Слике страница
PDF
ePub

or any other flag, at any time above the United States flag. Certainly the Roman cross should not fly above it. I think that Is a question which we ought to determine now. There should be no hesitancy on the part of American Senators to declare themselves on the side of the American flag. One other thing, and I am going to take but a moment, because I am anxious to have a vote on this tax bill. I hold in my hand the report of the hearings of the special Senate committee investigating and examining into the slush funds or financial contributions to presidential candidates. This is a report of the investigation made in New York just a day or two ago, where Governor Smith himself testified.

Governor Smith's testimony is amusing, misleading, and mystifying. Anyone who will read it with a discerning mind will get the Impression that the Governor is trying to cover up things, and that he is pleading ignorance about practically everything and trying to get away from responsibility for what is going on in his campaign for the highest office in' the country. He is dodging and evading and does not seem to know anything about his campaign. Whether they have asked him to assume that innocent or ignorant attitude or not, I do not know, but I want to tell the Senate this, that in the evidence disclosed already in this investigation we have another Frank Smith case before the Senate and the country in the matter of campaign contributions for Governor Smith. The governor's campaign manager is on the great and powerful Public Utilities Commission of New York, appointed by Governor Smith. He is the man selected to manage Governor Smith's campaign. He is the head of the organization that is now conducting Governor Smith's campaign. That man's name is George It. Van Namee. He has a man by the name of Kenny, of New York City, as a coworker, in the matter of obtaining campaign contributions, and Kenny is a big contractor in New York City. I understand that he and those he represents do millions and millions of dollars' worth of business in New York State and City every year. And that he and his associates obtain permits and franchises from New York State and City from Governor Smith and Mayor Walker.

Senators, this presents an ugly and serious situation to us and to the country. If Governor Smith can name as his campaign manager, or if he permits to act as his campaign manager, whether he selected him or not, the man he appointed for a 10year term on the Public Utilities Commission of New York State, he places himself in a bad light and in a very reprehensible position before the right-thinking men and women of the country.

Mr. Kenny, the evidence shows, gave $20,000 to this man Van Namee, who is running Smith's campaign, and the testimony shows that he has loaned him $50,000 in money to be used in the interest of Governor Smith. This is just one contractor out of all the contractors they have in New York City. If that is the situation, and if that tells of Kenny's contributions alone, it gives an idea of how much the contractors up there will have to give to the Smith manager before the campaign is over. On the other hand, if Kenny, the friend of Governor Smith, is the agent of Van Namee, member of the New York Public Utilities Commission, is to go out and get these funds to be used in the campaign of Governor Smith, he is in position to hold up and collect large campaign contributions for Governor Smith from every contractor and corporation in New York City and State. This use and abuse of official position and power in the bauds of Governor Smith and Mayor Walker to raise campaign funds to be used by Governor Smith or his friends to obtain the nomination for the high and honorable office of President of the United States merits and should receive the scorn and condemnation of patriotic Americans everywhere.

Think of it, Senators! Kenny, the big contractor, going out from Governor Smith's campaign headquarters in New York City calling on contractors and corporations for contributions in the name of Van Namee, of the Public Utilities Commission of the State of New York, and Mayor Walker, of New York City! He is the man who issues permits, and so forth. It is like a judge of a court with hundreds of cases, civil and criminal, pending for trial before him, sending a friend to all of those who had cases in his court asking them to contribute money for a campaign fund being raised to help reeled him. Will the Democrats of the Nation put the stamp of their approval upon such a corrupt and disgraceful perversion of official place and power? No; they will not! Are they ready to turn over to Governor Smith and the Tammany machine that I have just mentioned the leadership of a party that has fought graft and corruption ulwnys and been a terror to crooks and criminals since her birth time? No; they are not! I do not believe that one-twentieth of the money raised and expended in behalf of Governor Smith's race for President has been made known to the Senate committee or to the public. Governor Smith's manager told the

committee that they had taken in $103,000. No doubt the Tammany Tigers have laughed themselves sick about that

He also told the committee that there were a number of people who had told him that they would give Governor Smith any amount of money that he needed. Remember they were talking to a member of the public utilities commission appointed by Governor Smith. Verily this man Van Namee is not without "go-getting" influence, to obtain money from those whose business activities are under his scrutinizing eye and power in the State of New York. Next the testimony before the Senate committee shows that Governor Smith's campaign headquarters in New York City are at the Biltmore Hotel. The governor said so. He was asked how many rooms were in use by his campaign committee. He said he did not know, that he had not been in there. Think of that, the governor living in the hotel, headquarters opened up there to manage his campaign for the Presidency, and be has not been there. Strange indeed! I trust that I will not be accused of being intolerant for saying that. Either Senator Bratton or one of the other members of the committee asked the governor if the New York Central Railroad Co. did not own that hotel. He "thought" they owned the property. Of course the "property" means the hotel, but he said it was under the management of a Mr. Bowman. What difference did that make? Somebody asked him if the rent of all those high-priced rooms was not given as a contribution to his-presidential campaign, and he said he did not know. Strange indeed!

Then the committee asked Governor Smith, "Who managed your campaign in California?"

"I do not know. I do not know anything about it."

"Who managed it in Iowa?"

He said he did not know. He even declared that he did not know anybody in Iowa, not even the distinguished senior Senator, Mr. Steck, or Senator Bbookhaet. He finally said that he did know Wilbur Marsh and Wilbur Marsh is the fellow who went back on the Senator from Missouri, Mr. Rked. Somehow or other they had gotten Wilbur Marsh over into their camp. I have had nothing to do with the Reed campaign, but when I was speaking up in Iowa last summer—I made 8 or 10 speeches in that State—many people told me the State would go for the Senator from Missouri [Mr. Reei>]. At every place I spoke in the State I was told by a great many people that Reeo would certainly defeat Smith—that was before Governor Smith's public utilities commissioner of New York got busy in Iowa.

Governor Smith said he did not know who managed his campaign in Iowa, and he did not know who managed his campaign in California, where they spent $41,500. He either has a very obedient and convenient memory or he is very careless and indifferent to what is being done in his interest.

He did say finally after it was over, I understand, that Senator Phi'lan—a prominent Roman Catholic—had something to do with it. Somebody reminded him that Dockweiler—another of his faith—had something to do with it, and he said yes, he believed he had heard something about that. His testimony was most noncommittal and disgustingly evasive.

Mr. President, just such a ridiculous attitude was assumed by Newberry, of Michigan, who bought a seat in the Senate. Newherry disclaimed personal knowledge, as Governor Smith does, of money raised and expended in his behalf. In that case, John Newherry, a brother, was the Van Namee in the case. But Newberry for doing in a State what Governor Smith is doing in the United States was driven out. of the Senate. The- Roman Catholic political machine of New Y'ork is in action. The power of official position in city and State is employed to corruptly procure the office of President of the United States for Governor Smith, of New York.

This case of Governor Smith's is on all fours with the case of Frank Smith, of Illinois, who was denied a seat in the Senate because he used his office to financially benefit Insull, who was contributing to his, Frank Smith's, campaign fund for election to the Senate, and Smith, on the public utilities commission, was granting the requests of Insnll to raise the rates on citizens who were obliged to use Insult's light and power, Insull giving him money to carry on his campaign, and he giving judgments favorable to Insull on the public utilities commission to reimburse Insull and pay him back many times over the amount that he had given Frank Smith.

Mr. President, we owe it to ourselves and to our country to repudiate, condemn, and cast out forever such despicable, disgraceful, and corrupt practices.

Now, we are told that Governor Smith's man. Van Namee, and his contractor friend, Kenny, are going out and holding up the contractors and business men in New York City and State to raise an enormous campaign fund to buy the Democratic presidential nomination for Governor Smith, the head of the ._ Catholic political machine. I call upon the Senate

Investigating committee to go to the bottom of this thing. Call Mr. Kenny back and ask him, "To what extent do your Cllntraets go in New York City and State? How much money u° you make out of or handle on your contracts obtained through Governor Smith or the city of New York under Tammany's rule?" I suggest that they summon Mayor Walker and every big contractor and corporation head in New York City antl nsk what they have been requested to do in the way of contributions. That ought to be done at once.

The Senator from Missouri [Mr. Reed] made a good fight in thin body attacking the grafters and the corruptionists. I Wimltl like to have him give his attention to this most recent corrupt attack upon the safety and security of our American ffl.s-fiftitions. He knows how to do it as well and perhaps better ttiHii any Senator in this body. He has ably and forcefully *''tAs#«K:-iited certain grafters and corruptionists, and I want ^'tn t<D come forward now and aid in exposing graft and cor^ftficfK in the camps of both Democratic and Republican candi»*a Jtor President.

T«~»re I close let me say that I want the committee to ask
-=f ouver why he sent $27,000 into California when he had
•position. Was he afraid they would beat him, even when
no opposition?
have something more to say in a few days on this

[graphic]
[graphic]

rEDWARDS.' Mr. President, I ask unanimous consent to _»riiited in the Record at this point an article appearing

aiy's Issue of the New York Times.

VICE PRESIDENT. Is there objection? —e being no objection, the matter was ordered to be

M in the Record, as follows:

-•IN V1BW OF SMITH (JOVItRNOB'S VOTB-GETTINO CAPACITY ONLY

ONE POINT IN HIS FAVOB

Editor or Thb New York Times:

the standpoint of a southern Democrat the following are to my efficient reasons why Gov. Alfred E. Smith should be the tic nominee for President:

his undoubted vote-getting capacity. He has no superior as a ler. I used to think that the name of Smith, Jones, or Brown uidicap, but one forgets the name when he thinks of the winof the New York executive. Ills climb by his own from humble surroundings thrills and fires the imagination, the pronounced fear of Republicans, as manifested by their • :nt efforts to prevent his nomination. The Republicans are as »s the ultradrys and those affected by religious prejudice. Next *"- undoubted leadership, as demonstrated by his conduct of the great State of New York. And then there is bis unflinch-ago and his unassailable honesty.

it conies to his religion, anyone who stops to think must that a man's church affiliation is a matter almost entirely of nee or environment. Governor Smith is a Catholic because he that religion at his mother's knee, just as those of us who are ints, are Episcopalians, Presbyterians, Methodists, or Baptists same reason. Moreover, nothing was ever gained by sidestepissue, and If the religious issue has to come let it come now. feel that Governor Smith is a far better Catholic than I am a I hope I have the charity not to hold against him his sln^•votion to his own church simply because I may hold a lesser •»i for mine. Again, there are some 10,000.000 Catholics in the States, and it would be difficult to persuade them, if Smith is the nomination, that it has not been done because of his reXaith. and it appears to me that the Catholic Democrats of the *"» nd East have the same right to be considered as the Protestant r-sits of the South.

• * ng to the fact that Governor Smith is personally opposed to Htead Act and is commonly accounted a wet, in so far as his -"•y—standing as he does personally for the modification of the Act—will be a test of the attitude generally on the subject of -*i t ion, it would seem that the sooner this test is made that much l**^t t»r. Let me repeat, no good ever comes from evading an Issue. bn.-v« no fear of Smith's ability to carry the South. It is possible may not receive as large a popular vote as did Wilson, but In i"n the entire electoral vote of the South will be found in the 'luiun. Finally, no candidate that either party can name will i'h a popular appeal as will Governor Smith, and his able guldrhe Empire State of New York justifies the confident belief measure up fully to the dignity and responsibility of the of the United States.

Robt. K. Brock. •'•'-le, Va., May 10, OK.

referr I?1-'EASE. Mr. President, the Senator from Alabama has thing *° tne United States flag, but I think there is sorne

t?r"Oa*er in connection with that flag to which he might than flying it under a certaiu pennant when re

[ocr errors]
[ocr errors]
[ocr errors]

or

llgious service is being held. I refer to it being placed in so many common, ordinary places, and in so many business places.

It used to be that people reverenced the flag. I have seen old men, who, as they would pass it, would salute it. I have seen other men who would take their hats off when they passed an American flag. But to-day if some little parade comes into a little country town, everybody sticks out nn American flag. People have gone to the extent of having holes in the sidewalks, and there will be an American flag on a staff every few feet. They use it on jitney busses, putting a United States flag on front of the bus. Sometimes they will have five or six. Grocers stick them up on their wagons. They pin them on horses' heads.

I think what we should do would be to have some kind of a regulation, issued from some source, providing when the American flag shall be used, and for what purpose it shall be used. The practice of letting people use it for all kinds of purposes and on all sorts of occasions should be discontinued. I could cite some more common instances of places where it has been abused.

I think, instead of fussing about the religious proposition, we ought to get together and pass some law, or adopt some rule, or have a regulation brought forth from some source, providing when the flag shall l>e used, as it used to be in the olden days. Now, it has gotten so that many use it for advertising purposes, or any other kind of purpose.

Very much the same applies to the medals we bestow. I think it will be so after a while that if a fellow swims Bush River down in South Carolina, a stream about 15 or 20 feet wide, if he makes it without missing a stroke, I will be asked to come and pin a medal on him for swimming over the river. If a fellow runs and jumps over what is called the river, he will get a medal for it.

It is getting so that if a man flies, no matter where he goes, he is given a medal, something is stuck on him. After a while it will be so that deserving people will not want these medals.

One was conferred on Mr. Lindbergh, for whom I have the highest admiration. I expert to see this very Congress ask him to give It up. I was the only Senator in the Chamber who protested against the giving of that service medal, because it is a medal which is supposed to be won like the senior Senator from Wyoming [Mr. Waruen] won it. It is supposed to be won by men of that character on the battle field, men who fought for it. risked their lives for it at a time when their country was at stake and not for experimental mercenary purposes, simply to be used for advertising. Yet we have got so we deliver these medals in that way. Yet, what does anyone suppose Senator Warren to-day—and I say this without having talked to him about it—thinks of the medal that was handed him for a service for which he should have had it? I say that although he was fighting my people, he deserved it. Does anyone think he can hold that medal to-day as sacred as he held it before we began giving it to everybody, to somebody who happened to jump across u creek or fly in a balloon or some fellow that happened to knock down some man for insulting his wife?

I think my friend from Alabama should turn his course a little bit. If the flag of the Christian religion flies above the American flag, if it truly represents the religion of Jesus Christ and His Divinity, let it fly. because long after these people and this Nation shall have passed away thnt religion will live, and I thank God that that is true.

TAX REDUCTION

The Senate, as in Committee of the Whole, resumed the consideration of the bill (H. II. 1) to reduce and equalize taxation, provide revenue, and for other purposes.

The VICK PRESIDENT. The question is on agreeing to the committee amendment on page 15.

Mr. SMOOT. May we have the amendment stated?

The VICE PRESIDENT. The amendment will be stated.

The Chief Clerk. On page 15, line 19, the committee proposes to strike out " 11% per cent " and insert "12V£ per cent," so as to read:

(a) Rate of tax: There shall be levied, collected, and paid for each taxable year upon the net Income of every corporation, a tux of 12'/-j per cent of the amount of the net income in excess of the credits against uet Income provided in section 20.

Mr. HARRISON. Mr. President, this is perhaps the most important amendment that the Senate will be called upon to vote. I desire to recall briefly the situation.

The Senator from Utah [Mr. Smoot!, as I read to the Senate In the beginning of the discussion, stated thnt he would favor a $300,000,000 tax reduction. If this amendment, put in by the House, reducing the corporation tax from 13 V* to 11 '/• per cent, together with the other reductions proposed by the majority, shall be adopted, It will not carry a tax reduction of $300,000,000.

Mr. SMOOT. Oh, yes!

Mr. HARRISON. The trouble about it Is that the Senator makes figures, but he does not base them on correct facts.

Mr. SMOOT. It is $203,000,000, the original reduction, plus $24,000,000

Mr. HARRISON. The 11% per cent provision does not carry it to $203,000,000.

Mr. SMOOT. The $203,000,000 is the amount originally provided for. The Senate has just added $24,000,000.

Mr. HARRISON. Yes; against the advice and over the protest of the Senator from Utah.

Mr. SMOOT. That amount, together with the $82,000,000, which the Senator from Missisijippi now wants, would mean $309,000,000, and yet the Senator from Mississippi says it is not $300,000,000.

Mr. HARRISON. The loss in revenue, if the rate is reduced to 11% per cent will be $165,000,000. Is not that correct?

Mr. SMOOT. The difference between 11% per cent and 12% per cent is 1 per cent, and that means $82,000,000. That is what I said to the Senator. There was $24,000,000 just voted, and with the $82,000,000, plus the $203,000,000 reduction, that makes a total of $309.000,0000.

Mr. HARRISON. The Senator knows that is not the way to figure the proposition.

Mr. SMOOT. I know it is the way, because the bill as reported to the Senate carried $203,000,000.

Mr. HARRISON. The Senator denied what the House did with reference to capital-stock transfers, and he denied what the House did with reference to dues. He did not want to allow this $24,000,000 reduction in graduated taxes. Now, we want to reduce the corporation rate to 11% per cent, which would mean $84,000,000 more than the Senate committee provided for.

Mr. SMOOT. Those items were not involved in the $203,000,000.

Mr. HARRISON. I submit if the Senator will add up what the Senate has already done and then figure the loss by virtue of a 2 per cent reduction, as is now proposed in the corporation tax, it will not come to $300,000,000.

Mr. SMOOT. The Senator is wrong.

Mr. HARRISON. Let the Senator add up the figures and see.

Mr. SMOOT. On page 4 of the report these are the amounts of reduction stated: Corporation taxes. $82,000,000; corporation exemption, $12,000,000; readjustment of surtax brackets, $25,000,000; automobile taxes, $66,000,000; admission taxes, $17,000,000; cereal-beverage tax, $185,000: wine tax, $930,000; foreign-built yachts, $10,000; a total of $203,000,000.

Mr. HARRISON. Of course, $203,000,000.

Mr. SMOOT. That is right. Now, we have a loss of $24,000,000, which the Senate just voted, and, as I said, the Senator wants to take off $82,000,000 more, which would make a total of ({309,000,000.

Mr. HARRISON. The Senator has added and taken into consideration some $25.000,000 or $30,000,000 of surtaxes that we have not yet considered at all.

Mr. SMOOT. The Senator said that with the amendments which had been offered it would be less than $300,000,000.

Mr. HARRISON. We have not considered all the amendments yet. We have not considered the surtax proposition.

Mr. SMOOT. There is no question that the Senator does not want to make any change in that.

Mr. HARRISON. Of cour.se, we have made a change in that.

Mr. SMOOT. Not as to the amount.

Mr. HARRISON. It is about the same amount.

Mr. SMOOT. So the Senator was wrong when he said it was less than $300,000,000.

Mr. HARRISON. No; the Senator is not wrong.

Mr. SMOOT. The figures will speak for themselves. I insist that it is $309,000,000.

Mr. HARRISON. It is $809,000,000 according to the Semitor's own figures, but he takes into consideration $24,000,000 that we just put on over his protest.

Mr. SMOOT. Certainly.

Mr. HARRISON. Even with those figures it would be only $285,000,000 reduction.

Mr. SMOOT. Is the Senator going to vote to put that $24,000,<;<)0 back?

Mr. HARRISON. Indeed, I am not.

Mr. SMOOT. No; certainly not.

Mr. HARRISON. Is the Senator going to vote with us to maintain it?

Mr. SMOOT. No; I am not.

Mr. HARRISON. I am sorry.

Mr. SMOOT. Then the Senator ought not to try to take it off.

Mr. HARRISON. The Senator must concede that the Treasury will stand for a tax reduction of $300,000,000.

Mr. SMOOT. That was an estimate.

Mr. HARRISON. Yes; and the Treasury Department have given us estimates for seven years and every time they have estimated they have been wrong from $100,000.000 to more than $500,000,000. The argument the Senator from Utah has presented here in the consideration of the tax reduction bill is the same that he presented in 1921, in 1924, and in 1926, when revenue bills were before the Senate.

Mr. SMOOT. It was an estimate at that time, but now \ve have waited until after the March 15 payments are in, and we know what they are. It is not much of an estimate now.

Mr. HARRISON. Yes; the Senator has said that every time. The Treasury estimates with him are always correct. They were not correct and they have not been correct They were wrong seven times out of seven during the last seven years. I can not see much reason for believing them to be correct this time. Everybody knows that we have a surplus in the Treasury of over $400,000,000 from this year's taxes.

Mr. SMOOT. This bill has nothing to do with the coming year's taxes.

Mr. HARRISON. We have that surplus. We do not propose to disurb it. but let it be carried over so that if there is any doubt raised or any uncertainty as to the amount of the tax reduction, we will have at least that amount, under the Senator's bookkeeping process, to take care of any deficit. But there will be no deficit in the Treasury.

The Treasury said in 1921—and I must repeat this in order to make any impression on the Senator from Utah—that it would stand for a reduction of $372,000,000. Both Houses of Congress ignored that recommendation and passed a bill which carried $603,000,000 reduction, and yet, notwithstanding that fact, there was an enormous surplus piled up in the Treasury. The amount of surplus was $309,000,000. In 1924 the Treasury Department recommended a reduction of $323,000,000 and said it would not stand for any more of a cut than that amount. Congress passed a tax reduction bill carrying a reduction of $519,000,000, nearly $200,000,000 more than the Treasury said they would stand for, and yet with that great reduction there was piled up in the Treasury a surplus of $505,000,000.

Mr. SMOOT. That was Republican prosperity.

Mr. HARRISON. And yet the estimates to-day show that the returns from corporation profits are just as big as they were last year or the year before that, and the Senator from Utah undertook to rise in his place here and said It was an unusual situation and prophesied a reduction in it the next year.

Mr. SMOOT. The whole bill, I will say to the Senator, Is based upon Republican prosperity continuing.

Mr. HARRISON. Well, let us hope some kind of prosperity will continue. In 1926 the Treasury recommended a cut in taxes of-$300,000,000. Congress reduced the taxes $422,000,000. Yet. notwithstanding that, there was piled up in the Treasury a surplus of $607,000,000.

With these facts staring them in the face, the Senator and his committee have the audacity to try to make the American people believe that the Treasury's estimates are correct. Here it is in May, 1928, and on the returns which were made in March they say they are certain and accurate. The Senator knows that many thousands—I may say most—of the taxpayers filed in March only partial returns. Some taxpayers were given extensions until the 15th of May and have not paid anything yet or reported at all; and yet the Senator says "On the face of the returns that are made we know that the estimates nt this time arc more correct than ever before." We submit that tile Treasury Department is wrong in its estimates, Uiat the Government will stand for a reduction of at least $400,000,OOO, 'but to be on the side of conservatism, to raise no question of doubt about it, we of the minority have proposed a program which carries about $300.000,000 reduction.

Here is the United States Chamber of Commerce, just adjourned after its meeting in Washington, composed of hundreds of thousands of members comprising business man and leaders in business throughout the country. Every chamber of commerce and board of trade is a member of it. Only yesterday they passed a resolution, which I asked to he incorporated at the close of my remarks, asking for a reduction of the tax on corporations and criticizing and condemning the policy of the administration for levying these high taxes on the American people and drawing from them more than Ik necessary to run the Government economically, piling up an enormous surplus in the Treasury, taking it to pay oft the national debt so that certain favored groups in the country, who have bought Italian bond* and French bonds and Austrian bonds, may in time make their application to got a cancellation of our foreign debt and influence their bonds to go up.

That is what is behind the proposition. Why not be fair

With all the American people? Why do they not show enough

statesmanship to draw their pattern and frame their fiscal pol

icy so that these great surpluses will not pile up and so they

in'/J only levy so much tax on the American people as will pay,

wifliiu a reasonable time and in an orderly way, pay off our

national debt and meet every emergency and demand of the

government to run it in an economical way, without all of this

um-fi'taiuty and doubt and hyi>ocrisy and deception that has

been practiced upon the American people for the last seven

I say to Senators on the other side of the Chamber that they do nut fool and they have not fooled the United States Chamber ot f<>«>inerce. the business people. Their representatives apt*ear«?d before the Committee on Finance, and the Senator from Vta.li squirmed in his seat. They brought there Mr. Mills, whwiri they took from the House and put in as Undersecretary of ttte- Treasury, in order that he might protest and join in cvoil>at with the United States Chamber of Commerce. I doubt not ttia t every influence — and it is great — that could be brought to (>eM i- J>y the Treasury Department was brought into play upon the uiexnl.>t'rs of the chamlier of commerce and particularly those higher U£> in that organization, to keep them from making an issue out of this question and to prevent them passing these resolutions; but the Republican policy has been so palpably wron^ tl» at not even the United States Chamber of Commerce could lx> induced to change its position.

Mr. !?• resident, the Democratic Party has never stood as the cl)aini>I«:>n of big business in this country: it does not now do so, even tl»o>wgh the Republican majority in a sneering, cynical way have trie-el to make some believe that we are here to defend solely ;>:.- corporations. The Democratic Party believes in fair play to trlie American people; it believes in giving a fair deal to every legitimate industry in the country. We believe that the eor-i>« > rations which are conducting themselves within the law ova^cl-it to be given some tax reduction just as it is given to iiiflivIOual taxpayers. We have fought to reduce, and we have d^ii^andcd of Senators on the other side of the Chainlwr and ha-v^ finally forced them to reduce, the taxes of the individual ii^oome taxpayers of America.

We lijx-^-^ fought to eliminate normal taxes and surtaxes upon millions* «>f American taxpayers. And we have forced reduction of surt.t 3c«?-s upon every class. We have and always will stand for the gre-jxt^j^t relief to those who need it more, but we are not legitimate business, it matters not how large it may be. M **-li this time, what has happened to the corporations?

*i •*- *«ay to Senators on the other side of the Cha inter, even *-***y picture corporations as soulless, they are made up \H ijons an(l millions of American citizens who own stock ? c-orporations. Under modern business methods people SStfite own stock in corporations thousands upon thouB,iies away. Widows and orphans invest their earntuelr possessions in such corporations. Those cori>o"QS* Deserve fair treatment just as much as the individual

Just treatment.

ratii. Vls* trace tne taxes that have been imposed upon corpotflX . .t*- The tariff act of August 1, 1909, instituted an excise st<X-k **^1 respect to carrying on business by corporations, joint- *r°mpanies or associations, and insurance companies. That first effort ever made to impose an excise tax. The *ax 'aw kfld Deen he'd unconstitutional, and this was *ney tr'ed to reach corporation income. That tax was to 1 per cent upon the entire net income over and ^55.000 received from all sources during the year, excludividends. That act remained in force until the enact ^ *~kf the 1913 tariff act. Meanwhile the Supreme Court 2 of Jf*iield the constitutionality of the income tax law. Section "t»e act of 1913 imposed an income tax on corporations of the excise tax imposed by the law of 1909. That ; « first time an income tax had been levied on corporaj" The rate, however, was continued at 1 per cent; it was

<>:*eased; and only one return was required for the year The rate of the tax was the same, and otherwise the *!|x law and the income tax law were much alike, the

tax law being a trifle broader.

*Jext time (lie law was changed was by the act of Sep- 1916. The- tax was first imposed in 1909; it was in 1913, and then in 1916 the rute wns increased to 2 t*t on the net income of corporations. Then came the !" *»ct of 1917. when we began to prepare for war and le emergencies of the war which wns then impending. imposed an additional tax on corporations of 4 per *»lcing the total tax rate at that time 0 per cent in addi

[ocr errors]
[ocr errors]

tion to the excess-profits tax which was levied by that act for the first time on individuals, partnerships, and corporations.

The revenue act of 1918—the war tax law—levied a corporation tax of 10 per cent. By that time the tax on corporations had been increased from 1 per cent in 1909 to 10 per cent in 1918. Then followed the revenue act of 1921, which continued the 10 per cent tax on corporations, as in the 1»18 act, for that year, but for each year thereafter the tax was to be raised to 12% per cent. I call attention to the fact that in the year 1921, three years following the war, after the war had been over for that length of time, and the Republican Party controlled the American Government, it was then that they raised to 12>/:> per cent the corporation tax, which only 11 or 12 years before had been 1 per cent.

I may say, however, in citing the history of the corporation tax that the reason given for the increase to 12% per cent was that the excess-profits tax, while continued for the year 1921, was thereafter repealed. The credit allowed the corporations by the act of 1921 was $2,000.

The 1924 act did not materially change the corporation tax, but in 1926 the tax was increased to 13V> per cent. Here is where we come to this modern order of statesmanship, led by the Senator from Utah, who now tries to thwart the plans of the minority, and to restrain us in our efforts to reduce tho tax on the corporations of the country to 11% per cent. It was on his motion that the corporation tax was raised from 12% percent to 13% per cent. He said the other day that the reason for it was that we were going to eliminate the capital-stock tax and in order to make good the loss which would thereby accrue we should increase the corporation tax to 13% per cent.

The Senator at that time was just as wrong in his figures and just as misleading in his estimates as he is to-day. To me, Mr. President, it is one of the surprises of the age that on this issue he can hoodwink and cement together on his side of the aisle Senators who have talked progressivism and Senators who have stood in their tracks for more than 40 years and are known as the stand-pat crowd. It is rumored that there is an agreement on the other side with those who do not want the question of the estate tax brought up and that tax repealed. If the so-called progressives will vote with the "old guard" against giving relief to the small corporations, the relief which was unanimously decreed should be given to them by the Republican membership in the House of Representatives—aye, by the united membership 'of the House of Representatives—the leaders on the other side are willing to agree not to try to repeal the estate tux. We will see before this contest is over just what is going to happen. We will know how long this well-ordered agreement will live. We will see who is going to keep the faith over there and how long peace and harmony will reign on the other side of the aisle.

Ah, but the Senator from Utah, who now prates against this reduction in the corporation tax, said in 1926 that we were going to eliminate the capital-stock tax; that because of that action we would lose .$93,<H)0,000, and in order to make it up we would have to increase the corporation tax to 13% per cent. He stated at that time that that was the reason for the increase in the corporation tax. He denied it the other day; but the Record is before me, and I can quote it to him if I can keep him in his seat long enough while I am discussing him and this question. I cited from the actuary, Mr. McCoy, a statement that, in view of the general business expansion of that year, we would obtain from the corporation tax at the then prevailing rate of 12% per cent .$120,000,000 more than we had obtained the preceding year, and that if we increased the corporation tax to 13% per cent, because of the increased business activities of the country we would collect from the corporation tax over $200,000,000 more than we had collected the previous year. With a $93,000,000 loss because of the repeal of the capital-stock tax and more than $200,000,000 obtained from the increase in the corporation tax, there would be left a margin, paid by the corporations over and above what they had paid during the preceding year, of $120,000,000. Those are the facts.

Senators who sit before me now know they are the facts. If the Senator from Utah were in his seat now and should deny the statement, I would read from the discussion which took place at that particular time. Yet it is said the corporations of the country should not now be given some relief in the form of tax reduction.

Mr. President, if the American people would open their eyes and if they could fathom the innermost intentions of some men who are leaders in the public life of this Nation, there would, bo almost n political revolt. Mr. Mellon and the crowd that work with him have their eyes fixed singly all the time to the reduction of the surtax. That is what they want Why? Because they know that while on the dividends from stocks o£ corporations they pay no normal tax on their individual income aside from the stock dividends they do pay the normal tax as well as the surtax. Yet the Senator from Utah, in speaking pome months ago, employed a phrase which I will read. The Senator from Utah sometimes make a good speech, and sometimes makes a correct statement as to figures. Of course, they are only on rare occasions. This was one. The trouble is that the Senator forgets one year what he said the year before, and the Senator tells the American people one day what he is going to do, and he does just the opposite the next day. Some of these days they are going to find out the Senator from Utah, as we on this side and you over there, if you know it, already have found, that so far as figures are concerned he is not reliable.

Here is what the Senator said he was doing to do; and this was jus! in June of last year:

I think the tor bill

Says the Senator from Utah —

is a very important thing, and that taxes ought to be reduced to the extent of $260,000,006 to $300,000,000.

Here we take his advice, and try to do it; and he rises on the floor of the Senate and, with the power that he wields, he protests and restrains us.

That is not all he said — and the revision ought to be effected by February 1.

He snys:

The first thing that should be reduced is the corporation tax, from 13 Vi to 12 per cent

He says 12% per cent is as far as we can go. Why did the Senator say in last June that the first reduction of taxes to be made should be given to the corporations, and at least that they should be reduced to 12 per cent? Now, when we stand here fighting to give them 11% per cent, as the House of Representatives unanimously did, the Senator says, "You are trying to destroy the Treasury of the Government" So he went back on that statement.

Now, let us see what other statements he made.

The next tiling the Senator stands for is the abolition of admission and so-called nuisance taxes. Why, we took up a •whole day here, and the Vice President came near getting into political trouble again, because on the amendment that was offered the vote was 40 to 40, and the Senator from Pennsylvania [Mr. Reed], in order to embarrass the Vice President, got up and said that the Vice President ought to vote; that he was trying to shirk his duty on that particular proposition.

Ah! it is wonderful what politics does to people. One day they are with somebody and the next day they are against him. I do not know whether or not the Intention of the Senator from Pennsylvania was to embarrass the Vice President as once he was embarrassed on another close vote; but I submit that the Senator from Utah, who last June said he was for taking off all admission taxes, fought this week our effort to take them off and defeated us by calling in some Senators who had not been here when the discussion was going on. At that we were defeated by only two or three votes.

That is the record. It makes my heart bleed to have to tell the Senate about it, but I have to do It.

Now, let us see what else the Senator from Utah said.

As I have stated, the Senator said he stood for the abolition of admission and so-called nuisance taxes; but when we tried to abolish the capital-stock-issue tax, the capital-stock-transfer tax, and tax on club dues be thwarted our plans. He would not permit us to do it.

Then next there was to come a reduction In income taxes on incomes between $15,000 and $60,000; but since the Senator made that statement, he standing for a reduction in income taxes on incomes between $15,000 and $60,000, he went up to see the Secretary of the Treasury and they talked together, and then he got up another amendment, and he and his colleagues vn the committee brought in that amendment.

What is that amendment? Ah, you will be called on to vote on It. I am wondering if this coalition that has been formed between the Republicans and the so-called Progressives — who always backslide at the wrong time — is going to endure. I wonder if they are going still to stand with you and vote with you on the proposition. The Senator has an amendment; he has some political milk, some soothing sirup that he is going to give you. I wonder if you are going to take it. Do you know what it does? It does not give a tax reduction to persons of incomes between $15,000 and $60,000 that he said he was going to stand by; but he takes the man whose income is $5.000,000, and says to him, "You are the one who must get the reduction."

Oh, the Senator laughs; and I imagine that when some one on the other side who is easily misled and deceived made the suggestion to him he laughed that cynical laugh then; but we shall show you, when we get to the surtax revision and discuss his amendment and compare it with the amendment offered by the distinguished Senator from North' Carolina [Mr. Simmons] that the amendment we offer gives relief to the man lowest down and gives none to the man with over $70,000 income; while the amendment offered by the Senator from Utah gives no surtax reduction to the man with a net income under $20,000, but everybody above that up tg $10,000,000 gets his reduction. Is not that true?

Mr. SMOOT. Mr. President, the Senator asks me a question. Does he want it answered?

Mr. HARRISON. Yes. Is not that statement correct?

Mr. SMOOT. The Senator does not want any answer.

Mr. HARRISON. If the Senator wants to hide behind that, all right.

Mr. SWANSON. Mr. President, I should like to have an answer.

Mr. SMOOT. The Senator from Virginia has not the floor. The Senator from Mississippi has the floor.

Mr. HARRISON. Please do not embarrass the Senator again.

Mr. SWANSON. I should like to know whether that statement is true or not. Do you report a bill containing an amendment like that?

Mr. SMOOT. The Senator said that we have given the big reduction to the $5,000,000 man. It is not true.

Mr. HARRISON. Do you not give him any reduction in your amendment?

Mr. SMOOT. That is not what the Senator said.

Mr. HARRISON. Do yon not give him any reduction in your amendment? Of course you do.

Mr. SMOOT. Yes.

Mr. HARRISON. In our amendment we do not.

Mr. SMOOT. Politics, politics! That Is all there is over there. Now, will the Senator let me answer the question of the Senator from Virginia?

Mr. HARRISON. Yes.

Mr. SMOOT. I will say to the Senator that these are the facts in the case:

Wherever there is a reduction from bracket to bracket in existing law that reduction Is carried on at the next bracket, and so on down until it reaches $100,000, we will say. In the existing law it went right through, and they had the credits that each one of the brackets gave. Now, the majority report is that with those brackets they go just as they do in the existing law down to $100,000; and after that, no matter what Income the taxpayer may receive, he gets what is accumulated in those brackets, or $470. So the man who has an income of $110,000 gets a reduction of $470 a year and the man who pays $10,000,000, if there is such a taxpayer, gets only $470 reduction: but my friend from Mississippi says that we gave the man with $5.000,000 more than anybody else. It is not true.

Mr. HARRISON. The Senator does not understand me.

Mr. SMOOT. Iiet me tell you what they are trying to do, Senators: They are trying to fix up a scheme here by which they jump brackets 2 and 3 per cent. What for? In order that when they get down to $80,000, I think, instead of $70,000— I think that is what it is, but I can look It up in a minute

Mr. HARRISON. About $70.000.

Mr. SMOOT. It does not make any difference whether it is $80.000 or $70.000.

Mr. HARRISON. No; figures do not make any difference to the Senator from Utah.

Mr. SMOOT. They want such a figure in there that they will not give the man who receives $110,000 income any reduction whatever. That is what their proposition is. They will not even allow the step brackets where they are transferred from one bracket to another. The credit in the preceding bracket is carried on to the next bracket; and they allow that only just so far as the voters pay—that is all.

Mr. HARRISON. Has the Senator finished? If he has, I thRtik him for his explanation. It is exactly as I said.

Mr. SMOOT. Oh, is it? Well, I will leave it to the Senators. There is just as much truth in that statement as there Is in a good many others the Senator has made.

Mr. HARRISON. Now, will the Senator sit down and let me proceed?

Mr. SMOOT. I will.

Mr. HARRISON. I said that the Democratic minority gave no reduction on incomes above approximately $70,000.

Mr. SMOOT. And I do not deny it

« ПретходнаНастави »