The potters herald. [volume] (East Liverpool, Ohio) 1899-1982, 1947-11-13
NAM Finds
(Confinued From Page One)

| (L0nffHHed From rage OHf)
co-ops entirely out of business was
little too much even for Lewis to
swallow.
Echoing Gearhart's fright mt the
way in which the coop movement
is "menacing the American free en-
terprise SYSTEM" other Republicans
demanded additional taxes on con-
sumer co-ops and one COP commit
teeman declaimed for Is minutes
that capitalism is also "jeopardiz-
ed" by the fact that churches and
colleges are operating factories in
direct competition to industry"
The committee, headed by Rep.
Harold Knutson (R., Mimi, whose
"rob-the-poor" tax bill was twice
vetoed by President Truman, lis
tened happily to a parade of Is CO.
op-hating witnesses including the
executive vice-president of the
United States Wholesale Grocers'
Assn, the chairman of the Con-
ference of American Small Business
| Organizations, the manager of the
Natl Small Businessmen's Associa-
tion, and a dozen assorted repre-
sentatives Of the grain and milling,
seed, processing and fertilizer in
dustries.
Only restraining note in the
hearings came from Rep. John d.
Dingell 3D., Mich.) who reminded
Lewis that only half of the nations
10000 co-ops are tax-exempt and
that taxing such things as the
earnings of farm co-ops could open
the door to taxation of insurance
premiums.
Lewis testified that he joined a
farm coop during the war only
because nowhere else could he OBJ
tain feed for his turkeys and chick
ems, although he had even gone
to the middle west to obtain sup
rlles. He said he canvassed whole
salers, retailers and even manufac-
turers and finally was able to OBJ
tain the poultry feed from the
Southern States Cooperative in his
own county. At this point a Re
publican Congressman sympathetic
to Lewis testimony was heard to
whisper, Looks like he's biting the
hand that fed him."
Concentrating his attack on the
fact that the cooperative that ex-
PEELED him ''has not actually dis
tributed the full amount of its
operating profits at the end of the
year." Lewis complained that part
of the co-op's margin above oper-
ating costs was diverted" into re-
serves.
"As this committee well knows"
said Lewis, ''in private enterprise
none of those reserves would be
permissible as income tax deduc-
tions." Summing up his NAM posi-
ton, Lewis declared, at is abun-
dantly clear to me that if the ex-
emptions for farm cooperatives
were removed, and Congress were
to declare that the annual margin
between the costs of operation and
the income of the cooperative is
to be considered profit, in the same
sense that i. is considered profit
in private enterprise, the whole
problem would be solved. The CO.
operative would then be subject to
the same taxes on income that is
sidetracked into these reserves,
that any private corporation would
have to pay on similar income plac-
ed in similar reserves, and all com
petitive tax advantages of the CO.
operative would be eliminated"
Other witnesses made it clear
that the GOP-big business attack
was by no means confined to farm
co-ops. Vice-president Harold o.
Smith, of the U. S. Wholesale Gro
GERS Assn, cried that "the very
existence" of the retail grocery in
dustry is threatened by co-ops. He
was the first witness to make a
point of the union-owned grocery
stores that have cropped up thru
out the nation in recent months.
cooperative grocer stores owned
by city consumers or by labor
union members" said Smith, "are
able to escape tens of thousands
of dollars in taxes that independent
grocers must pay" The oil industry
asked for the taxing of oil and
gasoline co-ops.
Taxation of co-ops is only small
part of Knutson's "rob-the-poor"
program embodied in a plan pre-
pared for the committee by 10
man special tax advisory group
headed by Roswell Magill, New
York attorney. All sections of labor
have condemned the plan which will
give far greater tax relief to high
er bracket incomes and corporations
than to the nations wage earners.