntary
cooperation Of industry"
Any industry, Mr.. Whitley said,
may apply for a trade practice con-
ference. When an industry confer
ence is authorized. an official invita-
ton is extended all members OF the
industry to attend.
Other speakers this morning were
Pyke johnson. vice president of the
Automobile Manufacturers Associa-
tion. on Federal Legislation Affecting
Business" and Dr. Isador Lubin, COM
missioner of labor statistics, on
Prices and Business Revival"