Evening star., 1938-05-29
HARRISON REPLIES
TO TAX CRITICISM
Roosevelt 'Misinformed' on
Merits of New Law, He
Tells Senate.

WETIlS VI VcW Law, TIC
Tells Senate.
An old-line Southern Democrat
Senator Harrison of Mississippi-told
the Senate yesterday that President
Roosevelt was all wrong when he
criticized the new tax law.
Senator Harrison, chairman of the
Senate committee which helped write
the tax revision measure, replied to
the criticisms voiced by the President
Friday in a speech at Arthurdale, w.
Va.
Raising his long arms to emphasize
his words. he said:
Congress framed this tax legisla-
tion to help business. only hope
that what we had expected will not
be dampened or thrown away by this
speech the President made yesterday"
Mr.. Roosevelt permitted the $5,000.-
100000 revenue measure to become
law last night without his sigma
ture, declaring he did not want to
seem to favor 1.-The abandonment Of
an important principle of American
taxation"
Session Well Attended.
This was an obvious reference to the
undistributed profits tax. which the
President consistently has advocated
and many business spokesmen criti-
cized. The new law continues this
levy for two years in drastically modi-
fed form.
Although Saturday sessions Of the
Senate usually are thinly attended,
most Senators were In their seats
when the Mississippian started his
address at noon.
Starting in his usual quiet drawl.
Senator Harrison said Mr.. Roosevelt
had been "misinformed" in arguing
that the new flat-rate capital gains
tax did not bear on the big and little
taxpayer in proportion to their ability
to pay.
His voice rising as he progressed the
Mississippian said the Treasury gave
him no sympathetic cooperation
when he sought recently to ease the
tax load on debt murdered corpora
tions.
The speaker attribute dto Herman
Oliphant, Treasury general counsel.
the idea of the original undistributed
profits tax. enacted in 1895. Mr.. Oil
phant sold" the tax principle to the
President. he said.
Regrets Failure to Sign.
Senator Harrison expressed regret
that Mr.. Roosevelt had let the new
tax bill become law without signing it.
Il would have much preferred that
he had said he didn't like those Gun
distributed profits and capital gains'
provisions and vetoed the BILL" the
Senator added Il have no lear oI
what would have happened ii the
American Congress
This statementswas interpreted gen.
erally as a contention that Congress
would have overridden the veto.
Senator Harrison paused frequently
to survey the crowded Senate Cham
Der. Senate attaches and several
members of the House stood against
the walls. The Mississippian fire.
ouently waved a copy of MIR. Roose-
velt's speech.
He stood near Senator Barkley.
Democrat, of Kentucky. who defeat
ed him for the Senate majority lead
ership by one vote last year.
The new tax law, the Mississippi
Democrat declared, should "unfreeze
much of the credit Of this country,
and be most helpful in getting some
new industries started to relieve un-
employment distress"
Loyalty Expressed.
Il am not a member of any group
or body that abandoned American
principles of taxation" Senator Har-
rison said. adding that if the modified
undistributed profits levy doesn't
work. he would favor going back to
the old, time honored principle Of a
fiat tax rate on corporations.
The Senator expressed loyalty to
the administration and said that in
the future he would resolve every
doubt in favor of the administration"
on questions of New Deal legislation.
God knows" he shouted, slapping
the Presidents speech against his
desk, Il have shown my support Of
the President. No Democratic Sena-
tor has faced the breastworks and the
fire of battle more often than in
support of the administration"
AS Senator Harrison concluded, he
mopped his brow with a big white
handkerchief. Senator King, Demo-
crat, of Utah, ranking member Of the
Finance Committee, noiselessly simu-
lated hand clapping.
Prior to Senator Harrison's talk,
Treasury officials disclosed the ad-
ministration would seek general tax
revision at the next session Of Con-
gress.
Bailey Praises Address.
They said an administration bill
probably would include business levies
favored by the President, and that 1t
would be designed also to simplify ex-
isting levies.
Senator Harrison told the Senate
there undoubtedly would be tax bill
at the next session. He said some
nuisance" taxes would be expiring
next year, and added that the modified
undistributed profits levy would be
imperative after January l. 1910.
so we will need new taxes" he
said.
Senator Bailey, Democrat, of North
Carolina praised Harrison's address,
saying it was an liable, timely and
courageous response to the remarks
of the President"
On the other hand, the speech drew
criticism from Senator Harrisons
Mississippi colleague, Senator Bilbo.
my colleague spanked the Presi-
dent, didn't hep" Senator Bilbo re-
marked. well, somebody said, Would
to God that I might be delivered from