Evening Star Newspaper, August 1, 1933, Page 5

BY G\ GOULD LINCOLN. jon of the twenty-first amendment the Constitution, pro- viding for ripeal of national prohibi- tion, thereby" releasing to Federal and State taxation a source of revenue that liping the pockets of the hould be immediately fol- lowed by adoption of a twenty- second amendment providing for the taxation of the great mass of tax- exempt Govegrnment securities, both Federal and $tate, Senator Lonergan of Connecticut 5aid today. The Connecticut Senator, who has made a careful study of the problem of tax-free securities in this country, said approximately $35.000,000,000 of such securities) are extant today deed, there is reason to believ great mass of wealth, which is free from taxation which falls upon other securi- and all Xinds of business, is considerably larger than has been esti-. mated by Mr. Lonergan. Sees $15,000,000 Gain. It taxes could be levied against these securities, Mr. ergan said that cer- tainly $150,000.000 additional revenue would immediately flow annually. "This would aid greatly in keeping down or reducing the tax burden which the rest of the wealth of the country and the people who pay income taxes are compelled to bear today. Other members of the Senate, includ- | Ashurst of Arigona, chairman of the Senate Judiciary committee, have an- nounced their interest in bringing an end to an intolegable situation under which this huge amount of the wealth is permitted to escape taxation. Sena- | erf said today: ”r"!’:g: pge:gle actually demand relief a system which places mle tax upon a portion of our population and permits fimylot great wealth to escape through irjricacies of income tax laws, as reveafd by recent Senate nvestigations, or by placing all of their investments in secirities which cannot be reached for taj purposes. The loss in revenue to nat ments is tremendous. “The Joint Committee on Revenue Legislation in Cengress has revealed some interesting figures as a result of recent studies, and when these are properly presented to the” Nation it seems certain that an amendment will be demanded unless some means can be found to impose the tax without such amendment.” Court Approval Seen. He said some study had been given to the possibility of an excise tax on, all securities now classed as exempt. Be- llef has been expressed in some quar- ters that such a tax would be upheld by the United States Supreme Court, in nal, State and city | the light of its opinions in the Pacific Co. vs. Johnson, decision of April 11, 1932, which indicated a trend in that direction. ‘It seems certain,” the Senator said, that an excise or privilege tax on cor- porations holding such securities could now be imposed, but the difficulty rests with the individual holder of such se- curities, whose income cannot be based on privilege like that of the corpora- tion, unless by some stretch of legal reasoning which it might be possible to have the courts adopt.” ‘While the President has predicted that repeal of the prohibition amend- ment itself will save millions of dollars now being spent for enforcement, and will provide additional revenues suffi- clent to meet the present unemploy- ment relief program, Senator Lonergai believes a tax on securities now exempt will “go the rest of the way in return- |ing the Nation to its people, and lift a | tremendous tax burden from the shoul- | ders of millions who hold no tax-free investments.” Exemptions Compiled. ‘The last available compilation of tax- exempt securities in the United States is for the year ending December 31, 11931, Senator Lonergan said. At that | time the following totally-exempt or partially-exempt securities of various classes were outstanding, according to his_figures: United States Government bonds, etc., | totally exempt from normal as well as surtax, $5.011.000,000. Territorial bonds and securities, totally | exempt, $153,000,000. United States Government Federal farm loan securities, totally exempt, $1,789,000,000. United States Government issues which are exempt from normal tax only, $12.125.000,000. Total, both classes, $19,078,000.000. ‘To the above figures, the Senator adds the securities of the States, counties, | cities and school districts which were outstanding on December 31, 1931. | These securities, totally exempt from | @fifii@?ifii 18th & Col. RA. 1321 K St. N.W. AIR-COOLED DINING ROOM Special for WEDNESDAY DINNER 5 to 8 P.M. 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Ave. 14th and Eye CAPITOL LIMITED , A} THE EVENING STAR, WASHINGTON, Federal or State tax, totaled $15,583,- 000,000 Grand total for all classes, $34,661,- 000,000, Senator Lonergan pointed out that by deducting the figure of $12,125,000,000, representing issues exempt from the nor- mal tax only, we had a total of $232,- 536,000,000 in securities of all classes outstanding on December 31, 1931, which were totally exempt from taxation for income. g‘nlmn[ that much of this invest- mént might shift to other securities if the tax-exempt privilege were removed, the Senator sald there was no accurate basis for estimating revenue which might be produced at current rates if these securities could now be taxed, but pointed out that. if the current rates were applied to the entire sum by Fed- eral, State and city governments alike, the revenue would be around $150,000,- 000 annually. Would Aid Individuals. “The Nation cannot ignore the im- portance of this tax,” the Senator said. “What it would mean to the Govern- ment, even though reduced consider- ably by removal of investments to other channels, would be tremendous and would add substantially to the comforts | of every individual.” Questioned concerning the effect on national credit if provision is made for taxing income from such securities, ) Senator Lonergan -said the traditional belief that credit could not be main- tained without such exemption is being seriously shaken by experiences of the past few months. | “The National Government has had no difficulty in obtaining pur- chasers for Treasury ol tions since the gold clause was repealed,” he said. “Each 'nenmmue has been sub- scribed many over, and there is a demand for any type of issue bearing the official stamp of the Federal Gov- ernment. This is true despite repeated warnings that such a step would impair our national credit. “I sincerely believe that if an amend- ment to the Constitution is found necessary to tax income from securities now exempt, the States will approve [such’ an amendment if submitted by Congress, although tax experts are still somewhat divided on the question. I believe the credit of the Nation rests in the RJearts of its people, and in their | confidence in fairness and equality in government, more than upon any feel- ing that, by issuing tax-exempt securi- ties the Government can more readily obtain capital and maintain its credit.” 'RECALLS PARACHUTE LEAP FORT SMITH, Ark., August 1 (#).— | An 84-year-old Confederate veteran, J. W. Weaver of Muldrow, Okla., got a thrill out of his first airplane ride—but he still had one to tell the pilots. ‘Weaver related that on June 16, 1884, | he went aloft in a balloon filled with | smoke and thrilled a crowd by leaping 1o earth with a crude parachute. ITURE BANS BEER KEGS IN PARKS Elgin, Ji., Though, Permits Bot- tled ' Variety at Picnics. EBLGIN, Il (#)—Public parks and beer kegs don't mix, the Elgin City Council has decided. In the future there’ll be no tapping of beer kegs in the parks. Mayor Myron N. Lehman said the council held that “keg parties,” even quiet ones, are be- neath the dignity of the parks system. Drinking of bottled beer will be per- mitted. 100% PURE PENNSYLVANIA...THE FINEST " SO economical Crat fluto 5 C, TUESDAY, AUGUST 1, 1933. “THE-FAULT OF ANGELS,” HARPER PRIZE NOVEL tut By the Associated Press. NEW YORK, August 1.—Paul Horgan of Roswell, N. Mex., librarian of the New Mexico Military Institute, was an- nounced yesterday as the winner of the $7,500 Harper prize novel competition for 1933. ‘The honor was aw: to his first novel to reach publicatien, “The Fault of Angels,” which will be issued August 24. It is & satire on the arts in a pro- vincial American city. Horgan was born in Buffalo, N. Y., 30 MOTOR Ol i0¢ QuAR BAYERSON OIL WORKS - COLUMBIA 5228 co years .J: He attended private school | of the University of Rochester. He fore there, New merly was a reporter and music Mexico Military Insti- ! on the Albuquerque Morning Journal, and the Eastman School of Music' on THEN DRINK ICED SANKA COFFEE! 1T WON'T KEEP YOU AWAKE 1 LIKE ICED COFFEE, BUT NOT' AT NIGHT! @ If coffee at night robs you of sleep, change to Sanka Coffee! Sanka Coffee is a delicious blend of fine coffees— with 97 % of the caffein removed! And it’s the caffein in coffee that causes sleeplessness and jittery nerves. Your grocer sells Sanka Coffee with a satis- faction-or-money-back guaraatee. It is a product of General Foods. s The tremendous response to the announcement of this very important August store-wide sale shows that the people realize the importance of buying furniture now, before prices advance. Don’t delay, buy at once w}nle stocks are new and complete. 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