Evening star., 1939-05-05
Harrison Warns
Tax Cut Depends
On u. ). Economy
Tells Businessmen to
Create Sentiment
For Retrenchment

of Commerce of the United States,
businessmen from all parts of the
country today carried with them the
warning of Chairman Harrison of
the Senate Finance Committee that
there could be no substantial tax re-
duction until Government expendi-
lures were curbed, and that it was up
to them to create the sentiment for
retrenchment.
Scoring the spending for recovery
theory of the administration, the
Mississippi Senator at the same time
levelled his guns at businessmen in
chambers of commerce throughout
the country, asserting they had
played larger part in forcing con-
gressional expenditures than any
other organization with which he is
familiar.
Declaring they were constantly
seeking projects for their own dis
tricts, he added: .',
"Frankness compels me to admit
that the difficult task of retrench-
ment in Government expenditures
cannot be accomplished without the
active interest, encouragement and
support of the citizens of the coun-
try. II economies are to be employed
by this Governmental expenditures
are to be reduced, it will be because
such sentiment has been created
back home and the demands made
upon Congress for such a policy"
Hope for Revision Voiced.
Senator Harrison said he hoped for
a revision of.corporate taxes at this
session that would encourage
private industry to increase employ
ment, add to the purchasing power
of the people and stabilize the rev.
enues of the Government" He saw
no chance, however, for sweeping
revision of the revenue laws.
The Finance Committee chair
man spoke before notable COM
pany that filled the bathrooms of
the Willard for the dinner conclud-
ing the convention.
Earlier, at the final business
session, the chamber had adopted
resolutions calling for repeal of
the wage-hour law and other
changes in the New Deal program
as an aid to recovery. With the
resolutions out of the way, the
convention adjourned and the
directors met and named to the
presidency w. Gibson Carey, jr.,
youthful head of the Yale
Manufacturing Co., as successor to
George H. Davis, Kansas City grain
operator.
Senator Harrison launched into
the criticism of Government spend
ing at the outset OF his speech,
declaring that "the time is ripe for
tapering off"
THE country must appreciate
that governments, like individuals,
cannot 60 along indefinitely unless
income is sufficient to meet eX-
penditures," he said. Debts and
interest charges never sleep, and
when pay day comes, which it
assuredly will, governments, like
individuals, must pay or seek refuge
in bankrupt courts and experience
an impairment Of credit. With
world conditions unsettled, with
threats and rumors of war being
heard on every hand, we must place
our own house in order and pre-
serve the credit of the United
States"
Prudent Course Advised.
In 1888, the speaker continued,
emergency conditions demanded
large expenditures, but" he added,
'this is 1889. Nineteen billion dol
lars have been appropriated and
spent by the Federal Government
for relief purposes. Why, in the light
of past experience, after six years
of trial and continued application
of the spending theory, should we not
follow prudence and caution and de-
tour from the road we are now trav-
cling and continue our journey for
q while at least over a safer and less
dangerous highway? Certainly, one
should not be accused of violating
the sacrosanct by making such a
suggestion"
Conceding that taxes are at a
peace-time peak, Senator Harrison
emphasized that "our fiscal condi-
ton will not, at this session, permit
any changes that would result in
lowering the total of the Govern
ment's revenues" but he said at the
same time that II do not believe
there will be any new or increased
taxes levied at this session"
He said that Congress undoubted-
1y would agree to freeze" the old
age pension tax as recommended by
the House Ways and Means Commit
tee, and that miscellaneous taxes ex-
plrlng at the end of the year will be
continued. Congressional leaders
are comforting with President Roose-
velt and Secretary of the Treasury
Morgenthau, he continued, and it is
from these talks that the corporate
tax changes are expected to develop
Only about tenth of the 1900
or so members of the chamber who
attended the convention were on
hand as the resolutions were passed
without discussion.
Wage Law Attack a Surprise.
The condemnation of the wage
hour law was surprise, as it had
not figured largely in general ses-
sionS of the gathering. The resolu-
ton termed it "unpredictable" and
said that it should be repealed for
the benefit of employers, employees
and the general public"
Another resolution called for
"structural' changes in the Labor
Relations Act which would give
the employers more power. A year
ago the chamber urged outright
repeal or amendment.
The convention condemned the
Works Progress Administration