, 19.17. . QONGRESSION-AL R:rJCORD-SENATE. . .. . - . 7545 MoNDAY, - Octobet• 1, 1917. . The Chaplain, Rev. Forrest J. Prettyman, D. D., offered the followir:.g prayer: - , · · Almighty God, we would unite our hearts this day with mil· lions of hearts that have been going out to Thee in earnest prayer. We pray Thee to hear the prayers of Thy people, prayers that have been expressed in burning words before Thee, prayers that listen in the tear-drop, prayers that are voiced - only in the sea of burdened hearts. 0 God, hear the prayers of Thy people. We seek no kingdom but Thine own. We seek to establish no policy but that which Thou dost inspire. We would fill our place among the nations of the earth according to the Divine wm and plan ; and we pray Thee this day to guide us to this end and bless us in our undertaking. For Christ's sake. Amen. The - Journal of the proceedings of Saturday last was read and approved. . MESSAGE ' FROM THE HOUSE. A message from the House of Representatives, by J. C. South, _ its Chief Clerk, announced that the House had passed the bill (S. 2813) to authorize the Gulf Ports Terminal,Railway Co., a corporation under the laws .of the State of Florida, to construct a bndge over and across the headwaters of Mobile Bay and such navigable channels as are between the east side of the bay and Blakely Island, in Baldwin and Mobile Counties, Ala. The message also announced that the House agrees to the report of the committee of conference on the disagreeing votes of the t'-ro Houses on the amendments of the Senate to the · bill (H. R. 3932) to prohibit the manufacture, distribution, storage, use, and posses ion in time of war of explosives, pro- viding regulations the safe manufacture, distribution, stor- age, use, and possessiOn of the same, and for other purposes. The message further announced that t11e House insists upon its amendment to the bill ( S. 2663) granting the consent of Congress to the Wolf Creek Lumber Co. to maintain a bridge already constructed across Tug River, disagreed to by the Sen- agrees to the conference asked for by the Senate on the <lisagreeing votes of the two Houses thereon, and had appointed Mr. An.nrsoN, Mr. SIMS, and Mr. EscH managers at the con- on the part of tl1e House. . 'l'he message also announced that the House agrees to the report of the committee conference on the di agreeing votes of the two Houses on the amendments of the House to the joint resolution (S. J. Res. 78) to suspend, during the present war with Germany, the requirement that not less than $100 worth of labor shall be performed or improvements made on each mining claim during _ each year for all owners who, in lieu of such assessment work. expend the sum of $100 in the raising or manufacturing of products necessary for the maintenance of the Army, Navy, or people of the United States, or shall per- form 25 days of labor in any beneficial occupation, or pay into the Treasury of the United States $100. The furtl1er announced that the House had agreed to the concurrent resolution of the Senate authorizing the Clerk, in the enrollment of the bill (H. R. 3932) to prohibit the manu- facture, distribution, storage, use, and possession in time· of war of explosives, providing regulations for the safe manufac- ture, distribution, storage, use, and possession of the same and for other purposes, to insert after the word " in the first proviso of section 5 of the bill, as agreed to in' con- . ferenee, the words " are not subject to the provisions of this act." .ASSESSMENT WORK ON MINING REPORT. Mr. ASHURST submitted the following report: The committee of conference on the disagreeing votes of the two Houses on the amendments of the House to the joint resolu- tion (S. J. Res. 78) to suspend, during the present war with Ger- many, the requirement that not less than $100 worth of labor be performed or improvements made on each mining claim durmg each year for all owners who, in lieu of such assessment , .• .e.xP,end the of $100 in the raising or manufacturing of products necessary for the maintenance of the Army, Navy ?r United or shall perform 20 days of labor: . any .beneficial occupatiOn, or pay into the Treasury of the United States, $100, liaving met; after 'full and free ·confer- have to recommend and do recommend to their respecth:e . Houses as follows: · · That the 'r:ecede from its to the amend- , 1 ;ment _ of 1, and agree to the same. : · · ·- T_ hat. Set;t , ate f_ rom its .disagreement _ to _ the }Dent of the Hou _e·_ numl;>ered 2, . qn<l agree to :the .snnie ill).- amendiJ?-ent as In lieu .of the matter proposed. by the House msert the following: ·: years 1917 and 1918 : Pr·ovided, every claimant of any such mining claim in order to obtain the benefits of this resolution shall file or cause to be filed in the office where the location, notice, or certificate is recorded on or before December 31, of each of the . years 1917 and 1918, a notice of his desire to hold said mining claim under this resolution: Provided further, That this resolution shall not apply to oil- placer locations or claims." On page 2 of the bill strike out all of lines 19 and 20 and insert: " This resolution shall not be deemed to amend or repeal the public resolution entitled 'Joint resolution to relieve the owners of mining claims who have been mustered into the mili- tary or naval service of the United States as officers or enlisted men from performing assessment work during the term of such servicQ,' approved July 17, 1917"; and the House agree to the same. That the Senate recede from its disagreement to the amend- ment of the House to the title and agree to the same with an amendment as follows: In lieu of the matter proposed by the House insert the following: · resolution to suspend the requirements of annual assessment work on _ mining claims during the years 1917 and 1918." . And the House agree to the same. HENRY F. ASHURST, MILEs PoiNDEXTER, JoHN F. SHAFROTH, Managers on the part of - the Senate. M. D. FOSTER, E'QWABD T. TAYLOR, EDw ABD E. DENISON, Manage-rs on the part of the H01.1se. The VICE PRESIDENT. Is there objection to the considera- tion of the conference report? The Chair hears none. The question is on agreeing to- the conference report. The report was agreed to. PETITIONS AND MEMORIALS. The VICE PRESIDENT presented petitions from the County Council of Defense of Burnett County, Wis. ; from Edward Gillen, of Racine, Wis. ; from L. B. Ring, superintendent of the Wisconsin Bay Welfare Movement, of Milwaukee, Wis:; from B. W. Bradfield, secretary of the Kiwanis Club, of St. Paul Minn.; from Jean Rittanhouse, of San Diego, Cal.; and fron:i W. E. D. Stokes, of New York City, N. Y., relative to lhe public utterances of the Senator from Wisconsin [Mr. LA FoLLETTE] which were referred to the Committee on Privileges and tions. Mr. WADSWORTH. I present four petitions from sundry · organizations in the State of New York relating to· the public :utterances of the Senator from Wisconsin [Mr. LA FoLLETTE]. The VIOE PRESIDENT. The petitions will be referred to the Committee on Privileges and Elections: Mr. SHAFROTH presented a petition of sundry citizens of Colorado, praying for national prohibition, which was ordered to lie on the table. _ BILLS INTRODUCED. Bills were introduced, read the first time, and, . by unanimous consent, the second time, and referred as follows : By :Mr. ROBINSON: A bill ( S. 2937) granting the consent of Congress for the construction of a bridge and approaches thereto across the Arkansas River between the cities of Little Rock and Argenta ; and A bill (S. 2938) to authorize the construction, maintenance and operation of a bridge across Little River, in Poinsett County: Ark., at Ol' near the section line between sectio- ns 35 and 36,. township 11 north, · range 6 east; to the Committee on Com· merce. · · By Mr. KNOX: A bill ( S, 2939) granting an increase of pension to Samuel B. McBride; to the Committee on Pensions. By Mr. SHAFROTH: A bill ( S. 2940) granting an increase of pension to neorge W. Thompson; . · _ · I · A bill (S. 2941) granting an increase of pension · to Phineas L. Packard ; and . · · A bill (S. 2942) granting an increase of pension to Milton N. ; to the Committee on Pensions. · . MANUFACTuRE AND STORAGE OF EXPLOSrlrES. -M:r: WALSH.: -. On . Thu - rsday _ last _ the._Senate adopted the con- votes :.of the two I(ouses upon the bUl (H. !t· :3932.) p_ r_o!tjbjt the · distribution,
MoNDAY,- Octobet• 1, 1917. . The Chaplain, Rev. Forrest J. Prettyman, D. D., offered the followir:.g prayer: - , · ·
Almighty God, we would unite our hearts this day with mil· lions of hearts that have been going out to Thee in earnest prayer. We pray Thee to hear the prayers of Thy people, prayers that have been expressed in burning words before Thee, prayers that listen in the tear-drop, prayers that are voiced
- only in the sea of burdened hearts. 0 God, hear the prayers of Thy people. We seek no kingdom but Thine own. We seek to establish no policy but that which Thou dost inspire. We would fill our place among the nations of the earth according to the Divine wm and plan ; and we pray Thee this day to guide us to this end and bless us in our undertaking. For Christ's sake. Amen.
The -Journal of the proceedings of Saturday last was read and approved. .
MESSAGE 'FROM THE HOUSE.
A message from the House of Representatives, by J. C. South, _its Chief Clerk, announced that the House had passed the bill (S. 2813) to authorize the Gulf Ports Terminal,Railway Co., a corporation e~sting under the laws .of the State of Florida, to construct a bndge over and across the headwaters of Mobile Bay and such navigable channels as are between the east side of the bay and Blakely Island, in Baldwin and Mobile Counties, Ala.
The message also announced that the House agrees to the report of the committee of conference on the disagreeing votes of the t'-ro Houses on the amendments of the Senate to the · bill (H. R. 3932) to prohibit the manufacture, distribution, storage, use, and posses ion in time of war of explosives, providing regulations f~r the safe manufacture, distribution, storage, use, and possessiOn of the same, and for other purposes.
The message further announced that t11e House insists upon its amendment to the bill ( S. 2663) granting the consent of Congress to the Wolf Creek Lumber Co. to maintain a bridge already constructed across Tug River, disagreed to by the Sen~te, agrees to the conference asked for by the Senate on the <lisagreeing votes of the two Houses thereon, and had appointed Mr. An.nrsoN, Mr. SIMS, and Mr. EscH managers at the con-f~rence on the part of tl1e House. .
'l'he message also announced that the House agrees to the report of the committee ~f conference on the di agreeing votes of the two Houses on the amendments of the House to the joint resolution (S. J. Res. 78) to suspend, during the present war with Germany, the requirement that not less than $100 worth of labor shall be performed or improvements made on each mining claim during_ each year for all owners who, in lieu of such assessment work. expend the sum of $100 in the raising or manufacturing of products necessary for the maintenance of the Army, Navy, or people of the United States, or shall perform 25 days of labor in any beneficial occupation, or pay into the Treasury of the United States $100.
The mess~ge furtl1er announced that the House had agreed to the concurrent resolution of the Senate authorizing the Clerk, in the enrollment of the bill (H. R. 3932) to prohibit the manufacture, distribution, storage, use, and possession in time· of war of explosives, providing regulations for the safe manufacture, distribution, storage, use, and possession of the same and for other purposes, to insert after the word " explosive~" in the first proviso of section 5 of the bill, as agreed to in' con-
. ferenee, the words " are not subject to the provisions of this act."
.ASSESSMENT WORK ON MINING C~MS-:-CQNi'ERENCE REPORT.
Mr. ASHURST submitted the following report:
The committee of conference on the disagreeing votes of the two Houses on the amendments of the House to the joint resolution (S. J. Res. 78) to suspend, during the present war with Germany, the requirement that not less than $100 worth of labor sha~l be performed or improvements made on each mining claim durmg each year for all owners who, in lieu of such assessment
, .• '\YOf~, .e.xP,end the S~IIl of $100 in the raising or manufacturing of products necessary for the maintenance of the Army, Navy ?r p~ople o~ th~ United St~tes, or shall perform 20 days of labor:
. ~n any .beneficial occupatiOn, or pay into the Treasury of the United States, $100, liaving met; after 'full and free ·confer~nce have agr~d to recommend and do recommend to their respecth:e . Houses as follows: · · That the Se~ate ' r:ecede from its disagt:eeme~t to the amend-
, 1
;ment _of tl~e .H~:rt~Re, Ii.':liD~red 1, and agree to the same. : · · ·- T_hat. th~ Set;t,ate . r~et"le f_rom its .disagreement_ to_ the at:nend~ }Dent of the Hou _e·_ numl;>ered 2, . qn<l agree to :the .snnie ~ith ill). -
amendiJ?-ent as ~Q~ows: In lieu .of the matter proposed . by the House msert the following: ·: years 1917 and 1918 : Pr·ovided, Th~t every claimant of any such mining claim in order to obtain the benefits of this resolution shall file or cause to be filed in the office where the location, notice, or certificate is recorded on or before December 31, of each of the .years 1917 and 1918, a notice of his desire to hold said mining claim under this resolution: Provided further, That this resolution shall not apply to oilplacer locations or claims."
On page 2 of the bill strike out all of lines 19 and 20 and insert: " This resolution shall not be deemed to amend or repeal the public resolution entitled 'Joint resolution to relieve the owners of mining claims who have been mustered into the military or naval service of the United States as officers or enlisted men from performing assessment work during the term of such servicQ,' approved July 17, 1917"; and the House agree to the same.
That the Senate recede from its disagreement to the amendment of the House to the title and agree to the same with an amendment as follows: In lieu of the matter proposed by the House insert the following: ·
"Jo~nt resolution to suspend the requirements of annual assessment work on _mining claims during the years 1917 and 1918." .
And the House agree to the same. HENRY F. ASHURST, MILEs PoiNDEXTER, JoHN F. SHAFROTH,
Managers on the part of -the Senate. M. D. FOSTER, E'QWABD T. TAYLOR, EDw ABD E. DENISON,
Manage-rs on the part of the H01.1se.
The VICE PRESIDENT. Is there objection to the consideration of the conference report? The Chair hears none. The question is on agreeing to- the conference report.
The report was agreed to. PETITIONS AND MEMORIALS.
The VICE PRESIDENT presented petitions from the County Council of Defense of Burnett County, Wis. ; from Edward Gillen, of Racine, Wis. ; from L. B. Ring, superintendent of the Wisconsin Bay Welfare Movement, of Milwaukee, Wis:; from B. W. Bradfield, secretary of the Kiwanis Club, of St. Paul Minn.; from Jean Rittanhouse, of San Diego, Cal.; and fron:i W. E. D. Stokes, of New York City, N. Y., relative to lhe public utterances of the Senator from Wisconsin [Mr. LA FoLLETTE] which were referred to the Committee on Privileges and Elec~ tions.
Mr. WADSWORTH. I present four petitions from sundry · organizations in the State of New York relating to· the public :utterances of the Senator from Wisconsin [Mr. LA FoLLETTE].
The VIOE PRESIDENT. The petitions will be referred to the Committee on Privileges and Elections:
Mr. SHAFROTH presented a petition of sundry citizens of Colorado, praying for national prohibition, which was ordered to lie on the table.
_ BILLS INTRODUCED.
Bills were introduced, read the first time, and,. by unanimous consent, the second time, and referred as follows :
By :Mr. ROBINSON: A bill ( S. 2937) granting the consent of Congress for the
construction of a bridge and approaches thereto across the Arkansas River between the cities of Little Rock and Argenta ; and
A bill (S. 2938) to authorize the construction, maintenance and operation of a bridge across Little River, in Poinsett County: Ark., at Ol' near the section line between sectio-ns 35 and 36,. township 11 north, · range 6 east; to the Committee on Com· merce. · ·
By Mr. KNOX: A bill ( S, 2939) granting an increase of pension to Samuel
B. McBride; to the Committee on Pensions. By Mr. SHAFROTH: A bill ( S. 2940) granting an increase of pension to neorge
W. Thompson; . · _ · I · A bill (S. 2941) granting an increase of pension ·to Phineas L. Packard ; and . · ·
A bill (S. 2942) granting an increase of pension to Milton N. Campb~ll ; to the Committee on Pensions. ·
. MANUFACTuRE AND STORAGE OF EXPLOSrlrES.
-M:r: WALSH.: -.On .Thu-rsday_last _the._Senate adopted the con--ter~Jl-~e . ~ePQ~t _op _tJ:u~ : dis~gre~ing votes:.of the two I(ouses upon the bUl (H. !t· :3932.) _t~ p_r_o!tjbjt the · ~R;Il.ufact_ure, distribution,
:7546- DONGRESSIO~AL ltECOR.D~SENATE~-·
storage; 11se, nnd Fossessl-on in flme of -war ttf explosive-s, ]ll"o- Last December there was n !law -pnsse<l providing for a 640-acre ~ 'Vl<ling regulations for the ·safe .manufacture, aistribntion, ··stor- homestead for grazing pur:PGses. When hat ,lJill was before the age, .use, .IDld ]J<Jssession uf 'the .same, .and ·for other 'Jlii.rpOSes. committee, and later on before the .:Senate, -the argument then 1 desire ·to mo-ve io -xeconSil1er "the vote and action .of 'the 'Senate · was mada.that ce:r:tmn lands in 'the West were . dt · .fit fo1· :::ln""l'i· by which 'the :e·orrf.erence :r~ort was adopted. [ ask -:that the culture; were-not susceptible of u· ·igation, and ·-t was .not to motion ~be entel'ed ~d 'thfft for -:the :present tt be 'allowed to lie apply to timber claims. .It . as U'rged -that ·a 1man ou1d not ·xm e ou the 'table. 'The bill havlng'treen xeturned :to the other House, Jmy onsider.able number .uf cattle on·iliis homesterrd, 1lll.d·there"-1-move that it 'be recalled. · , .tore 1t wns llrg\led that as to eer.ta.inlands the homestead shoUld
The VJCE PRESIDEN-T. The .question is on ihe .motion of include •646 .nares instead ·af S20 .acres. t'he Senator ~om 1\!on'tana fhat the 'House :be requested to re- 'Later in the session nn attempt mrs made to wlpe out :the turn tb~ bill to the Senate. . :provisions -of 'the 11ct of D.eeember rwliiuh " lliegu:arded Jlands that ,
The motion was .agr•eea to. ' wePe usceptib1e of iiT-igartion '1IDd , erre fit :fior agricUlture a:nd Tlle VICE PRESIDENT. The motion ·to reconsider will 'be .contained timber. That ~nposed 'lrov 'Jll'OVided :that lt ·should
enteroo. be the duty ·of the -secretary nf ·~ ilnterlor to cm1se surveys to 'PRESIDENTIAL :A.PI>llO\A.L. be :made <Jf "these lands in :the W.est rand .tO ·select iJ:ots df ()4()
A message from the Presiaerit of the United States, 'by ·lli. :ll.Clles :-ana anake .a certification ,of the smne o thnt lands sllSShark.ey, c()ne of .his ecreta.ries, announced that .the President ceptible of agriculture and of irrigation and which contained had, -on ·octobel' a, ~91Z, .approveii and :signed the fRet (S. 270.5) timber .could not •be entered npon. Thn:t was -pa ed .here, 'but to create the ..Aircraft .:Boa_.ra .and ;provlde -for its maintenance. the House refused to pass it, and that effort was futile.
STOCK-GRAZING H<JJ.EESTEADS.
'The 'V1CE PRESIDENT. The lllOl'Ding business iB closed 11nd tbe -calenda:r under· Rule lVIII is in ~rller.
1\lr. JONES of New Mexico. "M,r. President, I desire to call attention again to . the bill 1( S. 2776) :provid'ing 'for the classification of lnnds lillder tbe stock-grazing homestead act in certain States, .and fer other _;purposes. It is very important that that bill should be passed, -and I understand there is probably only one Senator -who ·wfil -want :to ·speak against it. I therefore ask unanimOlls consent that we m~y proceed to the further consideration of :the ;bill.
Now comes this .bill that l)ra.utically wipes out all the sateguard's, 'and as- I .read it .and ·understand :it ·that ·practically opens up all tbe lands in . he States ·enumerated .herein .to ;public rentry whether ~they cc;mtain timber ·or 'Wbe.ther ·they are susceptible :<If ir.cigation nr -of a~cnltm!e. lt is true ,that ther.e ;are provisions in :the 'bill :which :plll"pnrt io ~empt those, but tbe !l)ra.ctical e:ffeet of :the provisions owbicn ·purport to exempt these lands amounts · to lllothing ·in -~y :i}udgment. [t •simply J.ays open to 'entry a .64.0-acre .homestead. The lands in .the States tbat -a:re included in the J>ill-New Mexico, Arizona, Colorado, Wyoming, · Nevada, North Dakota, South Dakota, and I believe Washington has been addea.---;take in a !gl'eat .many, Jif nut ll, the Western States.
The ViiOE .PRESI[).ENT. Is there objection 2 Mr. RUSTING. 1I ·Object. Mr. JONES of New Mexico. Then .I mov.e that the
proeeed to the consideration .of 'the bill.
Mr. SRAFRO'lJH. Mr. President, ·does the Senator Tecognize that the 'bill ·sateguards .both the ])roposition of timber and the
Senate t susctWtihility ·of "'the Jan:ds for irrigation? Does not the :senator reeqgnize .tbat this 1angunge is ·used ·in the <bill :
'The motion was agreed to; and the 'Senate, a-s in 'Comm1ftee of the Whole, resumed the consideration of i:he bill. whiCh contain ·tn sub tance a 'Verified .:sta'tement Jby the a-pp1icant, enrw
roborated by the •affidavits of two dlsinte?ested :Parties, that the lana 1\Ir. JONES of Washington. I have not a copy of the oill be- within . the origtnaltlllng .or entry 1does:not contain merchantable timb.er
fore me, but at the proper rplace i wiSh to insert the word suitable for lumber ·purposes:; is not -sus:ceptible o'! 'irrigation from :ro~:y ~ • asbingtoo." I think it is :in the .first s.ection ··of the b111. lrn<JWU £onrce -of -water supply, and ·t'hn:t -the ·land is chiefty -valuable -tor
'l'he VICE PRESIDENT. .There are -.certain ·C.ommittee grazing or raising 'forage .cro_ps, are ·hereby ·directed to be recei:vl!o-·"-;~"- ha b ~,,,.,....~"' T:l"" fir d And so forth.
~~~~~f: ;=ttee'"'~~tbe~:atC:a~u. ne &t amen • Mr. BUSTING. I know that is -what the bill purports to ~ao, :The .SECRETAllY. I !rhe Copnnittee -on Public Lands report, on but I look upon lt as camouflage .; it sgys ·somet:hlng, but it ·does
page 1, lln.e ·6, niter the word " W:yo11l.Ing,-.' to insert " Nevada, not ·mean anything in l)raetical e1rect. NOT.th iDak,a.ta," so :as to read: '1\lr. SHA..FROTH; ·noes ·not tbe ··senator recognize ·in the .first
u:hat :the SecJ:eta.ry of the Interior J.s hereby authomed and ·directed ·, instance that 'the ·Secretal~ -df the Interior 'has six months ·;in to cmnplete the clasSification or .designation ot lnnds 'Within :the .States WhlCb to make 'i:he "Survey and to oetermine ·as to Whether :the of New 'Mexico, Arizona, Colorado, Wyoming, Nevada, North Dakota, lands are to ·come 'Within the proviSions ((Jf :the .act, and ·1fhen ;f'f and South Dakota, ·as provided in the stock-grazing homestead act lfn he ·does mot do that the man who ts .upon :fhe 'land -or ho •files cases :in -wlllch application ·has heretofore been .made :to enter land ;under said act, wlfhin m ·months ,of the enactment of this .act; and upon the land has gut to file his affidavit, ·and then 'for .one year that the Beoretary o.f the Interior 1s hereby authorized ana directed thereafter t.be 'Government lJias a Tight to ·dispute ihat .and saY, to complete The classificatinn or deoigna"tlon ·of 'lands within the afore-- · it is not "S01 said 'States .as provided :In the ·stock~-grazmg 'homestead act in cases in which application may hereafter be !Dlade ·to enter land under Hald .act, Mr. RUST-ING. 'I wm say to the .Senator, in answer, ·that th1s within six months from date -of the filing of a..pplication therefor. _provision of one year is a statute of llmtta'tion. =It Tnns and
.Mr . . JONES ·Of W.ashington. l move ·to amend tbe amendment only ·runs for -one .:year, and at 'the ·.end -o'f ·one ·year ·they are of the committee by inserting "Washington." confirmed in 'the ·tffie. That looks ·a lffttle me a 'joker :in the
Mr. JONES of New Mexico. On .behalf of the Committee on bill. Public Lands l will state that I :have no objection to that amend· :Mr. SHAFRO'TH. I will state to the -senator :that under the ment. . · : S20~acre :homestead act nearly _an, ·the semiarid 'lands ··hu ve been
The amendment to the a1nendmen t -was :agreed to. : subject 'to entry, -and ':those iiha:t ha:ve not rtr.een ·entered nre :really The amendment as amended was a~eed to. _ ; the p.o.areSt nf ·the Ianas. :i llav.e not -an.y :dnubt t:b.at ninety~nine .The next amendment of 'the connnittee as, on 'page .2, line ; on~nnndredths uf all the land that is now open 'to entry in the
13, after the ·word "lV_yomlllg,n to insert .,, Nevada, ·orth 'Da- · States named wnuld ·properly ·com:e -witbin 'tlle designation 1: kota." , · 1 lands for grazing _purposes or for the .raising of forage crops.
Mr . .JONES . .of. Washington. I move the same .amendment to 1 Mr. HUST.ING. 'Then 'I 'Wlll -ll.Sk :the 'Senatnr wey ,nn -:this the nmenihnent at that J>Oint. . . ' attempt to m:a1Ie :tt 1qJpeRr that :these Jand:s .n:re going to e
The amendment to fhe amendment -was a:greea :to. settled? Why the declru.-atlve features of tbe bill'? ' 'Ilbe runenament as 1llllended was ·agreed to. Mr. SHAFROjJH. !rhe·-.dbject ds to sn:tisfy Senlltors just llike The -viCE PRESIDENT. The bfil 'is before tlre 'Semite :s:s in the .Senator 'from Wisconsin wlw 'ltlli:rik thel'e may 'be :Sometbing
Committee of the Whole and open to further amendment. :If '\ttong _and ;not ·correct. We 'Wllnt m m.fegu:.ntd i:lurt so .tha't there be no further .amendments, the bill will be :reported 'ta the it · eems ·to me itlle Senutor :fr:om ·w.isnons.i:n 'IWDUlll ha'Ve ·no :Obje~
ena t-e. ttnn :to the fpassage of the rbil1. • . · The bill was reporteu to the Senate as 1\DleD.oec'I. .Mr. BDS'IITNG. ·r WllJ. tSta.te to the :Smmtor that iif !he eelal !b) 1\fr. .HU.STING. .M.'r. President, a bill similar to ':thi.s -w.as ;be~ :s-atisfy ;Serurtm-s :31ke 11nyself .1m -mils -very ~gn.o:t:nlnio.usly~ .IDhs.
fore the Senate at the last sesslon. I oppo e<l It· at ihat ..time, : ·bill :uoes rnot ·sa.tisfy :me at -rui. · - · .and stated my reasons f01· o_pposing it I wish io .:reiterate ·s-ome : lli. ~ROTH. It 'seems to me 'ihnt ·the cSenntor ,on_ghl: to' of the objectlons that I nave 'to the 'bill. t be rsatisfied.
The -bill, in ..my judgment, reve1·ses .the policy nf "the 'Govern- j :Mr. RUSTING. 11 .do not thi.nlr .any"bod:y ·:e1.se "Wl."'l 1~e :sat~sfre(l ment 'in regard to llomestead entrieE!, ·und Nirtna11y iru!reases .the
1 :with this tpr.ovision who is •eally :nga:tnst .a ·.1)40-run~e · homestead..
number of .acres in a homestead from the present number 'to '-640 Thls bill, and this particular feat.u11e ·of 'it, 1s :not 1going :to "be acres. The· ·homestead 'law.s -of 'this -country ure IIaws of long -e.f!ectllte. -!It :has !been ::nr.-gned :tha-t :.the 'law 6f ~mb.et:, .19-16, -standing, :nnd .if we .axe -;golrig o B.'ellel'se ·.Ourselves .oi- ·illCllease should be rmnenim€1 bac'anse 'tlle .lnt rio:r De1Jar.h1lent bas 'lOO.t tbe ·.acreageto · tbe~:x:l:Emt :tbEfbiU !proposes·to 'increase it, it "'Seems . :time 1to in..vestigate !the .Character tdf the Ja."fld , oo· thM:, ,conseto ·me !We ;o:.ugbt :t.o ·€'Jo it 1\Vitlh ;eur yes ..-open. · ~. -tbe :law · im!ffectiT"e, .been u-se -- tel pm~ment -.can at
l917. CONG·R.ESSIO:N \L .RECORD-SENi\..TE; .·~ 7547-go and··.·examine .into. the character of these larrds. - If it is the fact, nml no doubt·it is the fact, that they can not make a survey of all these lands within a year or within · a year and a half, o1· possibly "\\ithin two years, then what good- is it going to do to say that they could come in within a year and contest the character of the land that it is claimed is not susceptible of irrigation and of agriculture ami contains no timber? What good will it do to. say that unless within a year contest is made again. t .the homestead claims when you know and argue that the nry reason you want the law amended is because the Interior Department can not make a surYE:Y of the lands?
Mr. SHAFROTH. Mr. Pr~sident, I will answer the Senator's question. The situation with respect to these lands is that we out 'Vest think that the semiarid lands are practically good for nothing except for grazing purposes or the raising· of· forage crop . The Secretary of the Interior was authorized by Congress nearly a year ago to proceed to permit these lands to be entered. · He has not made the classification, because be said there was no appropriation a\ailable for that purpo ·e. Since that time the Congress of the United States. has appropriated $150.000 for the purpose. Inasmuch as the lands have not been clas ·ified, if any man goes upon them and makes entry, in the ab ence of this propo ed statute, not only the Government can contest but any individual who feels that he ougi.1t to have the right to locate a 160 or 320 acre . homestead can contest the entry. Such entry is likely to be contested if it is on a Yery valuable piece of land. W~th the incentive upon the part of u per. ·on who desire to enter the land to see that no fraud is committed, and also the watchfulness of the Government in examining iLto the matter and trying to detect where anyone has committed a fraud against the Go\ernment, betwe~n the two, within the period of a year or a year and a half afforded by the bill--because a person fir t has 6 months and then a year thereafter, making 18 months-it seem· to me we ought to be able to detect any instance where a filing has been improperly made.
-1\Ir. HUSTING. l\Ir. President, it merely comes clown to this, that the law of December, 1916, ought to be amended, according to the Senator from Colorado, for the reason that the Interior Department has not time to survey and certify these lands. Therefore it is provided that men may go and enter the lands without such certification, and then, unless the department or an individual comes before the Land Office and contests the entry within a year, the title to the homestead is confirmed. That simply means that the department can not investigate the mat- · ter '"'ithin a year, and so, con equently, every entr.r which is made will be confirmed, because there will not be anybody there to contest it, w.hich means that almost every entry umler this proposed act will be in effect a homestead tmtry that will never be contested. That bears out exactly what I previously said, that this virtually means that homesteads with 640 acres will be allowed, instead of a smaller area.
There is not any use discussing that; we might as well face it If that is what the Senate wants, if that is what Congress wants, that is enough; but let us not deceive ourselves into believing that the department or any individual is going to have any opportunity to que tion a home tead entry. It means that lands, whether tlley are susceptible to agriculture or to irrigation, or whether or not they contain timber, are open to homestead entry. Anyone who want_s a 6-lO-acre homestead can go and get it.
The Senator says there are not any such lands left; then why indulge in . this kind of verbiage here? Why have it appear that agricultural land and land susceptible of irrigation are goin..,. .to be re erved, when you know t11at such Janus can not be rc. erved _under this bill?
I do not know that there is anything furtbet· I can add to these remarks, except to say that I do not believe it ciS for the best interests of the counh·y, I do not believe it is for the best interests of any State, to parcel out land in chunks· of 640 acres for homesteads . . That is not a homestead an<l never can be a homestead in the proper ense of the word; it is an estate; it is a . whole section of land. Instead of encouraging settlers to come in there, instcatl of encouraging the settling up of the States, it will niean that these great areas of land are going to pass into the Jumds of a few indhiduals. ,, Under the old system of. a limited numbe1· of acres of homestead, lands are far too fre- . quently getting into the hands of large lan<led proprietors, and the country is fast becoming a country of In.ndlords and tenants, and not uf Jandowners. Only. the other day I saw 3. discussion in t!1c newspnper.· 3.bout that matter by a Yery eminent citizen. of the United State, pointing out the danget· of this country •. be-, coming a coun.tl'y of landloru and tenants. The .. very .thing that we have . combated aud opposed for . all these years, the. policy of the Government. trying to keep the lands in the hands
of individuals, a.nd not in the hailds of large landed proprietors, -is going·to- be overturned. 'Ve are going to turn over the West to those who have some reason why they want to get a section of land instead of a half section or a quarter section. Of course, they want to get it; of course, there is a demand there .for it; but you will never get a State settled up by having one family only on every section of land in the State. · If that is going to be the policy of the Government, if Congress is going to turn about face and overturn the traditions of a half century, that is all very good and right, if Congress says so. However, I do not want it to be done without a protest on my part. I have opposed even the consideration of this bill, because I know it is· difficult to interest Congress at this late day in the session, when it is engaged in Yast war problems, in a dome tic matter of this kind, important though it may be. I do not think it ought to be entertained at this time. It is not a war measure; it is not a matter for which this Congr·ess 'vas called in· special session, and ·yet here, at this late day, without debate-for, I presume, I am the only one who is going to take the opportunity to protest against the passage of this bill-we are going to do the e things.
I protest against it. I think it is a bad policy ; I think it is establishing a precedent that is going to come back to vex
. this country in the future. I do not think we are acting as thetrustees of a great trust ought to act in this matter. - I understand that Senators here from the West are unani
mously in favor of this mea ·ure, but tltis is a matter in which not they alone are interested. The country, as a whole, is interested in the disposition of these vast domains; and too much carelessne has resulte<l in a great deal of ·injury to the country as it is. · We permitted the public domain to pass into the hands of pri
vate owners, and in many instances into the bands of vast landed · proprietors, and if we do not Jook out we will have to face a landlord and tenant proposition in the near future. I do not know how we shaH be able to deal with it then if we now allow the title to get out of our llands. " For that reason I am doing all I can to oppose and protest
against this backward step, one which, in my humble opinion, is fraught with disastrous consequences. 1\fr:h.~NDRICK. 1\Ir. President, I wisl~ to detain the Senate
ju, t for .a moment to say that I do not belie\e the Senator from Wiscon in understands the situation that prevails in the \Vest or he would not oppose this piece of. legislation. I think it is impossible for a man even to glimpse conditions that prevail in that arid section without having some intimate knowledge of the country.
The land made available for entry under the 640-acre homestead law is not tenitory that has been withheld from settlement; it is a section that has been ridden over by men for from · 40 to 50 years and has not been settled only because its generally rugged surface and arid character were such that every man who knew anything about western conditions understood' that it could not be profitably developed in the comparatively small allotments permitted under the homestead laws of the past. There are thousands of men living in the towns of my State at this time, and of all other States to which the law ap-_ plies, who are not even availing themselves of this opportunity to take land , becau e they are unwilling to undergo the hardships that every homesteader must endure who undertakes to build a home upon the arid land now remaining of the public domain. They do not care to make the necessary sacrifice for the small benefit to be gained. ,
The difficuJty ·of the situation now confronting us is found in the delay in designating the lands subject to entry under the stock-raising law. There haYe been some 60,000 filings m de upon the GoYernment domain under this law. The people have in many cases forsaken their former homes, have gone to this arid country and filed upon the land, and yet they are denied the right to go upon the land to begin impro\ements and to inaugumte the proce ses of production. . It i claimed by the Senator from 'Vi cousin that we :H'e
rushing into a condition of landlordism. If he understood the sihwtion there as well as do those of us who live in that section of the country, he would realize that a s~tion of this arid land is not equivalent to 40 acres of land in the State of Wis~ consin. · .
As I have already said, thousands of people have ,made filings . nncler this law, but, after having abandoned their old homes, they ate not allowed to occupy the new homes whi~b they se_ek. Hundreds and thou a:Qds of settlers,_ learning that the 640-acre law had been passed, antl not realiz.ing that the land subject to its operation had to be designated by experts of_ the Geo~ _ logical Survey, left thei..L~ old communities, sold o_ut what they owned, cut all the·r old tie , and emigrated into the States
7548 CONGRESS! ON .AL RECORD-SEN ATE: 'OCTOBER 1~.
where this dry land was. still to be had. Then~ after arriving The VICE PRESIDENT~ Without objection, the amendment in the sections where they had. imagined they were going to is agreed to.
· build their new homes, they learned that under the law it was Mr. RUSTING. Mr. President, I desire to say that I do not impossible for them to go upon the land, and have been forced want to go on reco1:d as agreeing to the amendments which to talm advantage of any expedient that offered itself in order have ju t been adopted. to make a living while waiting for the Government to act upon . The VICE. PRESIDENT. Then, the Chair will put the ques· the designation of the lands they sought. I am sure that if the tion. The question is on agreeing to the amendment offered Senator from Wisconsin unde1·stood the situation as it really by the Senator from California [Mr. PHELAN}. exists and if he could glimpse the inconvenience and hardships The amendment was agreed to. that have been visited upon these people by this delay, he would The VICE PRESIDENT. The question now is on agreeing realize that this proposed law is a real necessity- and ought to to the amendment offered by the Senator from Oregon [Mr. Me· . be passed at this time. NARY].
I am confident that the_ Senator is as honest in his opposition The amendment was agreed to. to the measure as· others of us are in our support of it, but the Mr. SHAFROTH. Mr. President, I want to say a few words Senator hardly seems to l'ealize the situation confronting the in. relation to. the bill, since the Senator from Wisconsin is settlers who are endeavoring to develop the arid portions of the objecting to its- pas age. West. · This is not a bill that establishes any right. When the 640,..
In addition to this situatio~ there is anothe1: feature that I acre homestead act was pa sed, then t)le right .of settlers to enter am reminded to speak of, and that is that the law unfortunately- npou the public domain for tbe·purpose of filing and entering a did not provide against filing until the classification of the land homestead existed. This is simply a proposed i·emedia1 statute. was made. Consequently the rush to the land offices to secure The Secretary of the Interier has· not been able to classify the· homesteads was so great that the limited force in the offices , lands. The 640-a-cre homestead act provides that all lands good was unable even to record on th-e maps the filings as they were . for raising forage crops or for grazing should be open to :entry. · made. As a result, in many cases duplication after duplication That law is on the statute books and has existed for 9 or 10' of filings was made. That means contention and strife, and all months. The Secretary of the Interior, however, bas been unSenators know that no such bitterness grows: out of anything in able to get the surveys made designating what lands are fit only neighborhoods as. that which grows out of contention over land for grazing purposes or the raising of forage crops, and conse· ownership. ~ quently it is necessary to have some way of determining it other
Another thing in connection with this matter, 1\fr. President, than through ills office, unless he does it within . the next six: is the fact that this is not, as the Senator from Wisconsin be. months. lieves, a big man's proposition ; it is essentially for the benefit This bill simply provides that he shall use the money which of the small man. For years and years this territory has been he has for six months in classifying the land. If be bas not occupied and u ed solely and entirely by large sheep ·and cattle' classified it at the- end of that time, then a man has a right to companies, and it was not possible, under pre-vailing conditions go on the public domain and Iocate 640 acres of- that kind of for a small owner to gain a footing. It was my privilege to be land, and; if afterwards it is discovered that it is land suitable the first marr in my State to advocate the enlarged homestead act. . for irrigation, or if it is discovered that it is suitable for any I based my advocacy of such a measure upon a lifetime of ob er- II other purpose than that which is specified in the bill, then the vatfon of the operation of the homestead laws as they stood. It department has a right to- ·object to it or an individual <'On· was my conviction that one of the things most need~ was an testant has a right to object to it and cfaim tbe land for other
. increase of population-that is to say, that it was to the interest purposes: That being the case, it seems- to me he oug1it to take. of the Commonwealth to have many owners with small herds the man's affidavit. verified' by the affidavits of two disinterested and flocks instead of a few owners with large herds and fiocksr parties, that it is land fit only for grazing or for forage crops. Such an increase could not be· secured, I felt certain,. under the The immediate emergency of tills matter arises from the fact laws as they then existed, because most of the land which was that there are 60 000 men now on the plains out West and in the left was not sufficien~ly productive for a man to maintain a home mountains ready' to file, and the land offices will not receive the on a small area of rt. · filings because the land has not been designated as forage-raising
I need only point out to you that after 40 years of settlement land or grazing. land only. l\1en can not develop a country unuer under all of the homestead acts only about one-fifth of the lands any such conditions. A man's patience will be worn out ; he of my State have up to this time passed to title, and there are will not stay there a year and wait for the Interior Department thirty or forty million acres of land still unoccupied. What the to survey the land and to indicate that it is good for these puraverage person, not familiar with conditions in the ·west, fails poses only. It is said-tllat 60,000 people are out on lands in the to understand is that these thirty or forty million acres do not · \Vest waiting for the hour to come when they can file their represent valuable agricultural territory. The land, on the other homestead entries in the various land offices. Now, it seem-.:; to han~ is adaptable almost entirely to purposes of grazing or me that it is an outrage to let those people stay there, without stock-growing alone. In order that a man may be able to estab· any aid whatever upon the part of the Gover_nment, when they lish himself on such land, he must ·have sufficient acreage to care are trying to comply with a law that has been passed by this for a large enough band of stock to support his family. It was body and by the_ House of Representatives by almost a unanithe final recognition of this fact that brought about the adoption rnous vote. of the 640-acre law. It is now obviously the duty of Congress, :Mr. RUSTL'l'G. Mr. President--having enacted the 640-acre law, to provide for its operation Mr. SHAFROTH. I yield to tlie Senator from Wisconsin. with the least possible delay. 1\Ir. BUSTING. Where are these 60,000 men located? Are
I am constrained to hope that the Senate will act favorably they on the lands that they want to file on? upon this measure, because under no circumstances can it bring :a1r. SHAFROTH. Of course some of them are on the lands. any disastrous consequences; it can give no man any benefit to Mr~ KENDRICK. Mr. President--which he is not entitled; and it will render a benefit, an? _an Mr. SHAFROTH. I yield to the Senator from Wyoming. important one, to the thousands of people who are now wmtmg Mr. KENDRICK. In the majority of cases these settlers have around in little towns and villages to go on these lands upon gathered around little towns waiting for the opportunity to which they have made their filings. It is for these people that I go upon the land. They are staying anywhere they can. bespeak your consideration. . Many of them with their families are living in tent ; an~ as
l\fr. PHELAN and 1\-Ir. BRADY addressed the C~ru.r. . the Senator has said, they m·e not allowed to go upon these The VICE PRESIDENT. The Senator from Callforma. lands and in many ca es more than one filing has been made 1\Ir. PHEL..lli. I desire to submit an amendment to the bill. upon' the same tract. Now, the quiCker that confusion is cor-
After the word "Washington," I move to insert the word "Cali· rected and we establish a condition of orde1: there the better fornia.'' it will be -for all concerned.
The VICE PRSIDENT. The amendment offered by the Sen· Mr. RUSTING. I under tood the Senator from Colorado to ator from California will be stated. say that these 60,000 men, or a great many of them, are on this
The SECRETARY. After the word "Washington," in the list land already. of State , it is pr:oposed to insert "California." Mr. SHAFR~TH. Some of tJ;e.m ~d go on t?e land and
:Mr. JONES of New Mexico. Mr. Pre ident, on be-half of the some of them did stay there, anticipating and hopmg to secure Committee on Public Lands, I can state that there is no ob- patents to them, and there may be some there yet. I. clo· not jection to the adoption of the amendment. know about thaL I do know, however, that the Intenor De.
The VICE PRESIDENT. Without objection, the amendment partment has reported that between 50,0<?0 and 6~,00~ app~ica· is acrreed to. tions have been sought to be filed. That 1s what 1S stated ~n a
M~·. McNARY. I move to amend section 1 by including the communication that was sent by the depru.·tment on that subJect. name "Oregon," after the name u Californja," just submitted Mr. BRADY. Mr. President, owin_g, to the fact that we ~re by the senior Senator from that State8 not asking to have Idaho included · lll the States that recerve
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•
1917. CONGRESSIONAL RECORD-SEN ATE. 7549 the benefits of this bill, I feel that I should say a few words 'Mr. BRADY. I do. relative to my position in the matter. · :Mr. RUSTING. Does the Senator from New MexiCO' b{)ld Som~ time ago Congress passed a law authorizing the hom~ that opinion?
steads named in this bill and authorizing the Secretary of the 1\fr. JONES of New Mexico rose. Interior to make the classification. H~ has not been able to do Mr. BRADY. I mean to say that when the man makes his so up to this time. Owing to the fact that I am exceedingly entry it is to be used as prima facie evidence only. I have no anxious that no land should be included or attempted to be in· objection to any man taking a 640-aere homestead; and my eluded in any of these entries where the land .could be. used for understanding of the real objection of the Senator from Wismore beneficial purposes, I have refrained from asking to have consln--and I think it is the understanding of the other mem· Idaho named in the bill. I feel quite confident that at a later , bers of the committee-is that it is n{)t so much to this plan day, if it is found that the Secretary of the Interior can not as it is that the Senator is opposed to 640--a.cre homesteads. Is properly classify our land, we will have no trouble in having that correct? Congress give us relief. Mr. RUSTING. The Senator is not quite correct-not com-
On the other hand, this is a bill that means much to the peo- pletely correct. ple of the West; and in the States ot New Mexico and Arizona Mr. BRADY. What is the position of the Senator, then, rela-and the other States that have been named in the bill there is tive to this bJU? very little, if any, land left at this time that will be useful for Mr. RUSTING. When the Senator has finished I wiD state other purposes than the purposes named in this bill. For that my _position again; but I wish to say at this time that I believe · reason I am in favor of the passage of the bilL I believe that it is the intent and meaning of this bill that after a year shall the Senators from the States named know what their citizens have run no contest on any ground shall be instituted; and if I desire and what they should have, and r do not believe they am incorrect in that respect I should like to have the Senator woUld ask the Government to do anything that it shoold not do. from New Mexteo correct me. This simply enables them to go on and make the entries With- Mr. BRADY. After what length of time--one year~ out the necessity of waiting for years and years to have this Mr. RUSTING. One year. classification made. If there is any question on the part of the- Mr. BRADY. That is correct, according to my understanding Government that this should be done before tb~ bill goes into of the bilL effect, it has six months in which to make the- classification, Mr. JONES of New Mexico. Mr. President, I am not willing and it can be done in that time .if necessary. that the Senator from Wisconsin shall be misled as to the pro-
While I do not ask to have my State included, I am heartily visions of this bill. During the first six months after- the pas- . in favor of letting those States that really want and need the sage of the blll the Government has the right to examine these benefit of this bill have the privilege of having this land en- lands and classify them. It has the same. right Within six tered without classification. For that reason I shall support months after the filing of any new application. · At the end of _ the bill. . the six months the applicant for the land may file an affidavit
Mr. KENDRICK. Mr. President, before ffie Senator takes stating the facts required by this bill, corroborated by the amhis seat I should like to say that the measure provides tha.t the davits o:f two disinterested parties, ·and ·tp.ose affidavits then Government may designate this land ·at any time wfthin the constitute a prima facie classification of_ the land under the' ' next six rrumths, or that six months must elapse after too pas-- 640-acre homestead law; bUt within a year or that time the . sage of the bill before the locator may take possession of the Government, or any individual, may contest the truthfulness~ land, and the G<rvernment has 12 months after that in which of those affidavits. · After the expiration of that year the stateto contest the claimant's right to the land. This gives the ments- in those affidavits can not be controverted, but the appll· Government practically one year and a half in which to act ad- c.ant must still comply with all the other provisions of the versely in case it is found necessary to do so. In the mean- homestead law, and he can not be contested with respect to time, the man who has filed upon the land knows definitely that anything except the classification. within six months' time, instead of at some indefinite future :Mr. RUSTING. Mr. President, may I ask the Senator a date, he may begin work on his land. · que.c;tion?
:Mr. BRADY. The-- ~ator from 'Wyoming f.s. entirely correct. Mr. BRADY. I yield for that purpose. It does not give any man an undue advantage. It simply en- Mr. BUSTING. That means that the affi.da.vits, notwtth-ables the homesteader to go on and make his entry, and tt at the ' standing tllat they may have no foundation in fact, can be taken end of six months the land is not classified, that does not mean as a barrier after the expiration of the year, does it not? that he can hold that land if he has ·made a fraudulent entry Mr. JONES o:tNew Mexico. After that time this is a statute or made any misrepresentation. In that event any citizen of of limitatij}ns upon contesting the classification ~the land, just the United States can contest it, or the Government can contest the same as we have a statute of limitations governing many it an its own motion. There is no advantage that can be gained. other thi1;1gs. It is simply giving an opportunity to th.ese 60.000 men who are- Mr. RUS.TING. And that statute of limitations would run out there walting at this time to go on their lands and commence on a fraudulent or a false affidavit? improvements. Mr. JONES of New Mexico. Just the same as the present
Mr. RUSTING. Mr. President, may I ask the Senator- from law provides. ldnho a question before he takes his seat? :Mr. BRADY. The same conditions and the same proof would
1\fr. BRADY. Certainly. . be required as would be required under the present law, and it Mr. BUSTING. Does the Senator say that after the year of is only fair and just that the people who live in these States be
limitation has ·expired the question can be opened on any given the opportunity to make these selections at this time. ground? . There can be no fraud perpetrated. There will be no fraud
Mr. BRADY. Under this bill, as I understand, the Govern- perpetrated. The bill simply enables these men to secure homement has six months in which to make the classification. If at steads who have gone out there for that purpose; and I sin· the end of that time the classification has not been made-, the cerely hope that the bill will pass. men who are on the land, or those who want to enter the land, Mr. RUSTING. 1\fr. President, the Senator from Idaho. [Ml'. can make the application, make their affidavits as to what kind BB.A.DY] says that no fraud will be perpetrated. I am willing of land it is, and that wm be simply prima facie evidence. I to concede the good faith in which the Senator makes that ask the Senator from Ne-w l\1exico if I am correct about that? statement, but I hardly think he is in a position to guarantee
Mr. JONES of New Mexico. Yes; the Senator is correct. that no fraud will be perpetrated, especially when, after a year, Mr. BRADY. It is not conclusive evidence; it is simply the fraud can not be looked into.
prima facie evidence. . My objection to this bill, whJch I will re$tate briefly, is this: Mr. RUSTING. I know, but I mean after the year of llmita- It purports to be a 640-acre grazing homestead act, when, as a.
tion in which contests must be filed, if at all. What does the matter of fact and in effect, it is a 640-acre homestead act. Senator say about the- effect on this of the running of the one-- 1\fr. BRADY. And that is in reality what the Senator from year period? Wisconsin objects to.
Mr. BRADY'. Does the Senator think that the men would Mr. BUSTING. I object to the bilL in the first place, on the nat have- opportunity to. file.before !Jle six: months' Pe;illd was up? ground that it is covered up with a lot of verbiage and verbal
Mr. RUSTING. Th1s b1ll proVldes, on page 3, line 3- scenery that makes it appear to be something which in e1Tect T.hat the ftllng of any sueh appllcati.on shall be onfy- prima facie it is not going to be. The bill proceeds upon the theory that
evidence o.t the facts theTeiD. stated, and that an in<llvidual or th~ the act o:f 1916 which was a 640-acre homestead gxazing aet. is Government may, within oni! year after the- allowance- of such appU- . • • cation, institute a con.test against such. application. upon the grou.od not practiCable, because the Department of the Interior will that such facts so stated are not true. . not have . time . to look into and certify the character of the
Does the Senator claim that after this year has run these facts lands. Therefore it is deemed necessary, in order to make it are still only prima facie and may .be contested later on the practicable, to provide something that will do away with the
.~round o! fraud~ necessity of any survey~ Now, if the Department of the In·
. 7550 CONGRESSIONAL RECOR.D-SENATE . OcTOBER 1,
terior bas not time enough to certify it in advance within a year, bow is the Department of the Interior going to be in a position to certify it in the same length of time after these men get title to homesteads? · - Mr. SHAFROTR. Mr. President, if the Senator will yield, I will state that the reason why the Secretary of the Interior was not able to classify this land was on account of the want of an appropriation. There was an appropriation made for the fiscal year ending July 1, 1918, but that has been in force only about two months, and consequently he has had only two months' time in which to classify the land. This bill gives him six months longer in which to classify it, and· then it gives the right, for one year after that, to object to any entry that has been made on the ground that it is not forage or grazing land.
Mr. RUSTING. I ask the Senator if he believes that the Department of the Interior in a year and a half's time will be able to examine, survey, and certify the character of all the lands in these States?
Mr. SHAFROTR. I think there will be objectiorrs made by people who want these lands if they are anything else than grazing lands and forage-raising lands. If they do not object, that is a clear indication to my mind that they are of that character.
Mr. RUSTING. The Senator has not answered my question. I should like to know whether he believes that the Department of the Interior will be able in a year and a half's time from now to certify, survey, and examine all of the lands in all of these States and make a certificate as to their character?
1\fr. SHAFROTH. I do not know whether they will or not. It depends upon the speed with which they go at the 'York. It depends upon how many men they have.
1\fr. 'RUSTING. I ask the Senator, judging by what has been done in the two months that they have been engaged in the work, whether any appreciable portion of the millions and millions of acres can be surveyed and certified within that time, in his opinion? • ·
Mr. SHAFROTH. I do not know what they have done in the last two months and consequently I can not answer the Senator's question; but if it takes a longer period o:f time than that it is an outrage that men shall not be permitted to take advantage of the homestead laws of the United States; and it seems to me that inasmuch as we know that the general character of this land is grazing land, the affidavit of the man filing the application and the affidavits of two disinterested witnesses ought to be sufficient if the Interior Department can not get around to it.
Mr. RUSTING. I will ask the Senator whether the reason he wants this act passed is not because he believes that the Department of the Interior can not examine and survey and certify these lands in a year and a half?
Mr. SHAFROTH. Mr. President, I do not think so. I must say that a critical survey to be made by going on each tract of 640 acres is something that is not necessary. I know something of the land in that part of the country, and I think I could do it in a very short time.
Mr. RUSTING. Then this bill is not necessary, because if the Secretary of the Interior may survey the land in the time of a year and a half, then under the law of 1916 you have that remedy.
Mr. SHAFROTR. You have not your remedy, because that referred to a classification of the land. It was presumed that that would be done easily and quickly, and inasmuch as the Secretary has not had the time to do it and has not had the money with which to do it it seems to me we ought to give relief to the people who are desiring to make these entries.
Mr. RUSTING. I will say to the Senator in reply that unless he can give a better reason every reason for the passage of this bill is lost, because there is a law now-the law of December, 1916-which provides for 640-acre grazing homesteads just as fast as the Department of the Interior can certify to the character of the land. Then there is no need of this additional legislation: This bill either is necessary or it is not necessary to serve the purpose for which it was introduced.
Mr. KENDRICK. Mr. President--The VICE PRESIDENT. Does the Senator from Wisconsin
yield to the Senator from Wyoming? Mr. RUSTING. I yield. Mr. KENDRICK. I will say to the Senator from Wisconsin
· that in talking with the head . of the Geological Survey, the department that has to do with this question of designation, I ,was informed that they would be able to do the largest part of this classification within the year and a half, but the difficulty is found in the fact that until the last of the land is classified these people are denied the right to go upon the land and go to work. This will simply save them the loss of one year's time.
Mr. RUSTING. This law is either· necessary or it is not necessary. The act of 1916 provides for 640 acres, subject to a certification by the Secretary of the Interior, as ~ propo ed grazing homestead, not in fact an agricultural homestead. It the Departmellt of the Interior in a year and a half can survey and certify all these lands, then there is no need of this amendment to the law, because then they will all have been certified and sun-eyed and you have got all the relief that you claim you need.
But the argument has been made here over and over again that the reason why it is necessary is because 60,000 people are waiting to go on this land, and the Department of the Interior has not the time, the facility, the money, or the ability within a year to survey millions upon millions of acres of land. I can only infer from that that some Senators want to have this bill passed in order to wipe away all obstructions in the way of getting agricultural homesteads. A year and a half from now, or a year from the time the application is made, even though it has not been acted up~m, though no patent has been is uecl, in a year's time from the filing of the application the homestead is confirmed in the man who makes the application, it does not make any difference whether it is agricultural land or land susceptible of irrigation, timberlands, or anything of that kind.
Not only that, but by the admis ion of the Senator from New Mexico it cures all fraud in that time. Now, what can be expected of this bill? Sixty thousand people are ready to go on l~nd to-day who have been waiting, as the Senator says, because their particular tracts have not been surveyed and have not been certified. Within a day or two after the bill passes they will file their application or prove they filed their application, and if the Department of the Interior can not within a year's time investigate these lands or survey them they are confirmed in their title.
It does not make any difference what they put in their affidavit, it is only a question of opinion that they have expressed. You can not indict -men either for perjury or for fraud when they only say they believe. They believe, and that is all they can do. They believe it is not susceptible of irrigation or susceptible of cultivation as agricultural land. So the result will simply be this, and there is no use in blinding ourselyes to it, it is just as plain as day, that if they go on and file their application in a year's time it does not make any difference what they put in their affidavit as to their land. · Judging by some of the things that have occurred in the past in regard to mineral lands, and in regard to lands of all kinds, it will be a violent presumption, indeed, to say ·that men are not going to make an affidavit that is going to confirm them in their land by exPressing an opinion whether it is susceptible of irrigation or not. That is a mental operation very difficult to disprove.
So the effect of this bill will simply be this : The men will go on the land. They will file. The Department of the Interior has confessed and admitted here· it will not be in a position to make these examinations and these certifications. Consequently in a year's time those homesteads will be confirmed to them. It does not make any difference whether there was perjury. It does not make any difference whether there was fraud. It just cuts it off. Here are 60,000 people waiting to go on lanus that are not susceptible of irrigation, that are not susceptible of agriculture. They are waiting there. They want their titles confirmed. They want to go and get a 640-acre tract.
Why did these men wait? Why can they not get 320 or 160 acre homesteads? There are homestead laws now. Why do they not enter under the present homestead law? Why do they want this bill passed, and why are th~y keeping off unless they are given assurance that this sort of a bill is going to be pa ed 1 They are simply waiting to get a better thing than they have now. They can take a 320-acre homestead. They want 640 acres. That is what they want, and they think they are going to get it; and not only do they think so, but they are assured, as a matter of fact, from the very nature of things, that the department will not be given enough time within a year to find out what the character of the land is.
It does not make any difference whether it is the finest agricultural land in the country. Senators speak of this as an aridland proposition. I do not know that they would class all of the land in California and Oregon as arid land. You can get pretty good agricultural land in California and in Oregon, and · I have nvt any doubt that they would get good land in the other States. I have listened to these debates here. I have been accused of want of knowledge of conditions. in these various States. Intimations have been made that this really is a matter on which I am not competent to express an opinion. I grant the right of the knowledge of the facts on the part of Senators who live there. I know my own State, and I presume they know
1917., CONQ-RESSION AL RECORD-SEN ATE.
theirs. This is not -a question. of -the knowledge ot facts. It . fri Quay County, 12,800 acres, grazing; is 11 .question of poli.cy. Are we going to give away the land In San Miguel County, 26,800 acres, grazing. that is left in cb.unks of 640 acreS' regardless of the eharacter of · In Union County, 394,000, grazin~ broken. . : the land? It is 11 matter of national policy, and wide, far- In Fort Sumner land district, Chaves County, 610',733 acres,. reaching national. policy, and upon that I reserve the right to arid, broken, grazing. I will not read entirely through this list. express my own view. In the Roswell land district, six counties or a portion of six
:6J.It I do want to say, notwithstanding the faith f have in the counties in southern New Mexico, there is not one in which the knowledge of the Senato-rs and in tooirgood faith, I -should dis- lands belonging to the United States Government are classified .like to . go_ around in their own States and make a campaign on by the Government itself as agricultural land. In the Santa Fe· the ground that th~y have not got anything left in those States district, 14 counties, there are four counties in which there are but arid land. If that is the kind of 'Rdvertisement you send classified some agricultural land, and in this district, with the out broadCast· all -over the United States, that you have not got exception of one county in the Tueumcari dish·ict, are the only any · land left in :all of these broad empires of the West-New counties in which the Government has found any agricultural Mexico, Arizona, Colorado, Wyoming. Nevada. North and S.outh land. Dakota, California, Oregon, and W.a.shington-that those are In the department itself there are now field notes of every, nothihg but -desert :areas, where a man ean not make a living 640 acres of the public lands in New Mexico which have been unless he has 640 acres of land, I am afrai-d that it would insult surveyed. By an- examination o:f those field notes of land by the people of those States. Not only that, but if the Senators the United States surveyor who makes the survey approved by, want to go around the United States and advertise their States the Surveyor General and approved by the department here, in that way they need nQt be surprised if they do not get any the land is described as to its surface character, and as to people to move into them, because nobody wants to move into a whether it is agricultural or not. Alf of that data is here in the desert: Nobody wants to go to -a place where nothing grows, office. and where men can not eke out an existence· unless they get 640 · Under the 640-acre homestead act or under the construction acre.g of land. It is a pretty strong indictment of those States, placed upon it by the S€Cretary of the· Interior it was necesand as a good American I dQ not ·subscribe to that indictment. sary for the applicant to state the exact character of every, As I said, notwithstanding the faith I have in the Senators portion of every 40-acte subdivision within the 640 acres. That· who make it, I think when they make these statements they data they have not in the office here. They have all the data make them in a Pickwickian sense. I do not think they mean with referen.ce to the exterior limits of a townShip consisting of exactly what they say about it. I think they w'ill have to admit 36 sections. They have all the data with reference to the exright down deep in their hearts that they ha-ve a few garden terior limits of every 640 acres. They have generally the data spots and a few oases in their deserts that might be worth hav- with reference to every 160 acres, and from that, within the next ing, even if they could not get it in lots of 640 aeres. six months, availing themselves of other information of like
Now, we talk about developing the West. Of -course, one character which they have on record, it would be easy enough family on every section may be a big average just now in those for the department to practically classify every 640 aeres of States, but it is not only for to-day, I hope. We all hope that the land in the entire State of. New Mexico which has been surveyed W~st is going to be settled more densely sometime, and it is and which is subject to this proposed 640-acre homestead act. being settled now. We all know that more than one family cnn They can not, however~ of course, within that time survey liv-e -on a section of land out ln tne West. But if you do not every sixteenth of an acre or every portion or fraction of every get any more than that you are not going to have your State settled and improved and developed as your 'Rssociates in other 40 acres, these sixteen-fortieths, within lhe 640 acres, 40 acres States fondly hoped you would. We 'all take a great deal of being the smallest unit of land measurement which is known
h 1 . to the law; but they require the homesteader, under the regu-pride in t e West. We are al interested lll the West, even if lations ado~ted in T111rsuance of tlw 640-aere law, to certify as to we do not all live there. We can not all live there. I do think .t' .t'~ those States have good land, land that can a:ttract farmers and the particular sort of grass that grows there; whether there is
h summer or winter range, spring or fall range, upon every 40 can sustain their families ·on a · alf section or a quarter section, acres out of every 640-acre tract, going beyond, in my J'udgment. and therefore we ought not to put this whole thing into a pot now and have a ease of grab out Qf it. We should not let people the intent of Congress in providing a 640-acre grazing home· get great tracts of land. The time will com-e, 'RS it has come stead. · already in the older States, when a man who has 80 acres has ·This bill is simply to facilitate the classification of those 640-a pretty good -piece ()f land. acre tracts for homestead purpo.ses by allowing the departme-nt
This bill marks an ep-och in. our public-land legislation, and to obtain inf{)rmation with reference to any specific tract where I would not have been so insistent, and I would not be so insist- they have any information here, so they can classify these lands ent now, if it w-as not a departure from an established policy generally as subject to the provisions of the law. and from a sound public policy. Land must be let out in small Under the pro-visions of that law also-by mistake, in· my judglots so tbat the poor m-an can get a home and not leave it all to ment-the lands were to be classified as- fit for grazing and rich men, not leave it to land barons, so that ordinary folks can raising forage crops; that is the dual purpose; that these 640-not get a home and raise a family and devel-op the State. I acre h·acts were to be fit for grazing and raising forage crops. would not want my ~tate developed in that way. I would not The Secretary of the Interior-and possibly any other Secretary want any State in which I have any interest developed in that ' would have done so-construed that law to limit him so- that way, and I hope I have some interest, as an American citizen no man could obtain a homestead upon a section which was fit at least, in the States of the West. After stripping all the only for raising forage crops, but that he must classify those camouflag-e out of the bill, after cutting it all out and pruning lands which were fit for the dual purpose of grazing and also it -down, you have got a 640-acre homestead act that can be raising forage crops; and that no others could be so classified. applied to agricultural lands, lands susceptible of irrigation, He has held in his instructions that it did not apply to the timberland and everything else. That is what it is going to- grazing lands at all in New Mexico or in any of the other ' amount to in practiee, it does not make any difference what it States; that it did not apply to agricultural lands, but that it is covered around with. I think it is a mistake. I do not think only applied to lands upon which forage crops other than grain the bill ought to be passed. I think it i-s so important that I crops could be raised and those lands some portions of which should like to have the yeas and nays upon its passage when it at the same time were. fit for grazing and not fit for agriculture. comes to a vote. Therefore, he held that every 40 acres within the exterior
Mr. FALL. Mr. President, it might be illuminating to some boundaries of the 640-acre tract applied for as a homestead must in the Senate who desire to know -something about condition~ be described, and described accurately. Nothing of the kind in my State, for example, if they would refer to the report of has ever been required with reference to any hoi)lestead or with the Commissioner of the General Land Offire to the Secretary reference to any other land law, whether it was a 640-acre desertof the Interior for the fiscal year ended June- 30, 1915. On land law or the 160-acre or the 320-acre law, as in some States pages 112 and 113 there is a graphic description of the landS in where they had for years the 640-acre homestead law. No rethe various counties of New Mexico as given in this official quirement of that kind has ever been made before; but under the report by the Department of the Interior. I am going to ask peculiar wording, as I thought at the time it came from the comthat the table be printed in the RECORD as a part of my remarks, mittee a mistaken wording, using the conjunctive "and," the but I want to eall attention specifically to the descripti<m Secretary so construed this act as that under the peculiar conof a few -of the counties in the districts in New Mexico as given ditions in New Mexico no man could obtain a 640-acre entry. by tile department. Those are the facts. This bill is simply to remedy those con-
New Mexieo, in the Clayton district, Colfax, 45,620 acres pub- di:ilims. Jic lands, arid, broken, grazing. I ask, Mr. President, that the classification of lands of New
In Mora County 23,680 acres, mostly grazing, some .broken. Mexi-co, as ('Ontained on pages 112 and 113 of the official report
.7552 CONGRESSIONAL RECOR.D-SEN ATE. OCTOBER l,
of 1915 of the Department of the Interior, may be printed as a portion of my remarks. ·
The PRESIDING OFFICER (Mr. STERLING in the chair). Without objection, it is so ordered.
The matter referred to is as follows: NEW MEXICO.
Statement~ by lalla distr-icts mtcl counties, showi11g the area of land wwppt·opriatecl and unreserved 01~ July 1, 1915.
Land district and county.
Clayton: Colfax .....•.••• Mora ...........
Quaifi ......... San ·guel. .... Union .....•.••.
Total.. .......
Fort Sumner: Chaves .........
~laitip:e::::: Lincoln ......... Roosevelt •••.•..
Total .........
Las Cruce·: Dona Ana ...... Grant. ......... Luna ........... Otero ........... Sierra ............ Socorro .........
Mr. WALSH. Mr. President, it is not difficult for those who h11ve followed this discussion to discern that the real objection of the Senator from Wisconsin [Mr. BusTING] is not to the measure that is now before the Senate. His real objection is to the act to which his address and his argument are directed, to
the mistaken policy o-f-the 640-acl·e- homestead act, rather than to the measure that is before us, which contemplates an expedition of classifi.cation·under that act. _ I regret very much, indeed that the Senator from Wisconsin
never · seems to sympathize with the qifficulties that present themselves to those of us who come from the western section of the country and who are more specially concerned and interested in the laws in relation to the disposition of the public lands.
I should like to have the Senator from Wisconsin refl.ect for a · moment upon the condition of affairs that is presented in my State. Under the 640-acre homestead act anyone may make an application to enter a tract of that area, and his application remains on file until eventually the classification of that land is made. Meanwhile no one else may take that land. The consequence is that in my State since the enactment of this law practically every tract of land is valuable that by any kind of stretch of imagination Cl!U be construed as coming within the provisions of this act, and has been applied for. Now, although it may not be subject to entry under this act, but subject to entry only under the 320-acre act or the 160-acre act, the thing stands there until the classification is made, and practically no man can enter any homestead lands in the State of Montana at all until this classification is made. The Senator from Wisconsin is not concerning himself with legislation intended to speed the classification of that land. I wish he would do so. It would give some of us a little more heart.
Mr. BUSTING. Mr. President--The PRESIDIXG OFFICER. Does the Senator from Mon
tana yield to the Senator from Wisconsin? Mr. WALSH. I do; but if the Senator will pardon me, as I
am going to vote with him upon this matter, perhaps he will indulge me further.
Mr. BUSTING. I merely do not want the Senator from :Montana to put me in a false position. I will say that I will vote for any measure that is thought advisable to speed the survey or cm·tification of this land.
l\Ir. WALSH. l\lr. President, I appreciate that the Senator from Wi cousin will do that; but that is not what I am complaining about. What I am complaining about is that he never exerts himself to relieve the situation. Of course, if some one else does and a measure of that kind comes up, 1 have no doubt that the Senator will vote for it .
But, l\lr. President, notwithstanding the animadversions which I have made upon the attitude and position of the Senator from Wisconsin, I find myself unable to give my approval to this measure. I regret very much that that is the case, because I should like to be in harmony always on these matters with the Senators from the section of the country from which I come, who, with myself, are deeply interested in these questions; but . I believe it is a mistake, and I regret very much that I have not bad an opportunity to present these views to the Committee on Public Lands rather than to express them thus in the open Senate.
Here is the situation: Those applications are already on file; this land is all tied up under the 640-acre act. The classification can not possibly be completed within the six months prescribed by this proposed act; it ca.n not be completed, I undertake to say, within twice or three times that period. As soon as t11e six months expire, the man who has an application on file, the classification not having been made, who submits his proofs concerning the character of the land, is entitled to enter that land. Then the classification goes on. The Secretary of the Interior within a year after that time will institute an inquiry in relation to the character of the land; but, Mr. President, everybody recognizes that the men who then proceed to make the classification are under all manner of constraint to classify, the land as coming within the provisions of the 640-acre act, because the settler has gone upon the land; he has built his house; he has made his residence there ; he has moved his family upon the land ; he has fenced the-land ; he has possibly broken up some of it in order to carry on his farming operations. Thereafter the classifier comes upon the land to classify it. As I say, 1\Ir. President, he is under all sorts of constraints to classify it so that the man may have the land. But, Mr. President, while he is so, we all recognize that many of these classifiers are not actuated by a deep consideration for the welfare of the settler. Neither is he always appreciative of the burdens that the settler undertakes.
Mr. President, I here and now assert that there is no citizen in this country to whom it is so deeply indebted, to whom it owes so much, as the man who, with his wife and his children, endures the hardships of pioneer life in order to bring into cultivation hitherto valueless sections of land in the western country. No man deserYes better of his country than does that man, and
1917. CONGRESSIONAL RECOR-D-SENATE: .7553 particularly no woman deserves better than the woman who accompanies him as his wife to make a home upon that land. Senators are sometimes not quite as regardful of these people, it -seems to me, as they ought to be. Mr. President, I want you to assume the case of the man who, entirely confident in his own mind, enfu·ely honest, desirous of securing no acre of public land under any law to which he is not entitled, goes upon that land, and makes his home upon it, builds his house, makes his residence there, moves his family upon the land, and does everything that is required by the law. Then the classifier comes along and classifies it as not subject to entry under the 640-acre homestead act; his action is approved by the Commissioner of the General Land Office, and is approved by the Secretary of the Interior; and that man is turned out of house and home.
Mr. KENDRICK. Mr. President--The PRESIDING OFFICER. Does the Senator from Mon
tana yield to the Senator from Wyoming? Mr. WALSH. I do. Mr. · KE...~DRICK. As I understand the law, such a man
would not be. denied the right to take a part of that land. I think he would be given the proportionate acreage under the other law.
Mr. WALSH. I think the Senato:P is in error about that. I think that if one contests his entry upon the ground that t11e land was not subject to entry under the act the contestor would have a 30 days' preference right to enter. ..
1\Ir. KENDRICK. 'Vould it not be a contest only as to the character of the land, and not upon the question of the testimony preseGted?
l\lr. WALSH. No; within the year, under the language of the bill before us, anyone may file a contest against his entry; and if in the contest it shoulu be determined that the land is not of the character of land subject to entry under the 640-acre homestead act, but is subject to entry under the provisions of the 320-acre homestead act, 'the contestor would, as I understand, under the law have 30 days' right to his entry of 320 acres. I submit to the Senators from the West that if that condition of affairs should develop under this bill-and I can not see bow it can be avoided-there would be hardships unspeakable worked upon honest and deserving settlers.
l\lr. KENDRICK. 1\Ir. President. will the Senator yield for just a moment longer?
1\Ir. JONES of New Mexico. l\lr. Presiuent--l\Ir. · WALSH. I yield to the Senator from Wyoming. Mr. KENDRICK. The very fact, in my judgment, that the
locator upon this land faces that condition will restrain him from making affidavit that would be proved incorrect by an examination of the land; he woul<l take a -greater risk by so doiQ.g than he could afford to take. That is one of the Rafeguru·ds of the measure, in my juugment.
l\f1;. JONES of New ·Mexico. · Mr. President--1\:(r. 'V ALSH. If the Senator from New 1\Ie:x:ico will pardon
me for a moment, that unuoubteuly is a safeguard, and naturally a settler would be a little bit cautious; but it is advisable to make allowance for the optimism of human nature. Eere is a man who wants n 640-acre tract of land; he is extremely desirous of getting it, and naturally he will convince himself that it is of the character that is open to entry under the act. It is exactly the same with a mining prospector. He is always sati fied that he is entitled to the land. The Senator knows something about the character of controversies between the mineral claimant and the agricultural claimant. The mineral claimant always depreciates the value of the land for agricultural purposes; be says it has no agricultural value; that it is only mineral land; and he is perfectly satisfied to go on the land and make his rlevelopment, confident that the decision must be that way. On the other hand, the agricultural claimant is naturally less appreciative of the value of land for mineral purposes, and is equally convinced that the classification must eventually be that it is agricultural land. So it will be with the man who desires to make entry of land under the 640-acre law; he will satisfy himself that there can be no classification except that which he thinks it ought to have, namely, one which "·ill enable him to make the entry. Yet men will differ about the matter, and the appraiser or the classifier who is sent out from Washington-and the Senator from Wyoming recognizes how these t;eatlemen do business out in the West, with very little regard even to our views as to what classification ought to be given certain tracts of landwill make his classification and send his report for approbation to the Commissioner of the General Land Office and the Secretary of the Interior ; and I undertake to say that many men who go upon the e lands and expend m9ney in their development in
LV--479
perfect good ~ faith, but simply mistaken as to their character, will find themselves suffering severely.
Really, Mr. President, the proper solution of this matter is to get an adequate appropriation for the classification of these lands. Let us not invite, let us not solicit people to come and make entries upon these lands until they are classified, so that the Government can give assurance that as soon as a filing is accepted no man can be heard to assert that the land is not of the character that the 640-acre homestead act permits to be entered.
Now I gladly yield to the Senator from New Mexico. Mr. JONES of New Mexico. 1\lr. President, I think the Sena
tor has about covered the point that I wanted to make. I understood that he was iri some controversy with the Senator
"from Wyoming [Mr. KENDRICK] as to "·hat kind of a contest would originate. I think the Senator from Montana has covered the matter as fully as I would care to clo, and, inasmuch as I hope to get a vote on the bill before 2 o'clock, I do not wish to take up any more time in discussing it. _
Mr. WALSH. I have said all that I care to say upon the subject.
The PRESIDING OFFICER The question is on concurring iu the amendments made as in Committee of the Whole.
The amendments were concurred in. The bill was ordereu to be engrosseu for a third reading, and
read the third time. The PRESIDING OFFICER. The bill having been read
three times, the question is, Shall it pass? Mr. WALSH. Mr. Presiuent, I understand that some one
has sent for the Senator from Wisconsin [Mr. BusTING], who is temporarily out of the Chamber. I think the Senator ought to be present when the bill is voted upon.
l\Ir. JONES of N~w Mexico. Mr. President, the Senator from Wisconsin desires a record vote upon the passage of the bill; so I will ask that the yeas nnd nays be ordered on the question of its passage.
The PRESIDIXG OFFICER. The Senator from New Mexico demands the yeas and nays.
The yeas and nays were ordered. Mr. BUSTING. 1\Ir. President, before the roll is called I
wi h to add ju t a few words to what I have already said. Of course I am very much gratified to have the support of
the distinguished Senator from Montana [l\Ir. \V ALSH]. It is always valuable and powerful. I am sorry, however, that the Senator should have indulged in some animadversions as to my attitude towaru this bill, and I do not feel as though I coulu let this debate close without at least setting myself right in the Senator's eyes and in the eyes of the Senate.
The Senator is entirely mistaken when he says that I am not in sympathy with the West or its aspirations or its people. I aru in the deepest sympathy with the \Vest, as I am in the deepest sympathy with my own State, the people of my own State, the people of the United States, the people of every State in the Union. It has l:appened, of course, that I have differ<><l with some of the western Senators on questions of policy; but that has been from no lack of sympathy on my part for the people of those States or the welfare of those States as I understand it, and I am doing my best to understand it. The men with whom I have not any sympat11y are the men that I think are trying to exploit those States. It is because I have sympathy for the people of those States and the people that nre going to inhabit those States at some time thnt I am ·opposing measures which I think are ilot for their welfare.
How much mistaken I may be is another question. My sympathy goes. out to the pioneers of the States who go there to help upbuild the States; but my sympathy is not with those who go there to exploit the States, to take more than their fair share of the resources of the States. I have no sympathy with the men who are seeking special favors in those States; that expect to be h·eated far and away better than anybody else in those States. · ·
That is my attitude. I say that this bill, in giving 640-acre homesteads in lands whether they are agricultural or not, in my judgment, gives too much in the first place. In the second place, I do not think a measure of this importance ought to be taken up anu passed by way of snap judgment in a special session called for war purposes. In the third place, I do not tbinl\: it ought to be taken up and passed at the close of the session, when it can not receive the consideration it deserves.
This is not like discussing a new proposition. The burden of proof is not on me to show that this is a bad bill. The burden of !}roof is upon the proponents of the measure to show that it is a good bill. When a certain policy has obtainecl in i.hls country for a half a century and over, ancl Senators want to
7554:': OcTO BEE I ~-
change~·.that ~polle · r:in"th~ twtnlilltlg··0fum~e, it is notwfor .. :inH~i •·i Mr.1SUTHERr..rAND!{~vhett...ms • name. . as ·:enlled):·. "-1 hava ·a- __ to show that the.:.bill is a bad:.~Diie: .u~u bf forJ.them.tto 'Show·thatl -paii' •With.Jthe ' ju.t;uo:r -. seiHtto:r from:·-Keiitu:c'ley i:·t:Mr; :BECKKKM:.]. ·· the ;billr. IS ·mrgood=:-o'ilemt:tTM ·· ui"<terl .. of 'Proof_ ·~ upon~·thefu ,_rto .As .. he iw6ut_of the'Dhambret; .. I· WJthhoid• my;:.vote."lf"' show •. thata:tb.Et[presentn.policY ·ts · wrong.:rnnfu\ougbt 'W ·be ·~mrel"'- ''- ~-Th" ':roll:"call was-:eoneluded1 . ...u turned~~ •f i Mr. · LETCHEB~:ai tia~n..,general air with· 'the enlor~ S.en:=·:t-
The : Senatonirfrom :Morita:na .t-Jis ,entk-~1 ~mistakeii<·whett:..che rntor"-:fro ' . eW"'Halilps~·[l\H.·.~ .(}.ALi:.INGEK}::"' ' Not being Tad-··_r, says-: .. that :.:I was .oppo ed to the-":ori-gifi:al~·bill fof 1916'.; "'I will··· visetll.;. -as u o how£,•he rJWould .. vote ·.on -tbis:. questlon;> •I withhold -:. n' confess that ~n voted::::fOr tha'f:,bill in l:he·rcommtttee'•with ~mi.&: .. my_ vote:- -~ givings;zmndLt:I · only;~ voted··!:forn·it :Upon.• .. the··representatioti. :of .P ' Mr:r:wou:::RYPJ:::'E~I wish- to ·ask-<:tl the:seniur ·S-eilll.tO'l~ · from'-':Senators in the committee that it was intended to apply. f. to rlndtaiu:I,L (Mr~ -- ATSONi .:-lias voted? · arid lands-to ·lands. thatLw~re: not!:fit fur!' agricultufe,I tto ,Jands:. The.,ERESIDING'iOF.FICER;: "~'He~ lias-not:··-r-that-:were':Iloti:.SUS<!eptibll#' o~ irrigation·,;:: lftnd •that..it wa · neces- · _ Mr::JWOLCOTT.- a have.J a•pai_p:-wJtrrthaf.:.Senato~;· nnd..in his :0:~ sary: to -having ;gra:zing.-,'!L.omes.teads.: in ·ID"der!:to ~raise 1Jeattle.-:.:on ·absenee withhold ..my:: vote. thes tracts ··of. tarid: •f.! am. oppOsed •to "it lioW' 1bec-a-use:.-1' ·see· ,,: · Mr. LEW IS. I desire to annourree=-thei abs:ence•·uf the :senior<"'""' thatH bat--was- :merely :an :: .enter-ing~ Wedge ;;for •'thiS bi u;:.! . hich - Sen a tor from . Georgia [l\lr . . SMITH]' on 'a.ccoun t iOf iUness: in big_:;-_ wipes:raway· :all l;the i:safeguards-·.with··, rega:rd.,-;.to .agricn1tui' · and'· ·family: .. I also_ wisa.to announce:~the .una-voidable; ·absffi:H!e-~of the·:: lands' ·suscep.tible'of irrigation,~··a:nd · g'Oeg:Jright - ~ow.n;tto 'the :nub .: junior Senator from ·Keritucky-::[,Mi·.:illEClltHAn~ ·::on :·account' of .;r•' of the matter'.,:Jand say ;·i" L~t us thuve:·all 64<1-ftere,·homesteads/' illness in his family.
The Senator from !:Montanar aid! tha't !! I, fuid tJiotHshown•:any , .. · Mr;-BANKHE:A.D; ~;I tian.sfer:mY" ·pair with the-·senior Se11ator zeaVin legislatio.n·looking,;toward: a> :speedy. surv-ey.tof ·tfiese--land~ . froin l\finnesottr ·[Mh :i NELsON} ·-to ;the-: junior. ·Senator ... :froml-IZ As I say, I voted with lllisgivings for the .. bill that was pr~ -'·'l.iouisiana: [.Mr:· BRoussARD] anct--vote "''·'y'ea:""-sented ~to ·me;:J :WaS: ib .iiot.:.for.A he Senater-s::who rpropesed··-1li:ld: Mr. WEEKS. Has. the senior Senator from Kentucky:·;'[:Mr,r:.:::~ championed.:;tlui:·bill; ·Of 191(Vto see ~that::prop~ legislativit •was •.TAMES] voted?.,.... • . included in it to carry out the. puriJo~es,:~f the: ·blll·t -T I will -say The P.RESIDING ·oFFICER. .::He has nnt . ...-•!:. to the Senator;:from:Montana ·that.if I 'hiul•drawn tthat' bill' ail(} 1.\frY-WEEK&.:.. · I hav..e· a.· general: pair- with. · that ~Senator;. -and':~·:.· had drawn it in good faith in order to get a sp~·yrtsurv:ey : of therefore witbh61d my vote -·;:__, the :land, I wouldlihave seen to :it thattthere ·wus alsa:-put in it Mr.· CURTIS (after hav..ing.voted·. in the affiriilatlve}·, -i J desire-·1 the means whereby to surve:y-the.lan(l;; .• But . my~ea·t'ean not ·be to kno.w: whether. the:. junlor·· Senatol~ .• froin · GeorgiaAr,fr. -HABn-- ~;,.,., very.: :well :excited!lvherr:.l see;dn the .light::of later ~vents·, ' that WICK] has voted? it was :never:-:contemplated:'.that we ·shotlld have'·a :speedy-:5urvey," : The PRESIDING OFFICER. He has . ..not. othe.twise ·-it: ·wotrld bave-.. been put:.i:n"the·.am.r:r: . Mr.~ OURTIS~ : 1 transfermy t:pair with :that-Senator to .the .._
seen~-to it· that•the:. propet 'Prov..is1ons ;Were put: i.n it for a· speedy ' Mr:··'FERNALD~ _J have- u pa.ir~ With the 'junior' Senator from - · surv.eyjr'Qr the .fault .Of .one. w.ho only· acquiesced"in it because he South . .Dako:ta--11\ft~ · JoH'NsoN]. In 'his absence I · withhold: my --~i:: took the advice of others and surrendered his prejudiceF if y.O"Q . vote.-~·:.If at l:iberty~·to vote, I slioul-d ' 'vote'· ~' yell:" ·-want 1-to :eall;-.it so, . ngainst:opening .up : these~larids-:·to 640-acre Mr:-r.'McNARY: f l desire. to announce· the: unavoidable .absen~e~._;,: homesteads? of my:eolleague· {1\rr~·:CH.urnERLAJ:Nl;'Oil account:of illness. :'·
If that is what the trouble is, w:hy 'is- nota·•biltp:resented ·here Mr: SUTHERLAND~- I transfer·· my pair-:-~-:witlr' he ·· junior , to see that .. there.is. a~ speedy- surv.ey-1 .:•.-I WilF say to the· 'Senator Sena-tor from Kentucky [Mr: .BECKHAM] to the junior. Senator~ .. :;. from Montana.that.I .;wm·.v.ote for~ such~a; bill as that, --a.nd rw1l~ from California. tMr: ·J'oHNSON] and vote · '~ yea.". . further:sayr:to the~ Seliator ;that if he and :.the tother·· Senators on · I a1so desire·to announce the 11navoidab1e .absence.:of my ..col-: ·· this .committee- will vote rfo1• it' and support it I will introduce a league [l\1r. GoFF] on account of illness., He:has·-a·-gerreral-pair bill the first:thing.tn Dec.ember:prov:idibg.fQ.r::a.speedy- :urvey. ~--~1 with the senior Senator..,. from South.Carolina ·{l\Ir. -Trr.t.?.rAN].~ will .do it gladLy·· and· .. <illeer.fiuUy; and:.slipport -it as best .... l .'can: in .• ' l\lr. SHAFROTH: . I desire to announce··· the.......unavoidable " ordwito getthis·sm..-vey ... ~ ' absence· of my• colleague [Mr. 'THOMAS] on acconnt...df illness -~
It routrt·hav'e been +foreseen :by the 'Sefutors ·who--:conterrd'that ahd •to state that ·he is paired .with ·the-~·senior.. · Senator.1 from -..::. they are so familiar witrr:·the··suua'tion--out there that under-the 1 North Dakota {l\fr:· McCUMBER];: I will let this'· announcement--· • bill as they;·· not ·.:r; d1·ew . it these· larids in 'the ' >very ~nature of stand·i:or the 'day::-'" things :eould" .. 'llOt "~-be :surveyed · 'and· 'certified: ... ~ Why did they not . -: . Mr:· FRELINGHUY.SEN~--" I desire to announce· the·· una voidput snch. a provist~n in there? ~ They knew-tbat·pr~SUlllably men : able absence of my .colleague ··[Mr: · Hud.HEs}:.:..;on account' ·of _ · · would be an.xious.~ to take p rthese-·homestetrds~ · Why"was not · ,. illness. the machinery ·provided'·to enable·.them to do so? ~ 1\fr; iCURTIS'. ~· 1 have been r:equested' to announce ·· the-:fol ·-
I say.: to my ::ftHmtl"the .Senator trom· Montana,.- for ·whom ·r · :towing:p.airs ·: ·•. have' the :highest -Tesp:ect; that.: it does seem:· to me ·that' his ' l"e- L TheT!Senator from Rhode Island [Mr: rco:LT] With. the Senator -marks were somewba-t:·gratUitorrsaand- in a· way ·unjust . . · How- ,from ·Deiaware- [1\fr. SAULSBURY].; ever we ·may ;.difl'el~ : ;on the: .:bill; however -we may ·differ:' on the - The-: senator ·from Connecticut [l\fr. !1\fcLEA.N] with the Sen..:. policies ' to be adoptOO' ·ih the ·western States;--an I can '.say is ·ator· from Montana [Mr>M'YERs} ;· that.•l l am acting rm accordance with rily..: b"est · · judgment~·· ·I carr · ' The Senator from ··nlinois {:Mt. SHERMAN] with the Senator· •I
not act:. with ·due· respeet for mys~lf ·and : act always according .fl'om ·-Kansas [1\Ir : THOMPSON]~ to tbe: ; judgment -~·of . others; . ·They have their 'duties· to their ! The 'TSen'a tor 'from 1 Massachusetts [-Mr. ~LODGE] . with· the'. Sen--: ... States :-and •'l • to ·mine. ' I cheerfully.: yield ·ro ··senators· who · ator from Georgia [1\fr. SMITH] , and · · do not come. from my State tbe ·right·:to form ·their own judg- . · The': Senator ,from Indiana [l\If> W.A'isoN] with 1the Senator _ .... ment in :cegard· to •matters which ··affeet "'llY State, such as from·Delaware [1\Ir~:. WoLcOTT]. · taxation,, water power, · and a' great · many ~uther things. of that Mr:'l KING.- I aesire to announce ·that the ·: Senntor frolll , kind But ·while •yieldi.Ii.g to them·the 1utmost freedom to form _Arkansas· [Mr. RoBINSON] and the Senator from Texas ·[Mr. '· their-- own opinion; 'and ·without intirriating or insinuating ·:that· ·CULBERSoN]. are detained on .officil:il business. ·-I know · more abotit ttre·matter than they do, at the··same time I - · ·: l\fr:r·HUSTING'.T I Wish fu announeed that the Senator from propose •to vol:e ·according' to my.:eonvictions ·and exercise my own "Kaii as [Mr. ~THOMPSON] is neces arily detained on important -judgment in the ~best -way that I. can possibly do so, actuated . public business. only, as I am sure the other Senators are actuated, by a · regard -- The. resnlt-wmr announced-yeas 51, riay.s ,3, as follows: for what· I · con:ceive to be :fair·,and 'right· and with ·due regard to YEAS-51. the welfnre o:f the' people not only; of the· States that theyrepre- Ashurst T...... Hitclieoek :·• New ·. sentlbut :of Ute .country at large.'~4' Bankhead: .r Jones-; N .. Mex: Newland!~ ~:'
The PRES'IBING' .. OFFICER.:- The :question is, 'Shiill•the bill ~~!~~~g~e k~~gg;ash~ ~~~~ts • pass'/· ·on · that question~ the 1yeas-· and nays. have ·been·-orderecl: c~Ider Kendrick "· Penrose ~he :Seci'etary· will till :tlle ·roll. 1 Cummins Kenyon - Phelan -
Thlr Secretm.'Y •.called he :roll. · :. i~iit:~! ~loiiette ~~~~!rte~ ... Mr. OVER~'i: ('when 'hiS' '.nnme- w.a.s ' called)'i : 1! have .. a" gerr.o~ • .:.Frarrce ·,, Lewis ·. Pomerene
eral pair· ~th- the sellior Senator from -Wyoming :[Me·1WABREN].;: g~~!~~huysen · - ~~~ffl~:r...:.- ~~i~roth _ ;Not knowmg how he would·vote;- I withhold·nty:;.vote; Gore .. .., McNary :_ Sheppard ··~
Mr> SMITH 'Of 1\f~-yland:·· twhen. his·· name.::was·.called)." I Hnrdlng".'J Martin· · Shields .,.. have a 1 gerreral--pa.ir ·with the: ·senior~ Setiatol~ · trofu Vermont: [Mr.·' · t N AY~3. · · . Drr.t.ING..H!AM]'. :' In :his absence •J: witllh'old ·my vote. ':1- H'bllls - Rusting-- Wafsh ·
1g17. CONGRESSIONAL R.ECORD-SENATE. 7555 NOT VOTING-42.
Beckham Gronna Myers Borah Hale Nelson Broussard Hardwick Overman · Chll.mberlain Hughes Owen Colt James Ransdell Culberson Johnson, Cal. Robinson Dillingham Johnson, S. Dak. Saulsbury Fernald Kirby Sherman Fletcher Knox Simmons Ga111nger Lodge Smith, Ga. Goff l\lcLean Smith, Md.
So the bill was passed.
Thomas Thompson Tillman Townsend Trammell , Warren Watson Weeks Wolcott
CONFIRMATION OF HON. CHARLES F. JOHNSON.
Mr. FERNALD. l\.lr. President, I ask unanimous consent that the appointment which has just been received from the President of the United States of Hon. Charles F. Johnson, a former Member of this body, to be United States circuit judge, first judicial circuit, be laid before the Senate at this time.
The PRESIDING OFFICER. The Senator from Maine asks unanimous consent that the Senate proceed, as in executive session, to the consideration of the nomination of Charles F. Johnson, of Maine, as United States circuit judge. Is there objection?
Mr. FERNALD. ·n sometimes happens that when an exceedingly popular appointment has been made by the President it is the custom that it be confirmed in open session. I move at this time that the appointment of Mr. Johnson to be judge of the first judicial circuit be confirmed.
1\Ir. OVERMAN. l\1r. President, I do not want to object, but I wish to say that I think the Senator is wrong about confirming some popular appointment. It bas been done in reference to an ex-United States Senator; and this being the case, I make no objection. I am very glad to have favorable action taken in the case of Mr. Johnson.
The PRESIDING OFFICER. The Chair lays before the Senate a nomination from the President of the United States, which will be read.
The Secretary read as follows : To be United States circuit judge, first judicial circuit, Charles F.
Johnson, of Waterville, Me. The PRESIDING OFFICER. The question is, 'Vill the Sen
ate advise and consent to the nomination? The nomination was unanimously confirmed. l\1r. FERNALD. Mr. President, I ask that the President be
notified of the 'confirmation. The PRESIDING OFFICER. Without objection, that course
will be taken: AMENDMENT OF NATURALIZATION LAWS.
The VICE PRESIDENT. The hour of 2 o'clock having arrived, the Chair lays before the Senate the unfinished business, which will be stated. .
The SECRETARY. .A bill (H. R. 2316) to promote export trade, and for other purposes. ·
Mr. CALDER. I move that the Senate take up for considera• tion the bill (S. 2854) to amend the naturalization laws.
The VICE PRESIDENT. The question is on the motion of the Senator from New York.
The motion was agreed to; and the Senate, as in Committee of the 'Whole, proceeded to consider the bill, which had been reported from the Committee on Immigration with amendments.
The Secretary read the bill. The first amendment of the Committee on Immigration was,
in section 1, page 1, line 7, after the word "changing," to insert the words "the first p·aragrapb of," so as to read:
That section 4 of the act approved June 29, 1906, entitled "An act, to establish a Bureau of Immigration and Naturalization and to provide a uniform rule for the naturalization of aliens throughout the United States," is hereby amended by changing the first paragraph of the second subdivision, and by adding four subdivisions to read as follows:
The amendment was agreed to. The next amendment was, in section 1, page 1, line 11, to
insert after the word "intention" the words "as that prescribed by the act of June 29, 1906," so as to read:
Second. Not less than three months _nor more than seven years after he has made such declaration of intention as that prescribed by the act of June 29, 1906, he shaH make and file, in duplicate, a petition in writing, signed by the applicant in his own handwriting and duly verified, in which petition such applicant shall state his full name, his place of residence (by street and number, if possible), his occupation, and, if possible, the date and place of his birth; the place from which he emigrated and the date and place of his arrival in the United States; and, if he entered through a port, the name of the vessel on which he arrived ; the time when and the place and name of the court where he declared his intention to become a citizen of the United States· if he is married, he shall state the name of his wife and, if possible, the country of her nativity and her place of residence at the time of filing his petition ; and, if he has children, the name, date, and place of birth a;nd place of residence of each child living at the time of the filing cf his petition. -
!Ir. REED. Mr. President, this seems to be an important bill. I should like to have some information in regard to it. I am calling attention to it because it is perfectly manifest we are amending the bill here without any human being paying any attention to it unless it is the Senator in charge. of the bill. I want to know something about the bill.
Mr. CALDER. I will be very glad to inform the Senator. The first change in the present law is provided on page 1, line 10, of the bill. The present law provides that after the alien files his declaration of intention he must wait two years before he can acquire complete citizenship. It is proposed to reduce this period to three months, without, however, in any other way _ changing the law as regards length of residence in the country and other requirements of citizenship. This bill, in its other provisions, aids the alien who holds an honorable discharge from the .Army or Navy in obtaining his citizenship, and it also provides for immediate citizenship for those who have enlisted or are drafted for service in the present war.
Mr. REED. .As I understand the Senator, the present law requires a probationary period of two years, during which period the immigrant is upon his good behavior and must satisfy the court that finally grants his naturalization of the fact that be ·bas been well behaved, and that is to be reduced to three months, so that an alien can be made a full citizen of the United States within three months after be makes -his first application. Is that correct?
l\1r. CALDER. The Senator is correct, Mr. President. I might add, however, that the alien must have been here for at least five years and must pass the examination of the Naturalization Bureau of the Government. He must appear with citizens who know him for the period provided by the present law, and he must be examined by the court.
Mr. REED. How much do you extend the present period for first papers? Is it extended at all?
l\fr. CALDER. No, sir; the bill does not disturb that. I will say to the Senator that the bill is very strongly advocated by the Department of Labor that has to do with such things from their ·observation of the working of the law. They believe the change a wise one.
I might also add that in the year previous to our going into the European war there was an unusually 1arge number of applicants for citizenship who were desirous of becoming full .American citizens, and this suggestion was prompted largely by that situation.
Mr. REED. In other words, we are passing this bill in order to accommodate those aliens who have concluded since the war began they want to become citizens?
l\1r. CALDER. During the last two-year period something like 625,000 declarations were made for citizenship.
Mr. REED. That was before we got into the war? Mr. CALDER. Yes: Now, it is the object to take care of
those men, many of whom are anxious to enter our Army and Navy. It is to accommodate that situation.
Mr. REED. But those men can be admitted into the Army and Navy without being fully naturalized. ·
Mr. CALDER. They can not in the Navy, I will say to the Senator; they can be in the Army.
Mr. REED. They can be by changing the law in order to make them eligible to the .Army and Navy. It is not necessary to make
-them eligible as voters. Mr. CALDER. I will say to the Senator further on where a
man enlists or proposes to enlist in the Army or the Navy or is drafted in the .Army, provision is made in the bill that he may upon application, if passed upon as a fit subject for citizenship, be given immediate citizenship, whether he has been here five years or not. · Mr. REED. That takes care of that question. The question I am addressing myself to now is this : It is proposed by the committee that we shall reduce the period of naturalization so that after an alien has made his application for his first papers he can be made a full citizen within three months thereafter. That question is one which relates to citizenship alone; it has nothing to do with the Army or Navy or with the service of the country in the Army or Navy, beca·use you take care of those later propositions further oa in the bill.
Mr. CALDER. That is correct. Mr. REED. Now, what I want to ask the Senator is whether -
he was not one of the men who voted for the restrictive immigration bill?
Mr. CALDER. As a Member of the other House, I voted the other way. ·
l\1r. REED. The committee that reported this bill in the Senate is the same committee that reported the restrictive immigration bill, is it not?
7556 CONGRESSIONAL RECORD-HOUSE~ OCTOBER 1,
1\Ir. CALDERr l think so.. Mr. BANKHEAD, Mr. P AG~ ·Mr. LA. FOLLETTE, Mr. McCUMBER, Mr. REED The same eommittee that came here and made·: Mr. SwANsON,. Mr. MARTIN,. Mr'. WILLIAMs·, Mr. SIMMONS", and
speecnes lasting- something like. 90 days. declaring that om· Mr. SToNE entered the Chambef and answered to their name$ country wa menaced by an influx of foreigners who.. came here · Mr. LEWIS... I was reque ted to announ-ce- the· absence of the· aruf received citizenship. be.foue they were. qualified for citizen- junior Senator from Kentu<i!ky" [Mr. BEcK:B:.A.MJ and the senior ship now presents a bill proposing to- reduce the period of natu- Senator from Georgia [Mr. SMITH], occasioned by illness in ralization by some 21 month · and having arri-ved at that, I want their respective- families. to ask why need they. formally take out. any se.co.nd papers at all The VICE PRESIDENT Fifty-six Senators have answered if only 9Q days are: t<>: elapse. between the first and seeond papers.? to the roll call. There is a quorum present. Why not grant the papers on. one application! 1\Ir. KING. 1\Ir. President, tliis is a very important measure;
Mr. CALDER.. I presume the· reason; for the 9() days is; for· some of us have not had time to considPx· it; and I move tnat the purpose of investigation. Notice is given that :rn applicant the Senate adjourn~ has filed his declaration of intention to become a citizen; the The VICE PRESIDENT: The· ·question is .en the:. :motion of court knows it and the Bureau:· o:fi Naturalization knows it,. and the- Senator from Utah that the Senate'adjomm.. · they have an opportunity to investigate the man, Mr: NEWLANDS~ Mr. President--
Mr. REED. Does- the Senator regard this. as a war measure? The VICE PRESIDENT. The motion is not subject to dis.~ 1\:lr. CALDER. I think it can fairly b.e said it is a war meas- · cussion.
ure. I think undoubtedly every pro.vision of the bill, with. the The motion was agreed to; and {at 2 orclock. andl 35 minutes possible exception of the- first provision, can fairly be said to p .. m.) the Senate adjomned until to~morrow,.. Tuesday, Octab.eJ: be a war measure 2, 1917,_ at 12· o'clock meridian.
I might add that I have a number of letters· here from' men who have read the provisions·of the bill. I ha-ve one: from a man who tells of the difficulties he has suffered in an effort to obtain NOl\IINATION.
citJzenship. He- tells of having served lT years in the British Ea:eeu.tive. 1wminati-on 1'eeeived by tl~e Sen-ate October 1~ 1911. Army and llis. wish to enter the. Army of the United. States. He has lived in this country seven years He has filed hi:s. applf Cmcurr· JUDGE, FIRST .TumcU.L DISTRICT.
cation for citizenship and will have to- wait two years: before : Charles F. Johnson, of Waterville, 1\Ie., to be United Stutes· he c:m become a citizen.. · circuit judge, first judicial circuit,. vice- William L~ Putnam,
Mr. REED~ If he· has been here for seven years· he could be· resfgned. a; full-fledged citizen by thi time if he. acted promptly.
1\fr. CALDER I' will say to the Senator that this provision is heartily recommended by the Department. of Labo:r. In fa.ct; I may say this particulm-- provision in the bill is their provision. It is not my suggestion, in the- first instance; but from the opera·
· tion of the law, from their exnerience with it, they think it m~ a -very proper proviswn, and for that reason I inco1·porated it in. the bill.
Mr. REED.. The. '~ Department of Laber " is a: vary useful term. It may and it may not mean anything. I have a great deal of respect for the- Seeretary of 'Labor, but I do· not. trunk he knows anything more about the workings· of the naturalization. law by virtue. of his p.asition. in. the Department of Labor than any Member of Congress might know by virtue of his position. What is meant by the " Department of Labor " I do not knowr It may mean: any one ot the young· gentlemen who are working in. the department at a salary- and who are,. ot course,. very necessary for the service. If there is any one lesson ol:l:t country. ought to have learned out of present conditions, tt is the fact that we ought to be careful about conferring the ri'gfitof citizenshi}J, more careful in the fn.ture than we have b·eerr in ike past. It seems· to-me that. this is an exceedingly bad time for making it easy for men to -become citizens o:f this country.
So far as caring fo:r the :rights of those who- may enter our· Army to fight for our country· is concerned, 1 have· very gp~'l..t sympathy with that proposition, but I am- simply a tound.ed: that a bill should be brought irh at this time proposing· te. break down. the safeguards that have heretofore exi ted and which have been. :intended to protect our electorate against. an infl.ur of those who have not yet established their lo-yalty to- the Government and their fitness for citizenship.
Mr. President, I suggest the absence o.:£ a quorum: The VICE PRESIDENT. The Secretary will call the roll .. The Secretary called the roll, and the: following Senators· an-
swered to their name : Brady Jones, N. M.ex. Ovecman Calder .Jones, 'Yash. Penrose Culberson Kellogg. Pittman Cm·tie Kendrick Poindext~r · Fall Kenyon. Reed Fexnald King Robirrson Fr:.rnce Lewis Shafrotb Frelinghuysen McKellar Sheppard Gerry MrNa"l'y- Shields Gore New Smith, Ariz. Ha.I"dwick Newlan<fs Smith, MU. Busting Norris Smith. • C.
TT1e VICN PRESIDENT. FOrty-five S'enators have answered to the roll call. There is not a quorum {}resent.
:;).1:-r. LEWI I ask tlla.t the nam of the ab entees· be called. Tbe VICE PRE IDE.1: T. 'Jibe Secretary wilL. call the names
of the ab ent enntor . The Secretary enlled the names of the absent Senators, and'
1\Ir. s~rrTH of Michigan and Mr. WARREN answered to their names when calle{L
:ur. SIDTH of l\1lchigan. I des.i:ce to. announce the. unavoidable aosence of my colleague [~1r. TowNSEND] on. acco11Ilt of
. illness in his family~
CONFIRMA.TION.
E:tecutive nominatio-n, confir·med by the Senate OetrJbe'l' 1, 191"1 ..
Charles F . .Tohnson to· be. lJnited States· circuit judge, first judicial circuit.
HOUSE OF REPRESENTATIVES., MoNDAY,. October 1, 1911.
The House met at lZ o'clOCk noon. The Chaplain. Rev. Henry · . Conden:, D. D:, offered: the fol·
lowing prayer : Our Father in Heaven, look down,. we be"eech Tiree; front T.hy
throne of grace upon this weary, wa:rring, su:fferr~ sorrowing_ world, with pitying love; and arouse within the llearts <Jf-ThY" children the better angers of our nature; and· Dring order out of ehoa. , harmony out of· discord, pea.ce out of wlfr, lo.ve <mt of hate, righteousness out of unrighteousness; that. brotherly ·love: may have its sway; that the unive1~sal prayer whlch has come; down thFough the ages may be· answered : · '~Thy kingdom eome, Thy will be done in earth as in heaven.n In: the. spirit o.t theLord Jesus· Christ. Amen.
The Journ::tl of the proceedillgg. of~ Saturday,. Septembe1: 29", !9--17:, was read and! approved.
CALENDAR FOR UNANIMOUS CONSENT.
Mr. KITCHIN. :Mr. Speaker, I ask unanimous eonsent tb.at the business on the Calendar for Unanimous Cons~nt :in order to--day be transferred! :from to-day until to-merrow and. tnut the business on the Calendar for UnanimouS' Consent be eon· sidered: to-morrow. ~he SPEA..KERl. The: gentleman trom North Carolina a, ks
unanimous consent that the business. in order to-day on tlie Calendar for Unanimous· Consent be· transferred to to-morrow. Is there objection?
Mr. 1\IADDEN. Mr. Speaker, reserving the right to object,_ :r would like to ask the gentleman from North Caroli-na wll ther· he intends to take up the report of the con.ference ornmi ttee· 1)11
the revenue bill to-day; and if so, whether he expects to give the Hou e an opportunity to debate: it'2
Mr. KITCHIN. I do. I am making this. requ t for that purnose, so that we can go immediately into the- con -illeration of the conference report.
Mr. MADDEN. What amount of debate- is expected'. to ba given to the eonference report?
Mr. KITCHIN. There will be no- disposition on my pnx:t to· curta:fi debate.
Mlrr FITZGERALD. Is the· g_entleman willing, if nec.es ry., to· give: the day to. it? ·
1\..fr. KITCHIN. Yes,.. if tt is· nece:ssary; but I do not tllin.k it' will be· neeessary.
'llhe. SPEAKER. Is there objeetion to the< request of the gentleman from· North Carolina 1 [After a:- pause.] The. Cfulir hears none, and it is so ordered .
A message from the Senate, by 1\Ir. ·waldorf, its enrolling · 292; 293, 294, 295, 296, 302, 315, 316, 317, 318, 319, and 321. cler-k, announced that the Senate had passed bills of the follo~ . That the House recede from its disagreement to the amending titles, in which the concurrence of the House of Represent3:- · ments of the Senate numbered 2, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, tives was requested: · 16; 1S, 19, 20; 21, 22, 23, 24, 23, 26, 27, 28, 29, 30, 31, 32, 33, 34. 41,
S. 2932. An act to guard the military and naval forces from · 42, 47, 50; 52, 53, 54, 55, 57, 58, 61, 66, 72, 76, 83, 84, 85, 86,- 89, .90, the physical and moral injuries· of commercialized prostitution; · 91, 92, 93, 94, 95, 96, 97, 98, 99, 100, 101, 102, 103, 104, 105, 106,
S. 2917. An act to amend section 15 of the act approved June 107, 108, 109, 110, 111, 113, 114, 115, 116, 117, 118, 119, 120, 124, 3, 1916, entitled "An act for making further and more effectual 125, 130, 132, 134, 138, 139, 140, 142, 143, 145, 148, 150, 152, 153, provision for the national defense, and for other purposes," as 154, 155, 156, 157, 158, 159, 160, 162, 163, 164, 166, 169, 174, 175, amended by the act approved May 12, 1917, entitled uAn act 176, 179, 180, 181, 182, 185, 189, 191, 194, 195, 196, 197, 198, 201, making appropriations for the support of the Army for the fiscal 213, 214, 215, 216, 217, 218, 219, 220, 221, 222, 223, 224. 225, 226, year ending June 30, 1918, and for other purposes"; 227, 228, 229t 230,_ 231, 232, 233, 235, 236, 237, 238, 239, 240, 241,
S. 2922. An act to amend the laws relating to the denominar 242, 24'3; 244, 245, 246, 247, 248, 249, 250, 251, 252, 253, 254, 258, tions of circulating notes. by national banks and to permit the 259, 200, 261, 262~ 263, 265, 266, 267, 268, 269, 270, 275, 283, 289, issuance of notes of small denominations. and for other pur- 290, and 298, and agree to the same. poses ; and Amendment numbered 5: That the· House recede from its dis-
S. 2719. An act to permit the reenlistment of Orner G. Paquet agreement to the amendment of the Senate numbered 5, and in the United States Army. agree to the same with an amendment as follows : In lieu of
The message also announced that the Senate had agreed to the the word " Eight," inserted b-y said amendment, insert the word· report of the committee of conference on the disagreeing votes "Seven"; and the Senate agree to the same. ot the two Hou es to the joint resolution ( S. J. Res. 78) to susr Amendment numbered 17: That the Hause recede from its tlispend, dming the vresent. war with Germany, the requirement agreement to the amendment of the Senate numbererl ~7. and that not less than $100 worth· of. labor shall be performed or agree to the same with an amendment as follows: In lieu of the improvements made on each mining claim, during each year for matter stricken out by said amendment insert the following: ae owners who; in lieu of such assessment work, expend the · "and "(c) the provisions of subdivision (c) of section 9 of sum of $100 in the raising or manufacturing of products ne.ceS!- such act, as amended by this act, requiring the normal tax of sary for the maintenance of the Army, Navy, or people of th~ individuals on income derived from interest to be dedn.cted and United States, or shall perform 25 days of labor in any beneficial withheld at the source of the income shall not apply to the new occupation, or pay into the Treasury of the United States $100~ 2 per cent nol'mal tax prescribed in section 1 of this act until
The message also announced· that tne Senate had passed the on and after January 1, 1918, and thereafter only one 2 per :following resolution: · eent normal tax shall be deducted and withheld at the source
Re.<Jolvetb That the Secr.etary of the Senate. be directed to· request the under- the pr-ovisions of such subdivi'Sion (e), and· any further House of .11epresentatives to return to the t::;enate the bill (H. R. 3932) normal tu for which the recipient of such income is liable under to prolll"bit the manufacture,· distribution, storage, use, and passession this· act or such act of September- 8, 1916, as amended by this act, in time ot war of explosives, providing regulations lor the- safe manu-facture, distribution. storage, use, and possession oi the same, and for . shall be paid by such recipient " ; and the- Senate agree to the other purposes, with accompanying conference papers. : same-.
E]fROLLEU nrr.Ls SIGNED. Amendment ·numbered' 35: That the House recede from its dis-The. SPEAKER announced his signatlH'e to enrolled bills of 1 agreement to the amendment .of the Senate numbered 3fi. and
the following titles: ~ . agree to the same with an amendment as follows: In lieu of tbe s. 2816. An act granting the consent of Congress .to the · matter inserted by said amendment .insert on page .64 of the
Ga'.i.nesville- Red River· Bridge Co. to construct a bridge across engrossed Senate amendments, aftm· lme 6, the followLDg: Red River. , "{2) That section 5 of such act of September S, 1916, is. hereby
s. 2823. An: act granting the consent of Congress to the city . , amended by adding at the end of subdivision (a) a further of Elgin., Ill.p to· -construct, maintain, and operate a bridg~ pa~~g1·aph, n~~red_ 9, to .read as follows: . . across the· Fox River at Elgin; and , 9. Con~nbut10ns or . g~s actuall~ made Within the year
S. 2813: . An act to authorize the Gulf Ports Terminal Railway t? corporatwll:s. or asso~tiQns or~am~ed and opera~ed excJuOo., a corporation existing_ un-der the laws of the State of stvely for relig~ou.s, chantable, SClentlfic, or educational. purFlorida, to construct a bridge over and across the· he-adwater~ poses •. or to soCJeties for the pr~ventlon, of cr_uel~ to children of Mobile Bay- and such na~igable channels as are between the or ammals,_ no p~rt of the net mcom~ o~ :WhiCb mures to the east s.ide of the Bay and Blakely Island, in Baldwitt and Mobile bene!Jt of any pnvate stockholder or mdiVldual. to an amo~t Counties . Ala not m excess of 15 per cent of the taxpayer's taxable. net .m-
, · . come as computed without the benefit of this paragraph. Such ENRQLLED BILLS PRESENTED- TO THE PRESIDENT FOR HIS APPROVAL contributions or gifts shall be allowable as deductions only if
Mr. LAZARO, from the Committee on Enrolled Bills, reported verified under rules and regulations prescribed by the Commisthat, on September 29, 1917, they had presented to the Presi- sioner of Internal Revenue, with the approval of the Secretary <lent of the United States for his approval the following bills: of the Treasury.' "
H. R. 5431. An act to authorize the construction, maintenance, And the Senate agree to the same. and operation of a bridge across the Saline River, at or near Amendment numbered 37: That the House recede from its Suttons Ferry, Ark.; and disagreement to the amendment of the Senate numbered 37, and
H. R. 4960; An act to define, regulate, and punish trading agree to the same with amendments as follows : In lieu of the with the enemy, and for other purposes. matter inserted by said amendment insert the following:
WAR REVENUE. "SEC. 200. That when used in this title-1\Ir. KITCHIN. l\1r. Speaker, I call up for consideration the . "The, term 'corporation' includes joint-stock companies or
conference report upon the bill H. R. 4280, the revenue bill, associations and insurance companies; and I ask unanimous consent that the statement of the mana- "The term 'domestic' means ereated under the law of the gers be r ead in lieu of the report. United States, or of any State, Territory, or District thereof, and
'.l"he SPEAKER. The gentleman from North Carolina calls' the term 'foreign' means created under the law of any other u p the conference report upon the revenue bill, and asks unani- possession of the United States or of any foreign country or m.ous eonsent that the statement be read in. lieu of the report. government; Is there objection? "The-term '.United States' means only the States, the Terri-
There was no objection. tories of Alaska and Hawaii, and the District of Columbia; The Clerk read the statement of the conferees. "The term • taxable- year ' means the 12 months ending De-
CONF ER:Ji:NCE REPORT (NO. 172).
The committee of conference on the disagreeing votes of tl1e two Hou es on the amendments of the Senate to the bill (H. R. 4280') to provide revenue to defray war expenses, and for other purpo es, having met, after full and free conference have agreed to recommend and do recommend to their respective Houses as follows:
That the Senate recede from its amendments numbered 1, 3, 4, 36, 38, 43, 49, 65, 71, 77, 78, 80; 123, "126, 127, 1'28, 129, 131, 133, 135, 136, 137, 141, 149, 151, 168, 172, 188, 190, 193,
cember 31, excepting in the case of a corporation or partnership which has fixed its own fiscal year, in which case it means such fiscal year. The first taxable year shall be the year ending December 31, 1917, excr.pt that in the case of a corporation or partnership which has fixed its own n cal year, it shall b the fiscal year ending during the calendar year 1917. If a corporation or partnership, prior to March 1, 1918, makes a return covering its own fiscal year, and includes therein. the income received during that part of the fiscal year falling within the calendar year 1916, the tax for such taxable year shall be that proportion of the tax computed upon the net income during such full fiscal
.
7558 COKGR.E SIO:\_._\L TIECORD-HOUSE. OCTOBER 1,
year which the -time from January 1, 1917, to the end of such fiscal year hears to the full fiscal year; and .
" The term ' prewar period ' means the calendar years 191.1, 1912, and 1913, or, if a corporation or partnership was not in existence or an individual was not engaged in a trade or busine s during the whole of such period, then as many of such years during the whole of which the corporation or partnership was in existence or the individual was engaged in the trade or business.
"The terms 'trade' and 'business' include professions aml occupations.
" The term ' net income ' means in the case of a foreign corporation or partnership or a nonresident alien individual, the net income received from sources ·within the United States.
"SEc. 201. That in addition to the taxe under existing law and under this act there shall be levied, assessed, collected, and paid for each taxable year upon the income of every corporation, partnership, or individual, a tax (hereinafter in this title refe1:red to as the tax) equal to the following percentages of the net income:
" Twenty per cent of the amow1t of the net income in excess of the deduction ( dete1·mined as hereinafter provided) and not in excess of 15 per cent of the invested capital for the taxable year;
" Twenty-five per cent of the amount of the net income in excess of 15 per cent and not in excess of 20 per cent of such capital;
"Thirty-five per cent of the amount of the net income in excess of 20 per cent and not in excess of 25 per cent of such capital;
" Forty-five per cent of the amount of the net income in excess of 25 per cent and not in- excess of 33 per cent of such capital ; and
"Sixty per cent of the amount of the net income in exce s of 33 per cent of such capital.
"For the purpose of this title every corporation or partnership not exempt under the provisions of this section shall be deemed to be engaged in business, and all the trades and businesses in which it is engaged shall be treated as a single trade or business, and all its income from whatever source derived shall be deemed to be received from such trade or business.
"This title shall apply to all trades or businesses of whatever <.le cription, whether continuously carried on or not, except-
" (a) In the case of officers and employees under the United States, or any State, Territory, or ~he District of Columbia, or any local subdivision thereof, the compensation or fees received by them as such officers or employees;
"(b) Corporations exempt from tax under the provisions of section 11 of Title I of such act of September 8, 1916, as amended by this act, and partnerships and individuals carrying on or doing the same business, or coming within the same description ; and
" (c) Incomes derived from the busine s of life, health, and accident insurance combined in one policy issued on the weekly premium payment plan.
" SEc. 202. That the tax shall not be impo ed in the case of the trade or busine s of a foreign corporation or partnership or a nonresident alien individual, the net income of which trade or business during the taxable year is Jess than $3,000.
"SEc. 203. That for the purposes of this title the deduction shall be as follows, except as othei·wise in this title provided-
" (a) In the ca ·e of a domestic corporation, the sum of (1) an amount equal to the same percentage of the invested capital for the taxable year which the average amount of the annual net income of the trade or bu iness during the prewar period was of the invested capital for the prewar period (but not le s than 7 or more than 9 per cent of the invested capital for the taxable year), and (2) $3,000,
"(b) In the case of a domestic partnership or of a citizen Ol' resident of the United States, the sum of (1) an amount equal to the same percentage of the invested capital for the ta:x:able year which the average amount of the annual net income of the trade or business durin~ the prewar period was of the inve~ted capital for the prewar period (but not less than 7 or more than 9 per cent of the invested capital for the taxable year), and (2) $6,000;
"(c) In the case of a foreign corporation or partnership or of a onresident alien individual, an amount ascertained in the same manner as provided in subdivisions (a) and (b), without any exen;1ption of $3,000 or $6,000.
"(d) If the Secretary of the Treasury is unable satisfactorily to determine the average amount of the annual net income of thCI trade or business during the prewar period, the deduction shall be determined in the same manner as provided in section 205.
" SEc. 204. That if a corporation or partnership was not in existence, · or an individual was not engaged in the trade or business, during the whole of any one calendar year during the prewar period, the deduction shall be an amount equal to 8 pe1·~ cent of the inyested capital for the taxable year, plus in the case of a domestic corporation $3,000, and in the ca e of a domestic partnership or a citizen or resident of the United States 6,000.
"A trade or business carried on by a corporation, partnership, or individual, although formally organized or reorganized on or after January 2, 1913, which is substantially a continuation of a trade or business carried on prior to t11at date, shall, for tho purpo es of this title, be deemed to have been in existence prior to that date, and the . net income and invested capital of its predece~sor prior to that date shall be tleemed to llave been its net income and invested capital.
"SEc. 205. (a) That if tl1e Secretary ' of the Treasury, upon complaint finds either (1) that during the prewar period a domestic corporation or partner hip, or a citizen or resident of the United States, had no net income from the trade or busine s, or (2) that <luring the prewar period the percentage, which the net income was of the invested capital, was low as compared with the percentuge, which the net income Lluring such period of repre entative corporation·, partnerships, and individuals, engaged in a like or similar tt:ade or business, was of their invested capital, then the deduction shall be the sum of (1) an amount equal to the same percentage of its invested capital for the taxable year which the average deduction (determined in the same manner as provided in section 203, without including the $3,000 or $6,000 therein referred to) for such year of representative corporation , partner hip , or individuals, engaged in a like or similru· trade or busine s, is of their average invested capital for such year plus (2) in the case of a dome tic corporation $3,000, and in the case of a <lomestic partnership or a citizen or resident of the United States $6,000.
" The percentage which the net income was of the inve ted capital in each trade or business shall be determined by the Commissioner of Internal Revenue, in accordance with regulation prescribetl by him, with th ~ approval of the Secretary of the Treasury. In the case of a corporation or partner hip which has fixed its own fiscal yeru·, the percentage determined by the calendar year ending during such fiscal year shall be u ·ed.
"(b) The tax shall be asseseu upon the basi of the deduction determined as provided in section 203, but the taxpayer <:laiming the benefit of this section may at the time of making the return file a claim for abatement of the amount by which the tax o as ·essed exceeds a tax computed upon the basis of th~ deduction determined a · provided in this section. In such event, collection of the part of the tax covered by such claim for abatement shall not be made until the claim is decided, but if in the judgment of the Commissioner of Internal Revenue, the interest of the United States would be jeopardized theteby he may require the claimant to give a bond in such amount .and with such ureties as the commi sioner may think wise to safeguard such interests, conditioned for the payment of any tax found to be due, with the interest thereon, and if such bond, satisfactory to the commissioner, is not given within such time a~ he prescribes, the full amount of t..'l.x asse sed shall be collected and the amount ove1'paid, if any, shall upon final decision . of tl1e application be refunded as a tax erroneously or illegally collected.
"SEc. 206. That for the purposes of this title the net income of a corporation shall be ascertained and returned (a) for the calendar yeara 1911 and 1912 upon the same basis and in the same manner as provided in section 38 of the act entitled 'An act to provide revenue, equalize duties, and encourage the industries of the United States, and for other purpo es,' approved August 5, 1909, except that income taxes paid by it within the year impo ed by the authority of the United States shall be in· eluded; (b) for the calentlar year 1913 upon the same basis and in the same manner as provided in section II of the act entitled 'An act to reduce tariff duties and to provide revenue for the Government, and for other purposes,' approved October 3, 1913, except that income taxes paid by it within the year imposed by the aut110rity of the United States shall be included, and except that the amounts receiYed by it as dividend!'. upon the stock or from the net earnings of other corporations, joint-stock companies or associations, or insurance companies, subject io the tax imposetl by section II of such act of October 3, 1913, shall be deducted; and (c) for the taxable year upon the same basis and in the same manner as provided in Title I of the act entitled 'An act to increase the revenue, an<l for other purposes,' approved September 8, 1916, as amended by this act, except that the amounts received by it as dividends upon the stock or from
1\ the - net-ea~rnings of otherJcorpora-tions; joint•sfuck"Companies6r' : casb- 01"1 tangibl~-- prop'erty, ·and then- not to·· exceed·. the ·actual ·. associations; or insurance cQmpanies, ·-subject to-'the· tax i:rnpDred' ·e:ash· or 11Ctual:·cash.value" of 'the tangible pr()p~rty paid--therefor
· ~~"by' Title·I ef such ·act' of: September 8;- ;1..916; ·sliall be: deduc..ted. . · at· th'e-tiroe' of· sue~ payment. _ · -~ ·· Th~ ·neu •·income ·· of a · partnership or irrdi.vidiln.F -shall ! be · · '~ SEC:."209. ' That in: t-he· case of a trade or · business·• hav:~ng na
. ascertained · and~J.:etu-rlied ... .for· the " ealendar •years 1911, · 19).~, irutested ~pital or ·not :more than a nominal·:capital thetre:shall ..-~. and i1913,' and -•for -the--:.taxable<-year,:·upon the--sam'e basis. rt~d . be: levled,- .assessed; collected·. and.~pnid, in addition to the-taxes ·:··· in ·. the ' same· mauner ·~ as "pro-tided· iii :Title I " of· • s'uch - ~ct t of :Lunder : existing ·Iaw· :and -under · this ·-act;~ i1l lieu •df the- .tax· im-
. :. ~eptember 84·:: 1916,-· as ~ amended ;by ·this :act;·· except tha~ tlie posed--by ·section 201, a · tax~ equivalent to -s· -perr-cenf of: -the net :"' ~redit- allowed by· subd~ori (b)" of:·sectid:il. '5 ' af'.such:-act- sli.all income of such trade or business in: excess of the !following de .. ;,_ -be ·dedu.eted.7 .There:·shalkbe allowed·.t (a}-· in ·1he:~ase of a do~. _ductions: In the .case : of . a __; don:iestic:-c.l)rporatioti $3,{)00,- and in .. ,.. mestie ·partnership': -the , same- deductions·-·.as" allawed · tcr · indi·~ the-case:· of a do.rrtest~c;._partnership: or a; citizen or ·resident ot ·v1 ·vidi:lals-- in ·subdivision: (a) : of section 5' of Sllch·net1 6f September· · tluLUniteu-State· _$6iOOQ;. -m the· case' of . .all .other trades· or :busi~ · 8, : 1916; as "amended• by• this ·act·; · and· (b)·: in the case: o:f ;a -:- ness,. no. deduction. forei~ - partnership the same~ deductio-ns·· as J'allowed·· to- lndi· · "SEc: 210. 'That.· iL the ~ Secr_etfl.ry~· of.. -the i'J:rerumry. is .unable
r :- viduals in-:-subdivision : Iru)t o-f section :6'r o:f s..ucb uet..; as_amende~ .. in 9~.ny_case.. satisfactorily. to -d-etez:mine.the invested capital, the •' •.; b'y.:this· act. · ' .. amount-of. th-e; deduction .shaU be. the. sum df:. I1) an amount equal
1 .;_J SEc:~ f207.'f That ~. as: ; lJ.Sed · in •'ihis :utle, ··the: term -: ~· inv:.es~~- to .. the:..£am,e ·p,ropm;tion' oi.-the ~net . Jnco.me 'of .. the Uade or- busi·
l obligations!' of -the 1:mllited. •.-S.tat~s), therein referred to) for · the· same . calendar year of representa" or thero.mssets t.the t.;ineom~ ·. from which' is not tsubject-· td the .. tiva. c_orp.or.ations_,-,.partnerships, · and - individuals. ~ngaged in a • r, tar imposed b'Yr · hiS' title; ·nor Eoney- or: !other· P~MrtY' b<trrowe9 · · lilre or.si1nilar trade or .b.nsinessr bears tO.-the ,totaLnet income of ~.--uind• means,:Stlbject· to, .theJ Rbovet~limitat:i-Gns : ' ; · .. the. -.trade. qt:. ... b.usiness. :r-eceived,. bsr·- such_ corporations,-· pa1~tner·
·• ~' (a)::- Iri. the ase o:f a·-·~rporation or tpartners:hip::l (1),. A-etili,l\- . ~,hips, and indiYi.du.al~,.. plus~_, (2_). ; in .. the. case. of a· .. domestic..· cor.... ,, ~-ash ·paid in;:: (2:) r-the::actua1-·cash value of::tangible--property:,phict, . poratidtf $3,000,·. an<i in: the e.ase·: of a ·do.mestia . pru~er~pjp, or a
in other than-. cash'; .=for :--sfuck ot' shares:. in · s·uch · ~orporationt ~r., ; citizen. or:.:residene of. th~ :IJnitea.Stat_es1;$G-;000. partnership, at the time-of,sbch- paymenf1 (but· in ·case such ta(l- ;- '..For.- ... the:.:p_urpos · o:Lthis-:--sectionrtl\e..proportion. between the
-.:: --gi.ble pr.opercy::wt!S'. pai-d: in"PFior· to: Janu_ary I;i'l914\ 1 ·the' acth~l - · deduction..and . .the.IJ.et--incGIIie. inl each ,trade· or.Jbusiness sliall be : -cash.~: value.: uf!!-sllch. property..: as ' oi 1 J anu_ary 1; :un 4,-~·.but' in~ np_ t deiE·mined. b'~1 ,thB·,Conimissiene.r, o.t.·lnteJ:milt Rev.enue in ·13.ccord~
.. ·• ca e ·tO' ·ex--<!eed b,e-par ' ;.r..altre.' Of -the;()tig!hal-lsf-o~ or share~ .. spe- ance ;:IDthn;e.gulu.-tieil'S ,prescribed;;by. ·hi,IIlJ:.With ·.·the:, appr.o:val of ut Cifically,-issued ·-therefor) ,_and~ (3):.paid 1rr o.r--ea'l"ll.ed.smplus a11d,- . .the.r. Seeret_flry;: ofJ: th~r'rreasury_~r:Id .the.-i£asei of, a: .,e01·por-ation
undi vided: ·•pi~ofit.s~nsed "or::employed• in .the;bnsiuess, ' ~~clu:si':Ei ~: or. .. p:a:ntnership hichc has fixed :-its,·..o.wlli-fiscaJ. ·y.e.ar;; th!eJ"·PJ.'OPOI'· .. '-; · :1ihd.ivided·:--profits..+ ea:rned· ;duling!' ·the.'·-taxable,, year ~-·· .Prom deft,_. .,tiolli- determined :dor; ~the-;,ealendair-;· yea · .endiJJg_:::d~ng.::. such rc That• (ai) ; the ncfual-.·eash value o'f ·patents an<t ·~~o~Y:flgh1;s: pkiA , ~ fiSCl'\lr -yeru· :. halh-bfbll.Seo. · ?~I i~.lf~r ~ stock O'Jr-:Bhares. in_sl:lcb::~~rporatioa- Q~p~rtnerShii?f ~t tlie " SEc. 211!. lillha-t·• e~.ery. .. :Fareiglh:pal'tner~hip"•ha:vjng a~· net in-
, :H• trme.: o.usuch~payment;. sliall~· be •mcl.u-ded'- as:'l_nv.ested! ~fqntal; :~H~t. £mrre at-$3,00.0 or(tiDOr.e~ for .tlro:taxabletSear;;·and- -evecy1dumestic not to exceed the·,parr.value of::- sucb:.- ste_~ o.v,~hares at-·thB -~e,_ -_pa:rtnerslliprilav,i;ng a ~net ·incollrel oi.l$6,000 or ·more~-'-fOJtnthe-. tax
- o:t,.·.sncb"! pa-yment,:r-l.and! (b )1"·the:~ ga?e::t :w.Ill;:tttade--~s: · tracT~, . able.! .y.:e.ffr 1-;,t,shall~.:roodBr fhecn.rrec-t-:.:i"etm·n~· ofr the ,iooome~ o.f the • 1-. ~d~~~ rths\tiranchise;- of a•e~t:ation ' or:· partnership ,_0 ·-~th~r~ -trade.: aP-i-lmsmess:-for::.the-, taxa.bte:yeru; ~setting; :furtq; sp.ecifu:!ally. , ,d1 l.Dtangrb~e ·p.r.ep~r.ty. J :Shall :beHnclnde<:I~.as:~lu,vestert_~apitat_~· ft'Qce., , t;h~-gros lineo~dOl'J i suctn~e.al\lmnd!,the,doouctions.i.:UHGWed in
t 'i su¢ go.od .WIH;.~ttadetmai k4- .ita de brand¢:r:anchise,1 o.r ..;mtangipfe undel!:! ff'ii.tle: I ,! of--.....-snchi acm: of r.Sep-tember. S,~d916:, --i aB--1 amended :· p;eop-er,ty;.~ no±! · tn··.ex'Jleed1-.t~e; ac~all.dis:t:r-o-r ac-t.ual~.cas Ynlu~ o~ b8'.-thi_st .act. - ~ · J !.-th.eHta:trgJ.ble r :we-p~rty. ;t.paid;Aherefo-r. i a:b the. ~:! oibsn~:P.:pay- .. :~ SEa.· '212: r ThmbaUoadminlstrative;rfs~ia1, " and~ general. pro4
T:::nnme; 'bl_lt :.~ood:- will~-:- t:a~e~a;~st! tra?--€;l>:r~d~~- f~a:nct:n~ af J aa i1'Visis~of.,ln '""''., including; -the: Laws--in ll>elatfon· t011heJ:asS€'ssment, cotwratwn: or::.pa:-:tnet ~h1p.,, OE .. otben: 1ntangibl~ · pt o-~ty.,. .b()~ : ':remission:,.r :eolleetioir.·JJ-dnd~ xefund:! at ·lin.terhal-revenu.e. .. .taxes not
~"' :ftqe.:;pul:Cbased; Pl."lO t4_1 :M11rch 3; ~1'9~7;,.rfon and- ;WI~_t.m~'-est~ · or · .· hexetofor~ specific:rllYJ:-trepealed'-· and: not! in:c.onsi:stent ::With the '•· tsi:ar _ m -_a tpa.r.tn-ex~~H:np:r ?l")for~. an.d .WI~ shares ~theJ~~-p\t~\ -.prhllis'iorrS:o:tfui.s•_title,.naJte~ hereby..~exten.decbm-d. made·.~plicable I ' . rsfuck:?of a:~~rpor.atiOn 1{JSStl.e9· pno-:: to 3.\I::!'rc~ 3-1 -1917); lll i a;n( to ·an -the.1)rONisions : of;tbiS".:title~ a.n:G; ro itlJ:e -tax:h-erein.Jmposed,
:• amou!lt ·~ot·: to~exeeed, '?n.l lM~rcli. .. 3,. :.-19~ 7., •• 2.0 -per --~ent ._of ~e ;: and.: all · prmrisi-gn ·of ~~tt:r.e . I-i of ~such.:act of;:iSeptember. 8.~r1916, total mter ~sts.; oo!'1 sh~re& m::the:..partn.ars.~up G.li_ of:_t?=e .total -s~m;~s.l as-::amendoo by.-~tll.Is': act; · relil.tingJ to Eetu.rns.and~ymen.U. of the
~ o.:f -the;~'Cft~tal:·:sto-ck:;- o:Ltme:~eorpor.ation~;iSballi : be..:mctu:ded-_ ID tq1· 1. :·tax::A:herein:::impesed-'- inuludingi-peha-lties-, J·ru:e-;: lmreby~Jrriade ap; •1n:v.es.te. eap11:a · at a:.y..aJ.ue· ~ot to.: ~xce~h.e" actua~·. casm_Ynl\Hf at . .tPlicable;to:-tlm:t:nlx!:impoS;ecl,by thisrtitle . .
t Alte tzroe O-ftSilcp:pu.rcha.se . :ttnd.m :case: 6f assue of. -stock. therefor "· S 213 Th t the Commissioner.: of~lntemal ·'Re.vennei ;with r.:.not: to · exeeed: ihe_par~v.ruu =1 of ·snch-.st:()ek; 1 _ Ec. . · ... a _ . . hall k u
" (b) Im the• cas~ of::aiD .indi:v.idual,::· I L)!"actua-l~ casJ:r·p:aidT.into '1 'th-e• rappro_wa:t. ofut~-e;: ~cre~:~n Y! 0~ l ~e'1"11~8.S1lry._,. l .S. . -~a e a. t' th ·tJ.·ade-- _ bnsiness ··· and - (2J :the actuah ·cash•valu.e;o:L:tangiblel , n-ecessary• u-eg:ulatie~ !for c:arFy.zng1 · 0~t-.the t pro~ISl?ns , of .. th~~
e. .. or-'. . • _ •-- •• - • • . .~ ·, th h ~t'- ti-tl~ tmnd ~· may..•Te4mre ::mnyP co:rpo:r.ation-, ·~ pru.'-tnel'Bllip; ;• oru·mdl-~i[Pr~rty. ~ paid .o.n ;o ... -the: , trade_ OI"T}b~ness. ' ot~er , . an.' eas •I. -... -·~id ualr,- SUbject; to'; the" provisions:· of~ .this· t title; '-" ttr furnish: him BAhru ~,e- ~::.. su<:'b: .; paymenttJ (.~ut 1~ ~se:;;snch: ~:tffng:Ibl;erprop~ty .with such facts. data;,' and li-nf:ormation•Jax in-Jhis::rjudgment are ,,;;:;was!pald 1n:~prwr.: toJ.January,, 1, 1914;: the uctual:!Cash .Yalue of t lfe t ttl taxt ' s d ·by ith' ti:tle
such property as ofuiJa:nu~ry_ 1; .: 1914~_ .. -U~d~ __ (3:} the a-ct~al · c~Sh1 ·~~~:-721~-:;1uf~ ·.Tft~e.lii~~(s~s;:~ooo ~0 3h~7; jtrclusive)~ of the : -l':~lue ~;:q.pat~tsf[· qepy:ngbt~, ·'· goo~- ·~ill ,. · trad~:mar~i' tr~~e· 1 • ae..t: entitled fAnJ-act to-prov-ide ~ inerease'd' revenue to::-d'efray the t--! ·brands.,! 1 ~~s.es, · 0~ t>~h~r-. mU!-ngible. proper~~ .. - paid. :rn~ t ,.e.· .:expQIU;es -<:-oft. -th~_; increased :": app:Fopriati.ons ."' fot)·the'.-::All·m . and i1: ~trade OI , bu:~mess; fl:"tt .tbe .tl;Jll.e ofr~~cb ... pa~ent. ~f .vayment . w~S' :Na-vu-11a'n.d: the 1·extensions: O'f fortifi-eatien~ ·· · d ·fort-othem pur .. r.;:made.Jthe1!ero:r;.A>pecifically .. -. as . snch m cash or: tangible; p:ropercy, ... .-,-,, . . . . ,, .not to:- ex:eeeffi .the acthak :easrr or actuaL. cash. value of the-.ta.n-gtble poses, appiOved 1\farch 3, 1917, lS hereby I.epealed.
'~.;:- ·aroMrtrbo_na "fide paid -th-erefor at.,the..time o.f, su_ch.payment. r "ot.~~.Any •·amotmt··~er~to~or~ or--herea:fit~ - pa~d -on ·account o~ th~ I . ·"·Jru he:- case: of a ,lforeign;cprpt>:ration. o:r .. partners?4>. or: of ~-- taX'·1imposetl• by ' s~.cli T_itie _ Ir; - sh~ll.·~e ere~i.te?' - tow~rd,~~ pay ..
the United states-bears to the Lentire -net. .ineome. ; · ' -- Snbdr'\iiSIOn ~ (1) of ••sectwn ·301 of •such act of ~eptem~er 8, "SEc. 208. That in casef df diherl·eo.rganization;.;.eonsolidat-ton, 1916! is hereby ~ended so thl;lt the ~at~ of tax_-~-tm~ t:_Im ~axab!~
1 t or. .• .ehange= of .. own-er!IDip·· o.f ~ crade.· or business ~ aftei.·- Marcli S,'r yean~ 191'l...shall be:.-'1_-6:'per: cenbmstead: Of.l2-!-peF:eent,-:- as .therem :: -1917 if:. an.: interest-or -._control . in , such- ttade or · busineSS,: oft· 5()l 1 provided. . ~~ per-~ent: •or.;-mor.e--. remains , in: .control~ of. .. the~ siiiiTe.: persons-,-· ~or- · !!~:~Stibdi-vtsion :; (2)·· of·.·snch ·section ,is-h-er~by ; ulflended · to· read ! ~ ·pora.tions, . ..asso.c.iation~.- partnelf'ships, .or :::~ny- o'f them-,,· thell," in'- as}ell~ws: . .... , . . . . . . , . , _ .• · ascertaining .~ the ,_ invested:-~a'pitali' of .... the ·:trqde..· or~·.business f no . ( 2): . This· sec-tion. sliall cease to- be: a:E effect on and· ttfter iT an u·
3 asset ~ail.s:fer.red:· or·:.rJacei:ved tt·mn-•. ~ :prlor- trade or :bu-siness· nr~ · 1;1.918." _ . . . . . n: shallLh~.'allowe:d a · greater ,valwL.than .woUld . have-:b:een'llllowetl ·-:·A:nd ' on-: page : ss:·' of:·-the.:~ngrossedr Senate:- amendments, \ line 7, : 11 t'indetlhis . title in , eQ.m.putl.ng,.-the; m.vested. _cttpitai ' of~ su$ tuiqr.. :strike ·out •th-e;'.wot·d ~"'~ve '''-and -insert · the·,~_drd ~" sixt~ and on 1 i- .trade. of-bUsineSS if:.s.i:lcb._:.-usset.:ollad..:nat ·been SO. ·transferteq•OJ:"' ·-page"-8()! of-' St\.Id:;en-grossed• am~dments, after \:line 8, ~·msert the
receh·ed, unless · such asset --was · patd"for-sp'e"cift~ally! as~s'ucht in foliowing;·a:s -a ··-sepal'atwpa-ragraph:
(•
7560 CONGRESSIONAL RECORD-=---HOUSE. OCTOBER 1,
" SEC.· 32. That premiums paid on life insurance policies coverinO' the liyes of officers, employees, or those financially interested in any trade or business condticted by an individual, partnership, corporation, joint-stock company or associ~tion, or insurance company, shall not be deducted in computing the net income of such Individual, corporation, joint-stock company or association, or insurance company, or in computing the profits of such partnership for the purposes of subdivision (e) of section 9,"
And the Senate agree to the same. Amendment numbered 39: That the House recede from its
disagreement to the amendment of the Senate numbered 39, and agree to the same with an amendment, as follows: In lieu of the word " four," inserted by said amendment, insert the word ,; three"; and the Senate agree to the same. .
Amendment numbered 40: That the House recede from its disagreement to the amendment of the Senate numbered 40, and agree to the same with an amendment ns follows : After the word " purposes " and before the comma insert the following : " or for use in the manufacture or production of any article used or intended for use as a beverage " ; and the Senate agree to the same.
Amendment numbered 44: That the House recede from its disagreement to the amendment of the Senate numbered 44, and agree to the same with amendments as follows : In line 1 of said amendment strike out the figures "302 " and insert the figures "301." · In line 2 of said amendment stri~e out the word "enactment" and insert the word "passage." In the last line of said amendment strike out the words "beverage purposes" and insert the following: "(1) beverage purposes or (2) use in the manufacture or production of any article used or intended for use as a beverage" ; and the Senate agree to the same.
Amendment numbered 45: That the House recede from its disagreement to the amendment of the Senate numbered 45. and agree to the same with an amendment as follows: In line 1 of said amendment strike out the figures " 303 " and insert the figures "302"; and the Senate agree to the same.
Amendment numbered 46: That the House recede from its disagreement to the amendment of the Senate numbered 46, and agree to the same with an amendment as ·follows: In the fifth line of the matter inserted by said amendment strike out the words " use of the United States or for denaturation " and insert "other than (1) beverage purposes or (2) use in the manufacture or production of any article used or intended for u e as a beverage " ; and the Senate agree to the same.
Amendment numbered 48: That the House recede from its disagreement to the amendment of the Senate numbereu 48, and agree to the same with an amendment as follows: In lieu of the figures " 304 " inseTted by said amendment insert the figures
_" 303 " ; and the Senate agree to the same. Amendment numbered 51: That the House recede from its dis
agreement to the amendment of the Senate numbered 51, and agree to the same with an amendment as follows : In line 2 of said amendment, after the word " purposes " and before the comma, insert the following: " or for use in the manufacture or production of any article used or intended for use as a beverage " ; and the Senate 1:\gree to the same. ,
Amendment numbered 56: That the House recede from its disagreement to the amendment of the Senate numbered 56, and agree to the same with an amendment as follows : In lieu of the figures "305" inserted by said amendment insert the figures "304 "; ancl the Senate agree to the same.
Amendment numbered 59: That the House recede from its disagreement to the amendment of the Senate numbered 59, and agree to the same with an amendment as follows: Strike out the word " enacted " in the first line of the Senate amendment and insert the word "passed"; and the Senate agree to the same.
Amendment numbered 60 : That the House recede from its disagreement to the amendment of the Senate numbered 60, and agree to the same with an amendment as follows: On page 13, line 21 of the bill, strike out the words "less than" and in the matter inserted by said amendment strike out the words and figuTes " 250 and not"; and the Senate agree to the same.
Amendment nnmbeTed 62: That the House recede from its disagreement to the amendment of the Senate numbered 62, and ngree to the same with an amendment as follows : In line 1 of the matter inserted by said amendment change the figm·es "306" to the figure. "305 " ; and the Senate agree to the same.
Amendment numbered 63: That the House recede from its disagreement to the amendment ot the Senate numbered 63, and agree to the same with an amendment as follows : In line 1 of the matter in erted by said amendment change the figures'.' 301" to the figures "306 "; aD<l the Senate agree to the same.
.
Amendment numbered 64: That- the House -recede from its disagreement to the amendment of the Senate numbered 64, and agree to the same with an amendment as follows: In lieu of the figuTes " 208 " inserted by said amendment insert the figures " 307 " ; and the Senate ag1·ee to the same.
Amendment numbered 67: That the House recede from its disagreement to the amendment of the Senate numbered 67, and agree to the same with amendments as follows: In line 1 of the matter inserted by said amendment strike out the figures " 309 " and insert the figures "308," and in the same line of said amendment strike out the word " enactment " and insert the word "passage " ; also in line 7 of said amendment strike out the words " not to exceed " and insert the words " less than " ; and the Senate agree to the same.
Amendment numbered 68 : That the House recede from its disagreement to the amendment of the Senate numbered 68,· and agree to the same with an amendment as follows : In lieu of the matter inserted by said amendment insert the following:
" Sec. 309. That upon all still wines, including vermuth, and upon all champagne and other sparkling wines, liqueurs, cordials, artificial or imitation wines or compounds sold as wine, produced in or imported into the United States, and hereafter removed from the custom-house, place of manufacture, or from bonded premises for sale or consumption, there shall be levied and collected, in addition to the tax now imposed by law upon such articles, a tax equal to such tax, to he levied, collected, and paid under the provisions of existing law."
And the Senate agree to the same. Amendment numbered 69: That the House recede from its
disagreement to the amendment of the Senate numbered 69, and agree to the same with an amendment as follows: In lieu of the figtrres " 311 " inserted by said amendment, insert the figures " 310 " ; and the Senate agree to the same. ·
Amendment numbered 70: That the House recede from its disagreement to the amendmE:!nt of the Senate numbered 70, and agree to the same with an amendment as follows: In lieu of the word " ten " inserted by said amendment insert the word " nine " ; and the Senate agree to the same.
Amendment numbered 73: That the House recede from its disagreement to the amendment of the Senate numbered 73, and agree to the same with an amendment as follows: In lieu of the figures " 312 " inserted by said amendment insert the figures "311 "; and the Senate agree to the same.
Amendment numbered 74: That the House recede from its disagreement to the amendment of the Senate numbered 74, and agree to the same with an amendment as follows: In lieu of the matter inserted by said amendment insert the words "equal to double such tax"; and the Senate agree to the same.
Amendment numbered 75: That the House recede from its disagreement to the amendment of the Senate numbeTed 75, and agree to the same with an amendment as follows: In lieu of the figures " 313 " inserted by said amendment insert the :figures" 312 "; and the Senate agree to the same.
Amendment numbered 79: That the House recede from its disagreement to the amendment of the Senate numbered 79, and agree to the same with an amendment as follows : In lieu of the figures " $1 " inserted by said amendment insert the follow-ing: "20 cents"; and the Senate agree to the same. ·
Amendment numbered 81: That the House recede from its disagreement to the amendment of the Senate numbered 81, and agree to the same with an ·amendment as follows : In lieu of the figures "314" inserted by said amendment insert the figures "313"; and the Senate agree to the same.
Amendment numbered 82: That the House recede from its disagreement to the amendment of the Senate numberad 82, and agree to the same with an amendment as follows : In lieu of the matter inserted by said amendment insert the following:
" If so sold for not more than $1.30 per gallon, a tax of 5 cents per gallon; if so sold for more than $1.30 and not more than $2 per gallon, a tax of 8 cents per gallon; if so sold for more than $2 and not more than $3 per gallon, a tax of 10 cents per gallon ; if so sold for more than $3 ~n~ not more than $4 per gallon, a tax of 15 cents per gallon; and u;,so sold for more than $4 per gallon, a tax of 20 cents per gallon.
And the Senate agree to the same. Amendment numbered 87: That the House recede from its
disagreement to the amendment of the Senate numbered 87, and agree to the same with an amendment as follows: In lieu of the :figures " 315 " inserted by said amendment insert the figm·es "314" ;· and the Senate agree _ to the same. . :
Amendment numbered 88: That the House recede from 1ts disagreement to the amendment of the Senate numbered ~8. and agree to the same · with an amendment as follows : In _ lu:~e 1 of the matter inserted by said amendment strike out the
i
1917. CONGRESSIONAL REOOR.D-_ HOUSE. 7561 figures " 316 " . and insert the -fignres- " 315 "; and the Senate
- agree to the same. Amendment numbered 112: That the House recede from its
disagreement to the amendment M the Senate numbered 112, and agree to the same with an amendment as follows: In lieu of the figures " 75 " inserted by said amendment insert the figures " 80 " ; and the Senate agt·ee to the same. -
Amendment numbered 121: That the House recede from its eli agreement to the amendment of the Senate numbered 121, and agree to the same with an amendment as follows : In lieu of the figure " 4" inserted by said amendment insert the figure "5 "; and the Senate agree to the same.
Amendment numbered 122: That the House recede from its disagreement to the amendment of the Semite numbered 122, and agree to the same with an amendment as follows: In lieu of the matter stricken out by said amendment insert:
"Sec. 402. That sections 400, 401, and 404, shall take effect 30 days after the passage of this act: Pt·ovided, That after the pas age of this act and before the expiration of the aforesaid 30 days, cigarettes and manufactured tobacco and snuff may be put up in the packages now provided for by law or in the
. packages provided for in sections 400 and 401." And the Senate agree to the same. Amendment numbered 144: That the Hou e recede from its
di agreement to the amendment of the Senate numbered 144, and agree to the same with an amendm~nt as follows: In t~ second line of the matter inserted by said amendment strike out the figures " 25 " and insert the figures " 20 " ; and the Sena ter agree to the sanie.
Amendment numbered 146: That the House recede from its disagreement to the amendment of the Senate numbered 146, and agree to the same with an amendment as follows: In lieu of the word " five " inserted by said amendment, insert the word " eight " ; and the Senate agree to the same.
Amendment numbered 147: That the Hou e recede from its disagreement to the amendment of the Senate numbered 147, and agree to the same with an amendment as follows : In lieu of the matter inserted by said amendment insert the following: " or by any form of mechanical motor power on a regular established line when in competition with carriers by rail or water " and a comma ; and the Senate agree to the same.
Amendment numbered 161: That the House recede from its disagreement to the amendment of the Senate numbered 161, and agree to the same with an amendment as follows: In lieu of the word " the " inserted by said amendment insert the word " such " ; and the Senate agree to the same.
Amendment numbered 165 : That the House recede from its disagreement to the amendment of the Senate numbered 165, and agree to the same with an amendment as follows: In lieu of the matter inserted by said amendment insert the following: " or has been so used; or (b) upon the transportation of company material h·ansported by one carrier, which constitutes a part of a railroad system, for another carrier which is also a part of the same system " ; and the Senate agree to the same.
Amendment numbered 167: That the House recede from its disagreement to the amendment of the Senate numbered 167, and agree to the same with an amendment as follows: Restore the matter stricken out by said amendment, substituting thQ word "November" for the word "June," in line 11, page 25 of the bill; and the Senate agree to the same.
Amendment numbered 170: That the House recede from its disagreement to the amendment of the Senate numbered 170, and agree to the same with an amendment as follows : In lieu of the matter inserted by said amendment insert the following:
" That there shall be levied, assessed, collected, and paid-" (a) Upon all automobiles, a~tomobile trucks, automobile
wagons, and motorcycles, sold by the manufacturer, producer, or importer, a tax equivalent to 3 per cent of the price for which so sold ; and " ;
And the Senate agree to the same. Amendment mm1bered 171: That the House recede from its
disagreement to the amendment of the Senate numbered 171, and agree to the sam~ with amendments as follows : In lieu of the matter inserted by said amendment insert the following:
" (b) Upon all piano players, graphophones, phonographs, talking machines, and records used in connection with any musical instrument, piano player, graphophone, phonograph, or talking machine, sold by the manufacturer, producer, or importer, a tax equivalent to 3 per cent of the price for which so sold; and
"(c) Upon all moving-picture films (which have not been exposed) sold by the manufacturer or importer, a tax equivalent to one-fourth of 1 cent per linear foot; and ,
" (d) Upon ·au -positive moving-picture films (containing a picture · ready for projection) sold or leased by the -manufac· -
turer, producer, or importer, a tax equivalent to one-half of 1 cent per linear foot ; and
" (e) Upon any article commonly or commercially known as jewelry, whether real or imitation, sold by the manufacturer, producer, or. importer thereof, a tax: equivalent to 3 per cent of the price for which so sold; and"
Also insert, on page 31 of the bill; after line 25, the following : " SEc. 603. That on. the day this act takes effect, and there
after on July 1 in each year, and also at the time of the original purchase of a new boat by a user, if on any other date than July 1, there shall be levied, assessed, collected, and paid, upon the use of yachts, pleasure boats, power boats,- and sailing boats, of over 5 net tons, and motor boats with fixed engines, not used exclusively for trade or national defense, or not built according to plans and specifications approved by the Navy Department, an excise tax to be based on each yacht or boat, at rates as follows: Yachts, pleasure boats, power boats, motor boats with fixed engines, and sailing boats, of over 5 net tons, length not over 50 feet, 50 cents for each foot, length oyer 50 feet and not over 100 feet, $1 for each foot, length oYer 100 feet, $2 for each foot ; motor boats of not over 5 net tons with fixed engines, $5.
"In determining the length of such yachts, pleasure boats, power boats, moto_r boats with fixed engines, and sailing );>oats, ~e \tieasurement of over-all length shall govern. _ ~In the case of a tax iipposed at the time of the original pllrchase of a new · boat on any other date than July 1, the amount to be paid shall be the arne nUlnber of twelfths of the amount ·of the tax as the number of calendar months, including the month of sale, remaining prior to the following July 1 "; and the Senate agree to the same:
Amendment· numbered 173 : That the House recede from its disagreement to the amendment of the Senate numbered 173, and agree to the same with an amendment as follows: In lieu of the letter "a" inserted by said amendment insert the · letter " f " ; and the Senate agree to the same.
Amendment numbered 177: '£hat the House recede from its disagreement to the amendment of the Senate numbered 177, and agree to the same with amendments as follows: In lieu of the word "two" inserted by said amendment insert the word "three," and on page 29 of the bill, line 10, sh·ike out the period anct insert a semicolon and the word "and"; and the Senate agree to the same.
Amendment numbered 178: That the House recede from its disagreement to the amendment of the Senate numbere<l 178, and agree to the same with an amendment as follows : In lieu of the letter " b " inserted by said amendment insert the letter " g " ; and the Senate agree to the same.
Amendment numbered 183: That the House recede from its disgreement to the amendment of the Senate numbered 183, and agree to tJ1e same with an amendment as follows: In lieu of the letter " c " _inserted by said amendment insert the letter " h " ; and the Senate agree to the same.
Amendment nrunbered 184: That the House recede from its disagreement to the amendment of the Senate numbered 184, and agree to the same with an amendment as follows: In lieu of the word '' fourteen " inserted by said amendment insert the word " thirteen " ; and the Senate agree to the same.
Arr:mdment numbered 186: . That the House recede from its disagreement to_ the amendment of the Senate numbered 186, and agree to the same with an amendment as follows: In lieu of the matter stricken out by said amendment insert the following: "(i) Upon all chewing gum or substitute therefor sold by the manufacturer, producer, or importer, a tax equivalent to 2 per cent of the price for which so sold; and" ; and the Senate agree to the same.
Amendment numbered 187 : That the House recede from its disagreement to the amendment of the Senate numbered 187, and agree to the same with an amendment as follows: In lieu of the matter inserted by said amendment insert the following: "(j) Upon all cameras sold by the manufacturer, producer, or importer, a tax equivalent to 3 per cent of the price for which so sold"; and the Senate agree to the same. ' Amendment numbered 192: That the House recede from its
disagreement to the amendment of the Senate numbered 1,92, and agree to the same with an amendment as follows: In lieu of the matter stricken out by said amendment insert the following:
"SEc. 602. That upon all articles enumerated in subdivisions (a), (b), (e), (f), (g), (h), (i), or (j) of section 600, which on the day this act is passed are held and intended for sale by any person, corporation, partnership, or association, other than (1) a retailer _who is not also a wholesaler, or .(2) the manu· facturer, producer, or importer thereof, there shall be levied, assessed, - collected, and paid a tax equivalent to one-half the
·tQ.x: .imposed -by• each · such :subdivision ·upon ·the 1Sale· of the and :agree to .the-srune-:witb an· amendment as follows: On page articles therein enumerated. This 7tn.X shall be.t paid by- the 37, line 5, of the bill strike out the word " Is .'.l · nnd · insert the
, per on, :co.n>Q~·atJon~ 'I.Utrtnexship.; or·-assoeiation SQ •holding such ·word !t~ ~~-;and. the ·S.enate· agree -to the·.same. ~l·ticles. Amendmentnnumbered:i255 .·1 That ·the House ·recede l'from its
" The r taxes·, impo.sed by this section. sbaU. be·- as essed, col-. disagreement to thet_amandment of the· Senate · numbere : 255, lected, and paid in the same manner as provided in section. and ngree to the same twith an:amendment as follows: In lieu.
1 J.002 in the._,<:,ase o~ · additional taxes upon ar.ti.cleij·.lupon'.which of the matter inserted byisaid· amendment strike out the word _..the tax,imposed··by·ex:isti.ng·law has been.paid. · ".November.". and in.sert ';'.l)ecember" . .; and the:Se.nate agree to
' '·'Nothing in this.i_soction -~ shall be ~on trued, tO'·. impose a. tlle· same. tax upon m·ti~les sold ·and deliveredprior to 1May 9, 1917;where .t.Amendment·numbered 257''! ~hat the ·House- recede from its
i • the .title is eser:.ved in_ the ;\'endo~ as ecurity for tha payment disagreement to •the:, amen.d.ment of the . Senate: .. numbered · 257, of -the purchase .money." and agree to the sam.e :with an amendment as follows: In· lieu of -~ .4\..nd the Sep.ate agree to• the-~ arne. ·· the ma.t te1: inserted by. .said ,amendment·:insert, on· page 48, after ._~A..me.ndment numbered ~ 199; ~hat therJiouse · r~cede from itS: ' line 10 ·of ·the .biU.. the:following:
.,,, di greement. to- ·the amendment of: the·. Senate numbered.i199, · '.' 14.- 'Parcel-post . packages ·: Upon ·everY'.;pa1·cel or package ,. and-agree to the : sam~iWith an atnendm"Ont as follows: In lieu transnollted •hom .one 'point in -tthe United States to ·ahother by
of the .mattel'.i . .Q.serted by• aid amendment insert ,the . .follow,ing·. ,parcel ,post omwbich •. the cpostage tamounts to 25: ... cents or more,' 1 ' paying .for .such 11.<Unission ~ Provided; lJhat the ta.x1 on ad:- a ·· tax Qf 1 centr for·teach> 25 •Jcents or-- fractional · part thereof
mis ion of. children ~ undex· 12 years of·.-age- w.here an admission) -eharged ·for.such:.Jtransportation, to be .. paid by. the con.signor. _charge for such _children is _made shall in ·every. case be ~ -cent" · J'~ No. uch rparcel or_ p_aekag~ - shall• be Jtransported JUntil a ,. and ~emicolon~ and .the Senate •agree to the same. , stamp ol~ stamps representin~ the ;-tax- due shall; have been
r ~Am.endment numbered• 200: ~hat the House recede from its affixed thereto." ~ (lisagreement to the amendment of the--Senate number~ 200, and And the Senate agree to: .the same.
' agree to the·Jsame with aru amendment as follows; ~ !].)eu of · Amendment. numbeTed' ·272 :· That the House· recede from its r_mthe ,.rrnttter. inserted b~ saidJ amendment: insert: · ~ and ~b) in -disagreement to the · amendment of •the· Senate. numbere-cl · 272, lJ the •case of. persons ·( e:+cept bona fide .employees. ~municip1llr ~-- and::-agree to the !Same,with· an~ amendment as -follows:: In lieu
, cers · on · official business! afrd ~ children· under . 12 ~ears of_age) . of : the .. matter -in erted by --said- amendment strike- out, on line ~:..admitted ~free to any. place at a rtime when and unden circum-:- -9, page 48 of the bill, the figure "8' .and insert in ·lieu thereof · •stances under _which an .ad.Ipjssion:charge -is made to- _otherJper- the figure" 5"; and the Senate agree to thellsnme.
sons of the same class, a tax of-1 cent fot each 10; cents or frac- 1 Amendment numbered -274': That ·-the House 'recede from its tion ·the~·eof ot the price :;;o:charged to such otb.erpersons for the· . d,i,sagreement to -the; amendment of the Senate::numbere.tr 274, .same or·:.similar accolllltlodations; to be:: paid by . the person so · and ~agree to the. arne with amendments as. follows.c·.Restore all
~:. admitted; -and (c) a . tax of 1 cent.for each 1{) cents or f:ra:etion the ·nmtter stricke,n ,out by said amendment; with· the ·fonowing •r. tb.eteof .paid .for: admission to any .public performance for profit amendments:
at any cabaret or otberr simila:t::· entertainment to which. the rr Qn page ·49 o.t -the:..bill1 in line 3, after the·w.ordY:whicb," in-. charge foP: ·admission is wholly or in ·par..t included in the price~ : sert ; ~' such."
.,._ paid ,for··refresbmentf .service, ar me~·c}lanQ.ise; the ·amount .paid · r: On ,page 49 ()f ~the .bill, tin line 23, :strike: out the1figure " 11,:•· for such 11dmJssio~ to be .coroputed;-under;r.ules::pres.cribed by the· . 000,000P·;tmd ·inserb.'.':$10,000,000; and." ;_-· Comm~ssioner of· Internal Revenue, .with •:the approval of the · ~-Ontthe · ame~ge nf: th~ bill. in Une 25 " afterr1the•w.ord 11 ex· : ... ·.Secretary of. the Treasury, ,such tax to be paid· by the: •person· ·Ceeds ', 'StDik : out t the . ·ema~de:r o;f. thedineJ1and: .. insert '· 1 10,· ,., paying· for. such ·refresl;ltnent, 'Service, Qf.·merchandise ":land the 000,000."
Senate agree to the same. On page 50 of.: the_ bill strike .out, liDJ!S 1 to 10, i:nctnsive. • u.A.weudment• ·numbered:-202: That.. tbe ;::House ·r-ecede·.from its · On ·pag 50 of; tbe: Jlill . after: .line 10 ' insert 1the: ;foHowing:
. ·::l dis:ag~:eem.e.nt to .thEt · ~endment of the Senate numbered' 202, ' :>~' SEc.,90l · .Tbat, the Ltaxlimpo ed by,:i!his: title .. shall not ·.appl . ;·~:an<bagree to ·the•same·rwith. an··amendment as follows: Jn ~lieu to .the:rb:ansfer of tthe net -estate- of-any decedent dying -.while
11 of the .matter inserted by; . said· amendment insert the following: - serving in the military· or naval ·:forces of -the :UuitedJ, States, .".cents, or in the case· of ·shows,t• rides,,.and :·other .amusements : du:J;ing. the•·continuance of, the wa.r in::which. the ~ United:.States
. l:(thOJ!:IUaximum -Charge·, for l:admission. to · which is · 10-o:cents) · is ,•now:~agecl; or it death · results ,from injuries recei-ved or ·n~ wltbin·.'OutdoOJ.!t general. amuse.ment.,parks; or in1•the· .case ot ad-. disease --.co.ntracted in·csuch service ~ w.tthin ..-•one:- ·year · .. aften the ·~- missions tQ~uch ·parks r' ·and. the-. Senate-agree to: .the.' same. 1 :termination of..: such. war. .For: the J.'Ul·poses of this section the
~ AJ;nendmenL numbered --203!', That the .House ·recede .from its termination of ~the wat· shall be e~denced by the ·proelamation disagreement to the amendment of the :,·Senate Hnmnbered1 203, , o;f:.the·=President." · · ·
.hand :agree to ·th-e .sa.me- with· an:-amendment .a:s followS:• In lieu .And1the ·Senate:ngree t() ·the-.same. - of :the matte.r ... inserted by,. said ..amendment insert · the follo~ng: . .A:m.endment._numbered '276 ~-t f.I?ha.t. the:· Ho.u e ·:recede·. from its
· 1~'none of.:the· profits of·whlch ·arei l.i.stributed to. stockholde~ or- disagr:e.eme.nt to · the··~ ameudment ·of! -:..the·· S.enaoo·· numbered 276, ' , members ot: ;the. -association ·-conducting the same;·~- and'. th~ r an~agree to the same with am am-endment as follows:: In•lieu
Senate agree to.ihe·s(I.Jlle. of.. the figuresL" JX· ·~ ~;-inserted- bYJ aid :1 amendment insert the r A.mendmenfu.numbeJ.'ed;;204' : That the House .re~ede from its1 -figure l" ~x and:Jthe<Senate:·agree t~ ,the·same.
u~ .. disagreement to. the ·amendment of the Senate nnmbel·ed :204, .. A.men.clment .nnmbered 277· •. crhat the. Honse,- il!ecede ' from its 1 and ;agree tj) ·the same with an amendment as follows: In· lieu disagreement to .the-:" amendment; o:fi .•. the -Senate ~numbered 277 . of. the:• mattel·~ stricken out- by•, said amendment insert the fol-: .. ltnd.agree· to ·-the ~ same with a.n ·amendment as .. follows ~ In lieu
'11; }QW.iJlg: Of the.. ~Jigureg ·'' ~ 900.!' ,~nserted, by. aid 1ftmendment -insert the , ... :~ SEC. !TOl; That from and· afte·r ·the ::1st day Of November., ·· .,figures ~';[000" · nnd :thei!Senate ;agree to :the ·.same.
~!:· :1917, ,there shall be levied1 as essed,.: collected\·,and lp.aid, a -tax • .:~Amendment number 278: .That: the House r.ec.ede -from its equivalent to 10 per cent of any amount. .paid as -dues or-:~mem- · disagreement to ,;the:.amendment of :tbe :· Senate·.numbered 278,
\i· bership -fees ·(ineiuding initiation· fee )· to any.~ s.ocial~ - athletic, ( .nn.d:-:agree to ·the ·same. with an: amendment asi•follow· ;. In lieu ·:~ ol" 'SPOrting_ elub- or otgani~ation;where such -dues or··fees are in•· ot ·,the.!.::figures )" 901 .:' rinserted· by >Said: -amendment insert the ·: e:xcess Qf.:... 12:pet:',Y.ear; [• such. taxes to be '·paid· bYJ .tbe ·-person: ·. figures , · 1001'~ :; andthe Se,nate agree. to tbe.same.
11, 'Paying •J3Ucb· -dues~ ·o~ ·-fees t·· IPr:ovidetZ," •Tbat:;there::sball be · ex- Amendment numbered 279: That the House- lli'Ccede: from its .·; erupted' from the -provisions. of _this sootion! all ·· amounts .. paid disagreement to the amendment of •the~-sena:te·'IlD.IIlberetT279, and
-~, as dues orr.fees to a .fraterna1 ·beneficiary. .so-ciety; wder, o -asso~ .. -agree to.·the arne with an· amendment as follows:. In lieu of the elation, operating! :under ~the :lodge tsystem o.r for the:-. ex.elusivel , .figures: I • .-902 l!Jdn erted ·. by ' said JJ amendment ~ insertr the : ·figures
• benefit of-• the . membets. of a -ftaternity!· ·tself;·operamng:. under .J 11'002 "; ·and-the Senate· agree to·the .same . . . · .the- ,lodge .sys-tem, nd,· providjng·.·fOJ: !tha·paym:en ot~t~· :sick, \;.:·Amendment . .numheretl i280 Jfl'hat the House ·recede -:from its h ·. accident, or~ othen:benefits to7themembers oi'ts.uch. societ r der:; ·~·disagreement to.r:the• ~ amendment of ~the 1 Senate ·.numbered 280~ , r or .as ociation· or:1their dependents." · · and agree to · the same .with an ·amendment n.s :follows: In-- lieu
And the Senate agree to the same. u ofT·th-e word -" ·ena;ctment ~' ' in e:rted· by lsaid;, am.endment ,i.n£ert ,, :JA.mendment -numbee:ed 212·: That rthe House q:ecede. .from- itS the -word·;., passa·ge "·; andAhe,Senate agree to the same.
PLdisagr.eement to the·-amendment of the Senate•rnll1Jlbered":212, .l~endment::numbered 281: .That tha House recede :from its 1. rta.nd~agree to.:the. same·with. an .. amendment as follows: rn lieu ofn disa-greement to • the J ame~dment' of 1 the.~~ senate· numbered ~1, j~ the• atte ·' inserted · by.[ said uunendment·· s.trikru out-~tbeTw'<>rd• and agree· fu · the-- arne With. an'fantendment as follows: I •lieu ·. ,.No:vimloer " ::! and~ .insert<" December ,,.·; ·•and :-the.: Senate:! agree of the . word "six l in ~'line S" of·! the:! matter "' inserted•· by, ,said
\'· to. :the same. , :-: lamendment .lnsert"ihe::wol' !' seven.~~_;and in.,the sa.me.iline strike .::;·::A..mendmentrnumbered· ~4r: ~hat 'tne lilouse!Tecede:··frortr its-· out 11th •.w'Ord r"'renactnlent• .· a:nd ,, insertttbe word 1 "·pn sage".;. disagreement to the amendment of the Senate numbered 234, and the Senate agree to the same~
1917. CONGRESSIONAL RECORD-HOUSE. 7563 Amendment numbered 282: That the House recede from its. Amendment numbered 303 : That the House recede from its
tllsagreement to the amendment of the Senate numbered 282, disagreement to the amendment of the Senate numbered 303, and agree to the same with an amendment as follows: In lieu and agree to the same with amendments as follows : Restore the of the figures " 903 " inserted by said amendment insert the matter stricken out by said amendment and, on page 59, line 20. figures " 1003 " ; and the Senate agree to the same. of the bill strike out the figures " 1200 " and insert in lie . L
Amendment numbered 284: That the House recede from its thereof the figures " 1100 "; also in the ·matter restored by said disagreement to the amendment of the Senate numbered 284, amendment, on page 59, line 21, of the bill strike out the word and agree to the same with an amendment as follows: In lieu "ten" and insert in lieu thereof the word "thirty." In line 1 of the figures "904" inserted by said amendment insert the of the matter inserted by aid amendment strike out the fol· figures " 1004 " ; and the Senate agree to the same. lowing: " Sec. 1000" ; and the Senate agree to the same.
Amendment numbered 285: That the House recede from its Amendment numbered 304: That the House recede from its dis-tlisagreement to the amendment of the Senate numbered 285, agreement to the amendment of the Senate numbered 304, and and agree to the same with au amendment as follows : In lieu of agree to the same with an amendment as follows: In lieu of the
· the figures " 905 " inserted by said amendment insert the figures matter stricken out by said amendment insert the follmving: "1005 "; and the Senate .agree to the same. "SEc. 1101. That on and after July 1, 1918, the rates of post-
Amendment numbered 286: That the House recede from its age on publications entered as second-class matter (including disagreement to the amendment of the Senate numbered 286, sample copies to the extent of 10 per cent of the weight of and agree to the same with an amendment as follows: In lieu copies mailed to subscribers during the calendal- year) when of the figures "906" inserted by said amendment insert the sent by the publisher thereof from the post office of publication figures " 1006 " ; and the Senate agree to the same. or other post office, or when sent by a news agent to actual sub-
Amendment numbered 287: That the House recede from its scribers thereto, or to other news agents for the purpose of di agreement to the amendment of the Senate numbered 287, sale: . and agree to the same with an amendment as follows: In lieu " (a) In the case of the portion of such publication devoted of the figures "907" inserted by said amendment insert the to matter other than advertisements, shall be as follows: (1) figures "1007 "; and the Senate agree to the same. On and after July 1, 1918, and until July 1, 1919, 11 cents per
Amendment numbered 297: That the House recede from its pound or fraction thereof; (2) on and after July 1, 1919, 1! disagreement to the amendment of the Senate numbered 297, cents per pound or fraction thereof. and agree to the same with an amendment as follows: In lieu "(b) In the case of the portion of such publication devoted to of the figures "908" inserted by said amendment insert the advertisements the rates per pound or fraction thereof for defigures "1008"; and the Senate agree to the same. livery within the several zones applicable to fourth-class matter
Amendment numbered 299: That the House recede from its shall be as follows (but where the space devoted to advertisedisagreement to the amendment of the Senate numbered 299, ments does not exceed 5 per cent of the total space, the rate of and agreed to the same with an amendment as follows: In lieu postage shall be the same as if the whole of such publication of the matter inserted by said amendment insert the following: was devoted to matter other than advertisements: (1) On and
"SEc. 1009. That the Secretary of the Treasury, under rules after July 1, 1918, and until July 1, 1919, for the first and secand regulations prescribed by him, shall permit taxpayers liable ond zones, 1l cents; for the third zone, 1! cents; for the fourth to income and excess-profits taxes to make payments in advance zone, 2 cents i for the fifth zone, 21 cents; for the sixth zone, in installments or in whole of an amount not in excess of the 2t cents ; for the seventh zone, 3 cents ; for the eighth zone, 3! estimated taxes which will be due from them, and upon deter- cents; (2) on and after July 1, 1919, and until July 1, 1920, for mination of the taxes actually due any amount paid in excess the first and second zones. 1! cents; for the third zone, 2 cents; shall be refunded as taxes erroneously collected: P1·o'l/ided, That for the fourth zone, 3 cents; for the fifth zone, 3! cents; for the when payment is made in installments at least one-fourth of such sixth zone, 4 cents; for the seventh zone, 5 cents; for the eighth estimated tax shall be paid before the expiration of 30 days after zone, 5! cents; (3) on and after July 1, 1920, and until July 1, the close of the taxable year, at least an additional one-fourth 1921, for the first and second zones, 1! cents; for the third zone, within two months after the close of the taxable year, at least 2-! cents; for the fourth zone, 4 cents; for the fifth zone; 4i an additional one-fourth within four months after the close of cents; for the sixth zone, 5! cents; for the seventh zone, 7 the taxable year, and the remainder of the tax due on or before cents; for the eighth zone, 7i cents; ( 4) on and after July 1, the time now fixed by law for such payment: Provided furthm·, 1921, for the first and second zones, 2 cents; for the third zone.
· That the Secretary of the Treasury, under rules and regulations 3 cents; for the fuurth zone, 5 cents; for the fifth zone, 6 prescribed by him, may allow credit against such taxes so paid cents; for the sixth zone, 7 cents ; for the seventh zone, 9 cents; in advance of an amount not exceeding 3 per cent per annum for the eighth zone, 10 cents; calculated upon the amount so paid from the date of such pay- " (c) With the first mailing of each issue of each such publicament to the date now fixed by law for such payment; but no tion, the publisher shall file with the postmaster a copy of such such credit shall be allowed on payments in excess of taxes de- issue, together with a statement containing such information as termined to be due, nor on payments made after the expiration the Postmaster General may prescribe for determining the post-of four and one-half months after the close of the taxable year. age chargeable thereon." . All penalties provided by existing law for failure to pay tax when And the Senate agree to the same. due are hereby made applicable to any failure to pay the tax at Amendment numbered 305: That the House recede from its the time or times required in this section." llisagreement to the amendment of the Senate numbered 305,
And the Senate agree to the same. and agree to the same with an amendment as follows: Restore Amendment numbered 300: That the House recede from its the matter stricJren out by said amendment and on page 61, line
disagreement to the am.endment of the Senate numbered 300, 15, of the bill, strike out the figures "1202" and insert the and agree to the same with an amendment as follo\VS: In lieu figures "1102 "; and the Senate agree to the same. of the matter inserted by said amendment insert the following: Amendment numbered 306: That the House recede from -its
"SEc. 1010. That under rules and regulations prescribed by disagreement to the amendment of the Senate numbered 306, the Secretary of the Treasury, collectors of internal revenue may and ngree to the same with an amendment as follows: In lieu receive, at par and accrued interest, certificates of indebtedness of the matter stricken out by said amendment insert the folissued under section 6 of the act entitled 'An act to authorize lowing: an issue of bonds to meet expenditures fo!· the national ~ecurity "SEc. 1103. That in the case of newspapers and periodicals and defen~e, and, for the purpose of assisting in the prosecution entitled to be entered as second-class matter and maintained by of the war, to extend credit to foreign governments, and for and in the interest of religious, educational, scientific, philanother purposes,' approved April 24, 1917, and any subsequent thropic, agricultural, labor, or fraternal organizations or assoact or acts, and uncertified checks in payment of income and elations, not organized for profit and none of the net income of excess-profits taxes, during such time and under such regula- which inures to the benefit of any private stockholder or inditions as the Commissioner of Internal Revenue, with the ap- vidual, the second-class postage rates shall be, irrespective of the proval of the Secretary of the Treasury, shall prescribe; but if zone in which delivered (except when the same are deposited a check so received is not paid by the bank on which it is drawn, in a letter-carrier office for delivery by its carriers, in which the person by whom such check has been tendered shall remain· case the rates shall be the same as now provided by law), 11 liable for the payment of the tax and for all legal penalties and cents a pound or fraction thereof on and after July 1, 1918, and additions the same as if such check had not been tendered." until July 1, 1919, and on and after July 1, 1919, 11 cents a
And the Senate agree to the ~arne: · ~ound or fraction thereof. The publishers of such newspapers . Amendment numbered 301: That the House recede from its •or periodicals before being entitled to the foregoing ,rates shall
d1sagreement to the . ame~dment of the Senate numbered 301, I furnish to the Postmaster General, at such times and under and agree to}he,s~me. With an ~mendment as. follows: In lieu I such. conditions. as he may prescribe~ satisfactory evidence that of the figure X mserted by said amendment msert the figures none of the net mcome of such orgamzation inures to the benefit "XI"; atld the Senate agree to the same. . of any private stockholder or individual."
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.
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~ CONGR.ESSIONAL ·REC011D-"H0.USE. OcTOBER 1,
And the Senate agree to the same. , stock of the corporation, joint- tock company, association. or AmenClment numbered 307: That th{l House l'ec.ede .from its .. insurance ··co1J!pany, wbich•-stock liividenU hdll be <'Onsidered in
disagreement .to the amendment .of .tbe Senate .nnmbeTetl. ' 307,; : com~. tothe·amount of;the ·earnings-or :_profits· ·o·disttibuteu. antl • .agree 'to the arne :.with an Amendment · as "follows: .:In · Ueu · "(b) .Any tliStTibution ··matlei:o the ha:reholder ·or ·rnembtr of of e ;.matter stri€ken .out by said -amendment insert .. thc ·Tol- : a corporationJjoint-stock ·company, ·or ·a aciation, or in urunce
.loWing: .. conwany, in i:he yeaT 191.7, .<Yr sub equeut tax ~year , llllH be "SEc. :1104. That where the total we~ght of any one edition or .deemed ·to have ooen made ·from the rno t t·ecently ac mnulatecl
i sue of any publication mailed ,t? · any on~ :zon,e does not exceeUi un!Uvide_d :JJroti.ts ·or SUJ,'p~us~ ·and shall ·con titnte a part •Of the l ·pound,; the rate of postage· shall be 1 c{lnt.'' ~ :annual ·· mcome of the di trlbutee 'for the . year 1in -.vhich re-
And the Senate agree to · th~ same. ceived, and -shall be taxed to ·the di tributee at ·tile rate· ·pre-Amendment numbered . 308: ·!!'hat tthe .Hou e ·1·ecede .fr.om its .scribed by law 'for the·year in which uch·profits or urplu w re
. dlsa(J'reement to the amendment of the Senate numbered ·aos, .accumulated 'by the co.g>oration, joint- tock ·company, a ocin··Hnd agree ' to the-same with an amendment as follows: ·In lieu . tion, ·or insurance company, but nothing herein hall be ·conof the .matter .striCken out by saW amendment .insert the :fol- strued as taxing at;1y earnings or :profits ·accrued pctor w .l\lm· h
,lowing: 1,"'1.913,-but ·such earnings or ·profits·may ·be di tributed in rt:eck "..SEc. ·uoo. The.z.one .rates provided by this :title shall rela~-e divid.ends or ptherwise, ,ex:ernpt-trom the ·tax, after the distribu
to th'€ entire bulk mailed: to. any one zone and:n.ot ·.to ·indindually ;tion of .earnings antl ;profits ;accrn.e.d sin.ce larch ~. ·1913, has .a<l<lres ed :paek.nges."" been made. :This subdivi ion sh-ull ·not app~y to arry ·di t:ribution
.. An.tl the ·Senate agree.to:the:same. ~ .rnade ·p.rior ·to .August 6, 1917, ·out · of earning • ·or ·profit aecrued .Amendment nu:n:ibered 309: ··:rhat :the ..Rouse ·recetle 'from its prior to March ·1, 1.91.3:"
, disagreement to ': the .. amendment of the Senate .numbered ·309, .( 4) OnjJage ·6S 11f said ·engr.os ed:·amendment:s, ;Jines O··and 10, and agree ·to the same· with an amendment as 'follows: 'Restm~e · strike out ·the ·· words -H;-eonnection with"' ' and insert ·the word
, the matter tricken out by said . amendment, and on page .:63, " the . act authorizing.'~ Jline ·1, of the bill in Ue.u of the figures "1206" in ert ·fue ·.figures (5) ·On·.page•63 ·of said engro ed amenllrn.ent , line 19, ·strike ·•• 1106"; .and -; the Senate,agree ·to . the same. "Out the figm;es '"n01 ~''1lnd ·insert ·.the 'thrure "1201:''
lAmend.Jllent numbered 310: 'That the Rouse recede ·fr.om -its , (6) On :pag_e 64 of -said .engross-ed tnnendrnents, line 2, ·strlke disagreement to the amendment · Of .the Senate ·numbered '310, : -: on.t'ihe-;wor.d""·.war·" and in ert tbe·word ·" ·excess:"
i an.d agree : to tbe .same with amenmnents as ·ronows : Restore~ (7) ~on page·:64 -of said "eTTgrpssed .arnerrdments ·strike out lines ·the ' matter stricken ·out l;)y :-sa.Itl amendment, .and .on 1page . 63, ~ '.7 and .8. line. '5, •. of;:thei.bi1Un lieu .. of . the·figures "1207'"-in e~t!tbe figures (8) On IJllge ~64 of ·said engro ed amendments, tine 9, ·sttike " •1107"; .al o on -.the .sam.e ;page .of the lbi].J., line 9, ··str1ke iout . out the figures "ll02" .and1nsert '.1.202."
·the :words ".an:d ~.secondJ'; .·and :the Senate .a.gree. to •the same. (9) On·page 64 of said -en-gros etl amendments, :line'25, strike :Amendment numbered .311: 'That the 'House .:recede :from its , ·out . .the .w.Qrd ·~war~· and in ert ·the ·word ·s' excess!"
rdisagreement . to :,the ;.amendment of the Senate ·numbered . ..311, :(10) On ,page 65 of .said engrossed .1l1llendments trike out nd ~:agr-ee rto 1 the ame : with . an ·amendment ::as ifollows: 'Jn Ue:u i :lines · 6-=13, incl usiv.e.
<of the ~ matter tricken ,_aut -by ::said Amendment, inser.t ·th{l Iol- j ,(:11) ·on.J)age 65-of. aid en:gr.o .ed ·amendments, line'1:4, strike ilowing: 1 out the figure ":3" ana 'insert ·the ·figure ~~2:"
".: Ec. :il108. ·:.That :.tbe:salaTies. of:l>OStmastei~s at ,_offices .of the , ~ (12) :On ·p"B,ge r66 ~of ·safd engrossed . ..arnendrnents, 'line '1, str-ike ,.first, ~se<:oBd, ·and ; third , .class.es ·'Shall • not be increased, after .cr u ly ; :out the ·figures "' 11'03 " and ·insert :.fue ·.figures · 1' :1.203." :1, l1917,•iiurtng ;tl1e .-existenee.o'f :..the ;pre ent war. The .. :con;rp.en< (13) •On page '67 of said -engrossed amendments, line ·15, strike
ation .of . posi:m.asters ·at -offices of , the ·fonrth .class .shall ..con-i out the figu:res·"':1104" u.ntl :inseTt the 'figures "'12M." J.timre 1to ;_be eornputed .· on 1the ;basis .of ·the ~ p1·esent rates ·of · :('14) On _page·tr8 of said engrossed nrn,entlments, ·llne ·n, a:fter .postage." - .'-the .word l" States-" insert:the:following ·words inclosed in paren-
·And ithe; Senate·.agre.e ·:to the -same. 1 theses: ·~rf 1lll.d to 'the ··extent ·that ·it is ·_provitletl ~in ·the act .Amendment ·numbered 312: That .t:lw illouse recede .from ~us -authorizing the issue .of :such obligations of the ·united States
"disagreem~nt to ~the .amendment of ·· the ,:Senate numbered .312, that they are exempt ·from -tnx:ation." and : ee ! to ~-.the -same with . .an :amendment as ~fullows: .Jn.lieu (15) On ,page .69 of ·said :engro ed amendments, line ·.22,
,of tbe ,matter inserted ~Y .said amendment insert :the 1fol- ' strike :out ·the ijgures ' ~''.11.05 u nnd ·insert "' '1205," and 'in -the lowing: 1 same line, .nfter "('Q)" andille comma, insert ·(c) and a ·cornm.a.
".SEc . .1109. Thn.t ;where postmru;ters at 'Offices , of , the third (16) On -page 70 of -saitl engrossed amendments, at the :end class have been since May 1, 1917, . or hereaft~r are granted of line ''1'5, insert ·the following: "make return thereof ·on or 1eav-e :without -pay ,for militacy ·purposes, the :Postmaster .Gen-. before 'March 1 df each year and, on "Or before ·the time fixed eral .may . allow, in addition !to ;. the ma.ximum .amounts which 'by law for the payment of the tax, shall."
, may :now + oo .allowed such , offices for . clerk hi:re, • in accordance . (17') On _page 70 of said engrossed amendments, after line tw:ith law, :an . .amount_.llot tto .exceed 50jPer cent.of the salary of ' ' 22, ·insert the-following as a ·new paragraph: the postmaster." "(G) The ·amount of the normal tax hereilibefore imposed
And the Senate agree to :the ;.;arne. shall al o be deducted ·and withheld from .fixed ·or tletermin-Amendment .numbered 313: That the House .recede from its able annual or periodical ·gains, profits, and income derived
•disa.:,o-reement to ·the .lllllendment of tile Senate .nnmber.ed 313,' from interest ·upoo 'bonds and mortgages, or deeds of n·ust or ; and ·agree to the same :with amendments as follows: ln ·line i1 other similar obligati(}OS of -corporations, joint-stock companies, of the ·matter .inserted by said amendment strike out tthe associations, and insurance companies (if such bonds, mort-figures u 1002 " and insert in lieu thereof the .figures "lllO ••; 1 .gages, or other obligations ·contain a contract ·or provision by in line 9 of the matter ~rted . by said amendment strike out which the obligor agrees to pay any portion of the tax imposed the word "proviso " and insert in lieu thereof the word " sec- by this title upon the obligee or to reimburse the obligee for
•'tion " ; and in line 13 of the matter inserted by said amendment any portion of the tax or to pay the interest without deduction -strike-out the words "bona fide " ; and . the Senate agree to the for any tax which the obl~gor may be required or permitted .same. to pay thereon or to retain therefrom under any law of the
Amendment numbered 314: That the House recede .from its :United States), whether payable annually or of shorter or disagreement to the amendment of the Senate numbered 314, longer periotls and whether such interest is payable to a non· and agr~ .to the same with amendments as ·follows: :resident alien individual or to an individual citizen or resident
' (1) .In the first.lin-e of the matter inserted by said amendrnent 1 of the United States, subject to the provisions of the foregoing -strike out the figures ".XI" anu insert the figures "XII." 1 -subdivision (b) of this section requiring the tax •to be with-
(2) In the second line of the matter inserte.d by said arnend- i 'held at the source and deducted from annual income and ::.·e· 1ment strike o.utthe..figures "1100 ".and insert tbe.figures .. 1200." ' .turned and paid to the Government, unle s the person entitled
(3) On. page 61 of,the{lllgros ed Senate arnen.dments strike out ' to receive such interest shall ftle with the withholding agent, all beginning with .the colon in line 16 of the matter inserted :by1 on or before February 1, a signed notice in writing claiming the said amendment through the word "years," in line 17, page 62, benefit of an exemption llDder section 7 of this title."
. and on page·73 .ofsaid engrossed .arnendments,strike out. all after ' (18) On ,page "72 of said engrossed amendments, line 3, after the word "title," in line 5, through the word "yeru.·s," in line! the word "section," insert a comma -and the following: "ex:cept 25,. and in lieu of the; matter thus stri<!ken out insert the follow- subdivision (c)," and a comma. ing on page:85 of said engrossed amendments after line 25: (19) On page 72 of aid engrossed amendments, line 7, sb.·ike
" SEc. 31. (a) -That. the term ' dividends ' as used in this title out " (c)" and both commas . . shall be. held to mean any distributionmade or ordered to be made (20) On page 72 of said engrossed amendments, line 10, sb.·ike ·, by a corporation, ,.joint-stock· company, ,association, or insurance I out the· figures "-1106" and insert '"1206." . company, .out of its .earnings or profits acc:;:ued .~ince Mar:ch 1, (21) ·on page 74 o'f said engrossed amendments, line 12, strike 1913, and payable to .its .sha:reholde1·s, whether ill .cash or .in· out all after 'the comma 'throogh ~the ·word ".twelv.e," in line ·13..,
C0NGRESSIONAL. RECORD-ROUSE ..
d .insert the:'following.; '{but not' including thetamount oflanY'· : STATEMENT:.
·neome ta.xes:pai<lby it within tha'Yceat_.itnposed.b the:anihor~· t Th'e·managers:- on :the part:-offthe: House.Lat the. conference· on:·· f •t11e Uhlted States.!' · - Jfue::disagreeing. votes: OO! ' th'e· two· Houses· OOJ .the: a;mend:ment&..-ot:'
(22) On p.a.ge-74 ·oflsaid-engrossed·mnentlmeats,, line ~T, . after: · •the-· S:enate:to th'e bi-ll ' (H. R~428~) ·to provide- -revenue to- defraY.• l1e ·word: "businesS;" irrser~ the words-" or: iS· invested in _ol?-liga~ · 'war expenses;. and! fOl'! other purposes, submit the,. following: ions of the United - Stat~ lssued .afte.rt September;·1: 191.!l.'t . 'written · statement im exp-lanatiOB!· of"' the. effect" of · the· acti(}n :
(23) On page-74 of-said ·engrossed. am-endme:n.ts;l lin~. 22, strike-· ·' agreed!upon. bY' the. conferees and recommended. in the -aecom-o.ut all after the word "thereon" throng:p. the · word-~ "flnnl.:~ in· ·panying: ·confere-nce-repo.rt: me· 24. On ame.ndinent-No. 1·:: Tile ·Sena:te .. limited 'the ··effectiveness:· of.
(24) On page 74 of said engrossed amendinents,-.line:25, strike the· additional : individtr oormal tax to H·during the- pre en.t: out . tbe: woud !' '-rate~ '~ an.d :inse-Pt·the·word ''"rates.'.' . ·war"'; and'the-- Senate. recedes _
(2.5) On • pag.e-::75 -· of~ sn.idlengrossed · am~ndmen.ts; lin.e:4; stnke:. 1 On amendment No.2: This amendment limits the 2 per cent• ut'the wo:ro.··" rate."" andH.nsertLthe :wurd : '~rates ,.,. additional 'il:fdividu'1ll normal ;ta:x:. to citizens -or residents -of the
( 26) On page 75 o:t· said engrossed amendments o l.fnB_ 11; , Uhited: States ; · and ~ the- House--recedes~·-t'Pike.·out·the-figures: " 1107?' and insert~ " -1207.' .. On· amendment No.3: Tlie ~ Senate: limited the:;effectiveness.-of r
(27) · On :page· 7T.of said engrossed amendments;.liile ·5, strik-e- the additi&nal : sm·ta:x:es.:·to.: '~during ·the present war"; · andrHhe-· ut the word ••war," and 1inse1:·t the ·word ." excess.!' Senate:· recedes.~
(28) Oa page 78• of said engros eel· amendments;. line· 1.5~ On amendment No. 4: The. Senate increased the- additional! trike out the word " war, ,_ and''insert• tim word· ' e-xcessr ·surtax:on ·the.:portion ·or nef' ineome between $15,000 and •$20,000
(29) On page 78 of said engrossed amendments, strik-e ·· ont:' from 5 to 6 per cent; and the Sen-at~· recedes:. all. after line I9 thrO'Ugh lli:le l3 ' on· page -80,. a:ndi on pa:g.e ·5 oi. On.amendment No.5: Th'e Senate.:ihcreasedJthe-a£lditional sur-he bill, line· 20~ after · the · matter: inserted by: amendm.ent· taxeon·. the: portiorr:of.: net income between· $20,000 and $40,00(),. To. 26,. insert a comma and · the- following: " except that · for. from .6 to 8 1Jercent;: Tlie.. House_ recedes from its ·disagreemeiit t
the purpose ·of· the tax- imposed 'by: ·this · section: the income·· em,. to the·· amerui:ment wtlli an.. amendment:: making.. the. rate· 7· per· braced in a rett:rrn. of. a corpomtion: joint-stock-; company · or cent asseciation, ol" insuranc~ company, slmll · be. credited':: with the · On amendment No. 6: The Senate increased the additional an:rount received as. dividends · upon· tlie· stock: or: ITO!Il;. the: net surtax; ·orr the portion.. of' net income between $00,000 -an-d.$80,000 earnings of any other corporation. j<:>int~stoe~ : company 1 or .. a:ssa;. from::,1B.75-to 14 ~r:rcent; and .. the House·reeedes.: ciation, or' instira:nce· compan:v., which~- isl tax:able' ul)()n·,- its net .OIJ amenlliD.entr No. 7~ The Senate.- increased the · ad0itio-nal1 incom-e as:-;provided in~. ttiis· title."· surta.x .orrthe-.portion:ofi:.net:income between $80,000and$-100,0001
( 30) On page so· of:·'said engl'ossed·amend:tnen.W, line· 4~ strike: from 17]). to .18· per.: cent·; , and.. the· House recedes ... out ·'' 1.10&.· (1)" and i.nsel!t1 " 1208'·' and· a· period. · Om a.memtment No-:.8-: '.Ehe Senate ' increasedt the" additionaL
(31') On·page 80 'of·said :engrossed amendinen.ts strik'e--out· air sm:tax: on the · pO'rtion of: net': income: • between $100,000 and '~ after line 20, through line 10 on page 8L · $150',000lfrom 21.25 to..~ 22~ per:· cent ;. and 1 the·•Hous.e-1·ecedesL
(32) . On page 81'of'said'engrossed: lamendments:,' liile '11' strike On:. amendmerrtr Noo. 9: . Tl:ie; Sena:te·· increased: the- additiomtl . out the• figures t" 1109 " ·and'insert '"1209/ ' ·surtax::- on. the pO'rtion; o-f' net-- incom between· $250,000: and.
(SS'): On: page: 81.;of: 'saidLengrossed :amendments, .. llne~ 15, affer1• $300,000 from ~33 .. 75.to· 34·i per -- cerrt~ and1the-H011Se. recedes.= tJm...word-:.uliabi-&'' insert :the.following:: "to-pay-the-tax" and 'a · Orr" amendment: No. ~o· The Senate, decreased:.; the. additional comma. surtax on1 , tlie portion::. 00:;' net- income between $SOO'~OOOJ and~
( 34) Oil' page' 81 orsaid engrossed amemiments:, line' 17; after $500,000 :from~7.5 to· 37 per.·cent·; and:ther·House:receda:.. the wor.d·! '" neglects" insert; the follo-wing; .. to. pay sneh tax:'' On amendment No. 11: The Houser-bill :prortded;th.at .. the-adiU~ and a comma;. tiona! s'tlrtax:. on; the·' portiolll • at net ; income~ hetween , $500,000
( 85')' On page-82 of:'said •engrossed 'ru:nenelments; .lrne-12; strike and · $1;000/)0();~ould :'be..41.25! :per: cent,.. and: that ·tJre. ·a:dmtio.nalJ ont"the-:figmres t"l1!10 . and;.iilsert' " '1210'"- stll'taoc: oH: ther: portio of,J n-et ~ income in . e~ess. oir $1..000'.000';
(86') tt Oir pager8S of'sa.id engr'ossed lamea.dments;: nne· 5, ~ strike- -.should! be: 4fr per:i' cent::: The.:Sen3.ter ameruhrumt provides:d:hn:t: 0111:" th figures " llll'" 'and· insert "'1211 n th~H additional surtaxJ: sh1lll oo. 40: per cent" o:rF the portiO'n-: o
(31} 011-page 85',of' said-engrossed· amendments;· line:.n, 00.. lncome- ·betwe $500,000 and ~ $'ffi&,OOO, 45qre cerr orE' the~ por;.· fore •t1ie1 period!insert · a •comma. and the~ fbHowing.: "but-shn.U tion of n:et· income·betwee . $750,()()(). anct..l$1))0(),.000,, and · 50'1Je · not· apply• to the payment·<Yflinte:reston ·obUgations· o:tlhe· United cent. orr the p9-rtion· of the: netr in:come · exces ·<Yf ~,000; , States " umt the, House,·recedes ·.
(38) 1 On: pag_e·85 'of·said : engrossed:amendments~. lme· 14; strike I On · amendments" No o h lz,' 13;-. 14,! 15; .and .W! ..:Tllese- anrendi.· out the- word' " war'' and insert'"'· exces&" ment;s:,arec·c1erical ~changes· ; aml .the -Htnrs-e. ~r-ecedes..
(39) On· page 85. of . sa:id engrossed amendments;· line 1T, On ~mend?:en! _ ~o:.17: · T.lle;•House::bill •pr_o-~d~. --tha:etl}e·no~ strike ·out· tlie word·~ war-"· and- ib.sert ·u ·e:xcess:.•~ · mal taX' oL: mdi'VIduals: to • be·~ d~ducted a;nu; Withheld ' at:: tlie
( 40) On· p:a:ge- 85" of sa.id engrossed .amendments, line 25, before source- of .. the ' i?come should n appl-y !CY- the. __ new 2 pe_ ceo; " tlie period; in ert ·a comma, and.' the following: "owned by such normal tax. until -on and af~er.Tanu:a:ry 1 1918'; ~rrd! th'at':.thereforeign Governments;· or. from interest on deposits . in banks· in after::sbomd applr only .to mco;nes· exceeding.: $3=,000_· ~ s~~ the United·: States or'moneys belongiilg to frlreign Governments.'' ate struck . out t~'i.S -proVIsi-o-n_, Tite.· Hous& ·recedes- -from: lf~ <¥s--
( 41) Orr page- 80'o "said. engrossed· amendments, .strim out an · agreement to this· ame~dn;t~ · with an ~dment·, _p:rovrdrng: after line 25; throu.gn line 8 'orrp.age·86.. ~hat · the normal tar.o:fifmdi'vrduals on ,the·, rncome dcrived:J~~IID
( 42) On page 86 of said engrossed amendments, line-9; strike. Inter~st ~om bon~ ·c?n~ining~tbe• tn:x::'fr~ -co~~, pro~u · out. the figures "1112 .. " and, insert ·" 1212.'! sh-all. 'b_e dMu:c~ed :and Wl.~he~d .~t'th~ source"of.th~ mcO'me ~
(43) On page 86 orsaid engrossed amendments, .line:14,.after provrding that ~ this. ~rov1s1on _shaU nut ap-ply to th'e-_new 2:..per the comma, insert -the tollow.ing_: "except• in the. cases·.-covered centtnormal tax ~til on.~ after Jtmn~ry 1, ~91S. , by subdivision (c) of section 9 of sucli act;.,as amended. by, this_ The ~ffect of th1s pro.viSlon an~ the wttJ;iliolding ame~nt act" and a comma; . to the mcome•tax .title. IS ·to reqUire.· the··Withl:rolding .. of only 2
per cent upon: the rncome ffom .the corporate- bon:d.s. And the. Senate- agree-to the same. . O'n amendments Nos.: 18· and 19: . These· runendments ·.aTe cleri-
. Amendment numbered 320: That the _ House. recede- from "Its cal 'clianges; and:': the House- recedes. disagre~ent to the ame!'ulment : of the:· Senate. numb~ed 320, On amendment No .. 20 ~ The· House bill provided an additionaL a;~ agr;e to t~e s~?· :With. an . amen~~ent~ as · follow~ In lieu . 2 per: cent ·le:vy on corporate netlincome. The· Senate increased~ o the · ~g.ure,. 1204-, lnseited· by. s~cl . amendrrle~t.msert- the- the ad<litional ' ta.x: on corporate net· income to ·4 per1 cent; and fi.gures · 13:02 ' · aud thCi Senate,agteesi to th-e· snme-r. the House ·recedes.
O'DAUDllr Kii'rciHN; On amendl'Bffilts Nos; 21; 2Z. 23, 2~ 25; and !26: These amend-HENRYrT. RAINEY~ · ments are clerical • changes ; and' the House.· reeedes. LINCoL. '"' Dixnw,·. On amendment No. 27: The House bill proposed the levy -of J()sEPH: WL FonDNET; an additional ' irr.come tax equivalent ~to 33!- l)Br cent1 o.f the tax Jf.~o MoooE,:. paid by individuals, corporations, joint-stock~ companieS'~ ox-as-
Mam.ager,s om the pM't of ' tT~e House;;. sociations, or·- ins:arance' companies. up:on their·· net1incomes re-F:· M ; SIMM-oNs; ceived ·: during-the- •calendllr yeaT 1916.: The- Sem1.te eliminated W:M. J J STONE; this provision, and the House recedes. JoHN SHARP - "W''LLIAM.s, OmamerrdmentTNo..,. 28=: The ~Houserbill. provided!Uhat"orr and B'OIEB i RENitosE; after J'anuary· 1~ 1918; partnerships, withholding. agents, . cor:. H. C. :LoDGE, lporntion.s;: joint..:stock! companies.: or: assucia.tions,;: and irum:rance:-
Managers.: on.' tlw· pa.rt~ otrthe s.enate:..·. ·companies; liable·· fort th.e;: payment- o-f' income,~ munitions, . or
·i .
. 7566 CONGRESSIONAL R.ECOR.D-HOUSE . OCTOBER 1,
excess-profits taxes, under existing law or under this act, should pay without levy, assessment, or notice, simultaneously with the submission of their return of tax, the amount of tax for the payment of which they were liable under their tax return. The House provision also provided that individuals subject to the additional taxes commonly known as surtaxes should pay without levy, assessment, or notice, simultaneously with the submission of their return of tax the amount for which- they were liable under their income-tax return. The Senate struck out this provision and substituted a new provision which is fully explained under amendment No. 299; and the House recedes.
On amendment No. 29: The House bill authorized collectors of internal revenue to receive uncertified checks in payment of income, munitions, and excess-profits taxes. The Senate struck out the House provision and substituted a similar provision which is fully explained under amendment No. 300; and the House recedes.
On amendment No. 30: This amendment is a change in section number ; and the House recedes.
On amendments Nos. 31, 32, 33, and 34: These amendments provide that the provisions of Title I of this act shall not extend to Porto Rico and provide that the Porto Rican Legislature shall have power by due enactment to amend, alter modify or repeal the income-tax laws in force in Porto Rico; and the House recedes.
On amendment No. 35: This amendment allows a deduction in computing net income under the income tax of such amount, not to exceed 15 per cent of the taxpayer's taxable net income, as the taxpayer contributes during the taxable year to corpo· ration.s or associations organized and operated exclusively for religious, charitable, scientific, or educational purposes, or to societies for the prevention of cruelty to children or animals. The House recedes from its disagreement to this amendment with an amendment transferring this provision to the incometax title incorporating this deduction in the income-tax: section relating to deductions to be allowed in computing net income.
On amendment No. 36: This amendment changed the title of Title II of the bill from "War excess-profits tax" to "Warprofits tax." The Senate recedes from its amendment making the title" War excess-profits tax."
On amendment No. 37: The House bill levied an excess-profits tax: in addition to the excess-profits tax now upon the statute books of 8 per cent upon the net income of corporations and partnerships in excess of 8 per cent of the capital actually in.vested, and an additional exemption of $5,000. The Senate struck out the House provision and substituted therefor a war-profits tax providing graduated rates, ranging from 12 to 60 per cent upon incomes of corporations, partnerships, and individuals in excess of their respective average incomes during the years 1911, 1912, and 1913. The Senate provision, however, limited the exemption to an amount not less than 6 nor more than 10 per cent of the actual capital invested.
The Senate provision also provided that if the exemption on the basis of the prewar period (the average income for the years 1911, 1912, and 1913) allowed corporations, partnerships, and individuals in any individual case did not represent the deductions allowed representative concerns engaged in similar businesses, that the Secretary of the Treasury could allow an exemption in such cases equal to the same proportion of their net income for the taxable year that the deduction granted representative concerns was of the net income for the taxable year of such concerns, provided that the exemptions granted should not be le s than 6 nor more than 10 per cent of the actual capital invested.
The House recedes from its disagreement to this amendment with an amendment levying an excess-profits tax upon the excess profits of corporations, partnerships, and individuals ranging from 20 to 60 per cent. In arriving at the excess profits, an exemption from the net income as shown by the income-tax returns of not less than 7 nor more than 9 per cent of the actual capital invested is to be allowed. In addition to this exemption, all domestic partnerships and citizens or residents of the United States are to be allowed a :flat exemption of $6,000 and all domestic corporations a :flat exemption of $3,000.
On amendment No. 38: This amendment is a clerical change; and the Senate recedes.
On amendment No. 39: This amendment is a clerical change; and the House recedes with an amendment changing the section number.
On amendment No. 40: The House bill levied an additional tax of $1.10 per proof gallon or wine gallon when below proof, on distilled spirits , regardless of the purpose for which withdrawn. The Senate increased the additional tax on such
spirits· when withdrawn for beverage purposes to $2.10 per proof gallon, or wine gallon when below proof, and provided that the additional tax on such spirits when withdrawn for other purposes should be the same as the tax provided in the House bill; and the House recedes with an amendment placing the additional $2.10 tax also upon spirits withdrawn for use in the manufacture or · production of any article used or intended for use as a beverage.
On amendment No. 41: This amendment is a clerical change; and the House recedes.
On amendment No. 42: This amendment levies an additional customs tax of $1.10 per wine gallon upon all perfumes hereafter imported into the United States containing distilled spirits; and t11e House recedes.
On amendment No. 43: This amendment provided for the imposition of an additional tax of $60 per 100 pounds on all grains. cereals, and other solid products and materials, and an additional ~ax. of $5 per wine gallon on all molasses, sirups, and other llqmd fermented products and materials; and the Senate recedes.
On amendment No. 44: This amendment provides that no distilled spirits produced after the passage of this act .shall be imported into the United States, e~cept from the We~t Indian Islands recently acquired from Denmark, and in this case only when produced from products the growth of such islands. The House recedes from its disagreement to the amendment with an amendment changing the word " enactment " to "passage " and changing the section number.
On amendment No. 45: The purpose of this amendment i3 to facilitate the handling of distilled spirits under rules and regulations to be prescribed by the Commissioner of Internal Revenue, with the approval of the Secretary of the Treasury; an<.l the House recedes, with an amendment changing the section number.
On amendment No. 46: This amendment is a modification of section 3283 of the Revised Statutes of the United States. Section 3283 requires distilleries to stop manufacturing distilled spirits at 11 o'clock p.m. on Saturday and to resume not earlier than 1 a. m. on l\fonday. At the present time the 'Var Department needs probably all of the ethyl alcohol that can be produced; and the purpose of the amendment is to amend the law so that the work can be continuous. The Senate provision exempted, from the provisions of section 3283 of the Revised Statutes, the manufacture, warehousing, 'vithdrawal, and shipment of ethyl alcohol for use of the United States or for denaturation. The House recedes from its disagreement to the amendment, with an amendment exempting from the provisions of the present law the manufacture, warehousing, withdrawal, and shipment of ethyl alcohol for other than beverage purposes.
On amendment No. 47: This amendment is a modification of section 3285 of the Revised Statutes of the United States. That section specifies 72 hours as the fermenting period at sweet-mash distilleries and had its origin a good many years ago, but under the present improved method of distillation and production no more than 48 hours are required for that purpose. Therefore there is a loss of 24 hours. The Secretary of the Treasury recommended the change for the purpose of supplying the Government needs; and the House recedes.
On amendment No. 48: This amendment is a clerical change; and the House recedes, with an amendment changing the section number.
On amendment No. 49: This amendment is a clerical change; and the Senate recedes.
On amendment No. 50: This amendment is a clerical change; and the House recedes.
On amendment No. 51: The House bill levied a tax of $1.10 on each proof-gallon or wine-gallon when below proof of distilled spirits held on the day this act is passed by a retailer in a quantity in excess of 50 gallons in the aggregate, or by any other person, corporation, partnership, or association, in uny quantity and regardless of the use intended to be made of such spirits. The Senate amended this provision, increasing the rate to $2.10 per proof-gallon for such spirits intended for sale for beverage purposes and left the rate at $1.10 for such spirits intended for other uses than beverage purposes; and the House recedes, with an amendment placing the additional $2.10 tax also upon such spirits intended for use in the manufacture or production of any article used or intended for use as a beverage.
On amendments Nos. 52 ·and 53: These amendments place the :floor tax upon distilled spirits upon the proof gallon only; and the House recedes.
On amendments Nos. 54 and 55: The House bill provided that the tax on distilled spirits in the custody of a court of bankruptcy in insolvency proceedings at the time of the passage of
CONGRESSIONATI ·-REGQRI>-l-JIDUSE~·~
is1lrtct..-.sbaltrbe' pai:rt:by :tberperson to- rwbom·.:thei court •delivers+ ~ t 'Ofr'amendment •No'. 2 :~ TbiS' -amendmentf'is'. a·-ciericat ::cbange~~ uchd listilleli l8pit-its .at• the~·t~~or . stich.;; dellvery~- ~.~ The: Senate·' ·a)ld: _the House I!ece~es ... - ~ mended.- thiS·'i pr9vision 1limiting.,~ i:t 1to ::distllled-' ·spiritS' 'i1n ·· !the: ~ ~on ·-amendment::No7'13 ': ~'This:'amendmebt1s· oc-der1ea'l:chang-~-; -.. · _ ustody· !of. a coui"tt of ·-b'ankTuptcy; in , insotvenc-. proceeding.t·o-~ : andd h'etHoU:se:-r-ecede · witl:nln ra'lp.-endntent ·changtng: tl).e · ectirui <:.;. une 1, 1917, and provided further that the person payintJ the . n'uil1irei";-"'"" ax should · haye.:.·an exemption of -w r-rgallons t::nnd·• the1·Hoi1se- '·. On) amendment No~' 74 :~TheiHoifse-biH~p'rovlded:that· tne ~tax:~~;... ecedes. tipO'II grape brandy< or wine.!spirits'. be 10 .cents -perproof ·gallon-.-: -
On -amendment !No.-· 56 ~ rr.rhl '"amendment$ a -clerleaJ:·change ~ ~ ~ in 1addttio'n .to the ~ta:x::nnw levted "by law. Tb~Senate i.ncreased:'--nd the House recedes, with an amendment charigi:Q.g:the.l'section~ thiS dd.J.tiona _tax~ to $1 1:r;fe:r. }Jroof ~gaUmL c-:;:.ThE:f Hous~:r re~des·...,·::· umher. , from.-:its :QJ.sa~eement to this:::a:mendm-ent, wit a'n :a:mendment:-:---On amendments Nos. 57 and 58: These ·amendmen.ts •.chahge:~ makilrg i}the!--additi6Ii rtl:evied ' 'tiPO'n"'grape:_bran · ID' wine::·:~.
be basis-for levy.ing,the tax ·npon rectified-spir~ts ·from·-·the~wine' sph'its.20 ·eents:peN:proof·galloi:lf· ullon, as provided by the House bill, to the proof:cgaHo·n;; and~tlle~ ·~ On· amendment-NcL''75 :·This-.·rrmendment·is a· derleat:C'hange:;;!;:-.,~ ouSe ~recedes~w _ and--the!Hoii e~J:"ecedes 'with'an amendment'changillg::.the:·sectlm1'•{!:': On lfl.lllendment·. o;;{)9 :·:This ·amendment-rpro:videSithat1 -the~ta . -'numbei"t• ."'
n rectified spi11its· .shalldiot nppl ._to ·gin'iJ)roducOO.:hy tbei il:edis:.- + On ~smendment-·No:-r-76 :~h1s mendment·fs a: clerical cha.nge"'"l:~t illation of a:.:purespiri.to.vep.junipev.bercies and:-ot: · .aromatic~~- ·-:a'I)dr-the':Holise:'I'ecedes. -lle!~ousa ·recedes- !from rits uisagt"eemeiitl:witlrHm t n-mendmen~ - . On :ttmen~ment; ro>' 7_7:"'Thfsl:mnendment.1s li.'derical "chailge~-:t::,,
On amendment No. 60: The House bill provided a penalty,J<Jf· · '' On mnenament"No:;78 ::rhe'Hoii.se bilHpro.virle<hm 'it.tlditional .:t .:2 ot ;less :than ;$50(f'land:ritnprisommmtr ot.;;n:ioi:e.rthU:ro.two.1years.;::. tar:upon: \sweelb WineS:dl.eld"if.dr: -saler!by -the rQdu.cer :npon~.the ·· ... : or any violation of the provisions relating:..<to :rectified:rspirits.1 :passa-ge·~of this/ act--equhralent-;to 10 c.en -l>e~:pruat-:gallo-u npo ~-r he: Senate amended! be:provisi:on:b _providfngra ,_pennlty.t !of mob -the: grape--brand}" 'Or' .wlne ·spirits-use.d·in · the~for'tiftcatiari-X>f such ~._
ess than $250 and not more than $1,000 Ot: ·:impriso:nment bt:! ::wine!::;2The·Seiiate··increa edrth'is -additlonal~xrtu $1 '];)eJ;''prqof:~ •f or,e~ _than t.wo years:r:-·!l'M~Hou ·:J:·eeedes41roliJfd.ts·ilisag:rel'!ment-"::.:· gaUont and :tlfe~·Sena:te"-trrecedes'_, . ..-...
o the:-.Senateo:amendnuint Lwith lin: :amendnientutx:iiigLthe· pena.lty.J: ·"; On 'amerrdment;>No·: -79 :'"'The HouseMbill fevfed":'an 'lldditi.Onat-~-.. : t not,:more · than:.~ $1,000--ror ·cimpris:onment:::.no more: .. tha·n;) t\\o : · tax of 10 cents per. proof gallon upon-., grape--:·bt·andy;..or· · wine.ti~· ears. spiritSJ'Withdl-a'wrr"by 1:he"produce _{If 8Weet-!:.Wines-;;fur"!the ~ 'pu:_r:r.? On 'IDn:endment· NO::. 61·.·. Tlie Hoiise ·• m " provided l.l;lat.:an~ - er;.-.. pose-- eYf f-o~i:fying· snctr .vin~d-~ot so ~ed·;:)rt.o:rrt~-the npa ·::>- •
tux . .evaded~ togethen wittrthe·· ta~;: to be : mJllee.ted .;by· .a-ssessment..;. ~:-·: 0_,? ~~en~ment· No. ~1 :--T~Is_:a.men~ent :is a::;~e;;tm:l•~h~ ~-~-1. or on any glVen bond; and the.:Hdus · Ieeedes· '>;7 and .. the House recede~ · tth .an niDe:ndrnen:t.:cb.a:ngl.:nb fu.e .. secti-on ... -. ·
On ·amen?ment •.:No:: 62:u.The~·put'P?se· ef · this:...amendmenHi to ; . n~~~endment-•No~1 82. 'The House bilnevied·'atux::e:quhmlenn." . do away wlth the use of the follow.mg .useless :_and'!-:anneces a:Py-~ . . . . ... . :-,. . , . ~ ..... stamp : •Distulacy:warehonset, · peeial:-:bonded l'lfirehou ~ -- pecia:l;_ - -;to . ~O p~r .; cent of _ th~ .pl'lc~ for . which- all.pi~Pa:te<:Lstr~s ... or r bonded ewarehonse~1.genernhbotided· warehouse :-g.eneral: tbonded-: .. ext:r rrcts · ~~,ntended-'fo-!' -u~e ill th~ -ma~~a:ture- tJ:J:- pr~ue-q~ _Qf ~retransfer• transfelt ~·brandy ·; e.xf)ort •. tobanro •h:eXf)m: ·- cigars-- _-exH J>e\~ages,-t.co~m~nl -@own as snft•;ID.mks; .by . .soda+'ionntams,..'"- '
• ~ . · • ,.: , . ' · .', r '. . , am •. h .);)ottling· est-ftblli11lmerrts,1and• other ... milar:.::places)-:=:-are7 sold-~ by ~·· POI . oteomarga~:~ef , anduexport. :ferment~ Iquor st. . P · _ tbe•·manufacturers:-'-' produeers m· importeT .:.. he·''Serraur struck "" House'necedes. 1.wtb an amendment hangmg;;thetseetion- umber, ... - t ~ ~-H - ,, ' ' . . · .. ~ . ,. >+
On 'amendment+No:: · 63 ·::;:,Thet'Jlurcpo . ·of thls-~nmendment. · is : to ~ .pu -th._ ouse -t~. and: substitutecl~m h~n - thereo ·.:gra~nted~---: a tborize.~the~: .CoinmissioneF-rof :.-Intern ,.;Re\i'enm:u:.<to :.requu;e.J ]f-ates upon such Sl~.ups or e1..1:raets, rangmg. fro~ S .. cents ~ r -· . u , . . . · ..,, . . . . · L .. gall an · pon ··such:r-su·ups ' t~r extracts •whenn·sold::-for ~'·not" ore ~ ms~alla:~n>~ ' ·addtt~?nal-t~etel's.,. -~a~ . :ptpe~ :·~.~ ~ 0!deudo , ; t~an 1$1.25. per· gallon to a· tax- ·<d 1'2 .::cents. pe~galmn - >Vhen·::s.uch ~?rr. p~mtus, __ 1f he .. de~,- ~ch t ru t~~lathJ~s m.~ce~ary::; 'l · . • ~1rups or extracts il.re sold · f-or ':'mo~.e .. ·tha 4 j:)er _-gallori: --~:..The·:;;~ proper-ly. .. afegna:rd. t~el.revenue ~ -! -and: .the,~Ho~~HecedeS.L'Wl.th:. "'H<ilise.'l.>-eeede ·1-ro"HI"its tli ·rigreement to"thi -amerrdrrrimt~ttr:an :!;.. an amendment!cha.ng:mg theH ection_-numbeiT~- am d · t "'d t+rrn- th .·· s t ·~1~ ·-A.n~·,l. · ·. ~ • t"" _....._
On :amendment.:No. i64 ·_Tht ' ·ttmen.dmentris· ac'-Cler.icah.chan~e-;.t :c . e~ ~en. t ...._ op: ......... 5 , e . ~na e·'UUJ. Sl~Lzon·.~~"""nc~ea:smg- ue. ~- · nd,the..llo\lse recedes ;with 'an:'tl.mendmenttrllanging:.the1 Sectro11~ z ate to fY: centso~::pe gallon. ~OU"'SUC~- SirUp .or -exb:a:cts'. lleil:t.-·
a i • • sold ermobmo-re-than- $1.30 ·pe1·~.gallon; and gradtrating1:lre-othei· - ": numb?l". · r .. _ •• _ ..:· , • • o-: . """_ rates o that the ttax :levied poirsuch ~·sirup "·or ex:trncts:-when On -amen~ent;. . .No.·. ev .,:Thfs .amendment .lS a -clenenl -ohange ·sold.,.:for .more th:a.n·•$4 pe gallnn .•wilt.lfu 20 eents:lJ-ergalloli.
'ditional tax·· upon· -fermentedPliqlior !S-hotiht:· be ,-$1.25 :~r ~·ev~·y r .On.-:rmendment-•No.' 84 :•The HoU.Se:bili provide-d a..tuxo£'2:-ce:nts•~bnrrel containing not more than .31 gallo~Si "4 ~he ·1 Senat-e•m- t ·per·.gallon upon ginger. ale, root beer;~s.arsaparillit -pop-;·:and tbet'""·· creased , tbi ·· tax. to $1.50_-pei,vbarrel;t• and:. tll~ fHo\lse•.:recede~ ' ~ curhenatedt'""v'atars·cor beverages.~manufacturedt~ar -sold ,by 1the •.
On .amendment· To~: 67 ·:-:Tl~e l !ptTl'poOO' ~~us ~m~n~enU.:·lS _to .l:fu anufacttrrer,::.. pl'oducer;~ .or imp.ortert:of the :,..carbomc-acid:··gas r:T,.
perlll.it:the· .saving•:of the :-.resuluellfrom -dlstiltatiO'n::,at mdustl"lRt lused•-in carbenating! the -same.;:-and· upon all Jinfe-rmented-grape:;."· di tilleries and uthe .. manufaclure . t he:refromttiOf -be\'-&ages • .con,., · juice,;-soft dritiks., :.or artificial 'lllirrerar~waters --(not carbonated}; · tuining not t o exceed,one;-hali'J.ttf. llper,centmf alcohol1bY. :vot~e; -'-and fermentediliqtior eontainingr1e s than.one-'half or1~er:.cent o-~· and:the~Hou fU ecede 1with :::m amendment making.c:ert!lll1 IDl.ITor " ·of alcohol-, 'the . Senate.Teduced- this tax; to 1 cent-per>gallon ;·-.clerical changes .. '::-~. and -ffie trHcfu e-:- recede . 1.
On amendrnent!NoJ 68·: Tlie' Holise: bill· tloubled· tl1e· ax: ,now. : On -a:mendmen No.' 85 :''ThiS amendment-is a . clericni -change:;~-: Ievied•-upon all wine except"ilio e-. cEmta.ining::not· more-<!than.J4 · :.and -rtlle Holise ~ rec·eue . ·!·-per eent: of aicdhoh••, 'rhe-cHol.iSe. bil11 increa-sed the!tarupon wine ~ · On I amendmEmt l·No. · 86 : ~~he- Hou e. bilLI;irovided' a tax •. of 8 contrunin ·nob more-·than •'14 ·per""cent··of alcohol ;··an .a.dditil>nn . :cents vJ)er ·-pound·· upon~ all ·carb<mic-"acid gas ~in drums T other;:,.,. 2 cents .-per ·wine ·gallon. The Seiuli:e-doubled the~ taxrupon :wines. containers intended for use in the ma.nnfaewe.t or pl'o.duction -~ containing n;ot"more, tllan· ~4 per•· cent·-·of alcohoLand•:provided ·an of .carbonated twater-:-Or other -drinks sold ·by' the<~-man.nfa:cturer, :: additional .r tax• upo:q-'-'wine£ ·containing•·more ' than:;~4 pe~r-cent~. producer, or impm·ter. _ The Senate struck: out:, thiS' prQvision . of aJcohol a:nd·not ·fortified -with•gi·a-pe-,brandY-: of $1.10-:per, proo-f- t. ' and, substituted- o: new- ·sectioo;, which wilr be ..e:xpiafned;::nnder ~-: gallon. · · The.House :recedes -from its <lisagreement·•to thlu .amen<E amendment No. 88; and the House recedes. ,~ ment • with . an amendment-·levyiug, an ·-additi6n - ::taX'nlpon:~ all. . On 'amendment-vNo.- -87. hiS amendment is a clerical -change-; ... '". still ·Wine, including -vermuthr -and·'llponua;l.h!hamp.agne:.c.and· other. calld the House -l'eCedes, with an runendmentfchanging 'the sec t...
sparkling wines, liqu~urs,~ cordiaTs;· '".artifictaU:and' other imi.:-.. -tlon"'·numbe:~:· ; tation wines· or compounds sold as wine ·.equal• to ' thettax::.n'O~::: i On amendment · o~. 88··'".The :Senate reduced tha..ta upon· car _ • impo ed by law. . · bomc"acid:'gas_-i:n dl·ums--~or othet ·eontainers·- (intended .for -use. i-~
On amendments Nos. -69 'andr70': These mnendments1 are:.:-cleri~. in the mannfa:cture:m: u e·uf carbonate<L'Wate:rs or other drinks}~ cal changes ; ·and ·the' House:.:recedes- with :amendments~ :Changin-g· ~"'tQ 5 cents}Jerp:ound.:ahd:prQvided· that this.:tax:Elotild. be pajd by , the sectim.i ·•numbers:~. the.pur.chaser.ft'O-the .~ndot~:mrl collected, retu:tned,. and...paid.;.to . !f.
On amendments. Nos. 89 and 90 : These amendments are clerl· cal changes ; and the House recedes.
On amendments Nos. 91 to 108, inclusive: These amendments relate to the tax upon cigars. The House bill provided the following rates upon cigars made of tobacco or any substitute therefor and weighing more than 3 pounds per thousand : If manufactured or imported to retail at not more than 4 cents each, 50 cents per thousand; if manufactured or imported to retail at more than 4 cents and not more than 6 cents each, $1 per thousand ; if manufactured or imported to retail at more than 6 cents and not more than 10 cents each, · $2 per thousand; if manufactured or imported to retail at more than 10 cents and not more than 15 cents each, $4 per thousand; if manufactured or imported to retail at more than 15 cents and not more than 20 cents each, $5 per thousand; if manufactured or imported to retail at more than 20 cents each and not more than 25 cents each, $7 per thousand ; if manufactured or imported to retail at more than 25 cents each, $10 per thousand. The Senate changed the cigar classification and rates as follows: If manufactured or imported to retail at 4 cents or more each and not more than 7 cents each, $1 per thousand; if manufactured or imported to retail at more than 7 cents each and not more than 15 cents each, $3 per thousand ; if manufactured or imported to retail at more than 15 cents each and not more than 20 cents each, $5 per thousand; if manufactured or imported to retail at more than 20 cents each, $7 per thousand; nnd the House recedes.
On amendment No. 109: This amendment makes the administrative provision relating to cigars apply to the importer; and the House recedes.
On amendment No. 110: The House bill provided that the manufacturer should affix to each box or container of cigars a conspicuous label indicating the maximum retail price of each cigar. The Senate changed this. provision to apply to the importer . as well as the manufacturer and requires each to indicate on each box or container of cigars by letter the class of this section under which the cigars therein contained have been tax paid ; and the House recedes.
On amendment No. 111: This amendment is a clerical change; and the House recedes.
On amendment No. 112: The House bill levied an additional tax of $1.25 per thousand upon cigarettes weighing not more than 3 pounds per thousand. The Senate reduced this tax to 75 cents per thousand. The House recedes from its disagreement to this amendment with an amendment making this tax SO cents per thousand. -
On amendment No. 113 : This amendment levies an additional tax of $1.20 per thousand upon cigarettes weighing more than 3 pounds per thousand ; and the House recedes.
On amendment No. 114: The House bill authorized the Commissioner of Internal Revenue, with the approval of the Secretary of the Treasury, to provide the dies and stamps for cigars and cigarettes necessary under the taxes in effect and the sizes of packages authorized after tlie provisions of this act take effect. The Commissioner of Internal Revenue already has ample authority to do the act specified; and the House recedes.
On amendments Nos. 115 to 120, inclusive: These amendments relate to the sizes of packages in which cigarettes may be put up; and the House recedes.
On amendment No. 121: The House bill levied an additional tax upon manufactured tobacco and snuff of 8 cents per pound. The Senate reduced this tax to 4 cents per pound. The House recedes from its disagreement to this amendment with an amendment making the additional tax 5 cents per pound.
On amendment No. 122: This amendment relates to the date of effectiveness of the additional taxes upon cigars, cigarettes, manufactured tobacco and snuff, and cigarette papers. The Senate made these taxes effective upon the passage of the act. The House recedes from its disagreement to this amendment with an amendment making the aforementioned taxes effective 30 days after the passage of this act.
On amendment No. 123: This amendment is a clerical change; a:1d the Senate recedes.
On amendment No. 124: This amendment is a clerical change; and the House recedes.
On amendments Nos. 125 to 131, inclusive: The House bill allowed the following exemptions from the floor-stock tax levied under the provisions of this act upon manufactured tobacco and snuff, cigars and cigarettes: One thousand pounds of manufactured tobacco and snuff and 20,000 cigars or cigarettes. The House bill only allowed these exemptions to each person, corporation, partnership, or association. The Senate reduced the House exemptions as follows : One hundred pounds of manufactured tobacco and snuff, 500 cigars, and 1,000 cigarettes, but provided that the exemption should apply_ to each place of business; and the Senate recedes from its amend-
ments provid4Jg that the exemptions should apply to each place of business, and the House recedes from its amendments Nos. 125 and 130 making the exemption from the flooc,stock tax 100 pounds of manufactured tobacco and snuff and 1,000 cigars or cigarettes. ·
On amendment No. 132: This amendment is a clerical change; and the House recedes.
On amendment No. 133: This amendment is a clerical change; and the Senate recedes.
On amendment No. 134: This amendment is a clerical change; and the House recedes.
On amendment No. 135: This amendment is a clerical change; and the Senate recedes.
On amendment No. 136: The House bill provided for an additional levy of a tax equal to one-half the additional taxes levied upon cigars, cigarettes, manufactured tobacco, and snuff, removed from factory or customhouse after the passage of this act but prior to the time when the additional taxes become effective. The Senate struck out this provision; and the Sellate recedes.
On amendment No. 137: This amendment is a clerical change; and the Senate recedes.
On amendment No. 138 : This amendment is a clerical change; and the House recedes. .
On amendment No. 139: The House bill levied a tax of onefourth of 1 cent on each book or set of cigarette papers containing not more than 25 papers. The Senate struck out this provision ; and the House recedes.
On amendme~t No. 140: The House bill provided that the tax upon cigarette papers, made up illto packages, books, sets, or tubes should be paid by stamps affixed by the per on, corporation, partnership, or association making up or importing the cigarette packages, books, sets, or tubes. The Senate struck out this provision. The effect of this action is to allow the tax to be collected in such manner as the Commissioner of Internal Revenue, with the approval of the Secretary of the Treasury, may prescribe ; and the House recedes.
On amendment No. 141: This amendment is a clerical change; and the Senate recedes.
On amendment No. 142: .The House bill provided that the war taxes on facilities furnished by public utilities and insurance should become effective June 1, 1917. The Senate changed the date of effectiveness to November 1, 1917; and the House recedes.
On amendment No. 143: This amendment provides that the 3 per cent freight tax shall apply to the amount paid for transportation by any form of mechanical motor power when in competition with carriers by rail or water; .and the House recedes.
On amendment No. 144: The House bill provided a tax upon express of 6 per cent upon the amount paid for the tran portation of property by express companies. The Senate amended this provision by proposing a tax of 1 cent for each 25 cents or fraction thereof, paid to any per on, corporation, partnership, or association engaged in the business of transporting parcels or packages by express. The House recedes from its di agreement to the amendment with a.n amendment changing the tax to 1 cent for each 20 cents or fraction thereof.
On amendment No. 145: This amendment is a clerical change; and the House recedes.
On amendment No. 146: The House bill provided a tax equivalent to 10 per cent of the amount paid for the transportation of persons by rail or water. The Senate reduced this tax to 5 per cent. The House recedes from its disagreement to the Senate amendment with an amendment making the tax 8 per cent.
On amendment No. 147: This amendment increa es the scope of the tax upon the transportation of persons to include the transportation of persons by any form of mechanical motor power when in competition with carriers by rail or water. The House recedes from its disagreement to this amendment by making the tax upon the transportation of persons apply to any form of mechanical motor power on a regular estal>lished line when in competition with carriers by rail or water.
On amendment No. 148: The House bill limited the tax upon transportation of persons to the amount paid for the tran portation of persons within the United States. The Senate amended this provision to make the tax apply to the amount paid for transportation of persons from one point in the United States to another or to any point in Canada or Mexico where the ticket therefor is sold or issued in the United States; and the House recedes.
On amendment No. 149: The House bill provided that the tax to be paid upon the amount pjlid for the transportation of persons should not apply to the amount paid for commutation or season tickets for trips less than 30 miles. The Senate increased this exemption limit to 40 miles; and the Senate recedes.
, CONGRESSIONAL- RECORD_:_1IOUSE.
- On .amendment No: -150: The House bill exempted far·e~ not· .In eXCeSS of 25 ·centS from -the tax UpOn the halli;porfution Of p~~·so~s. T-!Ie _ Sen.ate increased this exemp'tion to 35 cen~; and the House recedes. - · -' On amendment No. -151: The House bill . provided a tax . ~u!v!ll_~~t to 10 p~r ce~t qf_ the amorint paid ·for seats, berths: _and st~ter_90il!S _in pa1:lor ~ars, sleeping car~, _ Qr on ves~els~ The Senate reduced this tax to 5 per cent; and the Senate recedes. . - ~ : On amendm~nts Nos~ 152 antl 153: These amendments ar~ clerical changes ;- and the House recedes. . _ 1 . On ainendmenf No: 154: Tb.is amendment provides that if a ~icket (other than a mileage book) is bought b~t not used befor~ the tra~ortation tax becomes effective that it shall not be :Valid f01: passage until the tax h_as been paid, nor until the payment is evi9enced on the ticket in such ~anner as the Commissioner of Internal Revenue, with the approval of the Secretary- of the Treasury, may by regulation prescribe; arid- the House recedes. - I
. On amendment No. 155: The House bill levied a tax equivalent to 5 per cent of the, amount paid for electric power for domestic uses, and of the amount paid for light or heat service, arid al o _a tax equivalent to 5 per cent of the amount paid for telephone service by ·subscribers, · exclusive of the amount paid for toll .or · long-distance calls. The Senate struck out these taxes, and the House recedes. . _
On ·amendment No. 156: This amendment makes radio dispatches subject to a 5-cent tax upon each dispatch for which a charge of 15 cents or more is imposed ; and the House recedes: . On ai;llendments Nos. 157 to 160, inclusive: These amendments are _clerical changes; and ·the House recedes. . , ·on amendment No. 161: This .amendment is a clerical change; .and the · House_ recedes with an amendment substituting the word H such II for the word "the," . _On amendments Nos. 162,-_ 163, and 164: The e amendments .are clerical changes ; and the House recedes. : On amendment .N:o. 165: This amendment provides that the transportation taxes shall not be construed to apply to the transportation of company material transported by one carrier which constitutes a part of a railroad system for another carrier which is also a part of the same sy tern, nQl' to movements by railroad companies of the outfit, property, and per ons of any amusement company, which, in the conduct of its business, owns ami provides its rolling stock and equipment and which is not .engaged in . the .transportation of commodities for sale or exchange, nor to the amount paid for special mileage b_ooks issued under trans-
. portation- contracts to sueh amusenient companies and issued fo·r the transportation of -its bona fide eJllployees and agents. .The House recedes from its · disagreement with the Senate amendment -with an amendment providing :that the transportation taxes shall not apply to the -transportation of company ma-terial transported by one· 12arrier which constitutes a part of .a railroad system for another carrier which is also part of the same system. · : On amendment No. 166: 'l'he Bouse bill provided that no war tax on facilities . furnished by public utilities should be imposed .upon any payment received for service rendered to officers or _employees -of the United States, or of: any State or political subdivision thereof, in the course of their official business. The -Senate. amended this prov.ision _by: providing . that such taxes should not apply to any payment received .for · services rendered to .the Un.ited ·_ States or any. State, TerritOl'Y; or the District of Columbia.- ~ It .:ft}rther .. provided that. the right to thls exemption should be evidenc'ed.in su-ch. manner as the Commission-er of Internal Revenue, . with the approvnl of _the Secretary of the Treas:ury, should :by i.·egulation prescribe;. and the Bouse recedes. -. . On amendment No: 167: .The Hou~e bill levied the following rates upon insurance: Upon life insurance, a tax equivalent to .g cents on each $100 or fr_action_al part . the_reof of th_e amount for which .ariy life is iiisured; upon marine, inland, and fire in: ·surance, a tnx equivalent to 1 .cent on .each $1. or fractional part thereof of the _premium.chatge on each policy of insura:nce; upon _casualty :in~urance, a _ t~x equivalent to _1 .cent on each __ $1 or
- fractional part thereof of the premium charge upon each policy .of ins:q.rance or OQligatiop_ of the nat~re of indemnitY: for loss, damage, or liability _ (except bqn(1s_ t~xable ~der ~ubdivi~ion 2 _of Schedule A . of Title -VIII, which will be referred to _ untler . aii!eq~~-ent. ~o. _256). ~ T_he ~ennte, stp1c~- qU:t -aq t~e _ins11rance taxes. 1The House recedes from its disagreement to this amendment with an amendment restoring the insurance taxes proVided .in the House bill an.d' ch~anged tlie date of effectiveness of these :taxes from- Juiie 1 'to Novembe1· 1; 1917.·. _- . · ·_ ·r : , - . - ~ OiCi}menomenf ~o. ' i68: Tnf& amendment relates tQ ·making. the return ·an'tl ·tne ·payment of the taxes llue -under the i'nsurance
., • -- - .,.. • • ~ • • • • • .. , • £ ~ -
LV-480
provisi,ons. - The·. Sepate _st:.;uck out -this .. provision .when it elir~inated the insurance taxes ; and, since the insurance taxes have been restored, the Senate recedes. ~ . . : On riinendment No.-169: Title VI of the House bill was entitled ,·, Wru: tax ··on riiani1facturers." · The· Senate changed the title to read " War excise taxes ·" ; and the House recedes. - · -. On amendment NQ: 170 ;- -T~e House bill levied a tax upon automobiles, aut~mQbile_ truck.s, automob!l~ wagons, and motor~ycles, t\nd liJ.Utomobile, motorcycle, or bicy~le tires, including inner tubes, equivalent to 5 per cent of the p:1anufacturer's, producer'~, or imp_o_rter's s~lling price. : . The Senate struck out this provision . The House .recedes from its disagreement to this amendment }Vith ·an amendment making the tax upon automl)biles, automobile truclrs, a,utomo~ile wagons, and motorcycles 3 per cent of the manufacturer's, producer's, or importer's selling price. . On amendment No.- 171: The House bill provided a tax of 5 per cent ·upOn the selling price of all musical instruments sold by the- manufacturei·, producer, or importer for more than $10 each. -This tax - also applied to piano players, graphophones, phonographs, talking machines, and 1;ecords used in connection with any musical instrument, piano player, graphophone, phonograph, or talking machine. •rhe Senate struck out this provision. The House recedes from its disagreement to this amendment with an amendment levying a tax upon piano players, graphophones, phonographs, talking machines, and records used in connection with any musical insh·ument, piano player, graphophorie, phonograph, ·or taiking machine equivalent to 3 per cent of the manufacturer's, producer's, or importer's selling pricf'. · The House biil provided ·a ta;x: of one-half of 1 cent per linear foot -upon an-moving-picture films · (which have . not been exposed) ·sold by the manufacturer or importer. The Senate struck out tbis· provision. The House recedes from Its disagreement to this provision ·with ~n amendment restoring the House provision and making the tax-one-fourth of 1 cent per lin~ar foot.
The Hou e bill provided a tax equi~alent to 1 cent per linear foot upon all moving-picture "films (containing a picture ready fo1· _projection) sold or leased by the manufacturer, producer, or importer. The Senate struck out this provision. The House recedes from its disagreement to . this : amendment with an amendment restoring the House provis~on and making the tax: one-half of 1 cent per linear -foot. _ ..
The House bill provided for the levy of a tax equivalent to 5 per c~nt of the manufacturers', producers', or .importers' selling price on any article commonly or commercially known as jewelry, whether real or imitation. The Senate struck out this provision. The House recedes from ·its · disagreement to this provision 'vith an am·endment restoring the House provision and fixing the rate at ·3 per cent of the price for which so sold. ·
The House bill provided for the levy of a tax equivalent to 5 per cent of the manufacturers', builders', or importers.' selling price on yachts, pleasilre boats, motor boats, or other vessels not used nor intended to be used for trade. The Senate struck out the House provision and levied an excise tax upon the use of yachts, pleasure boats, power boats, and sailing boats, of over 5 net tons, and ·motor boats with fixed engines, not used exclusively for trade or national defense, or not built according to plans or specifications approved by the Navy Department at rates as follows: Yachts, .pleasure boats, power boats, motor boats with fixed engines, and sailing boats, of over 5 net tons, length not over 50· feet, 50 cents for each foot ; length over 50 feet and not over 100 feet, $1 for each foot l length .over 100 feet,· $2 for each· foot. Motor boats of not over 5 net tons with fixed engines, $5 . . The House agrees to the Senate amendment to this provision with an amendment making this provision section 603 of the bill and transferring it to the end of Title VI. ·· On amendment No. 172: This amendment is a clerical change; and the Senate recedes.
On amendment No. 173: This amendment is a clerical change; and the House recedes with an amendment changing the letter "a" to" f." -. On amendment No. 174: This amendment is a clerical change; and the House recedes. ·· · -- On amendment No~ 175-: The House bill proposed a tax upon fishing lines equivalent to 5 per - cent of the manufacturers', producers' •. or importers' selling price. The Senate sh·uck out this' provision ; and the :Ero-us~ recedes. ' On· amEmdinent'No.' 176: .ThiS nni(mdinent provides that the tax levied in the' sporting-goods. section shall nQt ·apply to chil-tlr(m"S toys _and ·games;· and the ~ous_e rec~es. ·
On amendment No: 177: The House bill provided for the levy of a tax .equivalent to 5 per eent .of the __ manufacturers', propuc·e):s', or importers' ~~elliiig fn;iee upc;:m· all art~cles specified in the·:·sp?~'ting-~oods~ s~~ti.on. The_ Senute· redm;ed · this tax -to 2
CONGRESSIONAL RECORD~HOUSE·. /. OcTOBEB r~ .
per ·cent. The House 1·ecedes from . itS disagreement" to . this amendment with im amendment making the tax 3 per cent.
On amendrpent No. 178: This amendment i'S a clerical change; and the Hoilse recede with an· amendment changing the letter "b ,, to the letter· u g... . J •
On amendmentS' No . 179, 180, and 181: These amendments are clerical changes ; and the House z:ecedes.
On amendmeDt No. 182: The Hol:lSe· b-ill provided for the levy of a tax equivalent to 5 per cent of the man:a:facturers, importers , or producers,. selling price upon perfumery, cosmetics, toilet soap and powder , and similar articles. The Senate reduced this tax to 2 per cent ; and the House recedeS.
On amendment No. 183: This amendment is a clerical change; andi the Ho11Be recedes with an amendment changing tlle letter "~" to uh."'
On · amendment No. 184 : This amendment is a Clerieal change ; and the House recede · with an amendment changing the word " fourteen " to .. thirteen."
On amendment No. 185: Tlie House bill provided for the levy of a tax upon medicinal preparation , compounds, or compOsitions equivalent to 5 per cent of the manufacturers', p1·oducers', or importers' selling price. The Senate reduced the. rate to 2 per cent ; and the House recedes:
On amendment No. 186: The· House bill provided a tax on chewing gum equivalent to 5 per c,ent of the manufacturers', producers', o-r importers' seiling price. The Senate struck out this provision. The House recedes from its disagreement to the a~endment with an amendment restoring tlle House pronsion and making the rate 2 per cent. ·
On amendment No. 187 :' Thls amendment pl'ovides for a to upon cameras equivalent to 2 per cent of the manufacturers', p1·oducer ", or importer ,. selliiig price. The House recedes from its disagreement to this amendment with an amendment making the tax 3 per cent.
On amendment No. 188: This amendment is a clerical change, and the Senate recedes: · · ., -
Ofl amendl;nent No. 1 · 9: This amenclrnent is q. clerical change; and the House recedes. ·
9n amendment No. 19~: This amendment is a clerical change, and the Senate recedes. ·
On amendment No. 191: This amendmeut is a clerical change, and the House recedes. '
On amendment No. 192: The House bill levied a :floor-stock tax, equivalent to 5 per cent of the plll'chase price, on any automobiles, musical instruments, jeweil"y, porting goods, perfumes, co metre , toilet soaps and powders, medicinal preparations, compounds or compositions, and chewing gum, held and intended fox sale by any pe1·son, cOTperatlon, partnership~ or association oihex than a retailer who is not also a whole aler, and on all sucb article. which, behYeen Ap-ru· 6, 1917, and the day this act is passed, have been sold to, and on the day this act is pas ed ·are held and intended tor snle. by a retailer who is not also a wholesaler~ The Senate struck out this provision. The House recedes from its disagreement to this amendment with an mnendment levying a tax on such articles which,. on the day thi act is passed, are held and intended for sale by any person, COil)Oration, partner-hip, or association, other than a retailer who i not also a whole
saler, equivalent to one-half the. tax levied upon such articles by section 600.
On amendment No. 1.93:. Thi$. amendment is a clerical change·; and the Senate recedes
On amendment No. 194: The House bill provided that the admission taxes should become effective June 1, 1917. The Senate bill provided that they should become effective November 1, 1.917; and 'the House recedes.
On amendments Nos. 195 to 198, inclusive: These amendmfnts are clerical changes ; and the Hou e recedes..
On amendment No. 199 : This amendment provides that the tar on admissions of cbildren :where an admission charge is made for such children shall in every case be 1 cent. The House: recedes f1·om its disagreement to this amendment with an· amendment providing that the tax on admissions of children under 12 years of age whe1·e an admi sion charge is made for such children shall in every case be 1 ·cent.
On amendment N(). 200: The Hou8e bill imposed a tax -ot 5 cents upon each admission of each person (excep-t in the case of a bona fide employee and children under 12 years of age and municipal officers on official business) admitted free · to any place for which n. charge is macr~. and provided tllat this tax was to be paid by the person adri:litted.
The Serrllte struck out thi.S provisi.on and tnse1·ted in lieu theroo.f the following taxes: A tax o:f 1 eent fOr each 1~ cents or fraction thereof paid tor admission to any pub:tic"performance for profit t~,t any cabaret or other simifar· entertainment to wliiel't the charge for admission is wholly or in part included in the
price paid for refreshment, service, or merchandise ; a tax equivalent to 5 per ce11t of the amo1mt paid in excess of the established priCe for tickets of admission to theil.ters and operas and ot~er _places of amus.emenf sold at news stands; hotels, and places other than the ticket offices of such theaters, operas; or other places of amusement at not to exceed '50 cents in excess of the sum of the establi.Slied price charged at such tiCket
. office; a tax equival~nt to 3() per eent of the amount a-f any excess charge for such Mckets sold for more than 50 cents m excess of the established selling price af the theater; and a tax equivalent to 50 per cent- o-f the amount for which the proprietors, managers, or employees of any opera house, theater, or other place of' amusement ell or dispose o:l tickets in exeess o:t the regular or establishoo price or charge therefor. T~e Honse reeedes ftom ~ts disagreement to this amendment
with an amendment imposing a tax of 1 cent for e:aeh 10 cents or a fraction thereof o-f the price charged to persons (except bona: fide employee , municipal officers on official business and children under 12 years 6f age) admitted free to any pla~e at a time when and under circumstances· under which an admission charge is made to other per ons ot the arne cla s · and also imposing a tax of 1 cent for each 10 cents or fractio'n thereof paid for any admission to any public performance for profit at any cabaret or other similar entertainment to -which too charge for admission is wholly or m· part in.Cluded in the price paid for refr·e hment, service, or merchandi e.
On amendrilent No. 201: Thi amendment is n el ricnl chan(\'e striking out the House pro-vL~on levying a tax of 1 cent npo~ the admis ion of ebildren under 1Z ye .. r: of age. Tbi provi ion has been changed to another part of this section and fully ex~ plained under amendment To. 199, and the Hou e recedes.
On amendment No. 202: This amendment exempted from the admi ~ion hl± admis ions: to moving-picture shows and outdoor .general amu ement parkS, main gates, shows, and rides
. therein, the maximum charge for admi. ion to which is 25 cents. The House recedes from its disagreement to the ame-ndment With ·an amendment exempting from the admiSsion tax admi sions to shows, rides, and other amusements (the mnximum charge for admission to which. is 10 cents) within out.:. door general amusement .parks and admi ions to such parks.
On amendment No. 20~: The House bill provided that the admis ion tax soould not apply to agriculture fairs whose entire proceeds inure exclusively for agriculture purposes. The Senate amended this provision so that the admi ion tick ts should not apply to admi~ ions · to agriculture fairs nor to a~ misSions to bona fide cbautauquas nor lyceum courses which are eontra€ted for or guaranteed. b-y local companies, as ociations, or individuals. The House recede fr·om its disa"'reement to this amendment with an amendment providing that the admission tax shall not apply. to agriculture fair " oone of the profits of which are distributed to stockholders or members of tile association conducting the same."
On amendment No. 204: The House bill levied a tax equiva-. lent to 10 per cent of the amotmt paid as dues or membersbip fees (except 1nltiation fees) to any social, athletic; or sportin...,. club or organization. The Senate struck out this provisio; The House recedes from its di agreement to the Senate amend: ment wtth an amendment restoring the House provision and providing that the tax shall become effective November 1, instead of June 1, 1917, nnd prov:i.ding that the tax 'shall not apply to sucb clubs or organizations. if the dues ·do not exceed $12 per year. The amendment also provide that the tax shall not apply to any fraternal beneficiary ociety, order, or a ociation, operating under the lodge system or for IDe exclusive benefit of the members of a fraternity itself operrrting under the lodge system, and p1·oviding for the payment of life; sick, accident, or other benefits to the members of such iety, order, or association or their dependents.
On amendments Nos. 205, 206, 207, 208, 209, and 210 : These amendments are clerical changes ; and the Senate recedes.
On amendment No. 21~: This amendment pFoVides for malting returns of certain ·of the admission -taxes that were biicken out in conference- and explained in amendment No. 200 ; and the Senate recedes.
On runentlment No. 212 ~ The HotiSe bill provided that too war stamp taxes ·soould be eft'ectl'ie June 1, 1917. The Senate changed the date to November 1, 1917; and the Hou e recede.s with an amendment making these tax-es eirective December l,
' 1917. . ' . On amendments Nos. 213 to 233. indusi\e: The e amendments
are amendments to the war stamp tax administrative provi i<mS . and clerical in nature and in the inter'est cit clearness; and the House reeedes. . .
On amendment No. 234: This amendment ·was merely a cleri .. cal change; and . the House recedes from its disagreement to the
amendment . 'vith an amendment making a further clerical change. ·
On amendments Nos. 235 to 254, inclusive: These amenpments are amendments to the war stamp tax administrative provisions and clerical in nature and in . the interest of clearness; and the House recedes.
On amendment No. 255: The House bill provided that the tax of 5 cents on each $100 of face value or fraction thereof on bonds, debentures, or certificates of indebtedness should become effective Jr_ne 1, 1917. The Senate changed the date to November 1, 1917; and the House recedes with an amendment ma1..'i.ng their tax effective December 1, 1917.
On amendment No. 256: The House bill provided a tax on indemnity and surety bonds of 50 cents, unless a premium is charged for the execution of such bonds, in which case the tax was to be at the rate of 1 per cent on each dollar or fractional part thereof of the premium charged. The House provision also exempted policies of reinsurance from this tax. The Senate struck out this provision; and the Senate recedes.
On amendment No. 257: Thia amendment levies a tax on parcel-post packages on which the postage amounts to 25 cents or more of 1 cent for each 25 cents or fractional part thereof char&ed for such transportation, and provides that the tax shall be paid by the consignor. The House recedes from its disagreement to the amendment with an amendment cha_nging the number· of the subdivision to "14" and ·placing the provision at the end of the war stamp taxes title. .
On amendments Nos. 258 to 261, inclusive: These amendments are clerical changes ; and the House. recedes.
On amendment No. 262: This amendment limits the tax on sales of pro<luce on any exchange by providing that sellers of commodities having paid this tax may transfer such contracts to a clearing-house corporation or association, and such transfer shall not be deemed a sale or . agreement of sale or an agreement to sell within the provisions of this act if such . transfer does not vest any beneficial interest in such clearing-house association and if it is made for the .sole. purpose of enabling such clearing-house as ociation to adjust and balance the accounts of the members of ·said clearing-house association; and the House recedes.
On amendment No. 263: This amendment is a clerical change; and the House recedes.
On amendment No. 264: This amendment exempted renewed promissory notes from the stamp tax on promissory notes of 2 cents on each $100; and the Senate recedes.
On amendment No. 265: This amendment is a clerical change; and the House recedes.
On amendments Nos. 266, 267, and 268: These amendments limit the passage-ticket . taxes to passage tickets sold or issued in the United States for pass~ge by any vessel to a port or place not in the United States, Canada, or Mexico. These amendments are necessary in view of the House receding from Senate amen<lment No. 148 relating to passenger transportation; and the House recedes.
On amendment No. 269: This amendment exempts from lll:e proxy tax of 10 cents proxies f()r voting at any election for officers, or meeting for the transaction of business, of any fra-ternal society ; an<l the House recedes. .
On amendment No. 270: Tllis ar.nendment is a clerical change; and tlte House recedes.
·on amendment No. 271: This amendment is a clerical change; and the Senate recedes.
On amendment No. 272: The House bill levied a fiat additional tax on playing cards of 8 cents per pack. The Senate amended the provision by providing an additional tax of 3 cents per .. pack on playing cards munufactured or imported to sell at retail for not more than 15 cents per pack, and by leaving the House rate on playing cards manufactured or imported to sell at retail for more than 15 cents per pack. The House recedes from its disagreement to the amendment with an amendment . making the · a<ltlitional rate of tax on all playing cards 5 cents per pack.
On . amendment No. 273: This amendment is a clerical change; and the Senate recedes.
On amendment No. 274: The House bill levied additional estate taxes ranging from one-half of 1 per cent .of the amount of tne net ~state not in excess of $_50,000 to 15 per cent of the
.amount of the net estate in excess of $15,000,000. The House provision also reduced tbe fleduction to be allowed in arriving at the net estate to $25,000 in lieu of the present ded,uction of $50,000, and levied a tax of .1 per cent upon the amoUQt of the estate. between $25,000 and $50,000. Th_e Senate struck out this proyisio11. The House recedes from its disagreeme.nt to this_ amendment with an amepdp.1e~t restoring . subdivisi_on (a) 1 the House .. provision, but pr<;>viding that the additionaJ. tax. levied in this title shall not apply to the transfer of the n~t
estate tax of any decedent dying while serving in the milita!-'Y or naval forces of the United States during the continuance of the war in which the United States is·now engaged, or if-death results from injuries received or disease contracted in such serVice, within ·one year after the termfriation of such war. The amendment restori~g the House provision strikes out the last House classification and provides that the highest additional estate tax rate shall be 10 per cent on net estate in excess of $10,000,000.
On amendment No. 275: The ;House bill levied a customs duty of 10 per · cent ori practically all articles that are now admitted into the United States free of duty and an additional duty of 10 per ·cent on all dutiable articles. Title X of the House bill also levied. a war tax on coffee and tea. The Senate struck out the entire title, which contained the war customs duties and the war tax on coffee and tea; and the House recedes.
On amendments Nos. 276, 277, 278, and 279: These amendments relate to changes in title and section numbers; and the House recedes with amendments properly numbering the same. - On amendment No. 280: This amendment provided that where additional taxes are imposed by this act upon articles or commodities upon which the tax imposed by existing Ia w has been paid, the person, corporation, partnership, or association required by this act to pay the tax shall make return tor assessment of the tax within 30 days after tl1e enactment of the act. The House recedes from its ... disagreement to the _ amendment with an amendment changing the word " enactment" to the word "passage."
On amendment No. 281: The House bill provided that the tax shown to be due by the return for the assessment of additional taxes upon articles or commodities upon which the tax imposed by existing law had been paid should be paid on or before November 1, 1917. The Senate amended the provision extending the time of payment to six months after the passage of this act, but provided that the time should be extended upon the filing of bond for payment in such form and amount and with such sureties as the Commissioner of Internal Revenue, with the approval of the Secretary of the Treasury, may prescribe. The House receded from its disagreement to the amendment with an amendment extending the time of payment to seYen months after the passage of the act.
On amendment No. 282: This amendment relates to a change in section number; and the House .t:ecedes Jrith an amendment properly numbering the same.
On amendment No. 283: This amendment is a. clerical change; and the Honse recedes. · . . · : .
On amendments Nos. 284, 285, 286, and 287: These amendments relate to changes in section numbers ; and the House recedes with amendments properly numbering the same.
On amendment No. 288: This amend.lLent is a clerical change; and the Senate recedes. .
On amendments Nos. 289 and 290: These amendments are clerical changes; and the House ·recedes. .
On amendments Nos. 291 to 296, inclusi\e: These amendments are clerical changes; and the Senate recedes.
On amendment No. 297: This amendment relates to a change in ,section number -; and the House recedes with an amen<lment properly numbering the same. · , On amendment No. 298: This amendment provides that in the payment of any tax under this act not payable by stamp a fractional part of a cent shall be disregarded unless it amounts to one-half cent or more; in which case it shall be increased to 1 cent ; and the House recedes.
On· amendment No. 299: The purpose of this amendment is to permit the payment of income and excess-profits taxes in installments. The House recedes from its disagreement to this amendment with an amendment permitting the payment of income and excess-profits taxes in installments, and also providing that the ~ecretary of the Treasury may allow credit against such taxes so paid in adYance of an amount not exceeding 3 per cent per annum, calculated upon the amount so paid from the date of such payment to the date now fixed by law for such payment, and providing that no such credit shall be allowed on payments ni~de after the expiration of four and onehalf months after the close of the taxable year. __ . On amendment- No . . 300: The purpose of this amendment is ~o permit collectors of internal revenue to .. r~~ei"ve _ :un;certified · checks and certificates of indebtedness issued . under the bond ·and certificate of indebtedness act of April 24, 1917, and subsequent aets, in payment of income and excesl'!~pr·ofits : 4'\x~s. ·. 'l;'he Bouse recedes from it!S .disagreement to this amendment with a similar amendment making minor changes and. providing that collectors: of. ipternal revenue may receive lincertified checks .and certificates of indebtedness at par and accrued interest in payment of income anq excess-profits taxes. .
7572 OON-GR.ESSION AL RECORD-HOU.SE. 0CTOBE:R . 1',
On amendment No. 301·: This ·amendment merely-changes the I· sho1lld ·Ire tbe ame-as the rate now provided' lby l:tw {tlld pr~title number, and the House recedes irom its disagremnen.t to I vided that newspapers should have free circulation in the this amendment with .an amendment j)roperly numbering the I county of pnblicaUon -as under .the present law. The Senate title. . . , i struck out tbis provision, -and the Hou e recedes from its ill a-
On amendment No. 302: The Senate bill as originally r_e- , greement to the amendment with ·an amendment r toring tlle ported by the Finance Committee -contained a war tax -on profits , provision and changing the section number. of publications, and the postal rate title was extended to ~ver , _On amendment No. 306: The House bill provided that in the this provision. This p1·ovision was struck out in the Senate: • ease of newspapers and periodicalcs entitled to be entered as and the Senate recedes from its amendment to the postal nte: eeond-class matter and .maintained by and in the inter t of title. ; r.eligious, educational, scientific, :philanthropic, agriculture, labm.·
On amendment No. 303: The Hou e bill increa ed the -ppstal ur ftaternal o1·ganiz:a.tions or .associations not organized .for ·rates upon first-class mailing matter 1 cent -for each ounce or : profit, and none of the net income of which inures to the fraction thereof, but provided that i:he rate r.of postage on drop i benefit of any ;private stockholder or individual, the econd-class letters of the first class :Should be 2 cents an ounce or fraction 1 postage rates ·should be irrespective of the zone in which dethereof. Thi provision also increased the 'I.' ate upon 'POStal , li-vered {except when .the same are deposited in a letter-carrier eards an additional 1 cent each. The House bi.ll provided -that <office .for deliv.ery by its carriers, in which case the rate shall the foregoing rates upon first-cla s matter should become effee- be the same as now provided by law), that the rate upon such tive 10 days after the passage of the aot. The Senate struck · publications should be li cents per pound or fraction . thereof -out this provision and incorporated a new ection ·providing that . from July .1, 1917, until Mareh 1, 1918, and -thereafter 1! cents letters written nnd mailed by -soldiers, sailors, ·and marines as- • ·per -pound or .::tractian thereof. ·The Senate struCk out this pr9-signed to duty in a foreign cauntry engaged in the _present war vision. The H.ouse recedes from its di agreement to this amendmay be mailed ·free 'Of postage_. subject to such rules and regu- : ment .restoring the House -provision but changing the rates -as lations a may be _prescribed by the Postmaster General. The follow.s: .u J:i cents per pound or fraction thereof on and after Hou e recedes from its disagreement to this amendment, with an i July 1, .1.918, and -u.n.til July _1, 1919, a:nd on and after July 1, amendment re toring the House provision and ineorporating into ! 1919, ·1-1 .cents per pound Ol' fraction -thereof." this section the Senate provisiop aforementioned and providing , On-amendment No. 307: The House bill pro-vided that where that the additional rates upon nrst~class matter shall become . the total weight of any one edition or issue of any pubHcation e.ffective 30 days after the pa sage of the act. mailed to .any one 'Zone does not exceed 1 pound, that the rate
On amendment No. 304: The House bill provided that the zone of postage should be :1 cent for each 8 ounce or fraction thereof. sy tern applicable ~ ::> parcel po t :should -apply to mail matter of The JSenute struCk out ·fuis .provision. The Hou e recedes from the second class ru1d provided the following rates upon second- , its disagreement to t:bis amendment -with an amendment restorclass :m.atter (other than newspapers and periodicals •entitled ing the •House provision, ·but changing the rate to 1 cent -per to be entered as second-class matter and maintained by and in 1 pound. the interest of religious, educational, -scientific, philanthropic, On amendment No. 308: The House bill pro~ded thatthe rates agricultural, labor, or ·fraternal -organizations or assodations provided by the postal rate title should iJ.'elate to the entire bulk not organized for . profit and none of the net income of which mailed to any one zone and not to individually addTe ed packinures to the benefit of any private stockhalder or individual): ·ages. The S'enate struck out this provision . . The House recedes
from its disagreement to the aiDendment with an amendment On and after N providing that .the 'ZOne -rate provided by the postal title sball ~Jl *;;~~· ~tii l!!;~i: ~J:~ ~ti· : relate to the entire bulk mailed to any one zone n.nd not to
1917 (cents' 1918 (cents per pound). J.ndi:vidually addressed packages. Zone.
per pound). per pound). On amendment No. 309: The House bill provided that where
1 ......... ·················-············· lt li 1! 2and3.................................. 1! 1! 2
The Senate struck out this provision. The House Tecedes i from its di agreement to this amendment with an amendment ' providing that the publisher may mail his publications from the po t ·office of publication or any other post offices and 1
secure the zone rate from the ().ffice from which the publication i mailed. The amendment agreed to provides a .flat rate, upon reading matter and puhlications where the space devoted to adverti: ements does not exceed .5 per cent of the total space, of 1! cents per pound or fraction thereof on and after July 1, 1918, and until Jt1ly 1, 1919, and a flat rate upon such reading matter of J.~ cents peT pound Ol' fraction .thereof after July 1,
,191 . Tbis !l.Illendment makes the zones applicable to fourthclass matter applicable to the portion of · econd-dass matter devoted to ad\ertisements where the -percentage of space devoted to advertisements exceeds 5 per cent of the total space of the publication. The rates of postage upon the portion of such publications devoted to .advertisements pro-vided by this amendment al.'e a.s follows~
On and after-
ih.e newspaper or ·periodical is mailed by other than the publisher or his agent or o. news agent or dealer, the postal rate shall be the same as now provided by law. The Senate struck out this vrovisi.on. The Honse ·ecedes from its disagreement to this amendment with an amendment .re toring the Hou e provi ion and changing the section .number.
On amendment No. B10: The Hou e biD provided that the Postmaster General should, on ar before the 10th day of encll month, pay into th-e general fund of the Treasury an amount equal to the difference between the estimated amount received during -the pr~eding IDonth for the transportation of first aud second cia s matter through the mail , and the estimated amount which would have been received under the provisions of the law in force at the time of the pa age of this act. The Senate struck out this pTovision. The House recedes from its disagreement to this amendment with an amendment restoring the House provi ion and changing the section number.
On amendment No. 311: The House bill J)rovided: "That the salaries of postmaste1·s at offices of the first, second, and third clas es shall not be increased after July 1, 1917, during the exi tence Qf the pre ent war. The compensation· of po tmaster at offices of the fourth class shall continue to be computed on the basis of ·the present rate of postage, unless compensation be le than that t·eeeived dUI"ing the fiscal year ending .June -30, 1917, in•which ca e such compensation shall be computed upon
July 1, 1918, to July 1, 1919 (cents per pound or fraction
July 1~ 1919, to Jwy 1,
1920 (oonts per pOllD.d or fraction thereof).
·the basis of the rates of po tage provided for in this act, but in no case shall the compen ation so computed be greater than that received during suCh fiscal year." The Hou e 1·ecede from
.After July it di agreement to .the amendment with an amendment pro-J'foy;r~i~J?· 1J!2~~=s , viding: " That the salaries of postmasters at offices of the fir t, Zone.
1921 (cents or fraction ·econd, and third class shall not be increased after July 1, ~U:tfo~ thereof). 1917, during the existence of tile pre ent war. The compensation thereon. of po tmaster at offices of the fourth cla s shall continue to be
computed on the basis of the pre ent rates of po tage." . 2
.on amendment No. 312: This amendment provi-de· that whet·e 3 postmasters at offices of the third cia are granted leave with-5 out pay for military purpo es, the Postmaster General maY. 6 allow, in addition to the maximum amounts which may now be ~ allowed such offices -for clerk hire, an amount not to exceed 50
8-----······-······-····· 10 per cent of the salat~y of the po tma.ster. The House recedes from its disagreement to this amendment with an amenum nt
On amendment No. 30!5: ·The ·House bill provided -that the providing that where po tmasters at offices of the third cla s x.ate_ o:t -postage _on daily '"llewspapers when the same are de- · have been granted leave since May 1, 1917, or hereaftel' are posited in a letter-.earrier o.fiice tor deltver,y b-y its carriers · granted leave without pay for military pm·pose , that the Post~
OONGRESSION AL ECORD~'ROUSR 7573 master. Oenera:bmn:vmnow, ;tn_'ll.ddition ttn !f:hamax.tmum :aino:mits
1 · ..Mr._ F.ORDNE_Y:· r lli. Speaker, in re~en·ce to tlme for ~ba.ttr,
wllich ·ma-y be now.eU·su:ch ·offic-es :for d.etk;Btre, .an: amount not .. I desire to state ·to tbe ~gentleman ::from .North Carolina tiat [ ' to exceed ·50 :pet •cent 'l>f the salacy•o'f the !POstmaster. · .have .requests :for about :an •hour~s.;f.ime upon this ·side. •·•Ori ,a:mendment. o. :313: 'This-.:amendment· -provided furt sec- · Mr. KITCHIN. Mr. Speaker, I ask unanimous censent 'fhn..t tlon 5 of tbe :a.at1of 1\i[a:roh '3, 19'17, makrl.ng npt;reoprla~i:o.ns ;f(}r· :debate upon i:he cEnrference report be 1imltea to 'two hours, :one the Post 0ffice Department for lfhe year ~ending ,June '30, :t918 .. 'hour to .be controUed -.by the gentleman from 'Micbfgan [Mr. wJlicnprovides ·"tha:t no letter., .post •.card, •ctrculal.", -newspaper~ FonnNE~J And ooe hour by myself. pamphlet, -or JP.ulJJicatton of :any .,kind ~Containing any'miverttse- · 'lllie SPEAKER. The .gentleman from North Caroilna asks. ment of spirltuQns, ' Vinous, . nudted, 'fermented, or ofher .intoxi- ·u:na:n1mous consent i:hat debate "Upon the canfer-e.nce report be GDJin<F liquOl's .:.Of any kind tOr 'cmitahiing a 'S'olicltafio~ nf tor· .. ":limited to :two hours, tmte hour 'to 'be controlled by the gentleman: ()rder.for sam liquors,: or ·auy of-them,,-shall_'be.depostied.in_.and fvam :1\.ficmgan '[Mr • . FmmNEY:J and ·one \hour by himself. Is carried by the mails of the United States or be deliver:ed by 1ibere ..,. ob)ec'tiah? any :postma:ster..i ·or 'letter ·car~et, iWhen :ac~.dr~sed' '?r <Iirec_ted · Mr. iCANNON. ·Mr. :Speaker, ·-r:eservi.ng the right tO' ·object, to . any person, firm, \t!Drpora.twn, .:o:r· assoc1atiorr1 0: other :ad· I ~elie·v~ :fllie 1gentleman from No-1.-th Ca:roltna will •be able to tn.Fk dressee, "'at-n.ny :pla<re lOr pnint ::in ..:any :stSJte <nr -~itory -:O:t the .'tar two 'boors lflmself. United States 'at ·w.hicli iit .is by tfhe .law ellfor.ced in 'tilE! 'State~ M FORDN·P'tr- M ·s I · ' o.-r Territory .11t :th!rt 'time unlawful i:o ··so1icl1: :Orders 'for sucl.L: . r. . . ~....... r. · !J)eak~~ desi~e to stnte _to the gentle-
, . . . , . . . . - . 111an that s1n.ce I 1ast-spoke to firm I have ·requests for mo-re than liq'!o:rs, .or "any_ of them, -resl!ecmv;t.Y. -shallln.ot :~e constrc?-e~ .to an hom's time, ·a:nd I ·suggest ihat he let del:Jate .run .along as aJi)ply• 't? -.eth:Yi --alcohol -:f?r gover ~ental, ;s.cieritl:tic, 1Ile<fici:na;t. -best we can for 11. ·time · mecharucal, mannfacturmg, and mdustr.ial ·pn.tposa .. Tlus M K!l:CHIN v · ell "" d ·th h amendment also' ;provides ·'tnat section ·5 ·of .itlre aforementioned ~ - r~ ·~ _ ery w • ~ U:~ e e:request a-t t e sugges-
t- ~,...r~~~3 ·. "fn-1rz li~.,1 4- ·b ·'k-"'Jd-4- h'"':-••1~~ · ·o.f ·th tlon of the gentlen:lan 'from Micblgan. ac .~~UJ.· •• ...u1. • • • l1ll no.~. . e .ut:::... .~.o 1>1.1~ I~~ use ~ ~ The SPEAKER. :Che ·gentleman from N01·th Caral::i:rra is mails . by .r.egnlar tOoofl;ned .ministers - ~~-relJ.~lon or .;by -officers dL ·recolttlizea for une ho-ur. negnlar . .establlshed :chUrches for :o:r:der1,ng 'Wl.Jiles -tor <Sacramental . ~ . · uses or by manufacturers and dealers for quoting :arul- ·billing; ~ Mt. ~T~~· · 'Mr. Spea'ke.r, fhe._managex:s .oo :t~e part of the StiCft '-wines' tfa~such:pUrp--oses fonly, :Tlre Jlmrse recedes hom its 1House a-re. 'happy 'to say that. we bring hack a rel).or't, perhaps ~r . disagreement •tto . :this :amendment -with an. _ amendment making· :the ,first trme .. ~ 50 years, ~ith .. respect to .-a t~ ~asw-e, '':hi eli minor clerical chan(Fes ~ has the sanctiOn and the stgnature or fhe enflre membership- of ".On. atilien1lrt:I.afil • ~:0~ ~"! r Tlils -amendlnent: reiates ~to- .ru:ue.na- ithe conference C?mmittee, · both Re~ublicaas ~d Democra~.
ments • to the; pre etrt Ji:n.come.Ytar law_ The ;Senate provided; JAPJ?~ause.] I trust .nEJ ,gen't!eman will get rmy ·1dea -of what .is that theJp!'oVisions- Telating to :withholding of' the urcome. tax ! ;m flii~ conference report or or w1Iat transpired i? t'he ·co-nference at· he aurce -should rbe !l'epealed ..ana '!tbat rin'formation l3.t·-the rcomlllJ.ttee from. any. . newspaper repor.ts. I have net :seen a so-urce sbotildiliersti.bstitnted tn lien. rtnereaf. 'The HmiSe :recedes .sta:t~en't an JnCh long in .a .newspapeJ: since we began onr delfb- from its disagreement to this portion of the amendment· ;with. ;erations that stated ·anytblng Iiear the fa.cts .or - ~ truth.. : an amendmer..t providing for the repeal :of tlie '\hth'holffing.-prO- [Lau~hter.J .. Tile so~e ~hought and ~ffo~ts of -the cm:f~reEee visions, except .m · the , case of ;the .income·rof' !lWilresident .aliens co~ ttee ,war~ t~ give due delil>:n-~wn to " every proVlSlon of , and interest from corporate- tbo.nds cont:a.iiilitg t1ie tax-free 'CGV· itbe ·bill r3.?d to evolve out of the ~1ff.eren.ces 'between the IFous~ ·emm.t ;provision. ; \'J:helS.enate 11.mendment ·proviiles tba± ·n ..com- rand the Senate the b~t, the wiSest, .ana the most eq.mtable~. puting income tax income and excess-profits taxes shall not he t ~easure ~ossfble ~or tlle Government and the people. There 'has_ allo-w..ed .as .a •deductiimr,:·and 'the :Hml.S.e~ accepts £fils .anienilment. lbeen no .discord. TJ:ere nave been conte~~the Senate conferees The Senate amandmeDt ~provides :for a€lnti.nistra'tive .reasons rconte!ldi.ng for -O~e -1tem -or .tor ,one ,proV-lSlOll, or for on~ theory tbat, :Jn , tbe··:caSe of nonreside-nt .:aliens, the :-additional 'Ilor.ma1 or :v,nnciple, and tlle House :fo-r another~ but there 'bas -been no tax of 2 per cent shall nut apply, ami 'to ·.eq11:tlize this exemption · :feeling, no heated ,perso-nal contests; .. as the .newspapers w.ou.Id . ptofJdes .tbn:Vm ~.eomputmg tlie incmne tax of..nonresident aliens lha:ve the .co.unn:y believe. E~ecy nn..nute .of -em· time ll.as t'fieen ~ that the deduction of $3,000 in the case of fSingle 'Persons -and devoted ~~ 1xon~ ·out the differences bef::veen the House ..and.. $1,000 in the case of::nirrrried -personS 6r'.heads .of :families .shall :the Senate. This_ w.as natural. The Semite conferees :had . .not:i not be ·alloiwed; .m:td i;tbe ·.Senai:e w:nendment. in 'thi · esp.ect as tb.een ,pr.esented Wlth the argum€'nts ana reasons for the .prowagreed to. This amendment also allows an -aildifiona1 ileiluction sions of the . .House bi1l ~in fact, our .side 'had never 1bee:n .pre": of· $200 for·•ea:ch ·depenoeiit·-clrild ·under 18 ~ears ·.o.f .age.. ..This fsented to ~e Senate. No one ·in the House .could go over to the_ portion· ·of ;the .amendment ds ~also ..;agreed to. T,h:is ·amend~Mnt . ;senate .ana preS-ent the -arguments ..and the reasons of the House-. amends the- ··co:rpm.a.timl.::trrx: by ll~-v~"lng ::an additional !tax l6f .10 · £a:r .this -.01: that ;provision of' the bill, and this .conference was .the per 'Cent upon. tthe :nmaunt of ,cor-porate d:ncome remaining un- tfi.1-st qpportu.nity fur the Senate .conferees to .hea-r our reasons- . distributed: .six ,months :n:tter the end .of each calend-ar -or · fiscal ' £or the various :prov'fslons. It w.as .also the iirst. .opportnnit;y the : year. ..It pro.Yides, however; 't.lurt --tli.is additional tax :slla1l not ! THouse conferees had to near fully the .argmnents and reasons .of . apply to~ portion · of ;the :nndistribnted net income ·actually . lthe Senate. for .its .amendments~ After two weeks o-f ·a-rduo.us · invested .and .employed. n ·th·e ;business a:r x.etained ·:eor ~ley- ' abor and mature CQnsideration :and deliberation ·Of the p.ros ,and .ment- ·in :the -JJeasonaltle reqn.ilt'erne:nts \()f "the bu:siness. Th.e . c~ns of every _prop9sition in the -bill we present -a report which, House recedeS .from the ·disagreement to this por11ion of tllis : ;as I said a while ago, has tne unanlmO.llS saDction and signasection ·with .I(Il· :a:mendme.nt providmg rtbat ttllis 1additiona1 101 ttuxes ~f all the ·conferees. per ;cent .tax sha:lL ra.'lBo on.ot ·.aprA'Y ito undistiil:Ju'ted sm:plus in- . When the House presented this J·evenue ·.biU, ·on May 9. 'the _ vested in .obligations ;of ~ U~ :States issued after -Septem- demands of the Treasury Department r·equired 'Only $1.800,ber 1, 1.917. .- 'JJllli; ;Senate .amanClmen:t also _provides .that :con- ' :000,000 (}f new ·-;taxes. When ;t;lle Finance Committee .:first .roetracts containing tax-free covenants entered into after the !J)RS-·, iPm'ted th-e ~bill to the Senate. July 3; that .amount was- ·still the sage of this act should :be rvoitl. The Senate recedes. ~from this ~requirement .and the demand. The House passed ·a bill wsing , portion of the amendment, a1lowing the .co~uance ·af ;the -use '$1,862,000,000 of revenue, $62,000,000 more than the exigency ·a:t :. of tax-free. 'COVenants- :in. hoods. .: 'that time demanded. The ·senate F\inanoo· Committee :reported
·Qn amendment .. No . .:315! This -nmendment remtes -to. the ' 'the :bill amended, pr-o~ucing about $1,650,000;000, $150,000,000 , change ·of the title :number :to the 1G~ner.al Prov-isions 'Title, ·a-u.d lless than the requirements of the Treasury Department, but · the .Se.nate;r.eredes. . . t immedia-tely thereafter .new demandsl new estimates 'fif neees ..
On amendments Nos. 316 and 317: These amendments are ; .sary rexpend:itlires 1n ·excess m -.about -$5,000,{)00,009- were sub· · .clerical cha'Jl.ges, ·and , the Senate· ;recedes: · · · mitted by .the Government departments. The Senate th:en. -re- ·
On amendments Nos. 318 and 319.:-- These amendments pr-o- /tamed the b-ill, to ·the F-inaDce 'Committee, .at .1-ts request. After posed .cer-tain change-s in the ·.cu.stoms ,administrati:ve provisioti.S, weekS of hard work, it finally reported, anu the Senate ;passed.: and .the .Senate .recede~ . 'the bll1 amended., which, acco-rding to i±s restimates, Will yield . On a.;nendment No. 320: This amendment ll'elates to 11. 'change $2,400,000,.()()(): T-he ·conferees ba-ve added .at least $128;000,00(}"' m .section nnmber, ana :the House recedes-with ;an ·amendment to that ·amount, .and the !bill as ~reed upon is :estimated to properly numbm;ing the ·section. yield $2,534.000;000 • . .:I first am :going tto- stat-e, brie:fiy, tlro
On amendment No. 321: This amendment ls a 'l!lericai ;change, <important ·amendments ro-f the Senate upon which the rcorrf-e-ees and the Senate ..recedes. · ~ · . . · - :o:f t'he Ho-nse unqualifiedly -r.,eooCJ:ed fr.om its disagreements. The:
DLA UDE .KiTC_Hll'lf, :.. , .. 1 itwo most impoo.-tant ;were the ;amendments :striking :crn.t the so· t :- . • ' . ' HENRY ::r. RAINJ:T; r ~ - talled. :retJ.tOac.tiv.e ineame tax: 11.nd the ;eliminating !from the ,bill
• r LIN.caLN DIXON, .• .of the horizontal 10 per cent tariff increase. The House eon- . ~ · , .- - .;JoSEPH w_ .Fo-R»NEY. - • · l'erees .agreed- ro ~se .two· .:Setrate- amendments. · 'The Serrate - . J:. :BAMP.ToON ..M.oOJtE,. added 2 per- 'Can't more than the. House ·to- ':the :Corpo:r-atton in· :
Manager'S on the part ot the H01.UJe. come tax, ·making the total corporate income tax rate 6 per
.. r
:7574 CONG~ESSIONAL RECORD-HOUSE. OCTOBER 1-. '
cent-2 per cent under the present law and 4 per cent additional under this bill-and the House conferees receded. - The House also receded from itS disagreement to the · Gerry
amendment. 1
Mr. 1\IADDEN. What was the Gerry amendment? Mr. KITCHIN. The House bill carried an income-tax rate
of 41:1 per cent upon all incomes from $500,000 to $1,000,000 and then a rate of 45 per cent upon all incomes over $1,000,000. The Gerry amendment made a bracket between $500,()00. and $750,000 and provided that incomes between $500,000 and $750,000 should bear a rate of 40 per cent, incomes between $750,000 and $1,000,000 45 per cent, and all incomes in excess of $1,000,000 50 per cent. There were other income-tax-rate amendments from which the House conferees receded. As yon will recall, the Lenroot amendment put fractions in-five-tenths, seventy-five one-hUlldredths per cent, and so forth-and the Senate struck out the fractions and put in whole numbers. In four cases the whole numbers were larger and in one case the whole number was smaller than the House bill rates. Then in the brackets between $15,000 and $20,000 the Senate increased the rate from 5 per cent to 6 per cent. The Senate receded in this case, and the rate will now be 5 per cent. In the bracket between $20,000 and $40,000 the Senate increased the rate to 8 ·per cent\ the House had 6 per cent. We concurred with an amendment making the rate 7 per cent. If any gentleman wishes to ask ·any question in regard to this--
1\Ir. CANNON. These rates are in addition to the present law of 1916? · Mr. KITCHIN. In addition to existing law.
Mr. MADDEN. Will the gentleman yield for a question? Mr. KITCIDN. I will. :Mr. MADDEN. The gentleman stated that the normal tax
on corporations was 6 per cent. Was that on profits or regardless of whether they had profits or not?
1\fr. KITCHIN. Six per cent on corporate net income. The existing law is 2 per cent. The House bill proposed an addition of 2 per cent. The Senate bill instead of 2 per cent added 4 per cent, and the conferees agreed to that increase, thus making the total rate 6 per cent on the net income, whether the profits are large or small.
1\fr. ROBBINS. Is that assessed for three years? Mr. KITCHIN. No. There is no time limit, for the act struck
out the amendment " during the war." The Senate bill provided that the additional income tax should be effective only "during the war." The Senate conferees receded from that amendment because we must have additional revenue from income taxes provided in this bill, or some similar bill, for many years after the war. I will state here that during the Civil War this Government raised more taxes for the two years succeeding the war under the acts passed during the war by over one hundred and . fifty to two hundred million dollars a year than during any year of the war. The conferees were of the opinion that it would be unwise to make the additional income tax to exist only during the war.
Mr. ROBBINS. I would like to ask, Is that income ascertained by taking the income for three years?
1\fr. KITCHIN. No; you refer to the excess profits; I will reach that in a few minutes.
Mr. FESS. What is the maximum rate provided in this bill for incomes above a million, 50 per· cent?
Mr. KITCHIN. Fifty per cent additional." Mr. FESS. What would it amount to, the whole thing? Mr. KITCHIN. The total income tax under the present law
and under this bill on an income of $1,000,000 will be $475,180, or 47.52 per cent.
Mr. ROWE. I would like to ask, in reference to the method of taking out these ta'xes, do you first take out the excess-profits tax?
Mr. KITCHIN. I will take i:Ip the excess-profits tax in a few minutes. There is another amendment to the income tax from which the Hou e receded. The Senate provided an .exemption of $200 for each child or dependent of a head of a family or married man.
Mr. FERRIS. Is it the plan of the gentleman from North Carolina to present the salient reasons why they did not go higher on the income tax when he reaches the excess-profits tax? I know both bodies have spoken on that. The gentleman knows, and the House knows, that there is a great controversy going on in t11e country as to whether or not the Congress is going high enough on the excess-profits tax or the income tar. . . Mr. KITCHIN. I think we · are going high enough on both ta.."i:es for the present.
Mr. FERRIS. I wish the gentleman would give us the salient reasons for it. I think it would be of value to all of us.
Mr. KITCHIN. In the first place, we have gone higher on the income tax than the public and perhaps Members ofr the
.House understand. We raised during the fiscal year 1917 on the income tax, in round numbers, $360,000,000. In this bill we levy an additional tax: on incomes of $850,000,000. That is $1,210,000,000 that we .are raising from the income tax. In other words, we will raise under the present law and this bill almost four times more tax from incomes than the amount of taxes paid in incomes for the calendar year 1916, paid, of course, into the Treasury before June, 1917. This bill also levies excess-profits taxes from which we expect to raise $1,226,000,000 revenue. ,
Mr. PLATT. Is it believed that.if the war lasts two years the . surtaxes will be increased above these figures?
Mr. KITCHIN. I do not think many of the surtaxes on the larger incomes will be increased, but I think that the normal tax could and should be increased, and also the surtaxes on some incomes. If we had a normal tax one-half as high as Great Britain we would raise, with our surtaxes, from $800,000,000 to $1,000,000,000 more. .
Mr. CRISP. Their normal tax is 25 per cent? Ml.•. KITCHIN. Their normal tax is 25 per cent, and it begins
at $633, with some little abatements, and the surtaxes begin at $12,500 and nm up to $50,000, and the last surtax on $50,000 is 17-k per cent. , ,
1\Ir. PLATT. I wish to know .whether it would not be better to ha\e our normal tax a little higher and the surtax a little lower? .
1\fr. KITCHIN. I will say to the gentleman that I think the next bill will provide an increased normal tax, and that the surtaxes may have to be increased in .some of the brackets.
Mr. PLATT. There is one more question I wanted to ask. This tax is in addition to the tax in the act passed last September?
Mr. KITCHIN. Yes, sir. 1\lr. PLATT. The normal tax comes above $2,000~ 1\Ir. KITCHIN. It is now 2 per cent. Mr . .PLATT. Does that increase when the income gets above
$4,000? . Mr. KITCHIN. On all income of a married person or head
of a family above $4,000 the normal tax is 4 per cent. The surtax upon the income between $5,000 and $7,500, 1 per cent; and $7,500 and $10,000, 2 per cent.
· Mr. PLATT. There is nothing in the bill that shows that it increases at $4,000. . . Mr. KITCHIN. Except the language of the bill. [Laughter.]
1\fr. MADDEN. Mr. Speaker, will the gentleman yield? 1\Ir. KITCHIN. I will. . Mr. MADDEN. The gentleman called attention to the fact
that we may be able in the future to increase the no;rmal tax, and he cited the fact that England levies a 25 per cent normal tax. But there is quite a difference between the method of levying taxes in England and the method that we pursue. For example, England does not levy any real estate tax. England collects its taJCes on the basis of income, so that, for example if a man had a builG.ing in the heart of London that was worth $10,000,000 and it was idle he would not pay any taxes on it, but if a man in this country had a building worth $10,000 000 . and it is idle he pays on the value of the property, so that 'our local taxes, added to the normal tax, would make it impossible for the American people to pay taxes on the basis of the normal tax paid in England, and it would not be justice to the American people.
1\Ir. KITCHIN. The gent1ema.t;1 may be right. Mr. 1\fAI)DEIN. Their taJCes are all on incomes. Mr. KITCHIN. I have often heard the statement ·made in the
House that all the taxes raised by Great Britain were national taxes; that there were no village or borough or city or other local division taxes. I have since learned that there are such taxes.
1\Ir. 1\lADDEN. They have what they call "rates." :Mr. KITCHIN. They ai·e taxes. Mr. 1\IADDEN. If I had the property I have described in
England and it was not rented, there would be no income from it, and no taxes would be paid on it, so that our tax on that concern, together with our normal tax, would make it unjust to increase our normal tax in the same proportion that England . makes her normal tax.
1\Ir. FERRIS. Mr. Speaker, will the gentleman yield? 1\Ir. KITCHIN. Yes. 1\fr. FERRIS. Adding together all the taxes that we pay, the
previous income tax and the present income tax provided in this law and the excess-profits tax and every other form of tax imposed on the people by the Federal Government, how does it
7575 'C'01Ilpare ·with the -~es ·Imposed ·on the tWo beiTlgerenf~coun- ." Mr. ~"TNON. ·It seetpS to ~e problematical .. I suggest to tries, England and FranCe<-? . - - · _ ·- tl;le gelitl~an; what th~ a:ntoliiit ~f any .given tax would be. on
Mr. 'KITCmN. ' Our rates are '11 great deal lower~ · but ·of ~x~ profits next :year. · course, owjng to -our larger wea1th and l'esourees und ·incomes, · lUr. KITCHIN. ·of· cou1·s~ the gentleman will understand the total ·amount -we raise is 1a:rger-' tha'n that of England or I am assuming that the profits would be -as large next year as France. · · · . this year. - ·
Mr. FERRIS. -Will th~ gentleman permit une other ·question·? · Mr. CANNON. Precisely. Why, the wonderful war profits . ~Ir. KITCHIN. Yes. · ·- that we made :in. -munitions and otller things while we were
Ir. FERR'IS. Row "la:r have they ~een abfe to go out there nentra1 -will n6t -materialize now; and we are also .fixing prices without Killing the goose that laid · the _golaen eggs, so called. bn evecythmg now. · I just wanted to make that ·suggestion,_ and stopping business? · · because I did .not want the country mislead, you know, by gen-
Mr. InTOHIN. Well, in addition to 1arge' income taxes Grea~ tlemen go~ to i;he country and saying that if ~ taxed as Britain levied an excess-profits ta>x: of 80 per cent on all profits they do in England we could get $3,000,000,000 more. in excess of the average profits t~y were making in 1.913: 1912, ! Mr. KITCHIN. Of course 1t was upon the assumption that and 1911, and those proijts b,ave been estimated to be -ar-oi:uJ.d ·6 We would -make ·as much next year, if. the war continued, llS rwe or 8 per cent, on ,the average. So they_ take in -Great Britain made this yeal!. . '80 per eent of all profits in -excess of an ·average ·of about 6 or_ 8 Mr. CANNON. I beg the gentleman's pardon. and withdraw -per cent ·on the capita-l invested. 'In- fact on new bUsiness that · all I said. has begun 'Since the war began sne 1lllows a deduction of only l\-Ir. KITCHIN. lt is a fact, however, that with these high 6 per cent. ' , ' faxes in Great Britain ller industries have not languished at all,
1\fr. FERRIS. How is it in Jrrance? but seem to be doing more business now than tbey ·did two years Mr. KITCIDN. In l'ranre ·the excess-proftts- 'tax Tate 1s 50 or one year_ ago, .o1· before the war. ·
per cent u·pon a11 persons and companies having profits in excess Mr. MADDEN . . There is one other dlfference between·Eng· uf $965. · . · ·- · _ · : Jand and tne Untted States. All of our States levy a corpora·
Mr. KEATING. Mr. Spe8.kel', Will the gentlem:m yield'? tion tax; in fa-ct, 1;everal taxes against corporations. England Mr. KITCHIN. Yes. _. . does not lev.y a,ny corporation tax except for natlenal purposes, Mr. KEATING. Could the gentleman -give the 'House any ln- and in oUl' bill we are adding to the taxes that are already.
formation concerning the revenue that eould be :reillzed if the levied against corporations by the State. · · · United States were to levy exactly the English rate on incomes ·. 1\fr. KITCIDN. Another amendment from whlcn the Bouse and exces profits? · · · · receded was the tax on cosmetics, perftimery, · and .proprietary
Mr. KITCHIN. · I 'fliihk I can gi-ve you some idea on that. I medicines. The House, "as you understand, J.mposed a tax of 5. should say you could 1.'aise from $s-,ooo,ooo;oeo to $4.;000;000,000 per cent upon the gross sales of the manufacturers, producers, more on incomes a:p.d excess profits, reta_ining the .snrtax,es of or importers of these articles, which would be addro to the the·present l inv and 'this bill . selling -price to the consumers. The Senate -reduced the tax
Mr. KEATING. So that fhe total to be raised on eice~ u__pon these articles to 2_per cent, and the Rou8e agreed to that. profits and incomes would be that?- _ . . 'Ve agreed to this reduction in rate because the .bill places.
Mr. KI'.l'CHIN. We ... could ·mise cat least ·_$3,000,000,000 .-inore hpon the alcohol that _goes tnto the· preparation of many -o~ revenue than .we provide in this bill if we had Great Britain's these perfumeries, _pro-prietary medicines, .and ·similar articles normal income tax and our surtaxes and the same excess--profits · an mcreased tax of $L10 per gallon. ~ tax that Great llrltain has~ _ · 'The House also receded from its diSagreement to tne Senate,
Mr. KEATING. More than you provide in thls bill? . ;unenament strikiug out the 5 per cent tax on the amount paid l\fr. KITCHIN. Yes; $3,000,000,000 more than we prov1ae in for heat ana light service and telephone service by subscribers.-
this bilL - · · . ~ : . - · These propositions which I have mentioned are the main, im--Mr. MADDEN. We are already·providing about, S',S00;005,000 portaQt ones with ·respect to which he House: conferees yielded
under the 'Present ·u vt 'and under this bill 1 • altogether without any ron current amendment._ Mr. KITCHIN. Yes. -· Mr.13LOAN. Will the gentleman _yield·? Mr. KEATING. ~ wouia llkEftO -see if I have ·a correet'idea ' Mr.'KITCIDN. I yield to the gentleman, if :he 'Wishes to ask'
of the chairman's stateinent. According to my ·understaruling ~of me -a qu~stion, -It, H we adopted ·the Englls1i rat~ ·On. 'incomes and -excess--profits, Mr. SLOAN. The House receded from the tariff or import how much of a :revenue would the Goverriment secure: A-s 'I taxes, ·did it nt>t; entirely·? understand tbe gentleman, he · y-s- that the Ebglish rate',- ap- Mr. KITCHIN. Y~s. . plied to the Amerlcan incomes -nhd American proftts, would net 1\-Ir. ~IADDEN. -The gentleman stated that. at lenst $3,000,000,000 more than the existing law a'nd the bill . 1\fr. SLOAN,. But he made no comment on lt. Is it not a that we are -about to pass? ~ faet -that nearly -all the other nations are -very materially in-
1\ir. 1\iADDEN. But the gentleman forgets-- erea.sing th~ir import taxes? Especially is that true of Canada ':the SPEAKER. To whom does the~gentleman.:yt~ld? . and ·Great Br1tain. -Mr. KITCHIN. -To -nobody now •.. I -yield to msself. [Laugh- _ 1\fr. KITCHIN. That -would be quite natural; for the reason ,
ter.] I will say_ that -G1·eat 'Britain -went to her .rates gradually, that lal'ge importations of all ldnds are being made by Great.. and I hope . 'Ye will not -~e forced to go as hlgh as England'.s Britain·'and an~increase of her customs woula ·yield .an increased rates. . . . · revenue, w.hile only small quantities of most lines of manufac·
Mr. HULL of Tennessee. 1\fr. 'Speaker, will the gentleman. fured products are coming into this country.. Eng1and also · yield? · · • levies n. high -tax on coffee, tea, and sugar, and other artic1es of · Mr. KITCHIN. Yes. _ ·necessity. I do not 1>elieve that this Congress ~r ·the country;
Mr. HULL of Te.nnessee. As to the question asked by the are -yet -prepared to go ~o ~ high tax on consumption at thiJJ gentleman from Qolorado [Mr. KEA"l''NG-], as to what the same time, and the Hou e coriferees yielded. , rates imposed by Engl~nd would bring 'if imposed in this coun- . Mr. SLOAN. There .iS, however, a very large value of lm· try, it would depend on. other co:b.siderations. It would d~pend ports coming into thls country? on whether our la.,w wns ~>n all fours with the Engllsh ~aws. . Mr. KITCHIN. Yes~
Mr. KITCHIN. What I meaQt to say~ nna what I thought Mr. SLOAN. And .a very large proportion of them come in I did say, was that, 1f we bad an 8 per cent flat basis of ex-- Without paying any tax. emption or deduction, and that is the average ·in Great Britain, Mr. KITCIDN. These large imports are ..i:J.ot lniports that if ~ou compare it with 'the aver:uge .of the :prewar ,period-1f w·e come in competition witn the Amei'ican manufacturer, because had an averl:l-ge deduction of 8 __per cent upon capital invested the war gives him all the protection from .his standpoint he and then took 80 _l)er cent of ..all in eX.cess of that, we would. wants. Other coUDlries that nave been our strongest rivals and raise about -$2,000,000,000 nn excess- pro1i.ts tno1·e than w.e . .are competltors-Gel"'Ilany, Great Britain, and .Frai1ce-h-ave no ruisino- now; and if-we had a 1lormal :tax or 25 per cent on all manufa~tured 1Jroducts to speak' of now lo send over here in incomes, say, .over $1,000, co~orate and individual, . with our competitio-n with tls. The .imports that are coming in are raw surtaxes, I think we would rruee at least $1,ooo;ooo,ooo _more. materials for the use · of our manufacturers, who in a largo
Mr. MADDEN. Mr. Speaker, will the gentlmnan yicld to me measure use them in the production of articles that are exported for a question? . _ _ ·tp thes-e countries. Ou:r increase in exports has not ~nly been in
1\!r. HULL of Tennessee. ln that -connection _ e. make a ae- . food _products, but thereJms been a large .increase in tbe exports duction for d€pletion of mines;' .England 1lllows .no deduetion. -of manu.fa-ctm·ed -products. ; ,
Mr. CANNON. Mr. Speaker~ Will 'the gentiem~n ',Yielil? , ·, OUr imp,Ortations, ..for instance,. of .raw sugar and woot have Mr. KTTOHIN. Y~1 · ' •• : l_~'r~ely; lncre~. but our exports .of th~ .finished products f:rpn_?.
them ha\e also largely increased. We exported more than twenty times as much sugar during the last fiscal year as we did during the :fiscal year 1913. We are importing it in the raw, refining it; and then exporting it. Mil,lions of dollars' worth of wool are being imported, more than ever1 before, but we exported during the fiscal year 1916 twelve times more woolen products than .during the_like period in 1913. If you will take, as I have taken, the statistics and see what composes the .immense increases of importations, you will find them to be food products and raw materials, and o\er half of the increase in . value of imported articles bas consisted of articles that were on the free list under the Dingley Act, the Payne-Aldrich Act, and ,the Underwood Act, such as tea, coffee, raw rubber, raw silk, and similar articles. I do not think the gentleman from Nebraska [Mr. SLOAN] would now urge an increase of duties or the placing of duties upon the e articles that I have mentioned. .
1\Ir. SLOAN. I am not favoring any increase for the purpose of protection or the reverse, but merely as a means of obtaining revenue and foll~wing the time-honored system of obtaining the greatest amount of revenue ·for the support of our war from duties on imports. · ' l\Ir. KITCHIN. I lmderstand.
Mr. SLOAN. All our wars heretofore, with' one exception, 'Were largely supported by the duties collected at the ports, not for p1·otection or anything of that sort, but as the best and easiest system of obtaining revenue. . ·
Mr. KITCHIN. I admit there is a very strong argument for putting customs duties upon some articles that come in. , Mr. SABATH. :Will the gentleman yield?
1\lr. KITCHIN. Yes. Mr~ ~ABATH. · Is it . not n. fact tnat our exports are three
times as large · as our imports? . 1\Ir. ~KITCHIN. Something over twice as large. Mr. SABATH. ·And trade is in our favor to the extent of
three or four billion dollars. · Mr. KITCHIN. I have already alluded to the. main differ
enc~s between the H~use 'and Senate with respect .to the income tax and the conference agreements thereon. With the permis· sion of the House, I will defer the explanation of the differences and agreement_s wit4 respect to ·the excess-profits tax and the seco!ld-cla s mail postal rates until after I explain somewhat in order the differences ·and agreements with respect to othe:r ~atters in the report. . . .
. TITLE III, WAR TAX 0~ BEVERAGES,
The House increased the war tax on distilled ::;pirits for all purposes $1.10 per gallon. The Senate made the additional tax $1.10 per gallon on distilled spirits for manuf3:cturing purposes and $2.10 per gallon for beverage purposes, and the conference agre_ement adopts the Senate rates.
The House increased the rate on beer $1.25 per barrel. The Senate made the rate $1.50 additional, and the House recedes. The total rate on .beer under the act of September 8, 1916 and this law will be $3 per barrel. · , '
The House doubled the tax now levied upon all wines except those containing not more t!lan 14 per cent of alcohol . . The House increased the tax upon wines containing not more than 14 per c~nt of alcohol an additional 2 cents per wine gallon. The Senate doubled the tax upon wines containing not more than 14 per. cent of alcohol and provided an additional tax upon wines containing more than 14 per cent of alcohol and not forti· fied with grape brandy of $1.10 per proof gallon. The House :.:ecedes from its d~sagreement to this amendment with m~ amendment !~vying an additional tax upon all still wine, in· eluding vermuth, and upon all champagne and other sparkling wines, liqueurs, cordials, artificial and other imitation wines or .compounds. sold as wine, equal to the tax now imposed by law.
,The House provided that the tax upon grape btandy or wine spirits should be 10 cents per proof gallon in addition to the tax now levied by law. The Senate increased this additional tax to $1 per proof gallon. The House recedes from its disagreement to 1;lli~ amendment with .. an amendment making the additional tax levied upon grape brandy or wine spirits 20 cents per proof gallon. · . . The House provide9 an additional .tax: _upon swe~t wines held
for sale by the producer upon the passage of this act, equivalent to 10 cents per proof gallon upon the grape brandy or wine spirits used in . the fortification of such wine. The Senate in· e1:eased. this additional tax . to $1 per proof gilllon, and the Senate recedes. ·
The House levied a taX equivalent to l.O per cent of the price for which all prepared sirups or extracts , (intended for use in the manufacture or production of beverages, commonly known as soft drinks, ~Y _soda fountains. bot~ling e~tSJ,bl~hments, and other similar places) are sold by the manufacturers, producers, or importers. The Senate struck out the House tar and sub·
stituted_ in lieu thereof-graduated rates upon such sirups or ex~ tracts, ranging from 3 cents per gallon upon such sirups or ex~ tracts · when sold ·for not more than $1.25 · per gallon to a tax of 12 cents per gallon when such sirups or ext1·acts· are sold for more than $4 per gallon. The 'House recedes from its dis· agreement io this amendment with an amendment adopting the Senate classification and increasing the rate to 5 cents per gallon upon such sirups or extracts wlien sold for not more than $1.30 per gallon, and graduating the other rates so that the tax levied upon such sirups or extracts when sold for more than · $4 per gallon will be 20 cents per gallon.
Mr. MADDEN. Our distilled-spirit tax was $1.10 per gallon, and the Senate raised it to $2.10?
1\Ir. KITCHIN. Yes; if the distilled spirits are useu for beverage purposes.
Mr. 1\LillDEN. And you agreed to it? , 1\fr. KITCHIN. Yes, sir. The additional tax is $2.10 per gallon if used for beverage purposes and a dollar less if it is withdrawn for any other purpose than beverage purposes.
1\Ir. KL.'CHELOE. 'Vill the gentleman yield? 1\Ir. KITCHIN. I will. 1\Ir. KINCHELOE. I notice in amendments 54 and 55 that
the House provision provided that in' bankruptcy proceed· ings of stocks of whisky that tax should be paid by the purchaser and at the time of the purchase, but I notice that you have adopted the Senate provision here that this provision should apply only during 1917. Mr~ KITCHIN. Yes. , 1\Ir. KINCHELOE. Now, what I want to ask, for informa~
tion is, what is ·going to happen in these bankruptcy proceed· ings after June 1? For instance, if the stock of whisky is sold in bankruptcy, who is to pay that tax? I refer to amendments 54 and 55.
1\fr. KITCHIN. I understand the provision in the bill is to the ·effect that the person to whom the court turns the liquor over pays it when delivered. --
1\Ir. KINCHELOE. I know that the House -provision was that the purchaser should pay it, and here you say in your report: ·
The Senate amended this pro'flsion limiting it to distilled spirits in the custody of a court of bankruptcy in insolvency proceeding on June 1, 1917. '
Suppose that since that time a. distillery, firm, corporation, or individual goes into bankruptcy?
1\lr. KITOHIN. Whoever purchases it thereafter will pay, the full amount of the tax. _
1\fr. KINCHLOE. Even after the 1st of June'l 1\fr. KITCHIN. Yes. . . Mr. SABATH. The additional tax on spirits that are not
manufactured for beverage purposes is $1.10 per gallon? 1\lr. KITCHIN. That remains like the House bill. Mr. SABATH. There is no change in that? 1\Ir. KITCHIN. No.
TITLE IV, WAR TAX 0~ CIOARS, TOBACCO, AND MANUFACTURES THEREOF,
The House provided the foJ!owing rates upon cigars made of tobacco or any substitute therefor and weighing more than 3 pounds per thousand : If manufactured or imported to retail at not rnore than 4 cents each, 50 cents per , thousand ; if manufactured or imported to retail at more than· 4 cents and not more than G cents each, $1 per thousand; if manufactured or impo1·ted to retail at more than 6 cents and not more than 10 cents each, $2 per thousand ; if manufactured or imported to retail at more than 10 cents and not more than 15 cents each, $4 per thousand ; if manufactm·ed or imported to retail at more than 15 cents and not more than 20 cents each, $5 per thousand; if manufactured or imported to retail at more than 20 cents each and not more than 25 cents each, $7 per thousand ; if manufactured or linported to retail at more than 25 cents each, $10 per thousand. The Senate changed the cigar classification and rates as follows: If manufaotured or imported to retail at 4 cents or more each and· not more than 7 cents each, $1 per thousand; if manufactured or imported to retail at more than 7 cents each and not more than 15 cents each, $3 per thousand ; if manufactured or imported to retail at more than 15 cents each and not more than 20 cents each, $5 per thousand ; if manufactured or imported to retail at more than 20 cents each, $7 per thousand; anu the House recedes.
On manufactru;ed tobacco and snuff the House provide<! an increase in the tax of 8 cents per pound. The Senate made the additional tax 4 cents, and we agreed upon 5 cents. In regard to cigarettes weighing not more than 3 pounds per thousand (the class ordinarily consumed) 'the House had one dollar and one quarter per thousand additional, and the Senate made the
·rate 75 cents a. thousand additional, and we agreed on 80 cents.
CONGRESSIONAL -REOO~D-HOUSE. .7577~
TITLE y, ' WAR TAX 0~ FACILITIES FURNISHED BY PUBLIC UTILITIES A~D INSURANCE.
' The Senate reduced the passenger-fare transportation -rate from 10 per cent to 5 per cent. It lias been restored ·to 8 per cent. As to express companies, the-House fixed the rate upon h·ansportation by express at 6 per cent. The- Senate changed the rate and made it 1 cent for each charge of 25 cents or fraction thereof. We agreed on 1 cent on each charge of 20 cents or fraction thereof. That . restores the percentage practically to the House ad valorem. '
On seats and berths in Pullman cars and boats the Senate reduced the House rate from 10 to 5 per cent of the amount paid for such accommodations. The House rate has been restored to 10 cents. The Senate struck out the taxes levied on life, casualty, and marine in.Surance and indemnity bonP,s. The House provisions are restored.
TITLE VI. WAR EXCISE TAXES,
The Senate struck out the moving-picture-film tax provisions, and we have put them back with half the rates of the House bill.
On automobiles the House h_ad a 5 per cent tax on the manufacturer's, producer's, or importer's selling price, and the Senate truck that out and substituted a license tax on the automobile
owner. The conferees agreed on a tax of 3 per cent on the manufacturer's, producer's, or importer's selling price.
On musical instruments the Senate struck out the whole House provision. It has been restored as to piano players, graphophones, phonographs, talking machines, and· records used in connection with any musical instrument, piano player, graphophone, phonograph, or talking machine, with a 3 per cent tax on the manufacturer's, producer's, or importer's selling price, instead of the 5 per cent tax provided in the House bill. · ·
Mr. COOPER of Wisconsin. Will the gentleman yield? Mr. KITCHIN. Yes. 1\lr. COOPER of Wisconsin. Does the automobile tax as
agreed upon amount in effect to 3 per cent tax on the gross sales?
1\fr. KITCHIN. On the manufacturer's, producer's, or importer's selling price and not the retail price.
Mr. COOPER of Wisconsin. The manufacturer pays 3 per cent on the gross sales.
Mr. KITCHIN. Yes. Mr. GRAHAM of illinois. What about the a<lmi'3sion to va-
l'ious entertainments? Mr. KITCHIN. I will get to that later. · Mr. KELLEY of Michigan. Will the gentleman yield? 1\fr. KITCHIN. Yes. . Mr. KELLEY o:f Michigan. I would like to inquire whether
the tax on the gross sales of automobiles and automobile trucks is paid when the Government is the purchaser?
Mr. KITCHIN. Yes; just like the tax on incomes of munition makers. They must pay tax on net incomes from sales to the Government.
:Mr. KELLEY of Michigan. Taking it out of one pocket and putting it in the other.
Mr. KITCHIN. Of ·course the Government in making the price, in buying, will take into consideration the tax the article bears.
As to jewelry, the Senate struck out the provision taxing jewelry. That has been restored with a 3 per cent tax on the manufacturer's, producer's, or importer's selling price, instead of the 5 per cent tax provided by the House.
On sporting goods the Senate reduced the 5 per cent tax: to 2 per cent. We agreed upon 3 per cent. .
As to chewing gum the Senate struck out the House provision. 'Ve l1ave restored the House provision with a rate of 2 per cent on the manufacturer's, producer's, or importer's selling price, instead of the House 5 per cent rate. ·
- . TITLE VII, WAR TAX ON ADMISSIONS AND Dt;ES.
Now we come to the tax on admissions. The Senate struck out the admission tax on moving-picture shows and certain other shows where the maximum charge is 25 cents. That has been restored as the House had it. and in restoring it we get about $40,000,000 more revenue on that and other shows.
We did, however, agree to a provision in the Senate bill as to certain admissions with an amendment excepting from the tax the gate receipts of outdoor general amusement parks and the amusements and shows therein where the maximum charge does not exceed 10 cents. We also accepted the Senate amendment making certain that the admission-tax provision should apply to cabarets and other similar entertainments ..
'Mr. ROBBINS. Will the gentleman yield? Mr. KITCHIN. Yes. ::\fr. ROBBL..~S. Does the tax app1y to county fairs and ag1·i~
cultural associations? · - · · · ' ·
l\I1·. KITCHIN. Yes; just like it does in the House bill. They are not taxed if no part of the net' income goes to private stockholders or individuals for the profit of individuals. If they put all tile receipts back for the fail~ expansion and improvements, the tax does not apply.
Mr. ROBBINS. 'Xhere are a large number of fair associations in Pennsylvania that do not declare a dividend; that put all the receipts back into a fund for premium£ and exhibits the following year.
1\Ir. KITCHIN. The tax would not apply to such fairs. 1\fr. ROBBINS. And use it for premiums for races, ami so
forth. Mr. KITCHIN. The tax would not apply to such fairs un
less the dividends go to the stockholders for individual .benefit. 1\lr. ROBBINS. Then only those who declare a dividend
are taxed? ' 1\fr. KITCHIN. Only ~hose where_ the profit goes to the
private individual. The House levied a tax equivalent to 10 per cent of the
amount paid as dues or membership fees-except initiation feesto any social, athletic, or sporting club or organization. The Senate struck out this provision. The :J]:ouse recedes from its disagreement to the Senate amendment with an amendment restoring the House provision and providing that the tax shall become effective November 1 instead of June l, ;1917, and pro-. viding that the tax shall not apply to such clubs or organiza .. tions if the dues do not exceed $12 per year. The amendment also provides that the tax shan · not apply to any fraternal beneficiary society, order, or association operating under the lodge system or for the exclusive ' benefit of the members of a fra"' ternity ·itself operating under the lodge system, and providing for the payment of life, sick, accident, or other benefits to the members of such society, order, or association or their dependents.
TITLE VIII. WAR STAl't1P TAXES .•
The stamp taxes will become effective December 1, 1917. The following were the important changes -made in the taxing
provisions of this title: -The House provided a tax on .indemnity and surety bonds of
50 cents, unless a premium is charged for-the· execution of such bonds, in which case the tax is to be at the rate ot 1 per cent on each dollar or fractional part thereo~ of the premium charged. The House provision also exempted policies of reinsurance-from this tax. The Senate struck out this provision; and the Senate recedes.
The Senate levied a tax on parcel-post packages on which the postage amounts to 25 cents Ol' more of 1 cent -for each 25 cents or fractional part thereof charged for such transportation, and provide that the tax shall be paid by the consignor; and we agreed on this amendment.
The Senate exempted renewed promissory notes from the stamp tax on promissory notes of 2 cents on each $100; and the Senate recedes. · ·
TITLE IX. WAR ESTATE TAX.
The Senate sh·uck out the estate tax title. · It has been restored with the following modifications: The House reduced the exemption from $50,000 to $25,000. This provision has been eliminated.
The large brackets from $11,000,000 have been stricken out. The House bill provided a tax of 7 per cent of the amount by which the estate exceeds $8,000,000 and does not exceed $10,-000,000; 10 per cent of the amount by which the estate exceeds $11,000,000 and does not exceed $15,000,000 ; and 15 per cent of the amount by which the estate exceeds $15;ooo,ooo. We agreed to a tax of 7 per cent of the amount by which the estate exceeds $8,000,000 and does not ex;ceed $10,000,000 and 10 per cent of the amount by which the net estate exceeds $10,000,000.
Mr. ASWELL. ·what is the lowest amount? Mr. KITCHIN. This is in addition to the present estate tax.
Then we provided that this additional estate · tax should .not apply to the estate of a person who dies or is killed while serving in the military or naYal forces of the United States or who dies within one year niter the war from disease or wounds contracted or received in such service.
Mr. BYRNS of Tennessee. What is the minimum amount to which this additional tax applies?
1\!r. KITCHIN. There is an exemption of $50,000. The ta:t begins to apply from $50,000 up. This is in addition to the existing tax. As I said awhile ago, the House reduced the exemption from $50,000 to $25,000. The conferees struck out that reduction.
Mr. LONGWORTH. ·wm the gentleman say whether any_ estimate has been made as to the amount that this will yield?
l\1r. KITCHIN. For the first year about $6,000,000 and after the first year about $35,000,00(} 'additional. -
/
'7578 OONGRESSION ATI -RECORD-~ RO-USE .. OCTOBER l', -: TITLE xr. TRST·ctass POSTAL nATES". __ . 1\lr. KITCHI.N. Yes. . .
The -adud:ion:al ' rates ui>on first-class kil, which 'the Honse . ..:1\fir. HULL of ,Iowa. In i'eference 1;.o circ;ular letters,_ are lVe ~:Jl contained and which the "'Senate struck' out, have ·been to umlerstand y~ cha.rg-e 2 cents on circular letters? The gen-re tored. - . . . < • • tl~man has _just ~ted to the gentleman from lllinois [M:r.
Mr. B UTLER. To 3 cents? . - .. DENISON] tlla.t -he did. -1\ir. KlTCHIN. Yes; o'n --all e.x:cept drop letters, wheie it ' Mr. MONDELL. In -order to clear up-- the matter will tb-e
remu.ins at 2 cents. Postal cards ·ill be 2 -cents :iilStead~ of 1 gentleman explain what -a drop letter is? .. cent. ~ " . Mr~ KITCHIN. I wm read the provision to ynu =
Mr. COOPER of Wisconsin. " Is the increase on the letter That the rate of postage on all mall matter ,of ,the first l!l.ass, except postage a flat rate of 1 cent'? Is it 3 cents now? postal car_d&, shall .so days .after the. passage of thls -aet be, .in addition
1\fr. KITCHIN. Ye ; in eases where it is ' 2 C!ents now,-exeept tt? tb~ ~sting rat~ 1 cent for each uUD.ce or tractwn thereof: Pro-• "'-1Mil, 'That tbe rate -of po tage on drop letter of the first class sh-all be 1~ the ease .of drop letters~ It will be 3 cents hereafter... ·. : 2 ·cent s an ounce or frAction _thereof. Postal eards, .and private mailing
Mr. COOPER of 'Vi oonsih. So that in tead .of nt)W c;n-rying or post .eard.s, when complymg with the requJ.rements o-f m ting law a letter from bere to Alaska or the 'Philippines or Hawaii or Shall be transmltt.ed through the mails at 1 cent each in addition to the Panama or Porto Rico for 2 cents the charge wnr be 3- cents! - -existing rate.·
Mr. KITCHIN. Yes. , . A drop letter is a letter that is to- be- delivered from the office· '1\ir. COOPER of 'Wisconsin. Is this a nat increase? in which the letter was .mailed. - · Mr.. KI1.'CHIN. _ ¥ es.. ML WINGO. Then ·a drop letter w-ould be 2 cents.. Mr. GARRETT nf Tennessee. When does that increase 'f.a.h.~ .1..1r • ..B.A.RKLEIY. The bill, then, does not rrecogni'Ze the prin ..
effect? ciple --of d:rop lett-ers :as applied to no tai curds"? 1\Ir. STAFFoRD. In $0 ..(lays. _ Mr. KITCRIN. No. Mr. K;ITCHIN. Yes.; .that ..iS right, 00 dqys after the passage Mr. WINGO. _Let ns take -a town where they have no :village!
of this act.' , · - delivery. The drop letter Js only 1 eent. Now by using the 1r. BUTLER. ,How -much income will we· (lerive .from the ~words " d1·o_p letter-" that weuld mean 2 cents here they now.
increase in i:'he posmgei · . · , pay 1. ' · - ..M:r.. KITCHIN. .F..rom first-el.ru;s postage, :$70JKJO,OOO. Mr. Kl'I'CHIN. · Dr.op let~rs of the fu·st class are · to b.e 2:-1\Ir. ~Hm.IPHREYS. What i$ the taX on".drop le.ttersl- cents an <mnce. ~ Mr. KITCBIN.. .The. rate .of postage on drop 1e.tters of the ..,.Mr.. ""\VTh"!Q-0. - We will t~ Ire it in a town where they have
:first cl.B£8 will.oo 2 c~ts .an ounce or ..fractiOn lhereof. not a city deli:vecy Now, a. drop letter is 1 cent. Under tbe - Mr. , WALSH. ; With re pect to ·the. inherl.ta.nce tax, was any tanguag.e tbe gentleman b.as ju t read it would be 2 -cents. exemption <>r allowance made for legacies ()t' bequests to oo:ucaw Mr. KITCHIN. Ye · it wiU be 2 -cents. tional or cbari;table institutions? Mr. REED. If t he gentleman will permit, in &der to clen.rw
Mr. KITCH1N. ~Ot in the 'estate tax; but we did proviile in up this matter, I believe a circular letter is classified ag -thirdthe income tax that . .gif~ to charitab-le,- religious, educational, clas po tage; t~.nd l under tand you have .not changed .that~ or scientific .associations. should be exempted. from the inoome - Mt·. KITCHiN. No. It goes in the third cia s · the· gen:tl:e-.
· ·man is right. ' ~ ~c~!e~mount ~J?-Ot m_-exc~ss of'15 per cen.f of t'OO taxpay_e:rs' .Mr. REED. It -will go--at 1 cent 1illshow. __
Mr. WALSH. ,That would not apply to th-e inheritance tax? ~fr. KITCHIN. .I think the gentleman is right· I think it. 1\Ir XITCHlN . ..No~ · · · is third-cla-ss . matter. , '
Ir. D.ENISOR ~ Is ru1_y lne1-ease. provided fqr postage on un- 1\fr. REED. It is tl>ird class; it goes at 1 eent ~01·-2 ounces._ Seaied Je~St ., ' MUNITION TAX.
1\Ir . .RIT"'JUN. .nle s tbey' are tlrol! letters .Or circul r let• Mr. KITCHIN. I will mention here another ma.tter befffl.'e t~rs they -carey an..-".iner.ease oi 1 ~e.nL. . going to the other matters of compo ed difference . The ennte
Mr. DENISON. And unsea1ed letters would pay 2 ceiitsi repealed ·the munition-tax' sections o.f' tb.e act <(}f ptember 8, l\1r; KITCHIN~ 1 think so; yes. 1916, altog-ether. It made that repeal to date from ~anu.ary~ 1, .Mr. DEN!SON. .I was informed · dift'.erently
1 and I wanted to- 1917. The House insisted it should go baclr; th.at 1t hould be
get the informati-on from the chafrnmn · unrepealed .mul th.a.t the Senate hould recede. finally Mr. KITC:RJN:- · We intended to have all .except drop letters agreed that the. ta:w hould r-emain in f{)rce until January 1,'
pay an increase of 1 cent, and I think the l.allgu:age will cover 1918, and that th8 rnte · b:oul.d be 1.0 per ~ cent -inst-ead o-i ][2~ that. . . p'eJ:• cent, We will ~et; I think, at least $25,000,000 ~ev; nue from
1\Ir. COOPER of Wiscon in. The 'answer whk the gentle-- thi tax. -The receip-ts during the las.t 1i cnl year from tOO man gave ~ to ·my question a moment agb seems to have misle<;l munitions tax amounted to . 27,600,000. some gentlemen ab~ut ~ .me.. I mentioned only -Alaska, Porto Mr. WN&'"WORTH. That i on Ul.e tlheory that pr-obably Rico, Hawaii, the Phiijppines, .and .Panama, but the flat increase after January 1, 1918-- · from 2 cents to 3 cents on 1etter p(>stage incllldes all of the terri- Mr. KITCHIN (inte-rrupting). The ptice will be fixed lby this tory of the ~Unjte'<t States? Gevernment, am:l th.e aRie -of this ..Qov:ermnent will have the
1\Ir. KITdHIN. Yes. · same interest. We insisted that the repeal should not date back 1\Ir. LOBECK. .1\fr. Speaker .. will the gentleman yield? tD .Tanu.ary 1, :t'917, as the erurte b-tll proviiled., lor the reason 1\Ir. KITCHIN. Yes. · :- _ ~ that a.U . contracts ·made· W'ith the fore1gn Government and 'OUr
Mr. LOBECK. Tha.t make the rate on -post cards 2 cents in- Government this year and for the production this year were-stead of 1:' cent'? _ · made certu.inly with Tefere:aee to tbe '12! per cent tax in the
1\Ii'. KlTCHIN. Yes. If we had not p1·ovided for that, we present e.x:isti.ng ..act of ~ptember 8, 1916, and the pri.ees rewould lose. ftom twelve to fifteeii million -dol.lnr , because people ceived and to be received took ~Care uf iit. would use pot or postal cards instead ef1ette.r . ~ We thought U ·was eru-y right that the Goveroment ~boold
J\Ir. WlN99- ~ thinR: the gentleman has answered this -ques- have the benefit 'Of tlus tax until January 1, -nl18, so we fina1Jy tion, but I din not quite catch 'it. Say a ette-r is' dropped into aglleed upon the ~0 per eent <rate until -January 1, 1918--an office fhat covers a rural route. Will that letter pay 2 cents The SPEAKER. The time -of the gentleman has ~ired~ or. will it pay .3 cents? Mr. CRISP. MI:. Speaker, I ask unanimous consent that the
Mr. KITCHIN. I think 2 cents. gentleman be grant-ed time to conclnde his remarks . . :)Ir. WINGO . . That will be considered a drop letter~ The SPEAKER~ The gentleman trom Georgia. asks unani-Mr. K1TOHIN. Y-es. mous consent that the gentleman fiom North Carolina be allowed Mr. WINGO. That is not classed as a drop 1etter now ln an · to conclude his remarks. Is there objeetion!
office where there is not city de.livery. They charge 1 .cent in. ].!r. STAFFORD. Mr. Speaker, not exceeding one hour if w~ the office, but on the rural route it would be 2 cents. are going to come to-a "\"Ote on th1s bill to-day.
Mr. "KITCHIN. I think that will he 2 cents now. Mr.. KITCHIN. If the aentleman wilL not ask so many ques-Mr. WINGO. It i strictly a drop letter? ti.Gns T can. finish. in .20 minutes. "Air~ KITCHIN. Yes. The SPEAKER. The gentleman .from Wisconsin asks that ,Mr. WINGO. Where. under the _present regulations it W.().uld the time of the gentleman from North Carolina fl\Ir. KITCHIN]
not be cla ed as a drop l~tter? . . be extended one hour. ls there objection to the reque t of. the 1\Ir. XITCifiN. That is correct. ' gentlem~ from Georgia. [1\Ir. CRISP] .as modified by the request M.r YO~G - of Nor.tb Dakota •. D6 l u.ndet>Stand. tlle gentl-e- of the gentleman from Wisconsin? t.A.Fter a pause.] 'T.he
man to say drop letters will be cheaper than postal .cards? Chair hears none. · . , fr. KITCHIN. Drop letter remain the .game, 1\:I.r. KITCHIN. Another .importan.t difference bet een the
:Jit:Ir. YOUNG of· North D ko:ta. Even though ;they .are more.. House and tbe Senate 'was the amendment of · :the Senate · with bulh.--y and heavy'l · ' · · · respect to collection at the source~
t917_. CONGRESSION~L ~~gonn....:.:HOUSE·; .7579 Mr. COOPER of ·wisconsin. Will the gentleman. permit an
interruption before he goes · into that?-Mr. KITCHIN. I will. . Mr. COOPER of Wisconsin. A moment ago the geiltlematr was
discussing the tax on munitions. Will he please, if he can, specify the articles whiCh are· included? ·
l\Ir. KITCHIN. Powder, shells, torpedoes, cannonsr guns, rifles, and so forth. ·
Mr. COOPER of Wisconsin. · It amounts, then, to arms -and ammunition? --
Mr. KITCHIN. Yes. -Mr. Sl\IITH of Idaho. Will the gentieman revert_"to amend
ment No. 202, with reference to tax on moving-picture shows. It is not clear to my mind whethet• or not it is proposed to ·tax moving pictures, as proposed by the Senate, by exempting those charging less than 25 cents admission.
Mr. KITCHIN. Just exactly like they were in the House bill. There is no tax on the people for admission to movingpicture shows where the maximum cha-rge is 5 cents. On all others they pay 10 per cent. That is, if you go to a 10-cent moving-picture show, you should carry a penny along with you and drop it in the box for the boys in the trenches ; if you go to a 15-cent moving-picture show you carry 2 pennies for the boys in the trenches ; and if you go to a 25-cent picture show you carry 3 pennies. You would not hesitate to do that, would you?
Mr. SMITH of Idaho. Certainly not. Mr. KITCHIN. I do not believe you should. Mr. STAFFORD. In that connection, is it possible for the
proprietors of the movies to pay it without charging the pab·ons :separately?
Mr. KITCHIN. He can if he wants to do so. Mr. · Sl\iiTH of Idaho. I have received a good many com
munications from moving picture proprietors protesting against any tax. ·
Mr. KITCHIN. No doubt they thought we were going to tax their gross sales 10 per cent, and they would have to pay it.
1\Ir. GORDON. Has the gentleman any knowledge of anybody who wanted to be taxed?
Mr. KITCHIN. Nobody, except Scripps, Pinchot, and a few others that came down here while the Ways and Means Committee was considering the bill. They wanted us to take everything over $100,000.
Mr. MOORE o~ Pennsylvania. Will the gentleman yield? Mr. KITCHIN. I will. l\!r. MOORE of Pennsylvania. I want to ask one or two plain
questions, if the gentleman pleases. This bill levies an income tax on the earnings of individuals. If that individual · happens to be a member· of a corporation he pays a corporation tax to the extent he is interested, does he not?
Mr. KITCHIN. Yes, sir. The corporation pays an income tax and the stockholder pays a surtax on his -dividends if he has income large enough to get into the surtax class.
1\Ir. MOORE of Pennsylvania. And if the corporation earns excess profits above the limit fixed in this bill, he pays an excess profits tax?
Mr. KITCHIN. The corporation does. - Mr. MOORE of Pennsylvania. ·And if he happens to be in the munition business, he pays extra taxes for being in the munition business? ·
Mr. KITCHIN. Yes. Ten per cent in addition to all other taxes.
l\Ir. MOORE of Pennsylvania. And if the corporation with which he is associated· happens to have a surplus which is divided within certain periods, a tax is payable upon that surplus to the extent provided in the bill?
Mr. KITCHIN. Yes. Mr. MOORE of Pennsylvania. Now, if that gentleman should
happen to die, the estate he leaves his wife and children would be taxed under this bill?
l\Ir. KITCHIN. Yes. Mr. MOORE of Pennsylvania. There is very little that has
been omitted so far as the upward career of the business man is concerned.
Mr. _ KITCHIN. Very little · that has been overlooked. [Laughter.]
M1·. MOORE -of Pennsylvania. ~o that it can be fairly stated that everything that the gentleman has in the way of profit, from the cradle to the grave, has been covered by this bill?
1tlr. KITCHIN. Yes. The gentleman is about correct. But I am afraid we are going to have ari opportunity to increase some of these rates.
1\Ir. MOORE of Pennsylvania. May r ask" the gentleman--1\fr. KITCHIN. I will say to the gentleman that this is the
price of war here and in all the countries of the world.
. Mr. MOORE of PenfiSylv~nia. And that is one of tile reasons why I" propose to support the bill. · .
If anyone sho~ld desire to have a lawyer to proceed anywhere along the line in shaping up the business in accordance with this bill, and that lawyer should charge a fee in excess of a certain amount, the lawyer pays a tax?
Mr. KITCHIN. Yes, sir. If he makes an amount in excess of $6,000 he pays an excess profits tax on such excess.
Mr. MOORE of Pennsylvania. And i.f he happens to cnll in a doctor to administer to him in his last hours, and the doctor's fee is as large ·as the traffic will b~ar, and exceeds a certain amount, the doctor will pay the tax?
Mr. KITCHIN. He will pay an excess profits tax, too, on the am<>unt in excess of $6;000: · .
Mr. MOORE of Pennsylvania. And if the undertaker happens to have made enough out of carrying the unfortunate body to the grave, and carries enough other bodies, and has charged enough in fees to have excess profits over $6,000 a year, he also will pay-a tax? ·
And I wish to ask this, in fairness, as it puts the other side of the case. The retroactive tax which was in the House bill is knocked out of this bill. There is no retroactive tax?
Mr. KITCHIN. That is true. Mr. MOORE of PennsylVttnia. There is no retroactive tax,
no e.~ post facto tax? - 1\!r. ·KITCHIN. No. The so-called retroactive tax ·is . not _ in this bill now.
Mr. MOORE of Pennsylvania. The tax on heat and light has been knocked out of this bill, so that the occupants of the small homes have been relieved to that extent? · Mr. KITCHIN: Yes. I have already explained that.
Mr. MOORE of Pennsylvania. The tax on tea and coffee has also been taken out of the bill?
Mr. KITCHIN. Yes; and the tax on sugar. · Mr. MOORE of Pennsylvania. . So that · those things stand to
the credit of the conference report, as I understand it. · - The SPEAKER. The Chair wants to suggest to all gentlemen, although we have been getting along here very quietly, that the right way to interrupt a man who is on the floor is to address the Speaker first and ask permission, and the · very worst feature of behavior in the House is that some gentleman sitting in his seat will interject himself into the debate. · It does not give the man on the floor a fair chance. It is done without thought; but these rules ought to be observed, because they tend to good order in this House.
Mr. GRAHAM of illinois. Mr. Speaker, will the gentleman yield?
Mr. KITCHIN. I will. _ . Mr. GRAHAM of Illinois. I have been interested in what
the gentleman has said about the taxation of everything un<ler the sun. I want to call attention to a matter of amendment or change that was made by the conf~rees that appears on page 7 of the bill as printed. Originally this amendment, which was inserted by the conferees, was offered as an amendment in the House and rejected here; but it was put in by the conferees and is in order, I guess, in view of a Senate amendment along the same line.
Now, this excepts from the provisions of this act income that is derived by a person who is a member of a holding corporation when the -income -tax has been paid by the subsidiary cm:poration. Now, I want to ask this: Does the chairman know any reason why a man who owns stock in a holding . corpor..ation and whose money is invested in this holding corporation and not invested in the subsidiary corporations · can not make investments in the holding corporation and be entirely free from the income tax on his investments? ·
Mr. KITCHIN. Any corporation that has stock in another corporation subject to the tax is relieved from the payment of the income tax or excess profits tax. imposed by this bill with respect to the dividends received from such other corporation, but is not relieved from the income tax as imposed by existing law.
Mr. GRAHAM of Illinois. That is, if he owns stock in a holding corporation; for instance?
Mr. KITCffiN. Yes. Take, for example, the United States Steel Corporation, which has about 50 subsidiary companies. It owns the stock of those subsidiary companies. It owns the stock, say, in corporation A. Corporation A pays a tax upon ·an its earnings, upon its whole net income, and on its excess profits, and after paying these it turns the remaining income over to the parent company, the United States· Steel Corporation. Now, that provision· does not tax those dividends in the hands of the United States· Steel Corporation, for the reason that the tax on all the_ earnings of the subsidiary company ·from which these dividends came have beeri paid by the · subsidiary company. Those who strongly advocated this provision and believed that
ill ' · as' Piglit . WA t would ue ooubie tamtton:. ow~ :rue genUe- I and 'got -out,· ..and nH' entirelY ·new· corporation was -organized man. from illinois need not look' me_:in.. tbe·faoe as if: I agreed·to tsince the ~rewar period, then it would take an 8 ·'per cent an··ot tb.Kt. :· [LaiuiTbter.} . If I had had 1liY way, that: .. proVislon '- deduction, as provided in the bill for new companies or busineSs. would. il t ~ha;ve been; in [t. ' '' · . ' ;' '. , Mr. GREEN· of Iowa-. The prewar income is no longer the t' 'l\Ir , ·GRAH M·.ot Illinois; '' W<eil, I ~ought 1;- im~w ho , you· !basis of. taxation. .
stood on that proposition. . r Mr. KITCHIN. It is no longer the basis of taxation, but it . Mr. KIT HIN. ' rBut· I couUf-not ha:ve my wa-jr •an the time, . ~still the basis of the deduction .in a much .more limited extent
and no othe conferee ·could have· his way all the time. ~-era\ than was in the Senate amendments. There still exists a difwere :nine others :on that conference- committee, each' -o:Lwh-om !f.erential of 7 and 9 per cent. I am going to get to that and als6 •had , ~. , 1 1 • • • ' • • ' ~- · 1 explain it as be;:;t I can. ·
l\l'r~ J.GRAHAM of"Illinois: The owner of'stoclrin: :the United 1 Mr. COOPER of Wisconsin. It is exp.eedingly important in States Steel Co., of a holding: compafi.Y\ : is le.t!out of the tax i:t :the. cas~ -of this partieular corporation. because for ~ this $75,000 that is an 'beJdWn.a? " , -~ ·t • i · · ·Qf new capital invested they gave notes payable monthly, and it·
~1r. KITCIDN. Of course, that dividend has alreruly ·pa:id· ' requires a _profit in order to meet those notes and amortize the the: :tax before if•get ·into •its' hands. · :debt; _ ·
:Mr. GRAHAM· ot ,Illinois.. Yes~ The lSUhsidiary COlJlPR1lY ; Mr. KITCIDN. · I will say to the gentleman that if there is a has. paid :it landrrthe ·owner of.: stock in:..the subsidiary ·eo:mpany ~ change of corporation. company, business, or ownemhip alto-bn-s•J>a:id it. . :. ' 1 • • gether,. then it is a new company tha.t ·was n-ot in existence uirring:
Mr. KITCHIN. That was one of the important difl'erem!eS' ~ the prewar period, and it wauld take the. 8.- per cent deduction.. betw~n -the· Seila.te coilferees ,·mi tlie: ·House1 conferees. The , for.. the new business. That is #would ha,ve an 8 per qent de-. Senate ball a -provision in the · bill releasing from '311 income . dueti.on upon- the capital invested. by the new company; plus ataxes, both under ,existing law an<l-:ulider: 'this bllf; dividendS :re:- ~ther · deduction of $3,000~- Then. -tlie rate of taxation would ceived by a corporation from a co:rporation that wascstibject to . apply on the income in excess of the deducti.Qn. · ~ . tlie itax upon ·ther· ground ·tluit it " ~Was a t double taxation. Per- · r Mr. COOPER of Wisconsin .. Eight per cent dedu<:tion: on the. sonally I was opposed to that. We had sotnmV'hat of'R ~ntest" capitalization. . . - .. . • ., ove-r it. 'We 'finally agreed tliat the. provision whieh.. the gentle- Mr. KITCHIN. On the~ invested capital, surplus, and undi-man . has just read should only apply to the additional income~ vided profits, plU;S $3,000. : · taxes imposed by- ·thisJ bill,1·but :t:lrat :the .corporation. tax . -of. 2 .J.\.fr. COOPER of .Wisconsin... Plus 3,000? ,· ~ ~ per. cent tunder exi.Sting 'law should "be paid by botn the .SUb- 'INFOBMA:riON AND WI.THHOLDING . AT THE SOURCE. ,, .- (
sidiary company .and· the -paren:t ··company. That · ·all we Mr. KITCHIN. Let me explain another difference, which r could get' nut ' .of the ·sermte ·conferees. The House , conferees c;:onsidered :that vecy carefully, and ·w.hi:ie' 'we~ believ-edCit ought · started to explain: awhile ago. The Senate substituted what 'is to be just as the House bill had it, ;i\Ve reeognized·that:a mate- knoWn aS' informatwn·at the source instead of collection at the rial change had heel!l made ::l.ni' the bilL since it left: the.. House source, in its amendment 'to the income tax. F'or several year ,• tliat' cwou.ldrpetha:ps'''jt'lstlfy <us . in· }delding· ct:o ·the ,eXtent ex- . since we first enacted the income tax of 1913, there has been. a~ plained. Ii.recall that' the gentlemn:n. and the..genUeman from Ohio. con~esl between the -owners· _of .bonds or obligations containing
. what is eaHeda tax-free-covenant and the makers otthose.bonds. fl\!r.:··LON-GWdRT.B].,... the· .gentleman. from ·Wisconsin ~[Mr. LE'N- I11 ·about $10,000,000,000 or ~~'12,000,000,000 of bonds issued by BOOT] 1 and ..mysel1i and everal, other -MemJ:>ers voted down in <~' the: House tbe propbsition . when .offered b the -gentle.man from railroad companies, telephone companies, and large industrial Illinois '[.1\fi\ STiERLING). ~.~ben;_ the normal tax on-·cort)Orations, corporations •there is a covenant something like this: If the stlbsidiat"Y' and othel' corporations; would ha.ve been-4 per cent Government sh·oul<l' ever require retention ·at the •source o:t under the present ·· law and d he .Honse4 bill. Since . then the· income tax on the interest payments on · these ~onds, then the Senate by· amendment, ! to- •whicb · the •House conferees ,agreed,_ maker agre~ to _pay the full amo~t of the u~terest to thefncrease<L the tax on corporations 'from A ;to .6 'Pffi'- eerrt. This , bondholder without deduction of the meome tax patd. Of course, increase of 2 per cent on all earningBl'Of ·the subsidiary com- . n~turally those who executed these bo~s wo_uld llke to abolish pani-es a:nd he .retention : l)y the c.onf.erees '· of . the 2 per cent : collection at the~source. which was proVIded m the acts_of-1913 under existing law which the parent or holding corporation and _is no!V ~rovided in the ac~- of !916". Both acts r~qmred th~ must pay somewhat evens up matters .. •,! ' • ·corporation to Withhold the mcome tax Upon .the mterest on· ··:Mr. !lONGWOR!rH. I would. like ·to ·.ask1the•·.gentleman: ·at · these bo~ds. ~t we were to acc;ept the Senate amendme_nt, ·then·
some time three -or ·.four questions-, about the excess profits tax these c~Iporatwns woufd get rld _of paying the tax, which they provisi'oil', · and ·I would' llke· tn ~kno-w"' whether 'the gentleman agreed m the bonds to pay, ~ ~t would throw several million would tnow.Jike me 'to postpQne·those questions? \ dollars of -taxes upon the- indlVIduaJ. holders of these bondSJ
Mr. KITCHIN Yes. Please pOStpone them for .a. minute. It was fi?ally agreed ~at we should retain collection at the Now there . as: another importnnt difference between the- House source Wlth ?espect !O these tax-n:ee covenant bonds. So the and: fue Senate. · . law, ·afJ. far. as that IS concerned, 1s· not changed by this bilL
Mr. COOPER of Wisconsin . . Mr. -8pM.ker will the gentleman ';l'hey will Withhold at the source one normal 2 per cent tax, but yield 1 ~ · 1f :ve ev_er levy :; gre~ter llat normal tax; we will require the
' The ~sPEJAKER.r rDoes the: gentleman' from North ·Darolina corp?ration .to Wlt~ld and pay ~at tax. We were ·unable to yield to "the :gentleman. from Wisconsin?. reqmre the corporation to wrthhold both normal taxes, because
Mr . . KJTCHIN. Yes· .:I yield •.:to • the .gentleman from Wis- the corporation would ':lot know how much to withhold in view consin. . ' • of the .diff~ent exemptions under the act of September 8, 1916, r -Mr. COOPER of' Wisconsin:r .The character of · :the excess ~d this_ bill. . . . • profits ta is .somewhat .diflicnlt 'to .ascertain :from a casual read- . In all other cases we substitute .informatiOn at the source ing o:f :this ·very complicated btll> ~and therefore I a-sk this ques7 mstead of payment at the source. tiOn, Wbich has·lJeen•gubmitted in. perfect good fS:ith; by, a Very TITLII II WAB »XCJ!l.SS·PROI'ITS TAX.
excellent gentleman: A corporation .durin~ , the p1·ewar period I will now discuss the differences and final settlement between made an average profit of $3,000 a year. After the- war began the Senate and the House conferees with respect to the· excess 1t bought out .a competitor, borrowed $75,000 in money, andmade profits tax. · a, .. considerable ;investment;.in-new •. buildlngs, and ii:lr capitalized ·The House--levied an exeess-proflts ·tax in addition to the ex• for $125~ .. · This last year its proiJ.tft-were $15,000. Now how cess-profits tax levied by the act of March 3, 1917, ot 8 per cent do you,··llildel' those circumstances, adjust the difference between upon the net income of corporations and partnerships in excess the prewar period .and the war~period?· ~ of 'S per· cent of the capital actunlly invested and an additional
Mr. KITCffiN. Does the gentleman m-ean that. the cor-pora;. exemption of $5,000. tion was merged or ,reorganized.durlng thewa~? _ _ This additional 8 per cent tax. would have made the total
l\Ir. COOPER of .Wisconsin. They· made a new corporation excess-profits tax under the act of March 3, 1917, and ' this act entirely. 1 ~· • , 1 , 16 per cent. This tax was determined when the needs of the
Mr. KITCHIN, ~er-e· is .a pr.o.visionin. the bill to-. take care of Treasury were only" eStimated to be $1,800,000,000: Had we that W.here: a corporation:. is ·reorganized with practically· the ha-ve known at th:e time the House- passed the bill of the new same owners tit is .considered, -so far as the percentage of dedu.c- demands: of"•.several ·billions of dollars which arose later, of tton is concerned, a: continuance of 'the business. • . course, we would have provided higher and graduated excess
Mr. COOPER -of Wisconsm ··But there are-:new·owners,in. it. profits' tax rates, graduated aceordtng to· the per cent of profits '1\In. lKlTGHIN. l knQw,·: but ~re· ,are also the- old. owners made on the invested capital.
in it. U::tbe uld owners.succeed to 'the new ·business, then. they. - The Ho'use · bill. if w111 be obsetted; bad the same exemption take the percentage thal! they thad before the war. but if it is on ~reduction for all and the same tax rate for all. There was qtscontinned .altogethel; it the old ,owners gave np·rtheir business neither discriminll.tion against nor favoritism to any, conditioned
' . ·. . ~-.
1917 .. 'CONGRESSIONAL RECORD-HOUSE~ .7581 ·upon whether or not · the corporation m·-partne-rshlp ·was · fol~tunate or unfortunate during some arbilrru·ily fixed -period before the war. It considered only the prosperity of the tixab1e partnership or corporation-its ability to pay its share of the war burden in the taxable year.
It included only corporations and -partnerships and excluded individuals because (1) of the extreme difficulty in the administration of the law as regards individuals, and . (2) of the exemption from the income tax of partnerships and the exemption of corporations from the urtax, and (3) of the discrimination
. an excess-profits tax on individuals would make in fav:or of· a corporation as against an individual in same busine s, same capital, and same profits, especially in view of the large £urtax on the income of the individual. and the further view that officers of a corporation, substantially the owners of it, can deduct from its incom.e subject. to excess-profits tax salaries for their : services, while the individual can have no deduction for salary on account of his services.
The Senate struck out the entire excess-profits tax title of the House bill, repealing also the existing law as to such tax, and wrote a substitute therefor. Its substitute made as the basis for deduction- or exemption the amount of profits, or the percentage of profits, made during the years .1911, 1912, and 1913, called the prewru· ,period. It graduated the tax not upon the per cent of profits made on tp.e invested capital but upon the per ·cent of profits made in excess of the deduction or ex-emption. It applied the tax to indivlduals as well as to corporations and partnerships. Individuals were given an exemption of $5,000 in addition to the per cent of prewar-profits deduction. Corporations and partnerships whose income was $5,000 or over Wei'e given no speeifie exemption, but the tax did not apply to those making less than $5,000.
The bill·-as reported by the Finance Committee of the Senate levied what it called a tax on " war profits "-so named in the amended bill. It conclusively assumed that every dollar of or income made by a corporation, partnership, or individual during the taxable year in excess of the profits or income made during the prewar period-1911, 1912, and 1913-was made out of or because of the war. · It proposed, therefore, to L'l.X only the profits made during the taxable .Year which we1·e in excess of the profits made during such prewar period. The deduction or exemption was the amount of profits, or per cent of profits, on capital employed made during the prewar period, but it was provided that it should not be less than 6 per cent in any case. The mo1·e fortunate and prosperous one was during the . prewar period the larger was his deduction or exemption and the less tax he would have to pay. The less fortunate and less prosperous one was during the prewar period the smaller was his exemption or deduction and the more taxes he would have to pay. For instance, if a corporation was making $25,000,000 profits, or 50 per cent on its invested capital during the prewar periodanti there were many such cases-before the tax attached to its income or profits, it-would be given a deduction of 50 per cent of the capital invested during the taxable yeru·. In numerous cases . corporations, though extremely prosperous, would pay nothing because they were equally as .Prosperous during the prewar period. On the other hand, if another corporation with same capital, in same kind of business, making same profits during the taxable year, was maklng only 6 per cent on its capital during the prewar period, it wou1d have only a deduction of 6 per. cent on its capital during the taxable year, and would therefore pay an amount of taxes many times greater than its competitor.
After the bill as reported had been under discussion for some time in the Senate the Finance Committee discovered that many of the largest and most succe sful corporations, making during the prewar period from 10 per cent to over 80 per cent profit, would under the committee's amendments have an exemption or reduction so large that they would escape payment of about $450,000,000 of taxes yearly ; some J;llaking as high as from 25 per cent to over 75 per cent would pay no taxes at all. It therefore abandoned the theory of taxing so-called " wru· profits " alone and proposed an amendment or substitute for the former . amendment, whlch the Senate adopted, making the tax one in. the nature of an " excess-profits " tax instead of a "war-p-rofits " tax-a tax on the profits in excess of a certain per cent of profits on invested capital-and both the Finance Committee and the Senate adopted substantially the House definition of capitaL·
The committee and the Senate, however, still retained in the bill as passed by the Senate a differential as to the deductiqn or exemption~ ba;sed upon the per .cent of profits made during the prewar period, but provided that the exemption or dedu~tion should in no case be less than 6 per cent nor more than 10 per cent of the capital invested, accordingly as the corporation, part-
nerBhip; or 1ndividual was making 6 per cent or less or as much as _10 per cent o~ more during the prewar period. For instance, if a corporation was making during the prewar period 6 per cent or leSs, it would have, under the bill as it passed the Senate, in computing the tax, 6 per cent of its capital invested during the taxable year as a deduction from its profits in the taxable year, and the tax would apply only to the profits in excess of the 6 per cent deduction. If it made during the prewar period 7, 8, 91 or 10 per ·cent on its invested capital, it would have, respectively, 7, 8, 9, or 10 per cent of the invested capital during the taxable year as a deduction from the profits of the taxable year, and the tax would attach only to the profits in excess of the respective deductions. If it made over 10 per cent during the prewar period, it could only have 10 per cent deduction for the taxable year, as it was provided in the later amendment or substitute that the deduction should in no case exceed 10 per cent.
The bill as passed by the Senate also retained the provision graduating the rates of the tax upon the per cent of pr:ofit made during the taxable year over the deduction or exemption and not upon the per cent of profits made on the capital invested during the taxable year. It reads :
Twelve per cent of the amount of such war profits not in excess of 15 per cent of the deduction-
And so forth. Sixteen fer cent of the amount by which such war profits -e.xceed 15
per cent o such deduction and do not exceed 25 per cent thereof. · 1
Twenty per .cent of the amount by which -such war profits exceed 25 per cent of su<'.h deduction and do not exceed .50 per cent thereof.
Twenty-fi-ve per cent of the amount by which such wa:r :profits exC"eed 50 per cent of such dedu<'tion and do not exceed 75 per cent th-er-eof.
Thirty per cent of the amount by which such war profits exceed 75 per cent of such deduction and do not exc-eed 100 -per cent thereof.
Thirty-five per cent of the amount by which such war profits exceed 100 per cent of such deduction and do not exceed 150 per cent thereof~
Forty per cent of the amount by which such war proiits exceed 150 per cent of such deduction and do not exceed 200 per cent thereof. ·
Forty-five per cent of the amount by w'hich such war profits exceed 200 per cent ~f such deduction and do not exceed 250 per cent thereof.
Fifty per cent of the tm1ount by which sueh war .])rofits exceed 250 per cent of such deduction and -do not exceed 300 per cent thereof. .·
Sixty per cent of the amount by which .such war profits exceed 300 per cent of such deduction. .
These were the main differences between the House and the Senate, and this was the -shape of the bill with respect to the excess-profits· tax when the conferees met.
These differences were composed in conference by rewriting the excess-proiits tax title. As agreed on, it ·provides for tp.e levying of a graduated tax, ranging from 20 to 60 per cent, based upon the per cent of profit or income mad~ during the taxabl~ year on the invested capital, as follows:
Twenty per cent of the amount of the net income in excess of "the deduction (determined as hereinafter provided) and not in exc-ess of 15 per cent of the in-vested c.apital for the taxable year ;
Twenty-five per cent of the amount of the net income in excess of 15 per cent and not in excess of 20 -per cent of such capital;
Thirty-five per cent of the amount of the net income in ~xcess of 20 -per cent and not in excess of 25 per cent of such capital; ·
Forty-five per cent of the amount of the net ·income in exeess ~f 25 per cent and not in excess of 33 per cent of .such capital; and
Sixty per cent of the amount of the net income in excess ~f 33 -per cent of such capital.
The tax applies to individuals, partnerships, and <Corporations·. Citizen or residents of the United States and domestic partnerships have a flat, specific deduction of $6,000 and domestic corporations have a flat, specific deduction of $3,QOO. Besides these deductions -eaCh trade or busine s has a deduction equivalent to the average percentage of its income to its invested · capital during the years 1911, 1.912·, and 1913, but ·this deduction can not be less than 7 per cent nor more than 9 per cent of its invested capital for the taxable year. .
In ca e the income of a trade or business during 1911, 1912, and 1913 was not representative of like concerns engaged in iniilar business the Secretary of the Treasury may grant a deduction equivalent to the deduction grante!} such concerns.
In case of a trade or busine s, including professions and occupations, employing no capital, or only a nominal capital, an additional income tax of 8 per · cent is levied upon the incomes of such trades or businesses in excess of $6,000 in the case of a domestic partnership or a citizen or resident of the United States, and $3,000 in the case of a domestic corporation.
If a corporation or partn~rsblp was not in existence, or an individual was not engaged in the trade or business, during the whole of any one calendar year during the prewar period, the deduction will be an amount equal to 8 per cent of the invested capital for the taxri.bie year, plus $3,000 in the case of a do_mestic corporation and $6,000 in the case o·f a citizen or resident of the United States or a domestic partnership. . ·
It will be noted that while a differential as to the deduction of 7 per cenf to 9 per cent, instead ·of 6 per cent and 10 per cent as in the Senate provision, is made, the· difference between the
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7582 CONGRESSIO:N AL _RECORD-HOUSE. OCTOBER _1,
two deductions is very small, in view of the method ot gradu_ating the rates ot the tax agreed on_ by the .conferees. If . the conferees had adopted the Senate's method of -graduatil)g the ta.~, even with the slight differential of 7 per cent and 9 ~r cent, the difference in the amount of tax between a 7 per cent and a 9 per cent deduction would have been quite large and the difference in the amount of tax between a 6 per cent and a 10 per cent deduction, as was provided in the Senate amendment, would have been extremely large. For instance. a corporation with a capital of $100,000, making a profit during the taxable year of $25,000, or 25 per cent, with a 6 per cent deduction, wquld have paid $7,029 of taxes, while a corporation in same busines , same capital, and making the same profits during the taxable year, :with a 10 per cent deduction, would have paid only $3,965, or over $3,000 less. Under the provision agreed on the difference between the amount of tax to be paid by a corporation with the same capital and same profits, with a 7 per cent deduction, and a corporation with a 9 per cent deduction is only $400.
:Mr. CAl\fPBELL of Kansas. Will the gentleman yield 1 1\fr. KITCHIN. Yes. Mr. CAMPBELL of Kansas. I have a great many oil wells
and coal mines in my district, and the owners of the property tell me that when they are taking out oil or coal they are exhau.sting their principal, and they have wondered if the exce s p~·ofits applied to them when they are taking out their procluc~ and exhausting their principal.
l\fr. KITCHIN. I am glad the gentleman mentioned that. Mr. CAMPBELL of Kansas. What did the conferees conclude
as to that? Mr. KITCHIN. We did not take care of that proposition.
Let me say that I have had owners of oil wells and of coal and zinc mines and lumbermen tell me that each day in carrying on their business they are exhausting their capital and ought to haye a reduction in some· way on their excess-profits tax on this account. They are mistaken. They are not ex-
. hausting their capital each day, but instead they are getting their capital back' each day. For iQ.stance, suppose I put $100,000 into standing timber costing, say, $5 a thousand feet, and erect a sawmill and cut it into lumber. Every time I cut a ·thousand feet I charge that $5 up as cost of raw material, along with the cost of labor and other expenses. When I sell that thousand feet of lumber I add the cost of the stanqing timber, labor cost, and other expenses to the price for which sold. Five dollars · of my principal is returned to me with a profit on it upon the sale of each thousand feet. Instead of exhausting their capital daily, a part of their capital is each day b~ing returned to them to be again invested.
1\fr. CAMPBELL of Kansas. But is it a profit? · · Mr. ·KITCIDN. They get their capital back and the profit, too. · ·
Mr. CAMPBELL of Kansas. Is it u profit when they are taking their capital out of the fl?.ines?
Mr. KITC;EIIN. For iustance, a man puts $300,000 into a coal mine, and the coal in the mine, say, stands him 5 cents a ton. He begins to mine and sell the coal. In th.e price of every ton he sells is included the cost of the coal in the mine, the cost of labor, overhead charges, and all other expense, and his profit. On every ton sold he gets back that part of his capital which he in\ested in or paid for that ton of coal at the mine.
Mr. CAMPBELL of Kansas. But suppose he has 160 acres of coal land, an~ he has mined all of that 160 acres, and it is completely exhausted?
Mr. KITCHIN. He has got his entire capital back. His mine is exhausted, but the capital he put into it has been returned to him from time to time as he mined and sold the coal.
Mr. CAMPBELL of Kansas. But is that charged to him as profits?
Mr. KITCHIN. The income-tax law and this bill permit him to deduct the cost of that coal, in gettirig at his profits or income that year for the purpose of the tax. He ~educts that, deducts the overhead charges, labor, and all other expense in determining the profits or income in his bnsine ·s.
1\Ir.- CAMPBELL of Kan as. Here is a man who has an oil well that cost him $20,000. Every time he ' takes 20 barrels · of oil out . of that weli he exhausts the· value of his inve tment, does he not? ·
Mr. KITCHIN . . He exhaust · that much of the oil in the .well and the well ·is worth that much less, but instead of exhausting his capital put into it, h~ has had it returned to him at ev.et;y sale .. of a barrel of oil to the extent of the cost to him of the oil in the well. Suppose the oil in which his capi: tal was invested .cost him at the rate of 25 cents a barrel; every ·baiTel he takes.· out,· when he s·ens it, he gets bacK 25 cents of his capital that he has put iri. When he has· exh·ausfecrtli'e
-well he ])as had . returned to him the $20,000. in the price he received for the oil. Suppose I buy standing timber_ for $100,000 and the next day I sell · it for $150,000. I have sqld all of it in one sale apd got my capital back the next <lay and $50,000 protit. Suppo. e I cut it up into. lumber and sell it in that way, taking a year in which to cut . it; each day -I cut and sell I get part of my capital back. When I have sold it all I hnve all my capital back and the profits on my investment. As a matter of justice one should not have a deduction on the whole amount of original capital when in the nature of the business his capital is from time to time returned to him as in the case of timber, oil, and mining business, and such returned capital ' should not be used as a basis of deduction.
Mr. GREEN of Iowa. The Senate Finance Committee took as its basis for computing the excess-profits tax certain prewar profits. That has been abandoned, except as there is a margin between 7 and 9? ·
Mr .. KITCHIN. Yes. Mr. REA VIS. The gentleman stated that to ascertain the
net income for the purposes of taxation there will be deducted overhead charge , labor, and so forth.
Mr. KITCHIN. Yes; that is in the present income tax. Mr. REAVIS. And the amount arrived at for the purposes
of taxes on incomes would be the basis of the exce s-profits tax? Mr. KITCHIN. Yes; you get that first.
- Mr. REA VIS. Let me suggest this condition, and it doubtless prevails in the gentleman's district as it does in mine: Take, for instance, the farmer who has a large family following the example of the gentleman, and who employs his boys upon the farm to aid him in his work. Is he entitled to a deduction for that labor, even though he does not pay for it?
l\lr. KITCHIN. No. Mr. REA VIS: Then he would be paying exce s-profits taxes
on the labor rather than on the real profits, would he not? · Mr. KITCHIN. Yes, to a certain extent, because in most
States if the child is under 21 his labor belongs to the parent . l\Ir. REA VIS. He is entitled to the labor? l\Ir. KITCHIN. Yes. . l\lr. REAVIS. That being true, he would pay a tax on the
returns with no deductions for labor. l\!r. KITCHIN. And that is one reason why I personally
and the House conferees were not in favor of including individuals in the excess-profits tax. The owner of practically all the stock of the corporation could cl1arge up his own salary as officer of the corporation, and for the labor of his wife and children if they performed services for it, and deduct the amounts so paid or charged up as part of the operating expenses from the amount of taxable income or profits, while the individual in same kind of business with same capital and making same profits could not have any such deduction.
1\fr. REA VIS. All of the labor ,,:ithin the corporation they are entitled to deduct?
1\lr . .KITCHIN. Yes; but one thing we did manage to get, to offset that somewhat. We secured in the agreement for the individual and the copartnership an exemption or deduction of $6,000 fiat, while tl1e corporation gets only $3,000.
Mr. CANNON. 1\fr. Speaker, will the gentleman yield? 1\fr. KITCHIN. Yes. 1\fr. CANNON. I think there is a provision in the con
ference report that gives a man credit, in making up his returns, for everything that he contributes to educational, re-ligiou , or charitable institutions. ·
Mr. KITCHIN. To the extent of 15 per cent of hi net income.
l\lr. C • .<\..NNON. He would get a par·t of it. The newspapers say, and I have no doubt it is true, that a certain wealthy gen· tleman contributed $5,000,000 to tha Red Cross. So he woulll get a reduction for that?
l\Ir. KITCHIN. On . his income tax, if it did not exceed 15 per cent of his total net income.
l\lr. CANNON. He would get all of it? l\!r. KITCHIN. No; 15 per cent. Suppose one's net income
i S10,000,000. He can give away 15 per cent or $1,500,000 of that to charitable, religious, or educational organizations, and that amount would be exempt from income tax. ·
1\fr. CANNON. And he still has a free hand as to $8,500,000'1 1\lr. KITCIDN. That $1,500,000 would be untaxed so far as
•the income tax is concerned, and all the balance of the net income-\vould be taxed.
Mr. CANNON . . There is no difference between the individual and the corporation, is there, in making up the excess-profits tax?
Mr. KITCHIN. lndi\iduals, copartnerships, and corpora-tions are · subject to the· tax, but we give the· individual and
•
1917, . CONGRESSION A'L . RECORD-HOUSE. 758!J the c<n;)artnershlp a $6,000 exemption so far as the excess-profit~ tax is concerned, while the 'corporation ·gets only ·$3,000. ·
1\lr. C~"'NON. I want to see if I am right about a kindred proposition. I have a constituent who has an· income of, ·say, · $25,000, sub tantially all from dividends of corporations tliat are engaged in business. He is a gentleman of leisure. The corporation pays the exce~s-profits tax and also the indiVidual?
~Ir. KITCHIN. I do not think in the case the gentleman Cites that the individual ~Ould pay any excess profits ·tax, as he is not engaged in trade or business and has no profession o!· occupation. He, of course, would pay an income tax. The difference between the e.x:ce~s profits tax and the income tax is thi : The income tax ·as a tax upon the total net income· recei'red from all sources, with a- fe'v certain exceptions. The ex~ess-profits tax as now written in the bill is a tax; ~n ti·~de or busines , including professions and occupations; that is, on the income or profits of h·ade or business, including professions and occupations.
l\fr. CAl'lNON. Now, if the gentleman will permit--Mr. KITCHIN. But if an individual is in business-say the
mercantile bu ines~-and has investments in railroad stocks and bonds and .receives $10,000 from them, disconnected altogether from his busines , that would not be included in determining the income subject to excess-p1;ofit tax.
.Mr. CL~O:N. But the corporation would pay the tax before he got it ; then he would pay the tax after he got it. It is double taxation. '
1\Ir. KITCHIN. No; the corporation pays the normal or corpotation tax. The individual will not pay the normal tax on dividends received from a corporation that is taxed. If you receive $10,000 or $50,000 or any amount from dividends of corporations subject to the tax, you are exempt from paying on tlio e dividends the normal tax, which under this bill is 4 per cent. But you must pay the surtax on income from the corporate dividends as well as from other sources when the income exceeds $5,000.
l\fr. C.A.t~ON. I understand ; under the law of 1916. Mr. KITCHIN. Under this bill. Mr. REA VIS. '\V~ill the gentleman yield? 1\Ir. KITCHIN. I yield. 1\Ir·. REA VIS. Take, for instance, the case of a gentleman
having no particular busines or occupation but who owns several thou and acres of farm land, which he rents. Does he pay any exce s-profits tax?
Mr. KITCHIN. There is orne doubt as to this, but I am inclined to believe that he would pay an excess-profits tax. He would probably be consh·ued as being in the business of renting land.
Mr. REA VIS. Or a man loaning money? ~ir. KITCIDN. If loaning money was his bu iness or part
of hi busine , he would pay. A.n occasional loan of money by one not in the business of loaning money would not be subject to the exce -profits tax.
Mr. l\lcFADDE~. Will the gentleman yield? l\Ir. KITCHIN. I will yield. 1\.Ir. McF.ADDEl.~. I ha\e in mind a corporation started sev
eral years ago with $15,000 capital. No dividends have been declared and the profits have been left in the business, until today there is an in\e tment of $175,000.
1\fr. KITCHIN. There would be a deduction upon the whole $175,000.
Mr. TOW~'"ER. Will tl1e gentleman yield? 1\Ir. KITCHIN. I yield. Mr. TOWNER. I hope the gentleman understands1 as I
think the Hou e does, how very important this interpretation of the bill is to us and will he to others. I was wondering.if it would be impractical for the gentleman to put into his revision of remarks a statement showing what would be the amount of taxes of indivi<.luals doing business, say, on an easily determined capitalization of $100,000, with profits of, say, $10,000r $25,000, and 50,000 :a :year?
l\Ir. KITCHIN. The gentleman means income tax: and exce · -profits tax, both?
:Yr. TOWNER. Yes. Mr, KITCHIN. I ha\e them here, but it will take very long
to read them. I will ay to the gentleman--~lr. TOW~ER. I do not expeet the gentleman to do it now.
Ju t take n corporation doing a bu ine of $100,000 a year and giYe us a bn~i · of what "·ould be paid on profits of $10,000, $25 000, ' 50,000, $75,000, or $1001000 on the capitalization. . It 'Jccur to me it would be very Yaluablet not only to :Members \Jut to. the connh'Y at large.
:\Ir. KITOll.D1. I wJlJ appenll tables showing the application of the tax nud the amount to be paid in certain specified cases '?f capital inYest_ed and profits made.
Mr. CANNON. If the gentlezmm-'wirt yield, that will be in the shape of a tab1e? -- Mr. l:{ITCIDN~ Yes_ .
Mr. CANNON. And made ,..1p by experts? Mr. KITCHIN. Yes; made up by~. Mr. CANNON. I hope the gentleman wili do so, because I
get letters constantly about that, · and I would: like to send them the table. ·
Mr. McFADDEN. Mr. Speaker, will the gentleman yield? Mr. KITCHIN. I yield. . -... Mr. McFADDEN. Referring to the. question I just put and
the gentleman's answer, the friend I refer-red to with $175,000 capital is now earning 10 per cent on $175,000, 'and under this plan the exemption is $5,000.
Mr. KITCHIN. Tbree thousand dollars flat plus the same percentage. of profits on invested capital as it was making during the prewar period, not to exc.eoo 9 per · cent. The Senate had n() fiat specific exemption for corporations. The House had 5,000, and we agreed on 3',000. The Senate .amendments, howeYer, provided that the excess-profits tax should not apply to corporations whose net income was less than $5,000. In other words~ by such a provision a corporation that made $4,999 would not pay u cent o:f the excess-pro.fits tax, but the corporation that made $5,000 or over would pay an excess-pro.fits tax on the whole $5,000. As I said, we finally agreed on a fiat specific exemption of $3,000 to all corporations. In the case the gentleman speaks of, if the corporation was· making upon its invested capital, including surplus and undivided _profits, during the prewar pe.riod of 1911:, 1912, and 1913, 7 per cent or less, it would have 7 per cent of its invested capital,. inctuding surplus and undivided profits, during tile taxabl-e year as a deduction p-tus the $3,000: fiat deduction. If -it was mah.'ing 8 Ol' 9 per cent or over during tlle prewar period,. it. would have· for the taxable- year as a deduction, respectively. 8 or 9 per cent plus the $3,000. The deduction tmde:r the repprt can not be less than 7 per cent tior more than 9 per- cent.
Mr. McFADDEN. It seems to me under that argument tlie gentleman is going to avoid paying any tax.
Mr. KITCHIN. If~" as I understand .the gentleman to say, the corporation was now making 10 per cent; that is, $17,500, and that it made 10 per cent befor~ the war on the · invested capital--
Mr. McFADDEN. Yes. ?!Ir. KITCHIN. It would have a deduction of 9 per cent. be
cause under the provision agreed on by the conference it can not go over 9 pe1· cent plus the $3,000 flat. deduction.
Mr. McFADDEN. · He would be paying on 1 per cent? 1\Ir. KITCHIN. ·No. It would pay no excess-profits· tax, as
the deductions would be $18,750, $1,250 more than the net income. The V per cent deduction on $175~()()() is. $15.750: Add the $3,000 and it will be $18,750 as .a total deduction.
.:Mr. CANNON .. If he was making .on the average for the three prewar years m()re than this year, he would not pay anything?
1\lr. KITCHIN. Under the. bill as fi~st reported by the Senate committee it would not. But the bill as finally passed · by the Senate· provided that tl:}.e deduction should in DQ case exceed 10 per cent of the capital invested. Under the bill as agreed on by the conference the deduction can in no case exceed 9 per cent of the invested capital plus the fiat specific deduction or exemption. .
Mr. 1\IcFADDEN. Will the gentleman define more clearly what he means by invested capital?
1\lr. KITCHIN. We have agreed · on a definition as to invested capital substantially as the. House bad it, with some modification as to good will and other intangible assets. We also provide that property turned O'\el~ for shares and stock in a corporation or partnership prior to January 1,_ 1914!, to be valued at its cash vnlue not as of tl1e time it was turned over, bnt as of January 1, 1914. .All property turned over since Januru.·y 1, 1914, is valued at its cash value at the time so turned over. We make-another provision that I am not speeially impressed with. We have modified the meaning of u capital invested n by permitting stocli issued in good faith for good will, franchise, n·ade-marks, and trade brands pri()r to 1\Iareh 3, 1917-the· date of the passage of the excess-profits. act of March 3'~ 1917, which ga\e corporatiollS' noti-ce that the-y c,ould not do so any more-up to 20 per cent of the total amount of the capital stock to be counted a part of the in.Yested capita.T.
Let me read the language ()f the bill as. agreed on de:fining the meaning of invested capital; ·
SEc. 20·1. That as used in this title the. tel'm "invested capital,., for any year means the average inv~tedl capHa.l :f~r the year. as defined and limited in this title, averaged! m-ontbty. · .
.As used in this title '' inV'l'sted capital,. doe not indude. . tocks, bonds (other than obUgations of the Unit ell States), or other assets
"1584 CONGR;ESSION AL RECOE-D-HOUSE. OcToB~R l;
the income from which is not subject to the tax imposed by this title, chant b k · 1 b nor money or other prcperty· borrowed, and means, subject to the above · • 1 an e.r._- - ~~~~er, ~ .erman, manufacturer, an(} every limitations: . - ~ other clas~ of mdrv1duals m . trade or business are ma<le to pay
(a) In the case of a corporation or partnership: (1) Actual cash the _tax, why should not the lawyer, the uoctor, an(} other propaid in, (2) the actual cash value of tangible property paid in other fe sronal men, who maue a profit or income m· 111• pr·ofe· s 1·on than cash, for stock or shares in such corporation or partn~rshlp,- nt the time of such payment (but in case such ·tangible froperty was paid of O\er $6,000 be also made to pay? Why shoul(l not the highin prior to January 1, 1914, the actual cash value o such property as salaried business man be made to pay? of. January 1 , 1914, but in no case to exceed the par value of the What ,, b · orginal stock or shares specifically issued therefor), and (3) paid in ~ goou reason can e grven why the farmer nn<l merchant or earned surplus and undivided profits used in the business, exclu- an(} manufacturer should be made subject to the tax and the slve of the undivided profits earnell durin9 the taxable year: Pro- lawyer, doctor, and other professional ·men be exempt from the videil, That (a) the actual cash value ot patents and copyrights tax? paid in !or stock or shares in such corporation or partnership, at the time of such payment, shall be included as invested capital , but .not to The only fair and reasonable objection that can be ma<le to exceed the par value of. such stock or shares at the time of such pay- the pro_vision is that the tax is n'ot high enough to equnUze tile ment, ·and (b) the good will. trade-marks, trade bra.nus, the franchise _tax wh1ch the fnrmer. merchant, anc, manufactt·u·er· 11PS to pPy. of a. corporation or partnership, or other intangible property, shall be -1 u ._. included as invested capital if the corporation , or partnership made .':f-'hey must ~ay ·f~·om 20 to. 60 per. cent of their ipcome or profit • payment bona · fide therefor specifically as such in cash or tangible prop- lll ex~ess of therr ueductrons, while the professional man nn<l erty, the value of such good will, trade-mark, trade 'brand, franchise; or t_he high-.salaried busine s man will pay on.ly 8 per cent on tlret"•· intangible property,· not to exceed the .actual cash or actual cash value ~ of the tangible property paid therefor at. the time of such payment; but mcome m excess of their deduction. Of cour e the farn1er, good will, trade-marks, trade brands, franchise of a corporation or part- merch~nt, or manufacturer has a larger decluctiou ou account nership, or other intangible property,- bona fide purchased, prior to of hav b t t• 1 ·t 1 March 3, 1917, for and .with interests or shares in a partnership or for mg su san ra capt a inve. ·ted, but this deduction will and with shares ln the capital stock of. a corporation (issued prior to not reduce his tax to as low as that of the lawyer uoctor or l\farch 3, 1917), in an amount not to exceed on 1\Iarch 3, 1917, 20 per other professional man. ' ' · cent of the total interests or shares in the partnership or of the total l shares of the capital stock of the corporation, shall be included in in- t is suggested that the _lawyer, doctor, or other profe ional vested capital at a value not to exceed the actual ·cash value at the man shonld not be taxed be~ause his income is derive(} from his time of such purchase, and in c;ise of issue of stock therefor not to brain and time and personal qualifi. cation: Does not the far·r·tnr, exceed the par vnlue of such stock. · · • c-
(b) In the case of an individual, (1) actual cash paid into the trade mer~hant: or manufacturer ca:rry , to his busir~es. his personal or business, and (2) the actual .cash value of tangible property paid quahficatron? Does he not devote to his busines his brain anrl into the trade or business\ other than ca. h, at the time of such payment t_ime, and in _adu_ ition puts capital in money an<.l pr·opei·ty 1·nto (but in case such tangib e property was paid in prior to January 1, t? I 1914, the actual cash value of such property as of January 1, · 1914), 1 • s not hrs mcome or profit derived from the combination and (3) the actual c!lsh :value of patents, copyrights, good will , trade- . o~ his bra~ and time and . capital? It is aid th~t the profesmarks, trade brands, franchises, or other intangible property, paid into stonal man IS taxeu .under the income-tax law 011 11is 1·ncome and the trade or business at the time of such pay~cn t, it' payment was th t made therefor specifically as such in ca h or t angii.Jle property, not to - a it is unjust to levy another tax in the nature of an excess-exceed the .aetna! . ca h or actual cash value of the tangible property profits tax on his income or profits, t;hat it is double taxation. bona fide paid therefor at the time of such payment. Is not the far h t f
In the case of a foreign ' co-rporation or partner sllip or of a nonresi- ·mer, mere an • or manu acturer or other individual dent nllen ·individual, the term "invested capital" . means that propor- in trade or business taxed on his income under the income-tax tion of the entire invested capital, as defined and limited in th1s title, law, !J. U<.~ is not an e.xces -profits tax levied, in ad<lition to the th~i~t~; ::eett ~nc~~~ from sources within the United States bears to l.'egul_nr mcome tax, on his profits or income? If such a tax is
Mr. McFADDEN. Mr. Speaker, will the ·gentleman yield? ~ust m .case. of the tarmer, merchant, and manufacturer. why is · rt no?t JUSt m case of the lawyer, doctor, or other professional Mr. KITCHIN .. Yes. , man. .
1\fr. 1\.lcF.ApDEN. ·In defining ~hat is the "inwsted capi- · tal," ·would the company be permitted to value its capitalization l\1r. OLIVER of Alabama. I would like for the gentleman to on the present inflated prices? · ' · st~te whether or not any attention was paiu to the number that
1\Ir. KITCHIN. No. We provide against that. mJO'ht compo_ e the business of a profe ional partnership? If Mr. OLIVER of Alabama. Mr. Speaker, will the gentleman there ":ere SIX or · even members, there would be the same flat
yield? exemptron as for two? Mr·. KITCHIN. Yes. ·Mr. KITCHIN. Yes. The six or seven would have the one 1\fr. OLIVER of Alabama. Does the gentleman propo e an ~x~mpt_ion as a Plll"tnership ·for the purpose of thi tax, 'which
exce s-profits tax on the business corporation without any capi- lS m heu of the excess-profits tax computed on the basis of . tal, the earnings of which are alone · dependent on the business c~pital invested, but when th ~Y divided their profits each of the skill. of uie members? s1x or seven woul<l have an exemption under the income-tax law.
1\fr." KITCHIN. I purpose to take up that question and dis- Wh~rever a corporatin or partnership or individual has no cuss ·ection 209 later ori, but since the gentleman has aske<l capital or only a nominal sum inV"ested and is in trade or busithe que tion I will now take it up. In the House bill, the n_ess, or in a l?ro~e.siol', · the corporation is given a $3,000 <.le(lucexcess-profits· tux applied o~ly to corporations and partnerships, bon and the mdiVr<lual or partnership a $6 000 U(:'duction All and not to inuividual . The Senate include(} individuals in its the net. inc?me derived from the bu ine s, traue, profe si~n, or amenuments. It made the individual merchant, farmer, banker, occupatiOn 10 excess of the deduction is taxed 8 per cent. · lumberman, miner, the manufacturer, an<l every other class of Mr. HUSTED. Mr. Speal:er, will the gentleman yield? indivitluals in trnde or busine s ~object to the excess-profits tax. Mr. KITCHIN. Yes. But ,it exempted from the ta:x the incomes of lawyers and cloc- Mr. HUSTED. I woulu like to ask if this bill uoes not bear tors and other professional men derived from their profession; ~ith special hardship on the man who happens to have the bulk also salaries of offices and employments, including the salaries of his property invested in the stock of a corporation? . of business occupations, as well as those of governmental offi- Mr. KITCHIN. He would not pay any excess-profits tax on cers. The llou. e conferees opposed the inclusion of inuividuals dividends received from a corporation subject to the tax. in the excess-profits tax provision, for the reasons I have before Mr. 1;IUSTED . . I mean a corporation which is subject to the
. given. The Senate conferees insisted upon including them, but excess-profits tax, but which has not maue any exce ive-war . agree(} to gi·ant them a specific deduction of $6,000 plus the de- profits. That man, a stockholder in that corporation bas relied unction of the per centum of profits made on iuve ted capital, if upon the divi<lends on his stock during the prewnr pe~iod for his any, the same as is given to corporntions and partnership~. livelihood. Now, that stock woul<l bear a greater proportionate
After much con ideration the conferees unanimously agreed share of the burden than other property would bear, it seems to that there should be no exemption from the tax of lawyers, doc- me, and .that he wouW indirectly pay more in proportion than tors, civil engineers, or other professional men, or the high- men who had . tbeir money investeu in other clas ·es of property. salaried business man. So the conferees, after mature delib- 1\Ir. KITCHIN. The excess-profits tax provi ·ion in this bill as erat.ion and afh'r a special conference committee. meeting called agreed on, does not · take ·into consideration the tlifference 'befor the pnrpo e of considering the matter, unanimously agreed tween his profits before the war an<l hi: profit· now, except
. on section 209, which is ns follows: as to the di~erential of 7 and 9 per cent on invested capital as That in the case of a trade or business having no invested capital or · a deduction, as I have before explained. This is not a war·
not more tt.:m a nominal capital ther<.' shall be levied, assessed, col- profits tax, but it is an exce "J)rOfi.ts tax. lccted, and paid, in addition to the taxes under existing law and under this act. in lieu of the tax imposed by section .201, a tax equivalent to l\:lr. HUSTED. For that reason it seems to me he would pay 8 per cent of the net income of such trade or business in excess of the more than the man who had his money inve ted in other clnss~ following deduction : In the case of a domestic corporation ·$3,000, and of property. · · · ' 1n the case of a domestic partnership or a citiZen or resident of the United States $6,000; in the case of all other ·trades or business, no - Mr. KI'I:CHIN. Every ~~nand every class of business, every deduction. . · partnership and every corporation, is paying more . ... A pr~or sec.tion defines trade or business to include professioqs l\Ir. HUSTED. I realize that he is paying more than' he did
- ana occupations~ There is not a more proper or just pr.ovision' 'Jje!qre"the w.ar, bt:tt it se~s to me · he is also -paying more in in the entire bill than this one. -If the individual -farmer; mer- proportion. - · - -
1917. CONGRESSIONAL R.ECORI)-=-HOUSE. 7585 1\fr. KITCHIN. · The difference between this bill and a · war- income. That ·word · " net" is ·of ·gretrt importance. ·· How 'd-oes
profits bilJ is that this bill taxes a_bility to pay to help car1:Y· on the Government determine the net income? this \Var. It makes no difference whether a man was fortunate . 1\fr. KITCHIN. The net -income is determined from the re-or unfortunate, whether he was prosper~us· or ~ot . before the turns made under the income-tax law. war. The question presented .in the bill as agreed on is what Mr. COOPER of Wisconsin. Is there any machinexy outside is hi present ability to help pay to support this Government, in ·of the returns under the income-tax law for determining the its war struggle? If e>er~·body had been as prosperot;ts during net capital? . the prewar period as now, there would be no excess profits to be 1\Ir. KITCHIN. If the income-tax returns are not sufficient, taxed under the Senate bill as originally reported, and no m_oney we have a provision in this bill providing th!;lt the department could have been raised from this sotn·ce. can get any data that it sees fit in order to get at the excess-
1\Ir. LONGWORTH. Will the gentleman yielu? profits tax. 1\lr. KITCHIN. I yield to the gentleman from Ohio. l\1r. LONGWORTH. '.rhat is already provided by law. 1\Ir. LONGWORTH. This exce s-profits tax provision repeals 1\Ir. KITCHIN. Yes; but we made it a little more specific.
the existing law, does it not? 1\Ir. HULL of Iowa. Will the gentleman yielu? Mr. KITCHIN. Yes. l\Ir. KITCHIN. Yes. 1\fr·. LONGWORTH. And that is the only case in ·which the l\1r. HULL of Iowa. If the gentleman is through on t11at
e:rl ting law is ·repealed? · subject, I would like to ask him a question in regard to the 1\Ir. KITCHIN. Yes; it i repealed an<l the exce s-profits tax postal rates.
provi. ion of this bill is substituted for it-- fr. KITCHIN. \e"v well. · l\11:. LONGWORTH. Except, too, I think, the munitions 1\fr. HULL of Io"·a. ~ Here is a postal card u~eu almost uni-
tax-- . versally in this country that can be classed as thiru-class mail l\fr. KITCHIN. The munitions tax is effective until January 1, or first-class mail. Is it the intention of the committee to make
1{)18, at 10 p~r cent_instead of 12! per cent. the sender of the postal card pay 2 cents, or can he mail them 1\Ir. LONGWORTH. This act applies to the c:ilenc1ar year for 1 cent?
· 1917, ending the last of next December? 1\lr. KITCHIN. All postal cards or post cards now going at M:r. KITCHIN. Yes. 1 cent will have to pay 2 cents if this bill becomes a law. 1\Ir. LONGWORTH. Except in ca es \Vllere a corporation l\1r. HULL of Iowa. If a man takes the same postal card and
may hm·e a determined fiscal year? puts it in an unsealed letter he can man· it for 1 cent. 'Vas l\Ir. KITCHIN. That is, in the case of a corporation wllose that the intention of the committee?
fiscal year began in 1916, ·w·e have a provision that it shall not l\1r. KITCHIN. It is not the intention of the committee; b~1t pay any excess-profits tax upon that · portion of its earnings would it not be foolish for a man to take a 1-cent postal card which it made in the calendar year 1916. _ and put it in an unsealed enYelope and place an auuitional
1\Ir. LONGWORTH. Only on that portion which they made 1 cent on the en>elope? during the calenuar year 1917? l\Ir. HULL of Iowa. If it is pTinted matter, umler the gentle-
l\1r. KITCHIN. Ye ·. That portion would be taxable. man' definition and his answer, it could be put in an unsealeu l\1r. LONGWORTH. Some questions have been asked by letter and mailed as third-class matter. It would be so rated
l\fembers which it seems to me indicate that they do not quite in the Po t Office Department. understand about the prewar period as now fixetl. Is this the 1\lr. KITCHIN. Can not you write a circular letter as long fact or is it not, that the prewar period only counts in uetermin- · a· your arm and put it in an unsealed envelope? ing the question of whether you shall ha>e a 9 per cent or a 7 l\1r. HULL of Iowa. You can; but under your bill you can per cent deduction? not put it on a piece of paper outside of an unsealed letter.
l\fr. KITCHIN. Yes; that is correct. l\1r. KITCHll~. I will &'l.y to the genth~man that if he under-l\fr. LONGWORTH. It makes no difference what the actual takes to take a post card, put it in an envelope, and senu it, he
receipts were in the prewar years, but only the proportion of will pay the 2-cent rate or he will be hauled up by the uepartthe percentage that those receipts bore to the capital inve ted in ment. If he continues to do it afterwards, they \Vill have him tho e years? up in another way.
l\fr. KITCHIN. That i · it exactly. In other word , if a l\1r. HULL of Iowa. Let me tell the gentleman that this is corporation, copartnership, or indi>idual had been ·making 8 not a joking tnatter. This is a card useu in this country by per cent profit on the capital inve ted during those thr~~ prewar every business firm which sends out thousands and millions of year -1911, 1912, and 1913-they "·ould be entitled to a deduc- them by every mail every day. tion of. 8 per cent on the capital in>ested during the taxable Mr. KITCHIN. If he puts the postal card in an envelope he year. If a man was making 8 per cent on $100,000 before the has got to pay 2 cents on it. war, the deduction would be $8,000. If now he has $200,000 Mr. HULL of Im-va. If he does not write anything on it, he inve teu, he is entitled to n deduction of 8 per cent on that can mail it out ·ide, can not he? $200,000, or a $16,000 ueduction before the tax applies. The l\Ir. KITCHIN. I think they could mail it like they could a tax npplies only on the profits in excess of the ueduction. piece of pasteboard. Now, the gentleman may be absolutely
1\Ir. DARROW. In a case of an individual in busine s, where right about this, but I do not think he is. he has no capital' stock, is there any way of arriving at his capi- Now, let me get to another matter, which will be the last one tal invested? I will discuss.
l\Ir. KITCHIN. Does the gentleman mean to take the case of SECO:\D-CLAss POSTAGE_ nATEs.
a lawyer· or doctor who makes $10,000, but who· has not capital The House as it pa ed the bill established the zone system, inve ted? making no uistinction between that portion of the newspaper or
l\1r. DARRO,V. Suppose a man has capital invested, but no magazine uevoted to reading matter and that portion devoted to capital stock? advertisements. It had one flat zone rate for the whole paper,
l\Ir. KITCHIN. Then the deduction is baseu npori the capital ad>ertising an<.l reauing matter. The House bill provided the in>e te<l, whether any tock was i sued or not. following rates upon second-class mail matter: In the first zone,
l\1r. DALLINGEH. Will the gentleman yjeld? H-cents; seconu and third zones, 2 cents; fourtll and fifth zones, l\Ir. KITCHIN. Yes. 3 cents; sixth zone, 4 cents; seventh zone~ 5 cents; and the eighth l\lr. DALLINGEU. Section 209 u es the word:.; "nominal zone, 6 cents. It gave the publishers until l\larch 1, 1918, to
capital." Snppose a family is incorporated for a ·mall amount adju ·t their business before the e final rates went into effect. of capital. and all they ha,·e is a traue-mark or the good will The ·Senate struck this provision out. The Senate, as in Comof n certain nrticlt>. Suppose they could sell to-day that trade- mittee of the Whole, put in the McKellar amendment, which mark for half a million dollars an<.l they are only incorporated proYideU for the zone system and greatly increased the rates in for $5,000. Would that come under that section? all the zones beyond the third. It applied to the whole paper,
1\Ir. KITCHIN. How much are tl].ey making? making no distinction between reading and advertising matter. l\h'. DALLINGEH. · Suppo e they are making net $100,000 When the bill got back into the Senate the Senate struck it all
and are only capitalized for $5 000. out and left the postage rates on second-class matter as they are l\Ir. KIT HIK. I would say that that was not more than a in existing law. The conferees, after three or four days of
nominal capital in the case the gentleman puts, and the corpora- discussing the matter from every viewpoint, taking into con-tion ,vould pay under section 209. , sideration every argument ·tllat had been made agafnst the zone
l\fr. COOPFJR of Wisconsin. Will the gentleman yield? system and increased rates, finally concluded that it was wise; Mr. KITCHIN. Ye . · · · . · . . just, .an<.l..fair to establish the zone system so far as it relates to Mr. CQOPE~ o_f "-'Ti ·co~sin. L I notice that the · gentlerila1,1 a the· advertising portion of. the newspaper or magazine. In view
moment ago, in replying to a question; spoke of the a_n!l!lal n(lt I of the enormous annual loss from second-class postage we
LV--481
7586 CONGRESSIONAL RECORD-HOUSE. OcTOBER i,
t:fiought it was just and· right to increa e the postage upon the reading portion of the newspaper one-half a cent a pound for all zones. That is to say, the reading portion of the paper or magazine, if this bill becomes a law, \Yill pay at the fiat rate of a cent and a half a pound. The zone system and zone rates will apply to the adverti ing portion. 'Ve give about four years after the pas age of this bill before the full rates finally go into effect. The f\lll rates will not go into effect until July 1, 1921. On July 1, 1918. one-quarter of this increa e is put into effect On July 1, 1919, nnother quarter is added ; on J-uly 1, 1920·, an:other quarter is added; and on July 1, 1921, the fourth quarter is added. So there are three full years from July 1, 1918, before the full rates become operative: The conference committee thought-and r believe every intelligent man, when he stops to think, will come to the same conclu ion-that the ne\YSpapers and magazine within four year , with such a small increase, can so adju. t their busine with the advertisers especially, and if not with them, then with the . ubscPiber. and the ad>ertisers, o that the paper or magazine itself bear only a part, if an3r, of the increa ·ed rates.
The SPEAKER pro tempore. The time of the gentleman from North Carolina has expired.
l\ir. KITCHIN. ·Mr. Speaker, I ask unanimous consent to extend and revise my remarks in the RECORD, and to append . orne tables· which may prove instructive and1 useful in the study of the revenue bill as agreed on by the conf"erence committee and which will oon become law.
The SPIDAKER pro tempore. Is there objection? There \\a no objection.
.ArPE~DIX A.
Estimated additional re1:e11uc to be de1iz;cd under H. R. 4?8a during the first 12 months the lato is i n opemtion.
SOURCES.
Title I: • 'ew war income tax ______________________ _ Title II;
:Mr: JOHr-so.... of 'Vashington. Will the gentleman yield? 1\lr. KITCHIN. Just a moment. Newspapers that are main
tained by and in the interests of reliO'ious, educational, charitable, scientific, agricultural, and labor organizations, no part of whose net income· goes. to the private benefit of any individual stockholdeT, wili' pay a flat increase of one-q_uaTter of a cent :1
pound, and one-half of that quarter goes into effect on the 1st of July, 19l8, and· the other ou the 1 t of July 1919.
The provisions with respect to tlle increased po ·ta:ge rat s on seconu-ch1 s mail matter are a follows:
, Title V: Tm.nf'portation-
1, 800,000 100, 000
P.C. 1101. That on and after .Ju~y 1 191 , 1be 1·ates of nostagc on publications entered as . econd-clas maher (including s~mple copies to the extent of 10 per cent of the weight of copie mailed to ubscl'iibers dm:ing the calenda-r yem.:) when sent by the publisher themof from the post office of publication or other po!'.t office, or when sent by a n .;:ws ag€nt to actual sub ·cribers thereto, or to other news agents for the purpo. e of ale:
(a} In the case of the portion of such publication devoted to · matter othH than a.dvertl. ements shall bu a.s follows: ( 1) On and after July 1, 191S, and until July 1, 1:)10, 1l cents pe1~ pound or fructi<Jn thereof; (:!} on nnd after. July 1, 1010, H ~ents per pound Ol' fraction thereof.
(h) In the case of the portion of such publication devoted to adverti ·pments tho ra res pet· pound or f1·action tha·.eot fo.r delivery ;vi thin the . everal zones appHcaiJle to fom·th-class matter: shall be as follows (llut \Yhet·e the ,·pac r1 •voted to adverti ements does not exceed 5 per cent of the total space the rate of postage shall be the same as if the whole of' uch publication was devoted to matter other than adveuti ements) : (J.) On and after July 1, 1918, and until July 1, 1919, for the fir: ·t and .·econd ~ones, H: cents; for the thit·d zone, 1~ cents; for the four·th zone, 2 c~nts; for the fifth zone, 2~ cent ; fm: the sixth zone-, 2~ cent. ; fot· th P. eYenth zone, S. cents; for the eighth wne, 31 cents; ( :.!) on and after- July 1, 1911>, and until Jul: • 1. 1!)20, for. the first and :seaond' zones, 1!! ('(']) 1:3; for thP. third zone- 2 cen~ : for the fourth zone, ;~ Cl'nts; for the :tift1r zone, 3?; cents; foL~ tbc srrth zone;. 4: cents; for the SPYenth zone, u cents; ft)r the eighth zone, ri?! cents; (3) on and :1ft<>r .July 1, 1020, and until July 1, 1921, for the fil'st and second. zones, H cf'nts ; tor the third zone. 2~ cents; for th fom•th zone, 4 cent ; for the fifth zoHc, 4fi cent ; for the sixth zone, ri_ cents-; for the sev, nth zone i'. cents;.- for· the Plgbtb zone, 7i cents; (4) on and• after July 1, 11J:!1' for the fir t and second zones, · :.! cent· : for the tblrd ·zone, 3 ernt.' · for thP tonrth zone. G cPnts : for thP. fifth zone; 6 cent ; for the ' sixtb· 'zone, 7 ecnt-·; foe the ·cvcnth zone, !) eents; fe:c the eighth zone, 10 cent.·.
(c) With the fit·st mailing of each is. rue of each. u~h publiaation. the publisher t-Jhall file with the po trnaster a. copy Gf su h ts ue, together with a. sta.temcnt coiLtaining uch. information as-; the Postmaste1~ Genera 1 may prescr.ibe for determining the postage chargeable thereon.
SEC. 1102. '.rhat th<> rate of postage on dally, newspapers, when the . a me are depo ited in a letter-carrier office for delivery by its carriers,
· ~haiT b~ the flame as now provi<led by law; and nothing in this title ~ha.Jl. affect existing la·w as w n·ee circulation a·n(l existing Dates on sPcond-cla mail matter within the county of publication: Pro.,;ided,
( That the Po tmaster General may hereaftel- require pubUshers to separata or make up to zones in uch a: manner as he may direct all' mnil matter of the econd· class when offered for mailing.
Freight ___ __ ______ ____________________ _
E.xpre s ---------------------------------Passeng~r--------------------------------Pipe line --------------------------------Scat and berths----------------------1-'elE>graph and telephone mes ·a-g.es _____________ _
Title VII: Adm.i~ sions --------------------------------Clnh fluPs --------------~--------------------
Title VIII: Schedule A, including playing cards _____ _ Title IX:. War e tnte taX---------~----------Title X: Virgin Island. oroducts------------------Titre XI:
First-class mail matter ______________ ________ _ Secorul-class1 mail matter_ ____________________ _
~~::c. 1103. Tbat in the case of new papers and periodicals entitled to hi' entered as sccond-cla matter and maintained l>y and in the interc.st of religion , educational, scientific, philanthropic, agricultural, JalJor, or fral~rna! organizations or a sociations, not organi~d fot· profit anrl none of the net incmne of which inures to the hene:fit of any private tockholdH or intlividuaJ, the second-class postage rates shall h<·. ilTP pective of tbo zone in which delivered· (except when the same at'\.' ciepo'>itc.l· in a. letter-carrier office fot· delivery b;v its caiTiers. in which case tll.e. nat-es shall. be tbe same, as· now provided by law), 1i rt>nts a pounrl or fraction the~:eof on and after .Tuly 1, 1918, and until J·ul 1, W101 anLl on and after July 1, 1910, 11 cents a pound or frac-tion thPreot. 'l'h pqbli.-hers of such new paper or periodicals· before hein'! cntitl <1 to· the foregoing rates hall furnish to the Postmaster C~en t- ral',' at ~mch Hines anti under uch conditions as he may prescribe, . a til:;f~H tGt'Y' rddeuce that non~ · of the net income of such organization hnu·es to tho lwnetit of; any pdyate stockholder 01: individual.
.- E t'. ll.C4: Tha wh1!re the total :weight of any one edition or i suo of a uy puiHica.twn ma i !eel to any one zone does. not exceed: ~ pound the rate of po. tug-e shall be 1 cent.
}:Ec. n<H1. The zoll!l rates proyic.led by this title· shall relate to the entire Ln1li( mailed to any one zone- ancl not to indl¥idually addressed pacltages. .
~EC~ 11'06. 'rba t where a newspaper: or periodical is maifed by other tha the puDli ·her ou· his agent or a- news agent or dealer the rate sha.U1 be the "Une·· as now prodded b~ law.
1 It is estima ted that when this tax is in full operation that the increased rates will yield 35,000,000 revenue annually additional.
2 lt i estimated that, when this tax is in full operation, the in· crea ed rates will yield $28,000,000 annually additional. !. A corporation toith $100,000 cap·ital, a 11r.t iucome of $50,000, and a-n
APPE~DlX D. The following tables show the excess-profits tax to be paid by an
in<liviclual or partner hip and a corporation, each with a capital of $10,000.000 and a net income of $5,000,000, and with 7 and 9 per cent exemptions :
Total ................................................ , 38, 000 I 17, 400
10, 200
Rate (per cent). Ta..""mblo income. Tax.
:J. An indiv1~~p~o~~~:dp~~t;~~~:~;~o~~i~~ i1$~~q~e~~~P;f~!' s~}~~ income of i ~::: :::::::::::::::::::::::::::::::::::::::::::::::::::::: $797,000 500,000 500,000 800,000
The following table' , &how the excess-profits tax to be paid 'tly a col~poration with a enplt:\1 of $100,000 ~tnd a net income of $25,000, and with 7 and 9 per eent e.·unptions : 1. A corpot·a.t ion 1fitl1 100,000 cap ital, a 11 et income of $25,808, and an
The following tablps show the ex.ct'Ss-profits tax to b~pllid· -by· -a · cor-1 The following tables show the · excess-pro.fits tax to be paid ,by indi· poration with a capital of $100,000 nnd a net income of $20~000; ·and viduals_ with a capital of $100,000 and a net income of 25, 50, 75, and with 7 !lnd 9 pel' cent exemptions: 100 per cent; and with a 7 · per ·cent exemption: · · ·
•
•
7588 CONGRESSIONAL R.ECORD-~ HOUSE. OCTOBER l,
1. An individual or partnet·ship tcith $100,000 capital, a net income of I s. An indiv-idual or partnership -&oitll $100,000 capital, a ne.t income of 75 $23,000, and an ellJemption of 7 per cent plus $6,000. per cent, and. an. ellJemption of 7 per cent plus $6,000. .
2. An indidd.ual or pat·tnership to-itll $100,000 capital, a net income of 50 per cent, and. an exemption ot 7 rier cent plus $6,000. ~- An fnd.i,;id.ual or partnership 1.oith $100,000 capital, a net income of 100
pet· cent, and. arJ. exemption of 7 per cent plus $6,000.
Total................................................ 37,000 17,200 Total ...•.•••..••.••••••••••••••••••..•••••..•••••••. 87,000 47,200
APPEXDIX F.
The following table shows the taxes levied under specified schedules, prior to the act of October 3, 1917, the new revenue law, and not now repealed, the taxes levied under the act of October 3, 1917, and the total taxes now imposed:
Taxes levied under-
Item. Tile acts prior to the act of The act of Oct. 3• 1917• in All acts, including the act of
Oct. 3, 1917• addition to those levied 0 t 3 1917
TITLE I. Income tax:
Individual normal tax ..•...•...•.........•.......•.••.•.•......•....•.••••. 2 per cent 1 •• ··~-· •••••••••••
On the net income of individuals, partnerships, or corporations in e..'Ccess 0~ •
nnder prior acts. c · _, ·
2 per cent 2 •••••••••••••••••• 4 per cent. 4 per cent ....•••••••••••••.. 6 per cent.
1 per cent. . . . • • • • • • • . • • • . • . . 1 per cent. 2 per cent.... . • • • • • • . . . . . . . . 2 per cent. 3 per cent .•.....••••........ 3 per r.ent. 4 per cent ..••..•.••••.....•. 4 per cent. 5 per cent................... 5 per cent. 7percent ..•..••••.•....•... 8percent. 10 per cent.................. 12 per cent. 14 per cent .•.••••••••••••..• 17 per cent. 18 per cent. • • • . • • • • • • • • • • • . • 22 per cent. 22 per cent .•.•••••••••••••.. 27 per cent. 25 per cent ••.••...••.•••...• 31 per cent. 30 per cent.................. 37 per cent. 34 per cent. •.•••.••.••••.•.. 42 per cent. 37 per cent •••.•••.••••••••.. 46 per cent. 40 per cent .•.•.•.••••....... 50 per cent. 45 per cent.················- 55 per cent 50 per cent. . . . . • • • ..• . . •. . • . . 61 per cent. 50 per cent. . . . . . . • . . • • . . . • • . 62 per cen~. 50 per cent .......•.••••••.•• 63 per cent.
The deductions and not in excess of15 per cent of the invested capital4.... . . • • • • • • . • . • • • • • • • • • • • • • •• . • • . 20 per cent.................. 20 per cent . 15 per cent and not in excess of20 per cent of the invested capital.. ..... • ...•.••••••••••••••••.••.•••.. 25 per cent .•.••..•.•...••.. . 25 per cent. 20 percent and not in excessof25 per cent oftheinvested capital. ...........•••..•••.••..••..••....... 35 per cent .........•.. . ..... 35 per cent. 25 percent and not in excessof33 per cent of the invested capital. ........•••.•••.•••••••••.•••.••..•.• 45 per cent .•.........•...... 45 per cent. 33 per cent of the invested capital.. .................................. . : . . • • • • • • • •• • •• • • • • • • . • . . . . . • . . 60 per cent.................. 60 per cent.
In the case of a trade or business having no invested capital or not more than a nominal capital, on the net income of individuals, partnerships, or corporations in excess ofthe deduction s. ..... . . . . . . . . . . . . . . . . . . . . . . . . . . . . • • • • • • • • • • • . • • • . • • • • • • • • • • • . . 8 per cent. • . . . . . . . . • • . • • . . . . 8 per cent.
Munitions tax: On the net income of persons~ partnerships, corporations, and associations
manufacturing (a) gunpowner and other explosives excepting blasting powder and dynamite used for industrial purpnses, (b) cartridges, loaded
. and unloaded, caP.s or primers, exc!nsi ve oft those used for industrial pur-poses.._ (c) projectiles, shells, or torpedoes of any J..ind1 including shrapnel, Ioadea cr unloaded, or fuezs, or complete rounds 01 amunition (d) firearms of any kind and appendages incfuding small arms, cannon, machine guns, rifles, and bayonets, (e) electric motor boats, submarine or sub- · mersible vessels or boats, or (f) any part ol any of the foregoing........... (') 10 per cents ....•.••..••••... 10 per cent.•
TITLE Ill.
Distilled spirits ••••...•.•••••• -~ •••••••••••••••••••.••••••..•.. ·,·.............. $1.10 per proof gallon or wine galfon when below proof.
Floor stork tax on distilled spirits upon which the S1.10 per gallon tax had been ..•••••••.•••.••..••..••..••.. paid and which were held by a retailer in u quanity in excess of 50 gallons in !he aggre~at~L~r by any other person, corporation, pa..l'tflership, or :JSsociation, m any quanny.
Rectified spuits ............•....................•............ per proof ~ZSllon .....•...••..•••••••••.•••••.••. Beer, lager beer, ale/ porter, and other similar fermented liquors, containing~ $1.50 ..•...•••••..•.••.••....
per cent or more o alcohol. .••.••••..•••••••••••••••••.•••........ per barrel.. For footnotes see page 7591.
$1.10 per proof gallon or wine gallon when below proof when used for manufacturing purp6ses. $2.10_per proof galll)n or wine gallon when below proof when used for beverage purposes.
(1)
$2.~_per proof gallon or wine gallon when below proof when used for manufacturing ptJl1loses. S3.20 per proof gallon or wine gallon when below proof when used !or beverage purposes.
Containing more than 24 per cent of alcohol ...................... , . . . . . . . . . (B) (B) Grape brandy used in fortification of wines, per proof gallon.... .. .............. 10 cents..................... 20 cents..................... 30 cents. Sweet wines held for sale by a producer, an additional tax upon the grape .............................. lOcents .................. : .. lOcents.
b!andy used in the fortification of such wine, per proof gallon. Grape brandy withdrawn by a producer of sweet wines and not used prior to .... .. .. .. .. .. . .. . .. .. .... .. .. 20 cents ..................... 20 cents.
the passage of the act of Oct. 3, 1917, an additional tax per proof ~allon of. Domestic and imported sparkling wines, liqueurs, cordials, and Sl milar com-
pounds-Champagne or sparkling wine, on each i pint or fraction thereof.. ........... 3 cents ...................... 3 cents ...................... 6cents. Artificially carbonated wine, on each t pint or fraction thereof.. ............ 1! cents ..................... 1' cents ..................... 3cents. Liqueurs, cordials, or similar compotmds, on each t pint or fraction thereof.. 1! cents 9.................... It cents..................... 3 cents.
Floor stock tax on all wines in excess of 25 gallons in the aggregate upon which . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . (10) the tax had been paid on the day the act of Oct. 3, 1917, was passed and which were held and intended for sale .
Prepared sirups or extracts (intended for use in the manufacture or production of beverages commonly known as soft drinks, used by soda fountains, bot- ! tling establishmen~1 and other similar pl&ces) sold by the manufacturer, pro- · • · ducer, or importer ii sold for-
Not more than $1.30 per gallon, per (mllon ................ : ........... : .... _ .... ~ . : : ...............•...•.. · More than $1.30 and not more than $2 per gallon ................ per gallon ............................... .
More than S2 per gallon and not more than 3 per gallon ........ per gallon .................... -----------· More than 3 per gallon and not more than $4 per gallon ........ per gallon ............................... . More than $4 per gallon ........................................ per gallon .............................. ..
Unfermented grape juice, soft drinks, or artificial mineral wators (not car- ............................ .. bonated), and fermented liquor containing less than ~ per cent alcohol, sold by the manufacturer, producer, or importer, ginger ale, root beer, sar.>apa-rilla, pop and other carbonated waters or beveraoes, manufactured and sold by the manufacturer, producer, or importer of the carbonic acid gas
5 cents. Scents. 10 cents. 15cants. 20 cents. l .cent.
used in carbonating the same per gallon. Mineral waters (natural) or tabie waters, sold by the producer, bottler, or im- .......•...................... 1 cent ........•.•.•••........ 1 cent.
porter, at over 10 cents p('r gallon, per gallon. Carbonic acid gas in drums or other containers intended for use m the manu- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . a cents...................... 5 cents.
facture or production of carbonated waters or other drinks, sold by the manufacturer, producer, or importer, per pound.
TITLE IV.
Cigars of all descriptions made of tobacco, or any substitute thereof-Weighing not more than 3 pound3 per thousand ............ per thousand.. 75 cents. .. . . .. .. . .. .. .. .. .. . 25 cents. .. . .. . .. .. . .. . . .. .. . $1. Weighin~ more than 3 pounds per thousand, il manufactured or imported
to re~ail at-4 cents or more each, and not more than 7 cents each .. per thousand.. S3...... . .. .. . .. . .. .. .. .. .. .. L... .. .. .. .. .. . . .. .. .. . .. .. $4. More than 7 cents each and not more than 15 cents each. per thousand .. '$1.. ....... ...... .... ........ 3.... ... .... .. ...... ..... ... 6. More than 15centseach and not more than 20 centseach.perthousand .. $'3 . ................. ......... $5 ••••••• -···-- ............. SS. Morethan20 "centseach: .... · .... . ... : :.: ................ perthousand .. $3 ... ...................... .. $7 ........................... $10.
Cigare ttes made of tobacco or any substit ute therefor-Weighing not more than 3 pounds per thousand ......... ·................... $1.25 per thousand.......... 80 cents per thous:md....... $2.05 per thousand. Weighing more than 3 pounds per thousand ............................. : .. $3.60 ppr thousand .......... $1.20 per thousand .......... $4.80 per thousand.
Manufactured tobacco and snufl', per pound .................................... Scents ...................... 5 cents...................... 13 cents. Floor stock tax on all manufactured tobacco and snuff in excess of 100 pounds ....... . ................... __ . (Il) (11)
and on all cigars or cigarettes in excess of 1,000 be&ring tax-paid stamps on the day after the passage of the act of October 3, 1917, held and inte.Q.ded for sale by any person, corporation, partnership, or association, and on all manu-factured tobacco, snuff, cigars, cigarettes, removed from factory or customs hou~c within 30 days after the passage of the act or October 3, 1917.
Cigarette paper made U(? into pack:agest books, sets, or tubes made up in or imported into the Umted States, ana intended for use by the smoker in making cigarettes:
On each packag~ book, or set containing-More than 2a but not more than 50 papers.............................. . .. .. .. . . .. . . .. . . .. .. .. .. . .. . . ~cent....................... ~cent. More than 50 but not more than 100 papers............................. .. .. . .. .. . .. . .. .. .. .. .. .. .. .. . 1 cent....................... 1 cent. More than 100 papers , for each_100 papers or fractional part thereol. .... . ............ -·............... 1 cent....................... 1 cent.
Upon tubes, for each 100 tubes or tractJOnal part thereof. .......... --·'- .......................... :,--...... 2 cents...................... 2 cents.
• TITLE V. - Transportation:
Freight, upon the amount paid for the transportation .. ................................ ...... ........... . Express. for each 20 cents or fraction thereof paid for the tranportation .................................. . P~sseng~r, upon the amount paid for !Jle tramport(ltion (") ............................................ . 011 by p1pe hne3, upon the amount pru.d for the t ransportation .......................................... . Seats and berths and state rooms in parlor cars, sleepmg cars, or on vessels, ...................•..........
upon the amount paid for the accommodation. Telephone, telegraph, or radio, ctispatch messages, or conversation for which ............................. .
a charge of 15 cents or more is made. · Lile in~urance, on each $100 or fractional part thereof of the amount for which ...•••••......................
any li1e is insured. Marine, inland and fire insurance, on each dollar or fractional part thereof of ............................. .
the premium charged. Casualty insurance1 on each dollar or fractional part thereof of the premium ............................ ..
charged. TITLE VI.
(a) Automobiles, aut::>mobile trucks, automobile wagons, and motor cycles, .............•.......•.•.•... . sold by the m :1n u!aeturer, producer, or importer, on the sellin" price.
(b) Phn:> players, graphophones, phonographs, talking machines,an8records ............................. . used in connection with any musical instrument ~ piano player, grapho-phone, phonograph, or talking machine, sold oy the manufacturer, producer, or importer, on the selling price.
Moving picture films: (c) Which have not been exposed, sold by the manufacturer or importer, ............... - ............. .
per linear foot . (d) Containing a picture ready for projection, sold or loaned by the manu- .................. .......... ..
facturer,pr:>ducer, of import-er,per linear foot. . For footnotes see page 7591.
3 per cent. .................. 3 per cent. 1 cent....................... 1 cent . S per cent. .. . .. . . .. . .. . .. . . . S per cent. 5 percent ................... 5 percent. 10 per cent. . . . . . . .. .. . • .. . . . 10 per cent.
5 cent each.................. 5 cents each.
Scents ...................... Scents.
1 cent ................... F ... 1 cent.
1 cent..... .................. 1 cent.
3 per cent. .. .. • .. • • • ••• • .. .. 3 per cent.
3 per cent .................... -3 per cent.
;cent ••••• ,. ................. tcent.
! cent ....................... ~cent.
,I
:7590 CONGRESSIONAL-R.ECORD-HOUSE. OcToB~R 1,
APPENDIX F-Continued.
Taxes levied under-
Item. The acts prior to the act oil The ":~ of Oct. 3• 19~7• in All acts, including the act of
Oct. 3 1917 additwn to t_hose leVIed Oct. 3, 1917. ' • under pnor acts.
TITLE VI -Continued.
(e) Articles commoniy or commercially known as jewelry whether real or ......... ..... ................ 3 per cent .••••.••••••.••.... 3 per cent. imitation, sold by the manufacturer, producer, or importer, on the selling price.
(f) Tennis rackets, golf olubs1 baseball bats, lacrosse stic~~-1- balls of all kinds, .•••••••••••.•.•••••.•.•.•.••. 3 per cent ...•••••...• · ••.... . 3 per cent. including baseballs, footballs, tennis, golf,lacrosse, billiard and pool balls, fishing rods and reels, billiard and pool tables, chess and checker boards and pieces, dice, games and parts of games, except playing cards, and childrens toys and games, sold by the manufacturer, producer, or im-porter, on the selling price.
(g) Perfumes, essences1 extracts, toilet waters, cosmetics, petroleum jellies, hair . . . . . • . • • • . . . . . . . • . • . • . • . . • • . . 2 per cent. • • . . • . . • . . . • . . . . . . 2 per cent. oils, pomades, hair dressings, hair restoratives, hair dyes, tooth and mouth washe<>, dentifrices, tooth pastes, aromatic cachous, toilet soaps and powders, or similar substances, articles, or preparations, sold by the manu-facturer producer, or impor-ter, on the selling price.
(h) Pills, tabfets, powders, tinctures, troches1 or fozenges, sirups, medicinal . • • ... .. . .. .. . . • .. . .. • .. .. .. .. 2 per cent ....... :........... 2 per cent. cordials, or bitters, anodynes, tonics, plaSters, liriiments, salves, oint-ments, pastes, dro~~ waters (except those taxed under the beverage title), essences, spirits oils, and all medicmal preparations compounds, or compositions, soid by the manufacturer, producer, or importer, on the selling price.
(i) Chewing gum or substitutes therefor, sold by the manufacturer, producer, .............................. 2 per cent. .................. 2 per cent. or importer, on the selling price.
(j) Cameras, sold by the manufacturer, producer, or importer, on the selling . ................. .... . . . . . . . . 3 per cent................... 3 ~r cent. price.
Floor stock tax on all articles enumerated above in items (a), (b), (e), (f) , (g), . ....... ... .. . ... ••• . .... .•• .. (U) (13) (h), (i), and (j) which on October 3, 1917, were held and intended for sale, by any person, corporation, partnership or association, other than (1) a retailer who 1s not also a wholesaler, or (2) the manufacturer, producer1 or importer.
Upon the use of yachts, pleasure boats, power boats, and sailing ooats, of over 5 net tons and motor boats with fixed engines, not used exclusively for trade or national defense, or not built according to plans and specifications approved by the Navy Department, an excise tax to be based on each yacht or boat, at rates as follows:
Yachts, pleasure boats, power boats, motor boats, with fixed engines, and sailing boats, at over 5 net tons-
Admission to any place for which the maximum charge is more than 5 cents, .•.•.....•.................... except in the case of shows, rides, and other amusements (the maximum charge to which is 10 cents), within out-<loor general amusement parks, or in the case of admission to such parks, and except admissions of children under 12 years of age, and bona fide employees, and municiapl officers on official business, for each 10 cents or fraction thereof of the amount paid for admission.
Admission of children under 12 years of age where an admission charge for such ...•.••.•••...............••.. children is made.
Persons admitted (except bona fide employees, municipal officers on official ............................ .. business, and children under 12 years of age), admitted free to any place at a time when and under circumstances under which an admission charge is made to other persons of the same class, for each 10 cents or fraction thereof of the price charged to other persons of the same class for similar accominodations .
.Admission to any public performance for~~~ at any cabaret or other similar .•••.•...•............•••...•.. entertainment to which the charge for a · ·on is wholly- or in part included in the price paid for refreshments, services, or merchandise, for each 10 cents
· or fraction tliereof paid. Dues or membership fees (including initiation fees) to any social, athletic, or ..••.....•...•..........••••..
sporting club or organization, where such dues or fees are in excess of 12 per year, on the amount paid.u
Bonds o!indebt.edness, each SlOO of face value, or fraction thereof. ............. . .............................. . Bonds, indemnity and surety .................................................................... . .......... . Capital stock issue, each $100 of face value or fraction thereof 16 ............................................ .. Capital stock, sales or transfers, each $100 offace value or fraction thereof 17.. • • .. ........................... . Produce, sales of, on exchange- · · · ·
Each $100 in value of the merchandise covered by said sale or agreement of .•.••••••••••••••••••••••••••. sale or agreement to sell. ·
For each additional 1100 or fractional part thereof in excess of 5100 ....................................... . Drafts or checks payable otherwise than at sight or on demand, promissory
notes, except bank notes issued for circulation, and for each renewal of the same:
For an amount not exceeding S100 ..................................................................... . . For each additional $100 or fractional part thereof .......................... I. ............................ .
Conveyances:ls When the consideration or value of the interest or property conveyed ex- ..•••.••••.......•..•••••••...
elusive of the value of any lien or encumbrance remaining thereon at the time of sale, exceeds $100 and does not exceed 500.
For each additional 5500 or fractional part thereof ...........................••....•••.•.••....•.•.•.•.•.. Entry of any goods, wares, or merchandise at any customshouse, either for con
sumption or warehousing: Not exceeding $100 in value ............................................................................. .
. Exceeding S100 and not exceediBg $500 in value ............................. , ........................... . Exceeding S500in value ................................................................................. .
Entry for the withdrawal of any goods or merchandise from customs bonded ............................ .. warehouse.
· Passage tickets, one way or round tri~, sold or issued in the United States for ~!f;~:~Y any vessel to a port or p ace not in the United States, Canada, or
If costing not exceeding $30 .............................................................................. . Costing more than $30 and not exceeding $60 .................... · .......... · ..................... ......... . Costing more than $60 ................................................................................... .
Proxy for voting at any election for officers, or meeting for the transaction of •.•••.•••..••.••.•.•.•••••••.• business, of any incorporated company or association, except religious, educa-tional, charitable, fraternal, or literary societies, or public cemeteries. ·
Power of attorney granting authority to do or perform some aot for or in behalf .•••.•••.•••••••..••.••••••••• of the grantor, which authority is not otherwise vested in th!'J grantee. layingcards,perpack ....... · . . · .............. · •...•.......• . ..... "·"········· .. 2cents .................... ..
Parcel-post packa~es on which the postage amounts to 25 cents or more, for each Rates increases according to 25 cents or fractwna.l part thereof charged for such tmnsportation. zones and weight of pack
Item. 'File acts prior to the act of The act of Oct. 3• 1917• in All acts, including the act of
Oct. 3'
1"' 7• addition to those levied Oct 3 1917 171 under prior acts. · ' · •
Estate tax: 20 Tll'L'E IX.
On the amount of the net estate not in excess of tsO,OOO .................... . In excess of $50,000 and not in excess oJ $150,000 .......................... .. ln excess of SlSO,OOO and not in excess o1 $2.'50,000 .•••••..•• .:.·-····--······ In excess of !250,000 and not in excess of $450,000 ..••.••••••••••..•••••••••• In ex<'e.ss of $450,000 and not in excess of $1,000,000 ..•.••.•••••.•••.••..••••• Jn excess of $1,000,000 and not in excess of $2,000,000 •.••••••••••••••••.••••. In excess of $2,000,000 and not in excess of 53,000,000 .•.•••••••••••••• ---···· In excess of $3,000,000 and not in excess of $4,000,000 •••...••• --····--····-· In excess of !4,000,000 and not in excess of $5,000,000 .......•••.•.•.•••..•••• In excess of $5,000,000 and not in excess of $8,000,000 ..••.•••.•..•••••••••••. In excess or $8,000,000 and not in excess of SlO,OOO,OOO ••••••••••••••••••••••• In excess of $10,000,000. ·····~············-········· -······-··············
TrrLE X. Upon articles coming into the United States from the West Indian Islands
acquired from Denmark. Postal rates: 22 TITLE XI.
.
1! per <'.ent .••••••••••••••••• 3 _per cent .....•.•....••••••• 41 per cent ...•.•.••••.•.•••• 6yer cent ..•.•...••...•• ; ••• 7~ per cent. •.•••••.•••••••.• 9 per cent .....•.••..•..•• : .•• 10! per cent ••.•••...••••••.• 12 per cent ••••••••.•• ······-13! per cent .••.•••.•••.•.••. 15 per cent ••••••••.•••.•.••• ~5 per cent .•..••••••••.•.••• 1.5percent ••••••••••••.•••..
2percent. 4 per cent. 6 percent. 8 percent. 10 per cent. 12per cent. 14 pet: cent. 16 per cent. 18 per cent. 20 percent. 22per cent. 25 per cenC.
First-class mail matter, except postal cards and drop letters, for each ounce or fractiOn thereof.
Drop letters of the first class, for each ounco or fraction thereof. .•..•••..••• Postal cards ......•.....•....•...••.. _ ...•.. -· ..•••.•...••.••.•...•.••• -~- ••
Second class mail matter: . The present rates nponsecond-class mail matter remain effective until
Jnly 1, 1918. The act of October 3, 1.917, provides a flat rate, npon r83ding matter and publications where the space devoted to advertisements does not exceed 5 per cent of the total space, of H cents per pound or fraction thereof on and after July 1, 1918, and until July 1, 1919, and a flatrateuponsuch reading matter of l!eent.sperponnd or fraction thereof on and after July 1, 1919. The new law makes the zones applicable to fourth-class matter applicable to the -p:ortion of second-class matter devoted to advertisements in excess of5 per cent of the total spseo of the publication. The rate of postage upon tho portion of such publications devoted to advert:llements are as follows:
ZQne.
land 2 3 4 5 6 7 8
July 1, 1918, to July 1,
1919 (cents per pound or fraction thereof).
li 1! 2 21 2! 3 31
On and after-
July 1, 1919, . to July 1,
1920 (cents per pound or fraction thereof).
11 2 3 3! 4 5 5!
July 1, 1920, to July 1,
1921 (cents per pound or fraction thereof).
li 2! 4 4i 5~ 7 7!
Alter July 1, 1921 (cents per pound orlraction thereof).
2 3 5 6 7 9
10
The rate of postage upon newspapers and periodicals entitled to be entered as ~econd-class matter and Ill3intamed by and in the interest of rellgious, educational, scientific, _Philanthropic, agricultural, labor, or fraternal organizations or associations not organized for profit, and none of the net income of which inures to the benefit of any private stockholder or individual will be the same as Il.(}W provided by law until on and alter July 1, 1918. From on and after July I, 1918, to July 1, 1919, tho rate will be 1 ~ cents per/ound or fraction thereof irrespective of the wne in which delivere and on and after July 1, 1919, the rate ofpo3tage will be 11 cents per pound or fraction thereof.
1 Incomes exempt from the normal tax under the act of Sept. 8, 1.916, $3,000 in the case of sjngle persons, and $4,000 in the case of married persons or heads of families. 2 Incomes exempt from the normal tax under the act of Oct. 3, 1917, $1,000in the case of single persons, and $2,000 in the case of married persons or heads of families. 3 The total normal tax is 4 per cent on all incomes Ovtlr $3,000 in the case of single persons, and $4.,000 in the case of m:1rried persons; and 2 per cent on all incdmoo be.
tween $1,000 and !3,000 in the case of single persons, and 2,000 and $4,000 in the case of married persons or heads of families. j The deduction is, (a) in the case of a domestic eorpora.tion, the sum of (1) an amount equal to the same percentage of the invested capital for the taxable Ear which
lhe anragc amount of the annual net income of the trade or business during the prewar penod was of the invested capital for the prewar periotl (but not ss than 7 or more than 9 per cent of the invested capital for the taxable year), and (2) $3,000; and (b) in the case of a domestic partnership or a citizen or resident oft: United States, the sum of (1) an amount equal to the same percentage of the invested capital for the taxable year which the average amount of the annual oot income of the trade or business during the prewar period was of the in>ested capital for the prewar period (but not less than 7 or more than 9 per cent of the invested capital for the taxable year), and ('2) $6,000; in the case of a foreign corporation or partnership or a nonresident alien individual, an amount ascertained in the same manner as provided~ in sub-diYiSJons (a) and (b) without any exemption of ~,000 or Sd-,000. .
6 The deduction is, in the case of a domestic corporation $3,000, and in the C3Se of a domestic partnership or a citizen or resident oithe United States $6,~; in the case of all other trades or business, no deduction.
e 'J'his tax will not be efiective after Jan. 1, 1918. Under the aet of Sept. 8, 1916, a tax of 12~ per cent upon the net profits received from the manufacture and sale o! such articles in additian to the regular income tax. This was reduced to 10 per cent.
7 'rho same additional rates as those levied upon distilled spirits. s Classed as distiUed spirits and taxed aecor{[ing1y. g II containing sweet wine fortified with grape brandy. · 10 A tax equal to the additional tax imposed upon similar wines. · u A t~x equal to one-half the addltioru:il taxes unposed under sections 400 or 401 of the act of Oct. 3, 1917. 1s The amonnt paid for commutation or ~e3Son tickets for tr ii_>"3less than 30 miles, or for transportation the fare for which does not exceed 35 cents is not subject to the tax. 13 A tax equivalent to one-half the tax imposed upon the articles enumerated in the items (a), (b), (e), (f), (g), (h), (i), and (j) above. u Tbis tax does not apply to amounts paid as dues or feas to a fraternal beneficiary society, order, or association, operating und-er the lodge system or for the exclusive
tx>neflt of the members of a fraternity itself operating under the lodge system, and providing for the payment of life, sick, accident, or other benefits to the members o1 such sociEty, order, or association or their dependents.
"' lf a premium is charged, the tax will be at the rate of 1·per cent on each dollar or fractional part thereof ol the premium charged. 16 If capital stock is issued without face -ralue, the tax will be 5 cents per share unless the actual valne is in excess of $100 per share, in wbiclt case the tax will be 5 cents
on arh ... 100 of actual value or fraction thereQf. 17 lf the shares of stock are without pur value, the tax will be 2 cents on the transfer or sale or agreement to sell of each share, unless the actual value thereof is in excess
of dOO per share, in which case the tax will be 2 cents on each ISIOO of actual value or fraction thereof. J! The tax on conwyances does not apply to any instrument or writing given to secure a debt. 19 rru ge tic-kets costing $10 or less are exempt from tax. . . . . ' to 'I' It" additional estate taxes do not apply to the transfer of the net estate of any decedent dying while servin~ in the military or naval forces of the United States dur-
ing the cnntinuance of the war in which the United States is now c.ng!lged, or if death results from injuries recerved or disease contracted in such service, within one year afte-r tl.c tel"mination of such war . • . ·
t:1 .\ tax equal to the internal-revenue tax imposed in the United States upon like articles of domestic manufacture. · ~l Lcttt•rJ written and mailed by soldiers, sailors, and marines assigned to duty in a foreign country engaged in the present war may be mailed free of postage, subject
to :,uch rules and regulations as may be prescribed by the Postmaste~ General.
fr592 CONGRES.SION AL RECORD-HOUSE. OOTOB.ER 1,
1\Ir. FORDNEY. 1\Ir. Speaker, I am going to be brief, unless ·I am questioned for information on the bill, and I hope that each and every man who wants to get information upon the sub· ject will study the report and the ·bill, so that the arguments here this afternoon may be as brief as posslle and the bill pass to-day. I would like to see the bill pass without a record vote, but there are some gentlemen here who want to go on record, J believe. .
First, I want to pay the chairman of the committee, Mr. KITcHIN, a compliment by saying that he has worked most dillgently on this bill to perfect it, and to 1·aise the necessary money without worlti,ng a hardship upon any class of people.
There are but two really bad features in the bill, in my opinion. One of the definition of capital, and the other is the tax upon gross sales. I have bowed to the will of the majority, however, and shall continue to do so, and I say now that this is n fairly good bill. No revenue bill that has ever passed the Congress of the United States was perfect, and, so long as the GovQrnment maintains, there never will be one that is perfect. Some men are of different frame of mind than others. Some have advocated taking all income from everyone who has an income except themselves. I have received letters and telegrams saying, "I am in favor of the tax, but I am not in favor of the tax you are putting on me." I know of no one who desires to be taxed, but we are at war with a powerful people, and our Army must be supported in the field if we are to succeed in this war.
I believe we are raising more money by direct taxation than we should raise in that way. I think we ought to borrow more of the money needed to carry on this war than we are borrowing. I· believe that we are raising by direct taxation a greater percentage of the money we are going to use in carrying on the war than was ever raised by any people in the world in a great war. I stated before on the floor of this House that during the Civil War we borrowed $5.09 for every $1 of direct taxation raised during that period. There is a vast difference whether my Government comes to me and borrows my money or takes it from me in taxes. If you tax me to the full limit of my wealth you have taken all I have except patriotism, but you may come during the strenuous times that exist during a time of war and borrow my money and give me collateral-Government bondsupon which I can borrow more money and continue to do business. There is a vast difference between the . two. I believe we are raising more money than we ought to raise now by direct taxes from the people.
Mr. LONG,VORTH. 1\Ir. Speaker, will the gentleman yield at that point?
Mr. FORDNEY. Yes. Mr. LONGWORTH. Will the gentleman state how much we
are now raising by direct taxes? Mr. FORDNEY. It would be but an estimate. If this bill
goes into effect as it is now before this House we will raise by direct taxes, together with money that will be raised under existing law, four and a quarter billion dollars during this year. · Mr. LONGWOR'rH. I ask that question for this reason. The other day in debate, when estimates were being made by the gentleman from New York [Mr. FITzGERALD] and the gentleman from Kentucky [Mr. SHERLEY], it was stated that with the bill at that stage in the Senate we would be raising about 35 per cent of all our expenses by taxation. Since this bill has come back with substantial changes I should guess now it would require something like 40 per cent.
1\fi·. FORDNEY. I should say those figures are correct. Mr. GREEN of Iowa. Will the gentleman yield? 1\ir. FORDNEY. I will. Mr. GREEN of Iowa. Has not our estimate been greatly in
creased since the time to which the gentleman refers? Mr. LONGWORTH. No; I refer to last week only. Mr. GREEN of Iowa. Have they not been increased since
then? Mr. LONGWORTH. No. Mr. GREEN of Iowa. Mr. SHERLEY and Mr. FITZGERALD were
not talking last week, but some. two weeks ago, and they have been raised since then.
1\Ir. FORDNEY. Our expenses in this war are going to depend on the number of men we are going to send to the front, and no man at this present time can estimate the number of men we are going to need before this war closes in Europe. I have voted and I am going to continue to vote for every measure neces· sary to back up our Government in suppo~ting our men on the battle field [applause], if it takes every dollar of our wealth. The definition of capital as given is, in my judgment, all wrong, for this reason: The exemptions allowed to capital are based upon the original capital invested, and I know of many institu-
tions in this country which 20 or 30 years ago invested capital, and the value of property purchased at that time has greatlY. enhanced, and the only exemption that will be given under the terms of this law will be based upon the original capital invested, say, 20, 30, or 40 years ago, without any increase for interest o.r anything else.
Again, the· tax imposed by this law upon gross saloo is the wrong principle of taxation. You may tax a man very heavily on his income, but you do not under that sort of tax or kind of tax impair his original capital, whereas if you tax him 1 per cent or 2 per cent or 3 per cent or 5 per cent on his gross sales you may not only take all his profits, but a portion of his original capital. Therefore that tax is wrong in principle. Those are the two serious .objections on my part to this bill. I tried to get them righted, but, as I have said, I bowed to the will of the majority. The bill is here and there is no possibility of changing it, my friends. Everybody in Congress wants to· pass the necessary measures to aid the administration in carry· ing on this war and to get away home, and therefore I want to see this bill passed to-clay. [Applause.] Therefore I shall take no further time of the House except to give h.ere an illustration of the amount of taxes which will be paid by a corporation or partnership or individual in business with capital of $100;000 and a net income of $50,000.
If the pending bill is enacted into law, the following table shows the total amount of income, corporation, and excess-profits taxes that would be paid, (a) by a corporation with capital of $100,000 and net income of $50,000; (b) by a partnership of three .parties with a capital of $100,000 and net income of $50,000; and (c) by an individual engaged in business with $100,000 capital and $50,000 of net profits.
(a) Corporation with capital of $100,000 and net income of $50,000. Deducting from net income 9 per cent of the capital (the maximum deduction) plus $3,000, or a total deduction of $12,000 shows the taxable income to be $38,000 : Tax on amount in excess o:t deduction and not over 15 per cent
o:t capital, $3,000 at 20 per cent------------------------- $600 Tax on amount o:t profit in excess of 15 per cent o:t capital and
not over 20 per cent, $5,600 at 25 per cent__·______________ 1, 2:50 Tax on amount in excess of 20 per cent of capital and not over
25 per cent, $5,000 at 35 per cent________________________ 1, 750 Tax on amount in excess of 25 per cent and not over 33 per cent
of capital, $8,000 at 45 per <.enL------------------------- 8, 600 Tax on amount in excess o:t 33 per cent of capital, $17,000 at
60 per cent-------------------------------------------·· 10, 200
Total excess-profits taX------------------------------ 17, 400 Net income---------------------- $50, 000 Excess-profits tax ---------------- 17, 400
Net income subject to income tax__ 32, 60Q __ at G per cent~- 1, 956 Total tax -------------------------------- - - ------- 19, 356
(b) Partnership of three parties with capital of $100,000 und net income of $50,000: Deducting from net income 9 per cent of capital invested -
plus $6,000, or a total deduction of $15,000, shows the taxable income to be-------------------------------- $35, 000. 00
Tax on amount of income in excess of deduction and not over 15 per cent of capitaL ________________________ _ Tax on amount of income in excess of 15 per cent, but not
over 20 per cent of capital, $5,000 at 25 per cent_ ____ _ Tax on amount of income ln excess of 20 per ceDt, but not
over 25 per cent ot capital, $5,000 at 35 per cent_ ____ _ Tax on amount of income in excess of 25 ue1· cent, but not
over 33 per cent of capital, $8,000 at 4$ per cent_ ____ _ Tax on amount of income over 33 per cent of capital,
$17,000 at 60 per cent------------------------------
Total excess-profits taX-------------------------Net income _______________________________ $50,000.00 Less excess-profits tax_____________________ 16, 800. 00
Income for distribution______________ 33, 200. 00 Share of each partner _____________________ 11,067.00
Income tax of each partner: $9,067 at 2 per cent------------------~ $181. 3!
17,067 at 2 per cent-------------------· 1241
5 .. 3
040 2,500 at 1 per cenL------------------
!l,500 at 2 per cenL------------------ 50. 00 $1,067 at 3 per cent___________________ 32. 01
Total for each---------------------- 429.69
0.00
1,250.00
1,750.00
3,600. 00
10,200.00
16,800.00
Total tor all 3 (3 multiplied by $429.6!)), or_______ 1, 289. 07 -----Total taX-------------------------------------- 18,089.07
(c) Individual engaged in business with capital of $100,000 and net income of $50,000 : The excess-profits tax would be the same as on a partnership,
which is shown above to be----------------------------- $16, 800
Net income --------------------------------------------- 50, 000 Deduct excess-profits tax--------------------------------- 16, 800
Income subject to income taX----------------------- 33, 200
1917. CONGRESSIONAL RECORD-HOUSE. ~593
Income tax of individual on $33,200 : · · $31,200 at 2 per cenL------------------------------• · $29,200 at 2 pPl' cent--------------------------------:
$2,500 at 1 per cent--------------~---------------$2,500 at 2 per cenL-------------------------------~ $2,~00 at 3 per cent--------------------------------• $2,u00 at 4 per cenL-------------------------------..: $5,000 at 5 per cent--------------------------------~ $13,200 at 8 per cent-------------------------------~
Total income tax----------------------------------~·
Excess-profits tax (above shown)-------------------------.Add total income taX------------------------------------
$624 584
25 50 75
100 250
1,056
2,764
16,800 2,764
Total taL----------------------------------------· 19, 564 The following tables show the excess-profits tax to be paid by
an individual or partnership and a corporation, each with a capital of $100,000 and a net income of $50,000, and with 7 and 9 per cent exemptions : 1. ...4. corpor ation toith $100,000 capital, a net income of $50,000, and an
I now yield 10 minutes to the gentleman from Pennsylvania [l\1r. MooRE].
l\Ir. lVlOOHE of Pennsylvania. 1\Ir. Speaker, I recognize the propriety of the suggestion made by my friend, the gentleman from l\li<?higan [l\lr. FoRDNEY], and believe we might as well 11a ,-e a '\'Ote upon this bill at once. The luminous speech of the gentlema n from North Carolina [l\Ir. KITCHI N ] covers the situation about ns fully perhaps as it can be co-vered in a speech, and a lthough the House may not be so fully informed as it would like to be because of the length and intr icacy of some of these legal definitions and administrative paragraphs, there is no possibili ty of defeating the bill at this time. The administration needs it, needs its immediate passage for the purposes of the war, and no minority here could stop it, e-ven if il were so disposed.
In order that time may be saved I have reduced to writing the little I have to say as a member of this most important conferencE> committee.
1\!r. Speaker, Pennsylvania, which I have the honor in part to represent, will be hit- harder by this bill than any other State
in the Union· save one. The exigencies of war as set out by the President, however, make it inevitable that some such bill as this shall be passed. It is not a question of doing what we want to do, but of doing that which stern necessity compels us to do. The original position of the administration was that the expense of this war might be borne half by taxes and half by loans, . but while we have already authorized expenditures aggregating approximately $19,000,000,000 and have authorized loans exceeding $13,000,000,000, we have not yet resorted to the taxing power except as to such taxes as were imposed prior to the declaration of war. The President has gone into this war whole-heartedly, and Congress has undertaken to support him; it can not longer postpone the levying of taxes to pay the expenses, or at least a part of the expenses, which the adminis· tration is incurring.
The present bill will not be pleasing to anybody. Tax bills never are. It may be that some l\1embers of the House or Senate may be impelled to oppose certain paragrapils of this bill, or they may think it does not go far enough. From my point of view it is too late now to prevent the passage of this bill. It has been fought over in the House and Senate for a period of five months, and has been in conference between the two Houses for more than two weeks. No conferees have labored more earnestly to harmonize con.tlicting opinions about a bill than those who have reported this one.
While I do not approach a discussion of. the bill with any enthusiasm and am dissatisfied with many of its provisions, I believe it has come out of conference in far better shape than it left either of the two Houses. Some of the objectionable features introduced upon the floor of both Houses have been eliminated, and as a result of conference the taxes have been more equitably distributed than they otherwise would have been.
Retroactive taxes have been cut out of the bill. The obnox· ious light and heat taxes, which would have extended to the occupants of small homes, have also been dropped. Tea and coffee are not taxed; neither is sugar. These would have been direct consumption taxes, but they have been knocked out of this bill. It is not improbable we shall have to resort to such · taxes in another bill next session, but they have been avoided thus far. And then the individual who makes excess profits has been included in this bill. Unless there is a flaw somewhere that will mean that the man who is making excess profits out of farm products, including cotton, will pay his share of excess-profits taxes. In other words, the tax on profits has been broadened so that certain middle men and speculators in food· _ stuffs not heretofore included are now covered.
If farmers making excess profits ·were cut out of the bill in the House, and lawyers or professional men making excess profits were exempted by the Senate, they have both been included in the bill in confer-ence. The individual cotton planter or farmer making profits in excess of $6,000 is now taxable as corporations are taxable, and the lawyer or professional man is taxable at the rate of 8 per cent upon his excess profits. The bill is drastic, as it was expected to be. . Directly or indirectly it levies a burden upon producer and consumer, as it also attempts to reach the middleman in proportions as fair perhaps as the needs of the Treasury will permit.
Corporations and what is denominated "big business" may not be satisfied with the rates of taxation imposed upon them or with t he definition of capital as it effects exemptions. They will have to pay income tax, corporation tax, a tax upon excess profits, a tax upon surplus in certain cases, and they will have -to keep a system of accounts that will be almost intolerable to some of them; but if the big corporation deems itself hard hit it will have the satisfaction of knowing that smaller corporations and individuals are expected to share burdens in like proportion and in some instances under conditions less advantageous.
I do not propose to attem!)t a discussion of the details of the bill; that is a task which will plague even the financial experts. Some of them doubtless will attack the law and undertake to evade some of its provisions, but that .is a matter upon which a subsequent session of Congress will be better informed than this. There is one provision of the bill which will undoubtedly awaken a lively discussion, because those who are most concerned will be in position to criticize it, viz, the second-class postage provision. Some newspapers and periodicals will find fault with the effort in this bill to reduce the deficiency due to the mailing of second-class matter. But if second-class rates ha-ve been raised, first-class mail rates have also been raised, thus placing an additional burden upon all users of the mails. It is to be noted that the new rates affect principally the magazines and metropolitan newspapers.
~fr. COOPER of Wisconsin. Will the gentleman yield?
i759Li CONGRESSIONAL RECORD-HOUSE~ -
~1r. MOORE of Pennsylvania·. I can riot at this time. The profits and war profits from those that made them while we gentleman wlll pardon me for a moment. 1 were neutral. I am .not complaining about it. I do not have
The special privileges of the country newspaJ)ers are pre- "any of those profits, nor do my constituents. Although in comserved, and tt.ere is an exception. perhaps not satisfactory to mon with you, with your salaries of $7,500 a year and the busithem, in the case of religious publications. Fraternal publica- 1 ness that_you have, we will find that under the term of excess tions, not issued for profit, can Iiot' complain of the bill. While profits that you and your constituents, whether manufacturers the. postal rates upon second-class ~atter might have been OJ' farmers, -whoever ·they may be, will have to pay what you lowered without offense to the Treasury, it is fair to the eon- call excess-profits tax. ferees to observe that the new rates do not take effect until the I know from the number of letters I get wanting explanation end of the fiscal year; so that all newspapers and magazines will 1 that there is going to be kicking here, and there, and yonder. have eight months' time in which to regulate their contracts But after all, the great mass of the people realize the necessity and adjust themselves ·to the new conditions. After that the , for revenuaand the maintenance of our credit, because we have increase·in rate is gradual, extending over a period of years. got to borrow. If the war lasts a year or 18 months long€r we
I shall vote for this bill, not because I like it but because it · will have to borrow $18,000,000,000 to $20,000,000,000. But I is a measure of necessity forced by the war. It will nn- believe that we will maintain our credit, that we will keep it doubtedly disturb business, as it will cut profits. It may work at a parity with gold. We will bear all our burdens whetl'1er extreme . hardship in many directions, but the President has they be in the Army or whether they be in civil life. [Appointed out that profits must not be put above patriotism and plause.] that the sinews o.f war must be ungrudgingly provided. The SPEAKER. The question is on agreeing to the confer-
Mr. Speaker, how much time have I remaining? ence report. The SPEA.KER. The gentleman has one minute remaining. Mr. MOORE of .Pennsylvania. 1\Ir. Speaker, I yield 20 min-"'Mr. MOORE of Pennsylvania. I am sorry I can not 'Yield to utes to the gentleman from Iowa [Mr. GREEN].
my friend from Wisconsin, because in this one minute I would Mr. GREEN of Iowa. Mr. Speaker, I want to commend the like to bear testimony to the ability, the energy, and the cour- · conferees on the part of the House :for what they bave . accom~ tesy of the chairman of the Committee on 'Vays and Means, who, plished. They have .bl·ought back to us the H{)use -bill in the
- ~n my judgment, kno:ws more ·about this bill. than :any o~er man main, upon the _plan sub tantially thnt was proposed originally m the House. [Applause.] He has surpriSed us by hiS grasp in this House. What is called the" reh·oactive income tax" has of Treasury details aild has proved up in conference as a match gone out, perhaps properly. The taxes on light, heat, and power for the financial experts, . have gone out, very property, as I think; and I am glad to say . Mr. Speaker, I do n?t believe the gentleman from _North Caro- that the taxes which were proposed by the Senate on tea, coffee~
IJ.n~ [1\:fr. KITe~] '!"l~ always ~the lead~r of thi~ House. I and sugar, to which I was very much opposed, have also gone belleve the storm. 1s nsmg ~at wlll.sweep lum a~d his party out out, together with a p1·ovision which the Senate inserted repeal-of power. I b~li~ve that storm will brea~ d~·m.g th~ next 16 ing the tax on munition makers. • months. But If It should happen thut this distmgmshed and The conferees have also raised the amount and rates of the ·forceful chairman of the Ways an~ Means Committee should exce s-profits taxes, from which it is now intended there should ever decide -to depar~ fro.m the sylvan surroundin~ at Scotland be ueriTed through this measure $1,110,000,000. I highly ~e~k and hand up his shmgle a~ongst the corpo~abon-taw prac- approved their course in this respect, except that I must add, tl_twners of the great metropol~s of New ·York .he -would. take in my opinion, they did not go far enough in rai ing the rates htgh rank amongst them, and his fortune would be made mter- -or the amount of excess-profits taxe or the total amount of the preting this bill. [Applause.] bill. I say this notwithstanding the income-tax rates have
l\Ir. FORD1\TEY. Mr. Speaker, I ask unanimous consent to b€en graduated up, so that a total of 66 per cent will be imextend my remarks in the REcoRD. I want to print an exact po e<l on incomes above $1,000,000, and the rntes on excess exa.i:nple of how much will oo collected under this bill on a given profits under the conference report are gra<led up to 60 per amount of capital, so that the gentlemen may see it. . cent on a profit in excess of 41 per cent. These figures are
The SPEAKER. The gentleman from Michigan [Mr. FoRD- not exact, as certain allowances must be made in each case, NEY] asks unanimous consent to extend his remarks in the but they are sufficiently accurate for the purpo es of this disRECOBD. Is there objection? [After a pause.] The Chair cussion. hears none. . This bill, when it left the House, carried about $1,800,000,000.
l\Ir. MOORE of Pennsylvania. Mr. Speaker, I yield five min- The Senate raise<l it to about $2,400,000,000. At the time it ntes to the gentleman from Illinois [Mr. CANNON]. was under discussion in the House it was vehemently contended
The SPEAKER. The gentleman frem Illinois [Mr. CANNON] by some Members that we ha<l no use for the amount of money is recognized for five minutes. [Applause.] that it provided, and that there was no nere ity for levying
Mr. CANNON. Mr. Spe.aker, I will say in the beginning, for taxation to that amount. Some even contended that under no fear that somebody may say I am unduly criticizing the bill, that circum tances ought" we to pass a bill that would levy more than I do not propose to criticize it much and that possibly I had best $1,000,000,000 of taxation. It is not necessary to discuss that keep my tongue still. point now. The march of events has brought us far beyond
I shall vote for the bill. .I am following the lead of the g€n- that. Before the bill came out of the Senate committee it was tleman from North Carolina [1\lr. KITCHIN] and the gentleman evident that the estimate would have to be largely revise<l, and from Michigan [Mr. FoRDNEY] and other members of the confer- the .Senate very pwperly increased it something like $500,· ence committee. I put in an anxious day yesterday. I did 000,000; an<l recently the gentleman from New York [Mr. FrTznot say my prayers or read a chapter in the Bible or go to GERALD], who is one of the yery 'best informed, if not the best church. I tried to get outside of the conference report. I went informed, Members as to the amount of money that the Governto bed at 1 o'clock this morning. I did not have any help pres- ment would need, stated that, taking the amount of the bond ent on Sunday, nor did I have any of the acts of Congress to bill and this bill together, we still would be short the sum of which I ·could refer but I arrived at the conclusion that I did $2,682,000,000. Since that time the estimate have been raised not know how many lawsuits were to grow out of this bill, and nearly a billion dollars, until it now appears that we will need that I clid not know in many respects what it is to do. I hope at least $3,500,000,000 more before the end of this fi ·cal year. it will produce a large amount of money, and I believe it will. How is this money to be raised? 'Vhence are we to obtain I hope when another bill comes-and, God knows, if this war the amount of this enormous deficit? The conferees added somedoes not close inside of 12 months another bill will come-! thing like $200,000,000, or a little over that amount, to this bill, hope that that bill will be such tl1at all of us experts and non- but that is far from being sufficient. I think the bill ought to experts can see what it does. This bill harks back and refers provide a larger amount. [Applause.] The conferees hav:e not to provisions in the Payne tariff law, the Underwo9d tariff law, added one-tenth part of the additional amou?t _which we wlll rethe law of 1916, which is not repealed except in spots, the law quire before the end of the :fiscal year. Is 1t mtended that the of last March which was repealed very iargely, if not entirely, balance shall be raised by bonds? If so, I want to warn the althouooh I thlnk not quite entirely. And I will confess that I House and the country that we ru·e entering upon a c~reer of i_ndo not'belie~e that, unaided, .I could get outside of it in three 1lation that will end in a financial debauch from wh1ch we will months. I wish that there had been time so that this bill not recover in 20 years. conld tell its own sto1.·y upon its face, disregarding the law of The bill was originally prepared on what was called the 1916 the Underwood tariff law, the Payne tariff law, and the "fifty-fifty!' plan; that is, with the expectation of obtaining law 'of lust l\farch repealing here and there a section or a one-half of our war expenses through taxes. The demands of clause or modifytn'g it or amending it I think that these the war have been so insatiable that it is now ev~dent that we people, by the time another bill is to be illtroduced. can give us .can not follow this plan or .take any de.fiq.ite pe~·centage as t!Ie one tlwt will tell its own story on 'its face. ratio between t11xes and war expenses, but I am m favor of rrus-
The next bill will carry more of consumption· taxes than this. ' ing the largest 'amount by taxation that can be imposed without We are going to take a large amount of what is called excess injuring business or affecting business enterpris~~ I am not in
..
1917. CONGRESSIONAL . RECORD-· HOUSE. ,7595· favor of injuring business, and no man in this House is. Everyone realizes that we could not carry on this war successfully if business were destroyed. But let us not be frightened by this cry that business will be destroyed unless there is some reason for it besides the bare assertion.
Gentlemen have pointed out that the percentage that we are raising by taxation of our total expense for war is larger than it was at the time of the Civil War, and it has been claimed that it is larger than it is in England. But those comparisons are fallacious. The total amount of wealth in this country is nearly $250,000,000,000. Our per capita wealth is about $2,500. The total wealth of England is only about $85,000;000,000. Its per capita wealth is probably less than $2,000. And yet England is imposing a taxation at this time of something like $65 per capita, while we are only imposing a taxation of a little over $40 per capita.
At the time of the Civil 'Var our per capita wealth, at the beginning, was only a little over $500. At the close of the war, in 1865, it was around $600. It is now, as I have already stated, more than four times that amount. These figures, gentlemen, instead of showing that we can not raise as large a proportion of our war expenses as this bill carries, show that we ought to raise a still greater proportion on account of our increased wealth as a Nation and individually.
The experience of Salmon P. Chase, who acted as Secretary of the Treasury during the most of the Civil ·war, · led him to state that $1 raised by taxation was worth $2 raised by bonds. The proportion may not always be correct, but as a general principle never were truer words spoken. If you wish to see how bond issues operate for inflation, look abroad. From the warring nations inflation has overflowed into our own land, resulting largely from their tremendous borrowings and expending the money here. A Government bond operates to a certain extent as a sort of fiat money. It creates property where none existed before; it affords a basis for the issue of additional currency, and with each succeeding issue of bonds the general level of prices is raised. The evils of this system are plain. The Government not only is compelled to pay double and often treble the price for materials that had prevailed before, but, worst of all, the unfortunate consumer, the man whose whole yearly income has been required to obtain the necessaries of life for himself and family, finds that here also prices have been enormously inflated until his life becomes a mere struggle for existence. In another year more loans will be required. Gentlemen sometimes speak as if no portion of the financial burdens of this war was ca t upon the workingman and the man with a small salary. I insist that notwithstanding all we may do to reduce food prices, he is already more heavily loaded than he ought to be. It must be remembered, too, that all of this inflation has to be paid for sometime and some way. Either business. will eventually pay for it or the workingman, or both, when the reaction fiually comes, as come it must. I firmly believe that the total amount of the bill should have been raised higher, and that this additional revenue should be derived from higher taxes on excess profits or war profits, whichever you may choose to
·call them. When the bill was originally before the House I then stated on .this floor that I favored raising the excess-profits rates. Now that the bill carries so much larger an amount and should be, as I think, further increased, the necessity of an increase in the excess-profits rates is still further apparent. It is said that to increase these rates on excess profits will injure business, prevent further iv.vestments, and lessen the amount to be collected another year. I deny this and offer proof in support of this denial.
No better evidence ought to be desired than the conditions in foreign countries, where higher rates of taxation than are even now proposed have been levied. England has been levying a flat excess-profits rate of 60 per cent, which this year was increased to 80 per cent. We would not think of imposing the last-named rate upon any profits except those that were inordinate and utterly unreasonable. I have already stated the higher rate of taxation per capita which prevails in England. Have these rates destroyed business 1n England? The contrary is true.
• Notwithstanding business was extremely flourishing in England before the war and a time of unusual prosperity existed, business is so much more prosperous than it was before the war that England could take last year $700,000,000 away from its excessive proiits and still leave them 40 per cent ·higher than they had been before the war. I am reliably informed that recently a canvass was made of about 1,000 corporations engaged in all kinds of business in the United Kingdom, and it was found with few and rare exceptions that these concerns were highly pros~ perous, even after deducting the excess-profits tax.
Every Member of the House has heard that Mr. Henry Selfridge, formerly a member of the firm of Marshall Field & Co.,
went to Loncon some years ago and started a great department store on the American plan. At the opening of the war British merchants were panic-stricken. They would not buy. But Mr. Selfridge, with that unerring business instinct that has alway,s characterized him, saw the fui:ure more accurately. He laid in additional stocks and prepared for the business that came as he prophesied it would. His sales and profits have been increasing every year since the war began. For the year endir.g January 31, 1914, the profits of his company were, in r::mnd numbers, $655,000; for the year ending the same date 1917, $1,115,000. Harrods, another great establishment, reports the largest and most profitable business in its history for the six months ending January 31, 1917. The Jewelers & Silversmiths' Corporation, another great concern, reports large gains over any :r;revious year. Hooper Bros., a large men's-wear house, reports great increase in sales, and so on.
Mr. PLATT. That is under an excess-profits law, and ther~ is no excess-profits tax under this bill.
Mr. GREEN of Iowa. I am not going to discuss technicalities. :Mr. PLATT. The gentleman may call this a technicality
if he wants to. Is there any real comparison at all .between .the English excess.-profits. tax and the taxes in this bill? It seems to me they are as different as day is from night.
Mr. GREEN of Iowa. The provision in this bill is ~. tax: on profits, and whether you call it an excess~profits tax or a '\\arprofits tax is immater~al. It taxes profits above an aver!lge of 8 per cent. It is a fair proposition and is based on the provisions for a tax on excess profits contained in the original Honse bill. The principal difference is that the rates are now ~i'U(led. The English plan, which was contained in the Senate bill when reported by the Finance Committee of that body, could not stand the test of argument, and that committee itself was compelled to go back practically to the plan contained in the House bill. which was so strongly assailed by some Members of the House. I opposed the English plan for tax on excess profits in the House and confess to some gratification that my judgment has been vindicated by its abandonment. Under the English plan, some of the companies making the greatest profits, such as some of the Standard Oil concerns, the Ford Co., and many others would have paid little or no tax on their enormous profits.
Mr. BENJAMIN L. FAIRCHILD. At the time we were all receiving letters from men who said that their business was going to bf' destroyed if they were to be taxed along the Jines of the House bill, · one letter that I received, different from any of the others, was .from Mr. George H. Allan, a journeyman printer, who was a member of a typographical union in Yonkers, N.Y.
It is right along the line of your remarks. While the others were writing the other way, he says this:
I think, as a patriotic American. that printers and all workmen earning $25 weekly and · above should be taxed during the duration of the war. Union printers are taxed in their union the entire year (1~ per cent in New York), and I think we could stand it it our Government should see fit to do so.
[A.pplause:] l!r. GREEN of Iowa. He is a patriotic citizen. When a
workingman writes like this, we ought to hear no coinplaints from men of wealth.
Resuming my argument, I would say that there is no occasion for alarm through fear that business will not prosper during the war.
The fact is that the enormous disbursements by the Government, which in this countt'y will amount to more than $10,000,000,000 this fiscal year, affords ap extraordinary stimulus to business which far overweighs the effect of such taxation. In this country the corporate profits for the calendar year of 1917 will probably exceed the average of the three years prior to the war by $4,000,000,000 to $5,000,000,000. We shall not take onethird of this increase; in fact, when we consider that the tax under the present plan of the bill is to be levied also on those corporations wllich were heretofore prosperous, the proportion will not exceed one-fourth. Business was not destroyed or ruined in the three years before the war. How is it possible to claim that when the corporations of this country after this tax is deducted will still have a large increase in their profits over what they received before the war that business is going to be injured. The principle of an excess-profits tax is that it takes only from such business as can afford it and always leaves a considerable sum above what might be deemed a normal or reasonable profit. Gentlemen forget that this tax is onlY. a per cent of a per cent; that upon small concerns with mOderate profits it amounts to little more than an occupation tax. It is only where the profits amount · to a high figure that anY, corporntiou will really be affected thereby. ·
Gentlemen say that if we increase the amount of taxation: llpon these big business concerns and upon incomes that we will
.· '7596 .· .CONGRESSIONAL RECORD~~OUSE. OCTOBER 1,
·leave nothing for investment. ·I do not understand the "logic ·or the reasoning of -this statement. Whatever is paid in taxes will by just that much re<lnce the amount of -bonds required. Can anyone tell me if a hundred dollars or a thousand dollars is taken by way of taxation, -why it will not leave just -as much for investment in busine s as if the same amount were used through purchase of bonds? Not only will there be as much left for investment but the Government will pay a ·lower rate of interest, inflation will be to some degree checked~ and the burden upon the Nation -collectively will be greatly lessened.
1\lr. MOORE of Pennsylvania. Will th.e gentleman yield at ·that point?
Mr. GREEN of Iowa. Just for a brief question. Mr. MOORE. of Pennsylvania. If we continue to issue bonds,
will we not continue to have to raise taxes to pay the interest on those bonds?
1\ir. GREEN of Iowa. Certainly; and if we raise the money by taxation we will not need the bonds, and we will not have to pay any interest, which is the point I understand the gentle-man to make. -
Nor can I understand the argument of gentlemen who -contend · that we should not advance our rates at once to those now levied by England, because England has arrived at that point by successive steps. Is a corporation or individual less able to pay t~xes now because taxes have not been paid in the past?
. Does the fa"ct that th~ absence of taxation heretofore has -enabled the· creation of a great surplus lessened the pow-er now to contribute to the Nation's needs? Gentlemen of the .House, these arguments will not bear analysis. Instead of arguing against the levying of similar taxes to those now imposed in · England, the whole reasoning is in favor of it. .
So far I have refrained from anything that ·might in the least appeal to sentiment or emotion, and the cold _facts would seem to be sufficient without anything else. But there is another side to the picture. Gentlemen who have shown the condition
·of the masses under the tremendously inflated -prices of the ·times and have pointed to the swollen profits of the Steel Trust, the Du Pont Powder Co., and others have sometimes been accused of fomenting class .hatred and prejudice. Certainly this is far from my purpose. On the contrary, 1 tam striving ·with all the energy in my power to prevent their growth by the -only means possible-that of removing the cause. There · is no more to this insinuation than . the charge that this is a rich man's
·war; a charge which is equally baseless. The wealthy men · of this country did not bring about the unprovoked attack upon Belgium, the devastation of that unhappy country, and -the enslavement of its men and women; they did not cause the waves to be strewn with the helpless pa.__~engers of the 'Lusitania; "they had nothing to do with the murder of citizens upon the decks of our own ships and under our own flag; .and they could not have been connected in plots to involve us ill wars with Japan and Mexico. We have taken men for our 'fighting force from all classes alike, except that the law properly enlarges the exemptions of the poor. We have striven to equalize the demands and burdens of the war so far as our fighting force is concerned. We have not been able to do this completely because in the nature of things it is impossible; but why should we not, so far as we are able, place the financial burdens of the war where they can best be borne and supply them when-ever we can from excessive and unusual profits mostly brought about by war conditions?
Wealth can be measured by dollars and property by metes and bounds ; but life and health and strength and heart blood are priceless and we are taking them without stint. Out in my district and all over the'land the young tenant farmers .are being taken from their crops, the young business men from their stores, the young lawyers and doctors from their practice. We are not only compelling them to leave their business to ruin but we will soon be asking them to endure the freezing waters of winter trenches, to struggle through barbed-wire entanglements swept by the hail of bullets from machine guns; to endure the terrific bombardment of the g!.ant guns which the Germans have produced, and our hearts beat with pride as we see the loyalty and patriotism with which they have responded to the call. Do you now tell me that tbe merchant princes of the country will sit and whine and whimper and protest because we are proposing to take a percentage of their profits above 10 per cent? If so, God help the Nation, for the men best able to assist are failing it.
Foreigners who have traveled in this country and associated \-vith the wealthy classes have somewhat slightingly referred to om· country as the land of the dollar, and characterized us as a money-grubbing people. Th€re may have been some foundation for this slur. For fifty years we have had for the most part
• extraordinary .prosperity in business which has resulted in a wonderful increase in the wealth of the Nation. This ha-s not
S{>rved to develop tbe finer instincts of our nature :but rather has tended to foster a love of ea e and pleasure and a desire for wealth and -power. Getting and ·pendjng, spending and •getting, -we have passed our lives a:way. ln the mad scramble for wealth and the fierce struggles of competition, the poor, the weak, and the friendless have too -often been ground _between the "Upper and --the nether millstones.
But, ..Mr. Speaker, I refuse to believe that sordid instincts have become ingrained in the nature of our business men. The parties -who now throng the lobbies of the hotels of this ctty -protesting .against this bill do not rep1·e ent the great body o.f .our business men. They have given. sine~ this war began, too many evidences to the contrary. ~'lris is a different hour, a
.new day, a nobler era. ·war is not "\vithout its compensations, ,and through the dark clouds of this dreadful conflict some stars still shine. They point to paths that shall lead us to loftier regions where humanity .shall be placed above profits and patrioti~m above gain, and then, when the sun of peace shines -again, from a soil that is drenched with .blood and tears, there will rise the spirit of a new America, true to the highest traditions of the past and dedicated to the loftiest purpose for the future. [Applause.]
Mr. 1\IOORE of Pennsylvania. 1\.fr. "Speaker, I yield eight minutes to the gentleman from· Nebra ka [1\fr. SLoAN].
Mr. SLOAN. Mr. Speaker, I shall -vote for this bill because there are two things that we need in the war; -one is an .Army and another is its support. I ean not well conceive how, having deliberately enteTed into a war, raised an army, and after four months of deliberation over the method of maintaining that army, men can find a way to say that it shall not be maintained.
I am in favor of paying very largely for the support of the war by taxation, because the burdens of posterity -will be heavy enough indeed. We know that borrowed money, whether by men or nations, is usually spent more lavishly than earned msaved funds. The proposition that the House Members started out with, to raise 50 per cent of the expenses of the war by taxation, met my hearty approvaL For that reason 'I -supported with a good deal of enthusiasm the bill as it left the Honse. The amount raised in the House bill provided for 50 per .cent of the then estimated appropriations. The bill w.ent to the Senate. It is now back .here, having been transformed in con""!erence. ·I want to recall the :po ition I took when the blll was referred to the conference committee.
I here quote a colloquy between the gentl-eman from North ·Carolina [l\1r. ·KrrcHIN] and myself:
:h-Ir. KITCHIN. "Mr. Chairman, IJ'ield to the gentleman from Nebraska [Mr. SLOAN].
1\Ir. SLOAN. Mr. Chairman, I want to ask the gentleman from North Carolina a question. The House committee drafted this bill with Teference to a .fift.y-.fifty ba.sLs, .and approximated that in its bill, did it not?
Mr. KITCHIN. Yes; a 1ifty-1lfty basis in this bill. Mr. SLOAN . .I mean 50 -per cent of war expenses to be met by taxa
tion and 50 .Per cent by bond issue. Mr. KITCHIN. That was the mea.surc npproximately created. Mr. SLoAN. I understood that was the demand of the country the
-recommendation of the Executive., a:nd it was what was accomPlished in the Ways and Mean Commtitee. .It was accompllslli!d a.t the time over the vigorous opposition of the gentleman from Michigan, so that the threat of the gentleman from 1\fichlgan about going up against his .fighting qualities bas not the terrors it used to have. {Laaghter.] As I understand, the Senate has changed it to 35 per cent tar1llld 65 per cent bond issue.
1\Ir. KITCHIN. Approximately. M.r. SLOAN. Thirty-five per cent tax -and 65 per cent bonds. Now, I
know the impossibility of appro:ximatlng fifty-fifty in this conference. The latitude between the House and Sen:a te b1lls will not permit it with the conference rules. But there are a number of opportrrnities to increase measurably the Senate bill. One is, of course, where we are allowing hundreds of mlllions of dollars' worth of goods to come through our ports every year without a dollar being paid for the privilege. That is one of the discards of i:he Senate. There are others we might speak of. I think it is the opinion of the country and of a majority of this House that the S.enate bill should be .measurably increased in so far as the relative conditions of the two bills will authorize it. We hear very frequently stated that a large part of the burdens of the war should be placed on posterity because the war has been declared by us. Posterity was .not pre"ent or con ulted and may or may not hereafter approve its involuntary representation in that declaration. We arc taking undue lioertles with posterity and seeking to place a 65 per cent tax on them and ass~ming only 35. per cent ourselv~s. The testator who wills a mortgage m favor of his legatee may be thanked. To bequeath a mortgage for the legatee to pay may not excite great gratitude.
By this .is indicated that it was the will of this House that in so far as the conference committee had the authority and jurisdiction it should increase the am-ount to be raised by the bill over what the Senate had fixed. I am pleased to see that the conferees came out with at least a part of my expectation in that regard. The increase amounts to about $150,QOO,OOO.
The following is an estimate of the revenue the bill will raise. It will be noted ·that nearly three-fourths of it is from income tax and excess _profits :
Revised figures indkatlng the rev'ennes to be derived under the various paragraphs of the war-tax IJHl are as follows : · Income ta.x~---------~-w-~-----"-----·-~--------~- $851, 000, 000
Perfumes and cosmetics------------------------- 1, 900, JOO Patent medidnes-------------------------------- 3,400,000
&~~~ -~~================:===========· n8.· 888 .
internal revenue, $37,vi0,787.9oJ or 33 per cent. It was thus appor· tloned in the turning point 'of tne great war for national existence. , In · 1872, Grant's administration, total ordinary revenue; $374',106-867.56; customs, $216,.370,286.77, or 57 per cent of .total; and intern:il revenue, $130,642,177.72, or 84 per cent of total. This was good enough under the soldier-President administration.
In 1886, Clev~land's administration, total ordinary revenue:, $3:36-439,727.06; customs, $192,905,028.44. or 57 per cent of total; internal revenue, $116,805,936.48, or 34 per cent of total. So it was under a -constitutional Demot:ratie President.
In 1898, McKinley's administration, Spanish-American War, total ordinary revenue, $405,321,335.20; customs, $14P 575,062.35, or 36 per cent of total; internal revenue, $170,900,641.4~, or 42 per cent of total. So we fought and won that glorious war.
In 1910, Taft's admimstration, total ordinary revenue, $675,511,-715.02; <;ustoms, $333,68.31445.03, or 49 per cent of total; internal revenue, $289,933,519.45, or ~ per cent of total.
In 1915, Wilson's adminiRtration, total ordinary revenue, $697,910,-827.58; customs. $209,786~,.672.21, .or 30 per cent <>f total; internal revenue, $415,669,6:46, or o9 per cent of total. Alas the degeneracy of these recent years when ' equal rights are ' accarded to some and special privileges to foreigners." ·
Flstirnatea revenue; 1918-United States. Total ordinary revenue---------------------------- $1,235,550,0~0 This House bill--------~----------------- 1, 800, 000; 000
Estimated customs----------'----------,:_ ______ _ This bill-customs ______________________ ~------- 230,000,000 200.000.000
Total (o"r 14 per cent)_________________ .430, 000,000 Admissions------------------------------------ 50, 000· 000 Estimated re.Pettue tor 1918, tncZudmf} the orcUnar11 roo-eipta and the J)f'O-Club dues-------------------------------------- 1, 500, 000 ceeds of .biU as presented in c~nterethe report. . War stamp taX.e1!---~---------------~--~-------.. - 29,000,000 C t 0 Inheritances___________________________________ 5, 000, 000 us oms ----------=------------------~------ $230, 000,0 0 Virgin IsLand products----------------------------- 20,000 Internal---------------------------------------- 3,837,500,000 First-class maiL--------------------------------- 70, 000, 000 Seeond-class mail-------------------~---------- 6, 000,000 Total ordinarY-------------,--------------- 4, 067, 500, 000
T d Customs amounts to 5.6 per -cent. here are two features of this report I desire to a vert to. Internal amounts to 94.4 per cent.
The first is, the elimination of all tariff duties by the conference · Great Britain-War fl,twnces • .committee. When I say that I do not speak of the doctrine of Total 'revenue-------------------------------- $2, 570,525, ooo protection or anything that might be made a party controversy, Customs (or 13 per cent>------------------------- 352, 805, ooo but I do refer to the loss of large amount of revenues practi- · Oarnuta--War finances. cally surrendered to the foreigner and no compensating benefit Total revenue------------------------------------ $232, ooo, ooo to us. I ·shall show what pm.·tlon of the support of all of our Customs (or 58 per -cent>----·-------------·-- 134, ooo, ooo other glorious wars was paid by taxes raised at the ports and &venue t•eceipts of United £t4te8, 1191 to 1916, both inclusive. taxes raised upon tbe industries at home. · Customs--------------------------------- $12,854,895,4:22.24
I lit 1 ld " hio ed d 1-.~ t tt th Internal revenue _________________ ;.._______ 10, 630, 905, 611. 75
am a t e o -J.,as n an .LUI.Ve no go en up, or, ra er, Total ordinary receipts------------------------ 25, 819, 422, 222. 52 fallen down, to the point far enough to subscribe to the doctrine customs. 49 per cent of total ordinary receipts. that I see put in operation so often nowadays, that whatever Internal revenue, 41 per cent of total ordinary receipts. was glorious in the history of America is wrong, all that mude Receipts of United States, 1791 to 191S, both inclusive. us great and strong should 1>e discarded, and that there is no Customs------------------------------------- $12,039,620,889.89 virtue in any legislative process unless it is in a change. And InternaL-----------------~---------------- 9, 322, 492, 9~. 67 so · I believe that a mistake was made in eliminating from this Total ordinarY----------------------------- 23• 60"· 173
r675· 74 Customs, 55 per eent of tota~ ordinary receipts.
bill about $200,000,000 t;hat should have been raised at the Internal revenue, 39 per cent of total ordinary re~ipts. ports, not in terms of the House provision, but in any reason- The foregoing was before 1t became fashionable for those in. QQWer to able modification. We know the latitude taken by the confer- condemn as wrong the policies under which we won wars and tr1u:mphed
• in~~ ees on many other proVIsions of this bill and which will be Receipts, 191.f, 1915, ana 1916. acquiesced in. Customs------------------------·-------------- $715, 292, 532. 35
The 10 per cent fiat on all imports did not meet my approval. InternaL---------------------------------- 1, 308, 412, 682. 08 Of course we -could have mised two or three hundred million Total ordinary _______ .:.. _________________ -------- 2• 212• 248, 546. 78
Customs, 32 per cent of total ordinary receipts. • dollars of duties .at 'Our ports without collecting taxes on· sugar, Internal revenue, 59 per cent of total ordinary receipts.
tea, or coffee. It would not on all other imports probably have This bill of $1,SOO,OOO,OOO total will produce in customs $200,000,000, ma<le 1 per -cent difference in the matter of price to our con- or. :J,l. per cent." sumers, because the expense of producing an article for the last The other proposition that I desire to speak of is a matter six months, for that matter for the last three years, has not of commendation of the courage, if not the justice, of the conbeen a base for its selling price. It has been based simply on ferees representing the House. When it was early suggested what could be grabbed, and therefore we could just as well have that we should collect more taxes, or, rather, reduce our losses during the last three years raised nearly $1,000,000,000 addi- on the matter of carrying the second-class mails in this country, tional revenue tor this Government if we had said to the for- I thought it was a matter over which this committee ought not eigner who desired to enter our ports with his products, " When to assume jurisdiction. I oppo&ed it for that renson. But when you bring something to American shores let it bow to the Ameri- the Ways and Means Committee proceeded to raise revenue can flag and pay tribute to the United States Treasury." [Ap- that way, and it became the settled policy, there has been, if plause on the Republican side.] YQU follow its history, a matter of courage, almost a matter
When this measure was before the House I submitted a few of heroism, on the part of the committee in resisting the pleas, facts and figures, which I quote: blandishments, and threats of those who were being called upon
In 1793, when our Tr.msury was empty, we collected $4,255,306.56 at . to pay a more equitable amount for the service the GoveTTIom· ports, and in internal revenue only $337,705.70. That was under ment renders in transportation of their products. Washington. The system was inaugurated and carried to success by It has been an interesting matter to follow. First, it was thf' matcbl~ss Hamilton, who divides honor with the Father of his proposed by the standing committee t r ·s th t fi t Country in the suecessful beginning our Republic made. Under Jefl'er- 0 al e e presen a son, in 1801, our total revenue was $12,945,455.95, of which there was rate 200 per cent, which would have been absolutely unjust. collected at the ports $10,750,778.93 and only $1,048,033.43 in internal The House bill was a change to a zone system, with no dis· revenue. Eighty-three per cent under Jefferson was collected at the crimination as to reading matter and advertisements. lntelliports <tnd 8 per cent in int-ernal revenu~. ·
The War of 1812. was fought under ~I.adisQn, a Democratic President. gence, news, opinion, entertainment, and instruction, perhaps, The total amount of revenue collected was 14.340,709.95, of which should go over this country at the same price per 100 miles as $13,224,000 were customs does and <>nly $4,755 internal-revenue taxes for 1 ()()() mile' B t d t• ts h' h · tell' 9.<! per cent customs, 8 per eent all others, interual revenue being on!'y ' :s. u a ver lSemen w lC carry no lD 1-three one-hundredths of 1 per cent. ge~ce, except a spur to cupidity, should pay the same as any
In 18311 under President Jackson, the customs revenue was $21,922.000 other commodity. So in this bill we have the result of the evoand the mternal revenue $12,160.62---88 per cent customs and only lution of the original plan in the increase of the rate for reading fivf! -one-hundredths of 1 per cent internal revenue.
In 1847, Polk's administration, during the Mexican ,war, total ordl- matter, which is to be ultimately raised 50 per cent. In other nary revenue $26,467,703.16. Of that sum $23,747,864.66, or 89 per words, to remain 1 cent per pound, as at present, until July 1, cent, came from custom~;:, whil~ only $375, or one fifteen-hundredth <lf 1918, then to 1-i cents till July 1, 1919, and thereafter 11 1 per C'..ent, came from ir.ternal rev-enue. '2"
In 1863, Lincoln's administration, Civil War period, total Qrdinary cents per pound. Advertising matter is to be compelled to pay_ revenue, $112,094,945.57. Customs, $69,059,642.~0, or 61 per cent; for .its carriage .as follows:
7598 . CONGRESSION _iL ·RECORD-HOUSE. OcTOBER 1, .
This amendment makes the zones applicable .to fourth-cl ass .matter applicable to the pol'tion vf second-class matter -devoted to advertiseDlf'nts where the percent:tgt> of spuce •1evott>d to advertisements exceeds 5 per ct>nt of the total ~pace of the publication. The rates of postage upon the portion of such publications devoted to advertisements provided by this amendment are as follows:
Zone. July 1, 1918,
to July 1, 1919 (cents per ponnd or fraction thereof).
On and after- ' '
July 1~ 1919, to Jwy 1,
1920 (cents per ponnd or fraction thereof). _
JoJy 1 ~ 1920, to TUly 1,
1921 {cents per potmd or fraction thereof).
After July 1, 1921 (cents per pound or fiaction thereof).
but that increase. comes not from any new methods invented el e.where, bu~ through the readoption of the taxes imposed by the House, and an increa e in the exce. s-profit tax, based not upon any new principles, but merely upon principles originally adopted by the Hou e. When we exempt the pro\i ion with regard to the tariff tax, the 10 per cent duty on all import , which no man here e\er defended as a matter of principle, becau ·e n fiat rate of 10 per cent on all imports cnn not be defended as a matt r of principle eithe1~ from the protectiYe or the free-trade standpoint, and when we elimlnate the retroacti\e tax on incomes,
ne\er defended here as a scientlfi.c proposition, there is practically not a chang~, so far a. · basic _principle is concerned, in the bill
1i 2~ 4 41 5! 7 71
2 as :we pas e<l it months ago anti as it now comes before u as 3 a result of the action of the conference committee. 'l'he bill 5 is, in round numbers, about ~600.,000,000 higher than when we ~ originally passed it, made necessnry .by increa ed demands upon 9 t~e Treasury, and accompli heel, a I ha\e aid, by the ree tab-
10 hshment of many of the House tnxe. and by a graduated increa ·e -----___,--.....!----___,..!.-.-----'------'----- in the exces;~-profits tax based upon the Hou. e principle. 8 ....................... ..
11 1~ 2 2! "2} 3 31
1! 2 3 3~ 4 5 ~
'Vhen that is done no transportation company can complain. As I have repeatedly said, I am personaily opposed to tlw The Government can not complain. And _no periodical pub- policy of raising so large a proportion _of our war expenditures lisher should complain if he is simply to pay for the carriage by taxes imposed on the present generation. A nearly as I can.
_of hi<; commodity. That is all he is expected to do. It has figure it, we are propo ing now to raise nbout 40 per cent of been recognized -:for years that this is a plan that should be our war expenditures b~· taxation antl about GO per cent by bonds. followed in the ma.tter of transportation of the mails. The Personally, I would prefer that a -small proportion of our war basic principles of fiat rate for reading matter and zone basis expenditures should be borne by the present generation. None for advertisement now adopted ~hould be studied by the Post of us know what those expense will be, however, nor how Office Committee that it may more justly cla sify the rates much more money we \Y:ill ha\e to rai e next year. So I am which are to be permanent. I regret the increase made in first- content, ewn though the proportion is a little higher than I class mail rates. It wa unnecessary and is unjust. myself would like, to give my emphatic support to this bill as it
Mr. COX. Will the gentleman yield? now comes before us. Of course, there are many things in it Mr. SLOAN. Yes. of which I tlo not appro\e, there are tl1ings in it .which no 1\Iem-l\Ir. COX. How much doe this yield in revenue? ber of this Honse and no l\1ember of another bo<ly entirely ap-l\1r. SLOAN. I can not, of course, give the precise figures, prove · ; but, o-entlemen, we must each of us yield om· individual
but it is conservati\ely e timated at an increase of $6,000,000. It views in times like these to the opinion of the majority. Do yon is intended to be scaled according to the expense of carriage. It not realize that it is an e:rtraordinatT .thing that we ha\e here a is not so much a matter of re\enue, but it is placing the Govern- conference report upon a re\·enue bill upon which the gentleman ment in relation to the publisher on a basis of value recelved. from North Carolina [1\lr. KITCHIN] and the Senator from
It would have been a gracious act, perhaps, on the part of Penn~ yl\ania [1\lr. PENROSE] ·tand in . agreement, as do tho the House conferees, in view of the recent refusal of the Secre- gentleman from Illinois [Mr. RAI~~Y] and the Senator from tary of the Treasury and Congress to use the publications of Mas ac11usetts [Mr. LonGE], and above all, that we have here the United States on a paid basis to advertise our great nationnl a revenue mea ure upon which t):le gentleman from l\lichigan loans, and the further fact that white paper has become so ex- [1\lr. FoRDXEY] and t 1e Senator from l\Iissi sippi .[1\Ir. 'Vrr.pensive and the. Go\ernment seems powerless to control it, to LIA~Js ] nre in accord. '\hat could be better proof that we aro have omitted this second-class rate change. However, the pln.n all united "·hen it come to measure neces ary for the defense adopted is the best plan seriously presented- and considerel1, of our CQuntry and th~ preservatJon of American ideals.. (Ap-except the so-called McKellar amendment in the Senate, ouce p1ause.] · · adopted by the Committee of the Whole and then reje<;ted by 1\.fr. COOPER of 'Vi con in rose. the Senate. .. The SP~A.KER. For what purpose does the gentleman ri e?
I have no doubt that within two or three years, probably -be- 1\lr. COOPER of Wi con in. 1\Ir. Speaker, I a k un:mimou fore this bill has gone into complete effect, the Committee on con ·ent to adclre ·s the House for 10 minute . the Post Office and Post Roads, of which the gentleman from 1\fr. FORD~TEY. 1\lr. Speaker, I shall yield to the gentleman Indiana [Mr. Cox], who has just interrogated me, is a member, if he will first let me yield to another gentleman. I yield fi\e will ha\e made a study of this and "·ill haYe completed what minutes to the gentleman from Mas aclmsetts [1\lr. GlLLET'T]. ought to have been completed 10, 15. or 20 years ago, so that The SPEAKER. But the gentleman from Michigan has not the carriage of mail throughout the United States will not be a any time to yield. money-making proposition. At the same time it will not be a Mr. GARNER Mr. S11eaker. what is the parliamentary sit-money-losing proposition to the Go\ernment of the Unit~d nation 't States. [Applause.] The SPEAKER. The parliamentary situation i that the gen-
1\-fr. COOPER of Wisconsin rose. tleman from l\!ichjgan had an hour and has u ed that hour up. The SPEAKER. For what purpose does the gentleman rise? l\1r. COOPER of Wisconsin. Mr. Speaker, I recei\·ed recogni-1\ir. COOPER of Wisconsin. l\11·. Speaker, I would lik~ to tion, and I a k for 10 minutes.
have the privilege of speaking to the House for 10 minutes upon l\.!1·. FORDNEY . . It is only fair that we. should ha\e as much this bill. time on this side of the Hou e as was consumed upon the other.
The SPEAKER. The Chair has no objection to that. l\lr. KITCHIN. How many gentlemen desire to talk? . Mr. MOORE of Pennsylvania. Mr. Speaker, I yield fi\e min- 1\fr. FORDNEY. I have se\en who desire from 5 to 10 min-utes to the gentleman from Ohio [1\Ir. LONGWORTH]. utes each. .
Mr. LO~GWOHTH. l\fr. Speaker, I am so profoundly im- 1\fr. KITCHIN. · Can we not complete the debate in 30 min· pressed with the necessity for the spee<ly adoption of this con- ute ? · ference re110rt thnt I mn only going to take a moment and that for The SPE.d.KER. The gentleman from Wi consin wants 10 the purpose of c ·pressing my gratification at the triumphant minutes. vindication of the wi: dorn of this House in passing this bill. 1\lr. KITCHIN. l\Ir. Speaker, I ask unanimous con ·ent that When the CoDl!ll ittee on Ways and Means reported the bill to all debate ~o ·e in 40 minutes. to include in that 10 minutes to the the Hou~ c a storm of critici m irom responsible, ns well ns irre- gentleman from Wi. cousin [l\lr. CooPER] and 30 minutes to be sponsible, 8ources :1rose. w·e were described as backwoods r.onh·olle<l by the gentleman from l\Iichigan [1\.Ir. FoRDXEY] . statesmen, and other \ery uncomplimentary epithets were hurled The SPEAKER. The gentleman from North Carolina asks at us. and when the House substantially accepted the report unanimous consent that debate shall close in 40 minute , and of the Committee on ·ways and Means you all we£·e include<l _in that out of that time the gentleman from Wisconsin [Mr. CooPER] that general · blanket characterization. It was ft·eely predicted shall have 10 minutes and the gentlem~ from Michigan [l\Ir. that \vhen another body had had a chance n,t it we would not FoRDNEY] shall control the other 30 ·minutes. Is there objecbe able to recognize om· own han<liwork. But to-day, after an- tion? [After a pause.] The Chair he~rs none. other bo<ly has spent months in the consideration of this mat- Mr. LONGWORTH.. l\1r. Speaker, before the gentleman· proter, we ha-ve· confronting us, so ·far as the basic principJes a,i·e ceccls, I ask unanimous consent to extend my remarks in ths concerneti, • practicaily the identical· proposition. for the . enact- REcORD. . ment of which we were so bitterly criticized . . It is true that a The SPHAKER. Is there objection? [After a pau e.] _The large increase has been made in the total of taxes to be raised, Chni~· hears none.
1917. CONGRESS! ON AL RECORD-HOUSE. 7599 ~Ir .. SLOAN. Mr. Speaker, I make the same request. The same request 'vas made by ll.r. GBUN of Iowa, Mr. Aus
TIN, "Mr. ;KREIDER, Mr. LoNERGAN, Mr. MooRE ot Pennsylv11nia, 1\lr. Foss, Mr. Tow ~EB, and 1\Ir. KrEss of Pennsylvania.
1\lr. FORDNEY. 1\lr. Speaker, I ask that all \rho wish . to extend their remarks on this bill be permitted to do so for the next five days.
The SPEAKER. Legislative or calendar? :Mr. FORD~"'EY. Legi lative days, Mr. Speaker. The SPEAKER. The gentleman from Michigan [1\lr. FoBD
JSEY] a ks unanimous consent that all gentlemen shall haYe the privilege of extending their remarks on this bill for fi\e legislative days. Is there objection?
1\lr. WALSH. 1\lr. Speaker, I object. Mr. FORDNEY.- I will ask unanimous consent that tl1ey may
extend their remark for five calendar days. The SPEAKER. The gentleman asks to make it five calendar
days. Is there objection? . 1\Ir. 'V ALSH. 1\11·. Speaker I object. The SPEAKER. Is there objection to these indi"Vidual Mem
bers who asked to extend their remarks? Mr. ·wALSH. 1\lr. Speaker, are the requests preferred to
extend remarks upon thi bill? · The SPEAKER. 'Vell, there are half a <lozen--1\lr. WALSH. Tho e are the ones I am referring to. The SPEAKER Is there objection? [After a pause..] The
Chair hears none. · l\lr. l\fADDEN. l\Ir. Speaker; I ask unanimous consent to ex
tend my remarks on this bill. Mr. GR.A.H..u.r of Illinois, l\fr. MAilTIN of Louisiana, l\fr.
ROBBINS, Mr. 0SBO'B~E, l\fr. SMITH of l\fichiO'an, l\fr. PARKER Of New Jersey, 1\lr. CARTER of Massachu~ ett , Mr. KNUTSON, Mr. HuLL of Iowa, Mr. JoHNSoN of North Dakota, Mr. SIEGEL, 1\Ir. SABATH, l\fr. KEATING, Mr. CLAYPOOL, and Mr. HULL of Tenne ee asked unanimous consent to extend their remarks.
The SPEAKER. Is there objection? [After a pause.] The Ohair hears none.
Mr. DEMPSEY and 1\lr. FocHT asked unanimous consent to extend their remarks on thi bill.
The SPEAKER. Is there objection? [After a pause.] The Chair hears none. The gentleman from Wisconsin [l\lr. CooPER] is recognized for 10 minutes.
Mr. COOPER of Wi cousin. Mr. Speaker, the gentleman from Ohio [l\fr. LoNGWORTH] a moment ago said that there are many things in this bill to which we can not rill agree, and this he said in a e11sual way, as if all the e things upon '\\hich we can not agree are of equal importance and of rather trifling character. But the gentleman i great1y mistaken. For, Mr. Speaker, thi<> bill contains one of the mo t reactionary and important provi·ions that has been before the American Congress in 50 years. I refer to the provi ion for the establishment of a. zone sy tern for the carrying of mail. I observe gentlemen upon the other side of the aisle smiling incredulously at my last obsenation, and therefore, in upport of my statement I beg to direct their attention to the opinion of a very distinguished man who, whil-e governor of a State a few years ago, when an attempt ,,.as being made to have Congress establi h the zone system, u ed the following forceful language :
It must be that tbose who are proposing this change of rate do not comprehend the effect it would have. A tax upon the business of the more widely circulated magazines and periodicals would be a tax upon their means of living and performing their functions. They obtain their circulation b their d.irect appeal to the popular thought. Their circulation attracts advertisers. Their advertf ements enable them to pay their writers and to enlarge their enterprise and influence. This proposed new postal rate would be a direct tax, and a very serious one, upon the formation and expression of opinion-its more deliberate formation and expre sion just at a time when opinion is concerning itself actively and effectively with the deepest problems of our politics and our social life. To make such a change now, whatever its intentions in the minds of those who pl'OJ?Ose it would be to attack and embarra s the free procesF;cs of opinion. Surely ober second thought will prevent any such mlscbievou · blunder.
Now, it may interest gentlemen across the nisle to know that the di tinguished person who thu 11owerfuny· denounced the propo al for a zone sy tern was a Democrat by the name o!
~ 'Voodrow Wilson. [Applau e.] Ne\er, until this afternoon, had I known of this opinion ·of
l\fr. Wi..l on's, and I trust that I may be pardoned if, after citing such an inspiring declaration, I refer to my own views ~n<l remind o-entlemen that al'\\ays <luring · the years of my erviee here, I have oppo ed efforts to establish a zone system.
Frequently since I h'uye been a Member of the House attempts haYe been made to enact n law to create· ueh a system, a system that was .. thorougbly tried rears ago: proven a failure,. and
. discanled for the vastl better one of to--day: When the bill wa originally before the Hou ·e, la t l\Iay, I spoke against the prop ed zone system. Again when two weeks ago, it ·came back from the Senate I ~poke against it, and said that ·its
effects wonld resemble tho e that wollid follow a supposed law re tricting "the cireul~tion of the· publications of California, Georgia, Wisconsin, l\Iissi ippi, Texas, or any other State · to that Stnte alone. Such a law as I have supposed would, -' Of course, soon destroy e-rerything like national spirit, bring upon the country the cur e of ectionalism, and sow the seeds of ineyitable disruption.
Now, a zone system, as I then said, "'\\Ould not confine circulation to a State but, as was intimated by this eminent Democratic go\ernor-now President of the United States-it would sectionalize apd harm the Republic becnu e it would surely te:ncl to re ·trict publications to zones.
There is no more reason for applying the zone system to n-ewspapers and magazine than there would be to apply it to letters. We carry letter. to the Pllilippine , and Porto Rico, and Alaska, and Panama, and the Hawaiian Islands, ana all over the Unitro States, for 2 cents, at a loss. But on grounds of high public policy \Ve have been doing this and will continue to do it except a8 this report proposes to le: sen the loss a little by raising letter .postag to 3 cents. But, wi ·ely. it is propo ed not to have a zone ystem for letters but to retain for them a fl.at rate.
The greate t law to promote commerce nnd industry, which the United States has ever 1..-nown, is, in my judgment, the law which established a low fiat rate for the carrying of newspapers and magazines. No other · country has ever 'vitne sed such an a tonishing g1·owth in commerce and indu try-in business generally-as has come to the United States since the zone system "'\\US abandoned and flat rates put in operation.
The press is t11e only business"Inention.ed by n:une in the Contitution of the United State·. It i not only different from any
other busine s, but it is also more important than any otl1er. It carries news and knowledge, and therefore newspaper , magazine. , and periodicals ought to go everywhere throughout. the national domain at cheap fiat rates.
Mr. SLOAN. 'vm the gentleman yield? Mr. COOPER of Wisconsin. I regret that for lack of time I
can not yield. I heard the gentleman' · statement a moment ago, and I am trying as best · I may to answer it and some of the other statements made during ~the droate. But being so re tricted in time makes it impo· ~ible to present a consecutive argument with anything like proper equence. of ideas.
Gentlemen have lisen bere and said, " Rnsb this through. Let us get away on the train." And yet, in essential re pects, nothing more important has come before this Congress than is this denationalizing p1·ovi ion. It is a denationalizing provision. Thoughts and idea , and their dissemination broadcast throughout this country, as they have been disseminated under the law e ·tablishing flat rates, have done m<>re to make us in sentiment a nation than did the Ci-vil War itself. That postal law ha in many wars done more than any other law ever pa ·ed by the Congress of the. United States to make us in unity of purpose a nation. That Jaw establishing cheap, flat rates for newspapers, magazines, and periodical has been also beyond question our Yery greatest promoter of' comwerce and industry. These ad-verti ements ca.u e the writin<r of millions. of letter , and thus, as the record of fact abundantly shows. l-ead at once to an enormou increase in the receipts of the Post Office Department. The Po t Office Department would to-day be self-sustaining but for the rural free delivery. The Rural Free Delivery System does not in money pay for itself. But neither for that reason, nor for any other, should we give up·, nor will we give up, rural free delivery. But you gentlemen who are so economical, who do not want, as you say, to "subsidize" new paper and magazines, why is it that you do not propose to give up the Rural Free DeliYery Sy tern, which is operated at a lo ? Are there too many votes in it? \Vhy do you propo e to carry county paper all o\er the counties free? We all are in favor of tl1at. It does a world of good. But why do- you thu " sub iilize" the county papers'? _Why do you " subsidize " the farmers, carry their mail at a lo , and carry the county paper at a los ?
I would not intimate that there were- \otes in that p1·opruition. Far from it! It is state manship! [Laughter.] There. is not a man here nor anywhere else that in a fait· debate can tiefend a proposal for a zone sy tern and carry it through Congress. It has been defeated and defeated when brought forward to st~nd or fall on it own merit . But ·now her it i in a conference report on a bill to raise the reYenue · neces ary to thoroughly equip the Army and the Navy and carry on the war. Anu we must vote for the system or vote ngainst the entire conference report: This sort of coercion over the votes of the HotL'5e . is wrong-absolutely, inexcusably 'noug. This p1·ovi ion, if it hau merit, ought to have been br()ught in he1·e upon a Po t Office bill. Let them bring it in on sucll a bilL Tllen ret the friend of the zone system · g~ve the Hou ·e two days of uebate on tlli. most
•
76()0 G~ONGRESSION A]} RECORD-HOUSE. OCTOBER 1,
important .subject, and Members '\\ill take Woodrow Wilson's statement, together with the indisputable facts, as their text, elaborate upon it, and defeat any atteri>.pt to reestablish in this country the discarded zone system for the carrying o~ the maps. [Applause.]
The SPEAKER pro tempore (1\Ir. DEc:ru:n). The_time of the gentleman has expired. _ .
1\Ir. COOPER of Wisconsin. Mr. Spenl~er, I ask unanrmou.s con ent to extend my remarks in the RECORD on this bill.
The SPEAKER pro tempore. The gentleman from Wisconsin asks tmanimou.s consent to ext~nd his remarks in the RECORD .on this bill. Is there objection? [After a pause.] The Chair hears none.
1\Ir. COOPER of Wisconsin. Mr. Speaker, unuer the leave to extend my remarks I insert the followir~_g very ~ffedive s~atements of facts on this vastly important question. It may be appr;opriate in this connection to say that I have, neither directly nor iuuirectly, had any communication with any member of the Periodical Publishers' Association concerning the following articles. As these have appeared, I have read them arid been impre ·seu by their strep.gth ·and clearness, and ther~fore I asked leave to insert them in the record of this debate:
It is repeated so oftpn that magazines cause the post office a loss of $89,000,000 a year that many have come to accept it as a fact instead of a tradition ; another set of figures makes the loss $40,000,000; a third guesses some entirely ditierent figure. ·
The advocates of the pre ent zone proposal are saying in Congress that although newspapers pay their way at 1 cent a pound, magazines cause a loss of $89,000,000, from which it would f~llow that newspapers cost the post office only 1 cent a pound and magazmes 33 cents a pound. The post-office figures, on, the other hand, say that magazines and trade journals cost less than newspapers by 0.23 of a cent per pound, on account of the greater number of pieces of newspaper mail that must be handled for each cent of revenue, and in spite of an admitted longer average haul of magazines.
LeavinO' for a moment this welter of contradictions, let us look at what bas "'actually happened to the post-office revenues as a result of the pounrt-rate system.
WHAT 1\IAGAZINE l\IAIL HAS DONE TO THE POST-OFFICE REVENUES.
The following figures are made up from the annual reports of the Postmaster GenE>ral: . _
In the year 1870 there was a deficit in the Post Office operations of 21 4 ppr cent of its turnover.
in 1879 was passed the act putting second-class matter on tb~ poundrate basis and cutting down radically the amount the subscnber had to pay as postage on his periodical. An immeuiate increase in the volume of second-class mail began.
In 1 80 the Po t Office deficit was only 9.6 per cent of its turnover. In 1 5 was passed the law making the pound rate 1 cent instead of
2. Congress dJ,d it on its own initiative, without even a suggestl~n from any publisher It was clone on the theory that the national diSsemination of literature should · be encouraged, and with the hope that the greater volume of second-class mail resulting, with all the collateral Po. t Office patronage accompanying a greater volume, would help to modify the effect of so low a rate on the Post Office revenues. ~be Yolume came. Second-class mail trebled in ~he decade · ending Wlth 1890. The next decade . brougb t ·a phenomenal 1ncrease--from 170,053,-910 pounds in 1890 to no less than 382,538,999 pounds in 1900.
The deficit in Post Office orarations in the year 1900 was only 5.2
pel;efJe prosperou. years following HlOO the increase in second-class matter was stupE>ndou -fr·om 382,53 ,99!l pounds in 1900 to 488,246,-903 pounds in 1902, only two years. These. years brought. the great forward movement in the production of low-pnced but well-edited maga-
ziii~·1no'1 the Post Office deficit was only 3.41 per cent of its business. In 1902 the dPficit wa 2.4 per cent.
This wan the smallest percentage of deficit in 18 years, and the smallest, but two, in 57 years.
But mark: The year 1002 would have shown no deficit at all but for a new item qf expen e. $4,000.000 for rural free delivery. .
Our Gover~ment had wL'>el:v and beneficently extended the service of the Post Offil'e to farmers in isolated communities, regardless of any commen~urate return from that branch. The report of the Postmaster General for 1902 says: " It will be se~n that had it not b~.en for the large expenditure on account of rural free ·delivery the receipts would have exceeded the expenditures by upward of $1,000,000."
Since 1902 there has each year been a handsome surplus in the operations of the Post Office outside of the expenditures of the Govern-
melnnt ~DrlGu~g~ fp~;tdg~~?i·e~orts a stu·plus of $5,029,236.07, whi<;h. added to the lo. s wl ely and deliberately taken ?n the Rural Free :Qeh-y· ery ~crvice , shows a real pt•ofit as co~pared w1th the yea~s before thts aid was given to the a~ri<'ultur>~l distncts of more than oO,OOO.OOO.
Tbi then, is the terrible effect of the pound rate for seconcl.-class mail a'nd of th~ consequent increa e of ma~azines and othpr secondclass matter; this is the result. o'f the "shameless . subsid~," of the $89.000,000 a year loss caused ~Y the magazines; that from 18 c9 to 1916, with second-class mail increasmg from 51,000,000 pounds annually .to 1,200,000,000 pounds annually the former rE>gul.ar huge annual deficits of the Post Office have come down with each mcre~se of second-class mail until surpluses have takeh - the place of deficits, and there has been $50,000,000 a year . in addition to aid rural life. _ . _ ·
This evidence bas not been used in Congress or by the National One-CPnt Letter Postage Association. - · · · . ·
Does· it help to substantiate the "$89,000,000 loss- caused by- the
m~~aNnee.;i~e:C~t~~ which magazines ougb't . to b~ strangled. by a sudden increase of more than 300 · per cent in their cost of delivery to subscribers? lllAGAZlNES ADE THE MOST PROFITABLE CUSTOMERS OF THE .POST Oll'FICI!l.
1. Through huge purchases of stamps entirely outside of their pound- ·
ra~h~a~~~~t~f a representative magazine has been give~ to Members of Congress with the following facts of its most recent four months' operation:
It paid the Post Office during these four months for dellvery to subscribers $8,676.04. - .
But during the same period it purchased 2-cent stamps to· the amount of $20,202.06. ' , ·
It purchased 1-cent stainps to the amount of $24,255.49. It paid parcel-post charges of $3,196.20. Here are direct. purcha es from the Post Office, entirely apart from
its pound-rate payments, amounting _for four months to $56,329.79. The above was for outgoing mail matter. Incoming showed for the 4 months 258,272 sealed letters with postage
stamps affixed, in addition to post cards and parcel post deliveries. So far we have payments, in only four months, to the Post Office of
$61,495.23, over an above the pound-rate payments of $8,G7'G.04, in transacting the direct business of the magazine.·
But in addition, . during the e four months, 800 advertisers spent $99,800.85 in this magazine for advertisement appealing to the people of the entire country. How could these 800 business men get back their $99,000 investment except by operations requiring the purchase of hundreds of thousands of additional 2-cenf stamps?
Is it a good thing for the Nation's revenues to trangle this publisher's business? Even if the question of fairness to him be dismissed, after he bas built up a busine s through 25 years, delicately adjusted to a 1 cent pound rate, is it good business for the Post Office suddenly to more than quadruple his freight rate and cut down or destroy )lis activities? .
2. Through the vast amount of postage generated by magazine advertising:
About 75,000,000 is invested annually in magazine advertising; about $400,000,000 in news(lapers and periodicals other than magazines.
Here is the postage bill of one of the great " mail-order " magazine advertisers-a company selling excellent clothing to women who have not access to the great cities and their department stores. The president of the company writes:
" Our business is derived entirely, either directly or indirectly, from our magazine advertising. During the year we paid the Post Office Department for ·carrying om· first, third, and fourth class mail matter the sum of $433,242."
What a single advertisement in one issue of a magazine did for another women's ,., wearing apparel" bouse is recorded on their books as follow :
" The postage required to answer the 15,000 replies from the onecolumn insertion in the magazine, also to send the merchandise reqnirl:'u by 2,000 of the inquirers and to 'follow up' other inquirers, was $5.400."
'l'he Government charge for carrying this advertis"ment was $3 .83. (That $5,400, by the way, did not include the several hundred dollars spent on postage by the inquirers thPmselves.)
The president of a concern publishing Pn<'yclopedias, nab.1ral histories, classics, etc., investigated the correspondence created by a recent page of his advP.rtising inserteu in a single magazine:
'' The stamps and money orders bought by the inquirers and the publisher, as a result of the 4,000 inquiries to this one advertisement, amounted to $884." .
The publishers paid the post office to carry that page, at second·class rates, $12. A good businPss man would be satisfied to lose several times $12 in order to do $884 worth of business as profitable to him as first-class mail is to the Government.
Scores of small advertisers arP found in any issue of any popular magazine. They are just as good customers of the post office, in proportion, as the big concerns using c<llumns of pages.
A modest l-inch magazine advertisPment is printed by a company which reports that its yearly postage bill from that cause is $i5,132. Adding the approximate postage on the 1,500 letters a month sent to the company, the yearly total of oostage createrl by this inconspicuous concern through the magazines is found to be $5,492.
Two qmirter-column announcements of a dress fabric appealing to women. in a sing-le magazine, brought 7,000 replies, involving postage stamps worth $230.
Pretty good business getters for the department. tbP.se " ads," which cost the publishers to mail at second-cia s rates $19.40.
Even better in proportion was a one-fifth column appeal to moth('rS in one issue of the ·arne magazine. It produced postage to the amount of 240.
To carry the littlE> advertisement at second-class rates the Government charged $7.76.
A single-column magazine "ad" of a Chicago clotbin"' firm, with a number of retail stores over the country, brought 4,000 inquiries, which. with follow up, etc., caused postage of $380. ·
That column cost t.he publisher to mall at second-class rates $38.67. The Woman's Home Companion sent a letter to the advertisers in a
November issue asking for an exact memorandum of the letter postage on the inquiries from their November advertising, and the answer!'; to these inquiriE>s. Seventy-five aclvertisers rE>p nrte1l with definite figures an aggregate 1ettE>r-po tage Pxpenditure of $3.a 5.90. ·
The Woman's Home Companion paid the Government just $583 for carrying the portion of the magazine on which these 75 advertisements were printed.
Any advertising man can point to "hundreds of" mail-order firms" like the above. These firms can trace directly to their magazine advertising every year purchases of millions of dollars' worth of the stamps that make big profit for the Post Office. ·
It is even more surprising to learn the enormous postage bills caused by an entirely different class of magazine adve1·ti ers-the "general publicity" or "national" advertisers-who wish the reader to a k for theit· fine soaps, or mattresses, .or silks, or stationery at hi~ local sto~e. These firms do not depend on direct rpplies, yet they receive so many that thousands of dollars are spent for stamps per year in scores of cases-even per month in many.
A mGderate-priced shoe is sold through a number of. retail stores in different cities. 'l'he manufacturers advertise in magazmes for national "publicity," to bring buyer into these st~re . Incidentally tbPy mention the.ir department to fill orders by mail. Thus an enormou. correspondence has been built up. of which the avPrage increa e alone during the last three years bas involved 264.000 first-class letters-a minimum po. taga of $5,280. This is simply one }early addition to the .. company's already large fir t-class bu ine , of which it wl'ite tb~t all bu~ a. nominal percentage ·• bas been ·• induced " by our magazme adverttsr-
me?.~~re than $15 000 is spent annually . for po tage by . a mattress manufacturer " following up " inquiries received from his magazine advertisin"' t'hough that. is designed to create a demand for the mat-tress at local furniture stores. ·
This .$15,000 is entirely over and above his steady correspond~ce with dealers, etc., which . was built up in the first place by magazme
ado~ii~Fgthc m;ny recent "contests" conducted by magazine advertisers was that of a stationery company. T heir s is also "publicity,"
1917. CONGRESSIONAL RECORD-HOUSE. 7601 not mail-order, advertising, It is designed to create a demand for their paper over the ~?tationery-store counters. But their " contest," announced exclusively in the magazines, brought 59,000 replies. which with follow-up, etc., avC!raged 12 cents first-class postage--a total of $1 080 in one month. · •
~Iagazine advertisements of a popular cold cream brought 170,000 letters to the manufacturers last year. though the controlling purpose of the campaign was to get the lJUblic to ask for that kind of eold cream at the drug stores.
Not including postal orders, special delivery stamps, etc., the stamp l'evenue to· the Government from those letters was $8,500.
And, of course, that does not include the profuse corr spondence between the manufacturers, the jobbers, the drug stores all over the country, and so on.
For another facial preparation a single advertisement in a leading weekly magazin!! brought more than 13,000 replies. The stamps involved here add up to $9\lO.
The publishers paid the Post Office to carry this advertisement at the second-class rate $48.83.
In the first part of this advertisement the figures in the reports of the Po~tmaster General are usecl to show how, instead" of ruining the post office, magazines and other sccond-cl.'lss mail have increased enormously in volume along with a revolutionary change in post-o1fi.ce finnnces from huge annual lo ses to huge annual profits.
The e few examples out of millions of post-office transactions caused by magazine advertising enable you to understand why the magazines have been a boon to the po t-office revE>nues.
Is thi the kind of testimony to justify death sentence on magazines "because they cause a loss to the post office of $89,000,000 per year"!
TIIB PERJ:ODICAL PtJBLISREllS1 ASSOCIATIOX (Oomprisinr; publications with aggregate C'irculations
of mo1·e than. 23,000,(JOO per iss~te) .
The publishers of magazines have never protested and do not now protest against any proposed war taxes that affect all business men alike.
'l'hE>y are willlng and anxious to pay any ex-cess-profits taxes, income taxes-any and all that Congress sees fit to l('vy. Scores of them have offel'ed to give all their profits while the war lasts.
They do protest with all their powel' against a hasty and ill-considered svecial device of postal le.,<>isla.tion, zone bill, under the guise of tax raising which unfairly singles out virtually onl.y 23 per cent of pul.>lishers to be specially taxed. t.he class all·eady most burdened, and demands from scores of these, not a 5 per cent tax on profits, not a 60 per cent tax on merely the excess profits of war times, but much more thon all the pt·otits coming from these publications.
The conferees have under considenttion in the revenue bill a modification of the defeated Senate amendment, changing the 1 cent a · pound postal rate for second-class mail to a zone system, making no increases in the first zones up to 250 miles, and increasing the present rate on part of the periodicals no less than 900 per cent for the far southern and western sections of the United States. Tile introduction of the defeated ::ienate zone bill was accompanied by a statement from a group of newspaper publishers, who are scarcely affected by the proposed system, undertaking to prove that newspapers carried at 1 cent a pound caused no loss to the post office ancl charging. magazines alone with causing tbP mythical and traditional $89,000,000 loss.
The eft'ect of this zone system is virtually to leave the rate on most newspapers as it was and to multipl,v by more than three the average rate on nationally circulated periodicals and magazines.
!any worthy magazines would be destroyed. The industry would be revolutionized, with the half dozen cf the strongest periodicals with the largest advertising patronage helped toward a monopoly.
The proposed measure substitutes for the Senate Finance Committee's carefully considered refuml to raise rates at this time an average increase of more than 200 per cent so cunningly distributed by the antiquated and provjncial zone system that it exempts the newspapers and falls entirely on the nationall v circulated magazines and busi.}:Iess and technical papers. The Post Office Departn1E>nt's figures show these, including h·ade joU!·nals, to make up only 23 per cent of the secondclass mail. These W(luld pay 98 pex: cent or the tax.
S..1i\1PLES OF THE u EVIDEXCE.JJ Below are samples of the testimony presented by the advocates of
the zone system ann a small group of newspaper publishers, which did not !nclude any of the large city daili~s :-
(1) That magazines, but not newspapers, are responsible for "an annual deficit reported by the Post Office Department of $50,000,000."
The Postmaster Gelleral's report shows for the past year a surplus of $Li,OOO,OOO even after a loss of $i30,000,000 for Rural Free Delivery Service.
(2) It was explained why newspapPrs should be chnr~ed less than magazines ( ee CoNonESSIOXAL RECORD) : "There is a wide difference in the cost of transporting heavy traile journals, immense numbers of Saturday Evening Posts, and magazines of that character and the cost of transportin~ newspapers. It is a different kind of paper, It is not so heavy and the cost of transportation is less."
The 'enator's evidence seems to be that a pounu of magazines weighs more than a pound of newspapers.
If you were a grocer would you rather deliver four quarter pounds of sugar to four different adill'esses or 1 pound of su,:mr to one address?
(3) It is claimed in Congress that the Post Office DepaTtment loses $8!>,000,000 yearly on second-class mail, but that newspapers do not contribute to tliis loss, and many figu1·es are presented to show that 1 cent a. pound is about the co t for newspapers, leaving the entire claimed $89,000,000 loss to be produced by the "heavy" magaziiies.
The magazines and business journals together make up only 23 per cent of the second-class mail (ll . Dot-. 559, p. 144), which weighs altogether about 12,000,000,'<,)0 pounds, so that if there is a total cost in excess of receipts of $89,000,000, the magazines ml.li!t be costing t)le Uovernment 32 cents a pound, as a2.ainst 1 cent for the newspapers.
But the Hughes Commission, arrer studying the figures an entire summer, reported that there is "no basis for the conclusion that the comparative cost of transporting and hanuling would justify a differ<'nce in rate" (between magazines and newspapers), and again: '' These figures furnish no sufficient foundation for a discrimination i,n
ra~~\ibe{heee~o~f'o~ac~er:6e~~~t~e~~~:;ic~~:~· figures state definitely that ne-wspapers cost the Post Office more per pound than magazines, in spite of their shorter haul (owing to the handling cost being a larger factor than the pure tranc:portation cost, and since newspapers have more than four times-as many pieces to the pountl as magazines).
L\--482
,
Is this the kind of testimony to pass a death sente:tce on? . Testi· mony to the effect that magazines cost the Government 33 times as much as newspapers, when the Post Office figures, the only ones to b had, show that a pound of magazines is less costly to the Post Office than a pound of newRpapers?
( 4) 'l'he defeated Senate amendment promiseu additional revenue of $12,600,000 from this death-dealing amendment. What were the facts 'i
Even assuming that all the circulation of all the magazines would remain with a far southern and western freight rate increasecl 500 per cent, the automatic exemption through the zone system of 98 per cent of newspaper circulation and the further arbitrary exemption of agricultural, religious, and certain other papers would have brought the new rates entirely on the magazines. .At the present rate of 1 cent a pound they produce post-office r evenue of $2,760,000. .An average addition of 2.08 cents a pound would amount to $5,740,000, not 12,600,000, a further sample of the accuracy of the testimony offered to support this attack on publishers.
But even this ls on the supposition that magazines, already struggling for their lives on account of war prices for paper, could stand an increase of uOO per cent on their carrying charges to nearly one-third of the nit~?d Stat.es. The measure is destructive and would produce no increa e m revenue at all or anything but destruction.
(5) The author of the Senate amendment complained that in ~Ir. Taft's aclminish·ation a postal commission, " the chairman of which was !10 le ~ a person t~an. the I;Jon. Charles Evans Hughes, was appointed to mvestigate, and ~d mvestigate and made a report. Nothing was clone."
The Senator did not. however, add that the llughes Commission exposed the fall~cy of every single proposal and set of figures advanced in support of this !'.one system and now again uncle.c consideration, ancl that it utterly condemned any zone system of postal rates whatsoever.
Of the many com.missions provided by Congress to study the problems of second-class mail rates the la t, an~l a . very distinguished one, was compos~d of Charles E. Hughes, then Justice of the Supreme Court of t?e Umted States; A. Lawrence Lowell, presidPnt of Harvard Uni-.ersity; and IIarry .A. Wheeler, president of the Chamber of Commerce of the City of Chicago.
Dealing with the question of a zone system this commission spoke as follows (a Doc. 559, p. 140) : '
" The policy of zone rates was pursued in the earlier history of our post office fi:nd has been given up in favor of a uniform rate in ·dew 6f the l~rg~r mterests of the Nation as a whole. It would se<~m to the commiSSion to be entirely impracticable to 'attempt to establish a svs· tern of zone rates for seconu-class m~tter." •
'.rhis was the latest commission. The next latest was the PenroseOverstreet Joint Commission of Congress on second-class matter which held voluminous hearings in 1906. On page 28 of the report 'or this c.omm~sion the zone rate system is consiuered as follows :
"Ne~ther, for rea ons almost equally obvious, is a solution to be founcl m a zone system of charaes * * • which would artlficiallv restrict the diffusion of the periodical agencies of intelligence. • • * Would it not be politically and socially unwise to create arbitrary barriers against the processes of national unification and solidarity?
"Apart from the social and political con,siderations, which to our minds are conclusive, there are suious administrative difficulties in the way of a. zone Sl'Stem of charges."
Thus we have the two distinguished commissions on second-class mail of recent years, the only two, both deciding flatly against the zone system.
These are the kinds of testimony on which a portion of the publish· ing i.IJdustry has been picked out for death sentence.
We demand that any changes in the second-class postal rates affE>ct· in,g vitally a body of reputable business men be made by a commission w1th. time! training, and expert knowledge to do the work fairly, \Yisely, and mteU1gently.
There have been two commissions in this century; the CongTessmE>n advocating destructive zone systems are paying no ·attention to the findings of these commissions. Moreover, conditions have radically changed ; now the magazines are tran ·ported by freight instead of faRt expensive mail trains, and they do a large part of the work originally done by the Post Office. ·
l'ROOii' OF THE DESTI!UCTIOC'i ,
The statement below shows the total 11et profits of 86 periodicals of general circulation, compared with the postage they are asked to pay under the zone measure now proposed : Number of periodicals as printed below- ------------- 86 Aggregate average circulation per issue in 1916_______ 21, 264. 404 Total amount of postage paid in 1916 at 1 cent a pound_ $1, 243, 403. 09 Amount of postage per year demanded by the proposed
zone meRsure, about----------------------------J $;:), 000,000.00 Total addition to pound-rate charge per year on new
proposed basis------------------ ----------------- $3, 715, 910. 06 Total net profits of all publications for year 1!>16 _____ $1, Hl7 • 403. 73
These periodicals llave not been selected because they were horrible examples. They are rep1·esP.ntative of the rank and file of American periodicals.
List of publications furnishing figures for consolidated accounts re· ported by Price, Waterhouse & Co. and printed above: The Gentlewoman McCall's Magazine, Woman's Home Companion,_ .American Magazine' Farm anrl Fireside, Every Week, Pictorial Review. McClure's, Collier•.i Weekly, Farm and Home, The Modern l'l"iscilla, Metropolitan, Leslie's Weekly, Judge, Film Fun, People's Home Journal, Mothers' Magazine Christian Herald, Motion Picture Magazine, Ladies' World, Nationai Sportsman, Motion Picture Cia sic, Field and Stream, Smart Set, Popular Science Monthly, Photo Play, Puck, Yachting, Outing, All Outdoors, Theatre Magazine, Municipal Journal, World's' 'York, The ·ew Counh·y Life, Garden Magazine, Short Stori~s. Travel, American Penman, Current Opinion, Harper's lligazine, .Ailierican .Art ews, Orange Judd ·weeklies (5), Weekly, Monthly, and Quarterly Religious Puhlications (35), Vogue, Vanity Fair, House and Garden, Outer's Book, Spare Moments.
The case is made harder by the fact that these magazin('s arc forced to pay in 1917 7.5 per cent more for their paper than in 1916, and some of the best of them are, irrespective of postal charges, struggling for existence. In such cases the proposed rates would certainly end the struggle.
It is not difficult for even a layman to understand why such a sudllcn change would disrupt an industry when he consiclE>rs :
(1) That hundreds of the general shippers of. the nited States have shown they could not stand an increase of even 15 per cent in their freight rates •.
r
7602 CONGRESSION \_L RECORD- HOUSE. OCTOBER 1,
(2) . That the propo .. ed zone mea. ure would increru:e the magazines' freight rates of 1 cent a poun<l, which they have had for 32 years, and to which their whole business had been delicately adjusted, by more than 200 per cent.
The group of southern and southeaRtern new papers which originally arranged for the introduction of the zone systcm an<l supported it with a lengthy tatement. in the COXGRESSIOXAL RECORD, protested >iolentl.r and with ome justice against--a special war tax of 5 per cent on lbe profit of publishers. Then they turn around anLl obtain this, requiring the magazine to pay from 30 to 300 per cent of theil· profits, with a 1levicc that would 'ii.rtually exempt themselves.
flow can a publisher pay more than 100 per cent of his profits? Why sboul<l one class of publisbet·s be hastily relieved from paying
a special 5 per cent of theit· profits and another class be immediately requirell to pay a special tax amounting in many in tances to more than all their profit ?
It wa. · repeatetlly . tatetl in Congress that publishers are enjoying an $89,000,000 suh idy from the Government. It was claimed, ho,vever, that this annual so-called los on second-class mail was not caused by the newspapPI'S, becau. e, on account of their hort hauL they can be handled by the post (1tiice without loss at 1 cent a. pound.
'This i . the ba,~ic rea on for introducing a zone schedule of secondclass mail rates that woulrl practically exempt from any increase mo t of the newspaper. and arbitrarily exempt certain other classes of publication ·, hut which '"oul1l increa e the rates on magazines an1l bu iness journal (their freight rate from producer to consumer) more than 300 per cent oyer the rate on which their bu iness has been buUt up through 32 year~ . .
If it is true that tlH' magazines are causing the post office this loss of S 9.000,000, then it is costing the Government 33 cents a pound to handle them, as against 1 cent a pound to handle the newspapers.
Wba t does the Po't Office Department itself say? Turn to Hou e document 5::19, page 144, of the Report of the Hughes
Commis. ion. Here Justice Chari s B. Hughes and his associates publish the figures
pre. ented by the Post Office Department showing that magazines aml trade journal cost the post office 0.27 or 1 cent les.- per pound than newapaper · cost (instead of thirt.r-three times as much) !
Also that newsrapers cost the n.ost office in that year $31,758,83t1, ''"bile mngazines cost $13,59 ,445.
If the total cost of magazin s to the yost office is $13,000,000, bow can ' $ 9,000,000" of it, or "$60,000,000" of it, or " $40,000,000" of it, uc los·?·
Rear in mind the. e arc the Post Offic Department's own figure ; we have bad notblng to do with them except to copy them from the report of Justice Hughes'.· Commi sion which got them from the post office (H. Doc. 5u9, p. 144).
But changes have come since 1910 that would alter these figm·es. Ye. ; they have; important changes. The magazines are now carried on freight trains by a >'ervice va ' tly
le s expen ive to the post office, while newspape1·s are still given the ~;arne expensive fa t service that all second-class mail enjoyed when these figures were made up by the Go>ernment.
It i further stated in Congress, to defend the exemption of newsRapers through a zone system of rates, that newspapers are largely 'made up" and routed at the publi bing offices, with the implication
that magazines are sent out without such handling senices performetl by the publishet·. Th~ fac>t: Magnzines. are gh·en the same treatment by their pub
Jisbers, except that tbe1r · goes much further than w1th newspaper:;:, hecause the larger volume of mail circulation per i . sue makes it possible to make up · a m'Ucb larger pl'Oportion of the circulation.
Less than 6 per cent of the New Yo1·k World circulation goes throngh the mails. (Testimony of the publishers before the Ov<.'rstreet commiRsion.)
OYer 85 per cent of the Outlook'-, the Scientific Am!'rican·s. the Lit<'rat·y Digest's, the Intlependent's, and the Review of Reviews' circulation goes through the mails.
Yet. although the Go>ernment itself gives the figures showing lhat nt>wspaper mail costs it more pet• pound than magazine mail, the zone advocates want. to more than Ueble the rates for the magazines, dealing many of them a mortal blow, and exempt the higber-costin:; part, the newspapers, whose profits would be only slightly affected.
It is true that magazines are carried farther (" ayerage haul") than newspapers.
Ought reputable publishers to be driYen out of bn ine s bec>ause some Congressmen have found that the anr·age haul of magazines is longer than the average haul of newspapers, but bave not found. although the
arne Post Office Department report· give it, that owing to the greater number of pieces of newspaper to the pound and con equent greater llandling Charges, the total cost of service to a ponnu of newspapers is great('r than to a pound of magazine ?
The zone system of second-class mail rates before Congress is not a war tax. It is a very ill-considered piece of postal legislation that would prevent many l>Ublishers from paying any war taxes by stopping their business.
We want to pay our war taxes-all of them that are jaid on businesse and individuals.
If we arc to pay them. Congress must look a ..,.ain at the testimony on which it is proposed to take from certain publ'hhers more than they have.
We ask that any. postal legislation be deferred until better evidence can be obtained, and we offer to help any competent commission appointed by Congress or the Pre ldent obtain it.
THE PERIODICAL PUBLISHERS' ASSOCIATIO)l' (Comprisill!J publications tt;ith a{}{]1'egate ci1·culations
of more tlla1l fJ,OOO,OOO per is ue).
WilY A ZOXE SYSTE:\1 0:-J ADVERTISING, OR A ZON£ Sl:STEM AT ALL? The zone system bas been condemned by both our recent eminent
po tal commissions. The Ilugbes Commission of 1912 (Charles E. llngbes, President A. Lawrence Lowell, of Hat·vard, and Harry A. Wheeler, presidPnt of the Chamber of Commerce of the city of Chicago) dealt with the matter as follows:
TilE HUGHES COAIMISSION'S Dll:CISIOX. " The policy of zone rates was pursued in the earlier histo1·y of our
Po. t Office and has been given up in favor of a uniform rato in view of the larger i.nterests ot the Nation as a whole. It would seem to the commission to be entirely impracticable to attempt to establish a system of zone rates for second-class matter."
This was the latest commission, The next latest was the renroscOverstrcet .J'oint Commission of Congress on Second-Class Matter. which held yol?mmous hearings in ,1906. On page 28 of the report of this commission the zone-rate prmcipJe is considered as follows:
THE PEXROSE-0\"ERSTREET COMMISSIO:'\'S DECISION. "Ne~ther, for reasons almo t equally obYious, is a solution to be
founrl m a zone system of chargps * * • which would artificially restrict. the diffuslo~ <?f the periodic!ll ag ci~s of intelligence. • • • Would It.not lJe polJtically and socially unv-N. e to create arbitrary barriers agamst the processes of national unification and olidarity?
''.Apart from the social and political con iderations, which to our mind arc conclusive, there are serious administrQ tive difficulties in the way of a zone system of charges." ·
WOODROW WILS0:-1 OX THE LAST PROPOS.\L TO CIIAUOE IliGUER R.\TES o;-.; ~AGAZIXE AD'\'EitTISING.
I!J an interview given on the occasion of the last effort to increase radically the postal rate on the advertising sections of magazines
,W?prlrow Wilson, then governor of New Jersey, was quoted a saying: ' It must be that those who are proposing this change of rates do not
compre~end t~e effect it would have. A tax upon the business of the mo~e Widely Circulated magazines and PN'iodicals would be a ta.x upou then· means of living avd performing their functions.
"They obtain thei~· circulation by their direct a'Ppeal to the popular thought. Tb('it' circulation attracts !ld>ertis('r . 'l'beir a<lverth;ements ~~g:!~c~~eru to pay their writers and to enlarge their enterprise and
::This proposed new postal rate would be .a. direct tax, and a 'Very Seiious one, upon the formation and e:xprc !:'non of opinion-its more dclibera~e forma~on and <.'xpre sion just at a time when opinion is concer!Jing Itself activ~y and effectively with the deepest problems of ouL" politics and our soc1al life.
"1.'o make such a change now, whatever its intentions in the minds of those who propose it, would be to attack and embarrass the free ~~~h~~~o~; ~f~~~:: ... Sul'Ciy sober second thought will prev<.'nt any such
Why, then, arc maguine publishers, at the time of their greatest need, faced )V!th destl'Uction by a high-zone system postal increase on their advertlsmg, supplemented uy a fm·tber postal increase on their reading matter?
The Senate considered these proposals, gave hearings to the publish~ ers, saw the futility, injustice, and destructiveness of the zone measure and eliminated all postal increases from the revenue bill '
Mr. Kitchin, in the llouse, bas refused any hearings, and bas forced the measure through. ~itb all the authorities to whom Congress would look and the most
e~ment. tha~ have ~ver pas ed on the subject, solidly arrayed against this radical mnovahon, why should a zone system, inct·easing the postal charg~s to tJ:e far West and South by 900 per cent, now be decided on?
Is It considered more expedient to increase the rates on magazines and leave the newspapers practically untouched, which is automatically accomplished by such a zone arrangement?
But see what the IIughes Commission has to say after mauy months of study of the absolute and relative costs to the post office of the several su?.classes of sec~nd-class mail matter (H. Doc. 559, p. 144) :
The commissiOn is further of the opmion that it would be a mistake to discriminate between newspapers anu magazines or other periollicals. So far as educational value is concerned no satisfactory distinction can be made. And we have no basis for the conclusion that the comfnar:1~~~· cost of transporting and handling would justify a dlJfcrence
Anrl again (H. Doc. 5:>9, p. 14u) : "These figures are the only basis we have for judgment as to the
comparative cost of transporting and handling the different !duds of publi~ation above mentioned, and it is evident that they furnish no suffic1ent foundation for a discrimination in rates between newspapers and periodicals."
We have re.cited the tcstin1ony furnished by the CONGRESSIOXAr, RECORD on wb1cb a part of the magazine industry has been sentenced to death. .
'Y'e prote t again. t a mea ure of utter <le.'tructiveness, not claimed by It~ advocates to have any reference to revenue-raising which flatly repudiates every expert report and opinion, every eminent authority that bas given study to the matter.
Are Congress and the President willing to look at this testimony and make these postal changes into law?
THE PERIODICAT, PUBLISHERS' ASSOCIATION (Comp,-ising tHtblicati01l8 tvitll aggrcoate circulatiolts
of 11W1"6 than 25,000,000 per i.9sue).
lHr. GILLETT. :Mr. Speaker, I appreciate that the llou e is impatient to vote on this report, and I will delay it but a moment. A Member of the minority just now is in a peculiar po ition. If he cxpr sses the criticisms which be feels, and oppose. a bill as objectionable, he is charg~d with being partisan aml un· patriotic. And if, ·on the other hand, he acquie ·ces in the measures brougllt before us, then hjs very assent is heralded as proof of the merits of the bills and of the infallibility of those who presept them.
Take this bill, for instance. There nrc many things in it to which I am thoroughly oppo ed and which I think are unwise, unfair, and unequal. The gentleman from Illinois has just mentioned one of them. In ordinary times I certainly would not vote for it. I should wish to both criticize and oppose it. I would not vote for it when it pas ed the House before. But I appreciate that these are not ordinary times. I appreciate that the one thing nece sary for us to do is to provide money immediately for prosecuting this war and to win the war, and that to do that we of the minotity must swallow our scruples and our partisan hip and repress critici rns, although they may be deep-seated and numerou . We must unite and give all our strength to the administration. That I lmve tried to <Uo, and shall continue to do.
I am of opinion that this bill does not l'n.i~e too much mone-y, compared with the bonds that we issue. I am ulsposcd t D think;
'
1917-. CONGRESSIONAL RECOR.D-HOUSE. ~603.
that it is the best compromise to which· the majority of the The SPEAKER pro tempore. The gentleman from New York Senate and the majority of the House can come on a revenue bill is recognized for five minute . at thi · time. And therefore, objecting as I do to many of its Mr. PLATT. l\Ir. Speaker, I ·hall take the time of ihe features, yet I feel that it is my duty to vote for this conference House only a few minutes, tllough it seems to me that a bill 1·eport, and I . hall vote for it with tbe hope that this revenue. of such tremendous importance and of such great complication and the appropriations that are made from lt may auequately should be much more thoroughly e~:plained and debated. Few . upport ou~· armies and speedily bring us to our normal condition l\Iembers understand it. In some respect it flies in the face of legi. lation. [Applause.] . of all vrecedents and in the face _ of the adyice of the greatest
::\Ir. FOllDNEY. 1\Ir. Speaker, I yield fi.\e minutes to the gen- experts on taxation in tltis a.ncl other countries. We are beO'in-tleman from ·wyoming [Mr. Mo;-.-roELL]. ning the war with too high a percentage of taxation, far higl1er
The SPEAKER pro tempore. The gentleman from ·wyoming than any other nation has thought wise. It is a dangerous is recognized for fise minutes. {'Xperiment. • Mr. l\IO~DELL. Mr. Speaker, I doubt if there i anyone who The ~hairman of the committee [l\Ir. KITCHI~]. in an wering i ~ entirely sati~fied with this bill, and practically all of tllose a question from me, said a little while ago that tlle income sm·who llaYe to pay tax:{'S under it will have some eritici~m of its tnxe were so high in tllis bill that 1f the wnr should la. t another provist.on~. And yet the most tbnt can be said against and iu year, us it probably wi11, when we are compelled to raise till <·riEcism of the tax provisions of the act is that they may be more re\enue, we shall have to increase the normal tax and adu exce ·. iye; that they may be somewhat inequitnble in levying consumption taxes on tea and coffee. I think there ls danger upon the property of the citizen in paying the necessary ex- th.at such a policy might make the war unpopular: just when it penses of the war. That is the most that can be aid in criti- might _be of most \ital importance to ha\e every possible sup<:ism of any of the tax provisions of the bill. I port-m the second year. I think we should start on a policy
There is a provision of the bill, however, against which a much that would enable us to raise rates a little all around nGxt year . . tronger and more vital objection, criticism, and indictment can ~1at wo~Illl be more scientific~ would flroduce less interference be laid. That is the provision of the bill· which proposes to w1th busme , would consene mstead of destroy some important re\olutionize the system e~ tabli hed more than half a century sources. of revenue. ago in this country, and since adopted by practically all of the . The mcome surtaxes are abo\e the line of safety, while orne civilized nation of the world, for the wide and general dis- Important sources of revenue that would be entirely safe have tribution and dissemination of literature, opinion, news, and been o~itted-the bank-check tax, for inStance. Probably the information, under a low and uniform .rate for newspapers and normal mcome tax should be at least 1 per cent higher and the n1agazines curried through the mails. This bill propo es a ~3,000 and $~,000 exemption sbould ha\e been repealed entirely, radical, a revolutionary, and, in my opinion, an infinitely harm- mstencl of bemg lot\""ered to $1,000 and $2,000 for this bill while ful departure from that system; and it proposes to do it not in left in the olcl law, if it is left. Nobody but a Plliladelphia a reasonable way, if tllere be any reasonable way, but in a way lawyer can tell just what tlJat . ection of the bill mean. as it which will be trying, troublesome, and infinitely \exatious to stands. the publishers. The excess-profit. section as final1y adopted seems to me
I am not so much interested, hot\""ever, in the matter from the s~mewhat b~tter as fi~~ly agreed upon t11an in either t!Ie House tandpoint of the newspaper and magazine publi hers as I am or Se~at~ bills, but 1t IS ~rude and altog~ther too ey1dent1y a
primarily from the standpoint of the American people. 1 am compromise. The comp~·lSon fin.ally pronded fo~· mth profits interested in it in Yiew of my belief that it will tend to de- of 1911, ~912: and 1!.>13 IS ~omphcated ~nd practically_ use~es~. nationalize om· magazines, our newspapers, and make them sec- The section lS no~ a~ a~l hke the Engh h tax, of w~1ch 1t. IS tional, local, parochial, provincial. In the running of the years ~upp~sed to be an 1m~t~t10n. I see no good reason for mcludmg such a zone system as is proposed will do more to break tlown a mdiVIduhls. and reqmrmg theill: to. ~le tw? sets of returns and broad and growing spirit of nationalism, which shoulU be encour- P?-Y two kmds of taxes .. T~e. mdtvt?ual u;tcome t~1X was suffiaged, than anything in· the way of legislation that could possibly Cl~nt .to coyer profit~ of. md~nduals m busmess.. Nor do I see he written upon the statl
1te books. any 1eason for constdermg mterest on bonds-liberty bonds or
. . . . others-as " profits.'' · I feel so strongly m regard to tins matter that If 1t were Tl t f · · ,, 1
po sible at this time to have it con idered on its merits I shoulu le zone sys em 0 rm ·mg secOI~u-c as posta_g~ rates seeDLc;; ~o offer a motion to recommit the bilJ, with instructions to strike me wholly bad, but not so bnd as 1n the bill ongmally passed m
t ll th . . l t' th the House. oseuconad cl"~es np1r~'lnswtntse .I:eba t·Ivthe tHo e. zone sy~temt goverruti·~g On tile '\\hole the bill may lle tl5 or 60 per cent good, and 'vith ,· - ... :"'. . m rna r , . . u . e _ouse IS so amuou~ o pass us con iderable doubt I shall Yute for it. bill, and It 1s of such very great Importance that It be 11as ed Mr FORD:NEY 1\Ir Speaker if th tl fr K speedily,. th~t the matter wou~d not be co?sidered on its merits, tuckY [Mr. L.A.NG~EY] is here a~d desfre~e~o e~s~n theo~ime eni and ther e~or e I sh~ll not offer. ~uch a motwn. . . . agreed to give him two minutes. If not, I wish . to say to the
But, l\lr. Speaker, I have fatt!J. and co~fidence m the Amencun gentleman from North Carolina that 1 b . . t Congress, even though one of 1ts committees has so grieyou ly for time. A lause a\e no mOie teqnes s erred, as I feel the committee has in this matter, and I am confi- l\f. coo~/P .].c:: • . y • •
dent tllat wllen the people realize the exceedinO'ly harmful tend- 11 I. R of Wtvconsm. Mr. Speaker, I ask unununous
c 1cies and effects of treating the distributi~m of news and c~? e_n~ that I be.allowecl to ~x:tend my remarks in the RECORD by 011inions the dissemination of ideas as we treat the shipment prmtrno some thmgs that 1 read and some others. of bacor{ a.nu bea'us, we shall haYe ~ ~·eversal of the action taken , The s.PE~ER pro tempore (l\Ir . . DECKER)· The gentleman to-day nnd that we shall return lono- before the period when ~Iom Wtsconsm asks unanu!wu~ consent to extend his remarks
. • . . . . . • . o m the RECORD. Is there obJectiOn? th1.. legislation will be m full operatiOn, to the old system under There was no· objection · w~1c_h we haye had a. nation-wide dissemination of ideas and The SPE.'KER IJI'O tern. pore. Th t· · op n ons f f t -~ ,., fr · a1 ..:3.. e ques wn IS on agreeing i 1 , .o rn ·orma wn ~u ~ew: '. ..::3.. ee press IS essenti to the conference report. to ·the m~mtenance of free mstitubons, and a free press can not The question was taken anu th f . perform Its perfect "·ork unless its distribution be nation wide, ao-reed to ' " e con ei ence report was unhampered and unvexed bv the restrictive and medieval zone "'Th SPEAKER t T~, ~ystem "\Vhich certain sections of U1is bill estnblishe. [Ap- e . . pro . empore. ue ayes ha\e it, and the con-plan e. ] ' • · ference r~port IS unammously agreed: to.
. . On motion of l\lr. KrTCIIIN, a motiOn to recon ider the Yote . I am profoundly of the opmwn that our country can not con- by which the conference report was agreed to was laid on the
tmue to grow and develop as a great, free, enlightened, and table. hom?fl'ene?u pe~ple unless \Ve shall continue to have the widest 1\fr. RUCKER. I ask unanimous cbnsent to extend. my re"' poss1bl: Cll"Culatw~ of. ne~spapers and magazi~es, and t\""e can marks in the RECORD, to include the publicatjon of a very pa-not bm e such a dlStributwn under a system like the one pro- triotic editorial. · ~ose?., und{'r which n_ewspaper~ and J?llg?--Zines will be hn·gely The SPEAKER pro tempore. The gentleman from Missouri 1e tucted to the Iocahty of their pubhcatwn. asks unanimous consent to extend his remarks in the RECORD
The plan proposed is unfair to the newspapers and mng;lzines. and to include a patriotic editorial. Is there objection? 1
It i. clumsy and un cientific in its detail , will be cumbersome 1\lr. WALSH. I object. anu vexatious in its operation; but it is infinitely more unfair The SPEAKER pro tempore. The gentleman from 1\Iassachu-c to the people of many sections of the country, and would even- setts objects. tua1ly, if it were continued, tend to make us a people sectional ~ocul, and provincial in our views. I shall never cease to fight m fa\'or of n ·ystem truly national in its scope anu purpose.
1\Ir. FOTIDNI'JY. Mr. Speaker, I yield five minutes to the gentleman ft·om _ Te'' York [".:\fr. PLATT].
ADJOUR~MENT.
Mr. KITCHIN. I move that the House do now adjourn. Tile motion .was agreed to; accordingly (at 4 o'clock and
53 minutes p. m.) the House adjourned until Tuesday October 2 ·1917, at 12 o'clock noon. _ ' •
r 7604 CONGRESSIONAL RECORD- HOUSE. OcTOBER 1, 1917.
REPORTS OF CO~Il\!iTTEES ON PUBLIC BILLS AND RESOLUTI ONS.
Under clause 2 of Rule XIII, bills ancl resolutions were severally reported from committees, deli\ered to the Clerk, and referred to the. evernl calendars tilerein named, as follows:
1\lr. SHALLENBERGER, from tl}e Committee on Military Affairs, to which 'vas referred the bill (S. 2796) to permit American citizens to wear medals or decomtions received from certain foreign countries on entering the military or na\al service of the United States, arid for other purposes, reported the same w ithout amendment, accompanied by a report (No. 173), which said bill and :report were referred to the House Calendar.
l\Ir. COOPER of Ohio, from the Committee on Interstate nnd Foreign Commerce, to which was referred the bill (H. R. G310) granting the consent of Congre ·s to the Trurnb1,1l1 Steel Co., its successors and assigns. to consh·uct, complete, maintain, and operate a bridge and approaclles thereto aero s tlle 1\Iahoning Ri\er, in the State of Ohio, reported the same 'vith amendment, accompanied by a. report (:Ko. 174), which said bill nnd report were referred to the House Calendar.
l\Ir. PADGETT, from the Committee on Naval Affairs, to which "·as referred the bill (H. R. 6306) to pro"Vide for tlle payment of six months' grah1ity to tile wido\\, children, or other previously designated depentlent relative of retired officers or enlisted men on active duty, reported the same without amendment, accompanied by a report (Ko. 175), which said bill anu report ''ere referred to the Committee of the Whole Iron e on the state of the Union.
l\Ir. BROWNING, from the Committee on Naval Affairs, to wl1ich was referred the bill (S. 2437) to provide for the acquisition of an air-station site for the United States Navy, reporteD the .·arne ·with amendment, accompanied by a report (No. 117), which said bill and report were referred to the Committee of the 'Yhole House on the state of the Union.
l\Ir. PADGETT, from the Committee ·on Naval Affairs, to which was referred the bill (H. · R. G3G3') to provide for the senice of officers of auxiliary na\al forces on naval courts, reporte<.l the same with amendment, accompanied !Jy a report (No. 176), which said bill and report were referred to the Hou e Calendar.
He also, from the same committee, to which was referred the bill (H. TI. 6362) to promote the efficienc}! of the UniteU. States :Kavy, reported the same without am~p.dment, accompanied by n. report (No. 178), which saitl bill antl report were referred . to the Hou e Calendar.
l\lr. DENT, from the Committee on l\Iilitary Affairf:, to which was r .ferred the bill (H. R. 6350) to authorize the i suance of ReN rve Corps and National Army commi. sions in the lower grades of Staff Corps, and to remove tile fixed-age limits requiring the discharge of Reserve Corps officers, reported the same without amendment, accompanied by a report (No. 179); which said bill and report were referred to the House Calendar.
He nl o, from the same committee, to which was referred the bill ( '. 2883) making further pro\'ision for the allotment of pay of officers, enli ted men, and civilian employees of the Army, and for other purpose , reported the same without amendment, accompanied by a report (No .. 180), wllich said bill and report were referred to the House Calendar.
PUllLIC BILLS, RESOLUTIONS, A~D l\lE:UORIALS. L"nder clause 3 of Rule XXII, bills, resolutions, and memorial~
were introduced and se>erally referred as follows : By l\lr. SEARS : A bill (H. n. G387) to promote the impro\'e
ment of rural education; to the Committee on Education. Also, a bill (H. n. 6388) to fix the status and rank of officers
on the retired list of the Army, who, under the pro\ision of the ne t to the last proviso of section 24 of the act of Congress approved June 3, 1916, ha\'e been placed on acti\'e military duty by direction of the President of the L"nitetl States; to tile Committ eon Military Affairs.
'By ~lr. LUXDEEN : Joint re.·olution (H. J. Res. 1;)8) <.lit·ecting the Pre··ident to place an embargo upon such food snpplie as are found necessary for home consumption and for the supply of our solc1iers at llome and abroad; an(] further directing the President, when necessary to the public welfare, to seize food supplies and apportion them among th~ pe01)le; to the Co~nmittee on A(l'riculture.
PRn·ATE BILLS ArD RESOLUTIOXS. "Gnder cTau. e 1 of Rule XXII, private bills and resolutions
v1ere inti'oduced and severally referred as follows: Dy rlr. CRAMTON : A bill (H. R. G389) granting an increase
of pem.:ion to Amo" A. H.asl{ell; to the Committee on In\ali<.l P en ion~.
By l\Ir. DICKINSON: A !Jill (H. R. G390) granting an increase of pension to DaniPl Brummett; to the Committee on In-Yalid Pensions. -
By Mr. EAGAN : A bill (H . n. G391) granting a pension to Helen E . l\IcWhoocl; to the Committee on Pensions.
By l\Ir. GANDY: A bill (H. n. G392) granting .an increa e of pen ion to John Worrell; to the Committee on Invalid Pen ion·.
By l\Ir. KRAUS : A bill (H. R. 6393) granting·a pen ion to Grover Colter; to the Committ~e on Pensions.
Al o, a bill (H. R. 6394) granting a pen ion to Frederick E. Lamb ; to the Committee on Pensions.
Al o, a bill (H. R. 6395) grnnting a pen ion to George B. Locke ; to the Committee on Pen ions.
Also, a bill (H. R. 6396) granting an increase of pension to Russell F. Oliver ; to the Commit tee on Pen ions.
Also, a bill (H. R.6397) granting nn incrense of pension 1.10 Thomns Denton; to the Committee on In\alid Pen ions.
Also, n bill (H. R. G39 ) granting .. an incrca e of pension to Jame · Kirby; to the Committee on Invalid Pen ·ions.
A.lso, n bill (H. n. G399) granting an increa e of pen.:ion to Newton J. Wells; to the Committee on InYali<.l Peusions.
Al o, n. bill (B. R. G400) granting an increase of pN1Sion to Samuel J. Whiteside; to the Committee on Invalid Pensions:
. Also, a bill (H. R. 6401) granting an increase of pen ion to Henry Barher ; to the· Committee on InYalid Pensions. ·
Also, a bm (H. n. 6-402) granting an increase of pension to James l\1. Cash; to the-Committee on In\alid Pen ·ions.
Also, a bill (B. R G403) grunting an increa. e of pension to \V.illiam G. Lamb; to the Committee on Im:alid l'eusions.
Also n. bill (H. n. G404) grantiug an increa. e of pen ion to Nimrod Brook ; to the Committee on IQYalid Pension.·.
Also, a !Jill (H. n. G403) granting an increase of pen~ion to Rolaml Smith; to the Committee on In\alid Pension .
By l\lr. l\IOORE of Penn yl\ania: A bill (li. R. G40G) to correct the military record of Chri.-topher P. Rhodes ; to the Committee on :Military Affairs.
By Mr. CHARLES B. S~IITH: A bill (H. R. 6407) g~·nnting an increase of pen ·ion to Edward Smith; to the Committee on In>alid Pen~ions.
By l\.Ir. THO~lPSO:X : A bill (H. n. 6408) granting an increase of pension to James A. H. l\Im·kwell; to the Committee on InYalid Pen. ·ions.
By lUr. 'YOOD of Indiana : A bill (H. n. G409) g-ranting a pen~ sion to ~fnry E. Price; to the Committee on In\alid Pensions.
PETITIOXS, ETC.
Under clause 1 of Rule X..."''UI, petitions and papers were laitl on the Cl rk's desk and referred a. follows;
By the SPEAKER (by request) : l\lemorial of U. S. Grant Po t, Ko. 327, Department of New York, Grand Army of the Republic, calling upon the Executives of both the :Kation and the States to take immediate step for the protection of our flag- and the pre\ention. of disloyalty on the part of any resident in the United States; to the Committee on the Judiciary.
By l\Ir. DRUKKER : Memorial of the New Jersey State Firemen's Association, repre ·enting 23,000 firemen, JH.lopted at its fortieth annual convention, indorsing the declaration of war and pledging support t.o the Government; to the Committee on Foreign Affairs.
By l\Jr. ELSTON : l\Iemorial of Court of Knnresborongh, A• . cient Order of Foresters, of Oakland. Cal., demanding congressional inYe~tigation of the East St. Louis (Ill.) riots; to the Committee on Rules.
By l\lr. KE:KNEDY of Rhode I land : Petition of Union Council, No. 12, Junior Order United American l\lechanics, of Valley Falls, R. I., favoring pa sage of House bill· 48~ and 53G9, 111'0-viding for further restriction of immigration; to the Committee on Immigration and Naturalization.
By l\lr. KETTl\'ER : Petition of San Bernardino '\'"oman's Club, San Bernardino; Southern District California Fc<lerntion of Clubs, Colton; Woman's Club, Rialto; NaYy League, Riverside; Young Women's Christian Assciation, San Bernnr<lino; and City Federation of Parent-Teachers, San Bernardino, all in the State of California, urging that effectiye zones be created about all camps; to the Committee on Military Affairs.
Also, petition of H . R. Kearns, secretary Inyo County American Red Oro ·s Chapter, urging Congress to authorize printing of special 3-cent Red CrosN stamp; to the Committee on the l'o t Office and Post Roads.
By l\1r. l\lORIN : Petition of the East End 'Vomen's Chri tiau Temperance Union, of Pittsburgh, Pa., urging the submission of · the Sheppard-·Webb bone-dl·y amendment unconditionally, and asking the President to propose joint war prohibition to all our allies; to the Committee on the Judiciary.
By Mr. NICHOLS of Michigan : Petition of Detroit Fed ration of Labor, against the passage of the bill to suppress publications denied the use of the mails; to t11e Committee on Inter tate and Foreign Commerce.
