Mr. BROOKHART. I should be doing so from the standpoint of the Senator from Mississippi, but there happens to be a different standpoint on the part of some of us. Again the Senator from Mississippi said:

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.

Mr. President, I wish to direct my attention first to the question of who has done the "backsliding" on this tax proposition. In 1924 I was a Member of the Senate, and I had the pleasure of working for a tax bill with the Senator from Mississippi, and also with the distinguished Senator from North Carolina [Mr. SIMMONS]. In that tax bill certain basic elements were worked out and followed. At that time the Senator from Mississippi and other Senators were not for the so-called tax reduction. They were for paying the public debt. I remember on that bill with what enthusiasm the progressives on this side of the Chamber joined with the Democratic side in the enactment of the estate tax. The rates of that tax went up to 40 per cent, and the tax was enacted on the theory that it was not a war measure but a permanent measure of just taxation in the United States. It was the most important principle of taxation that had been enunciated in the Senate in many a day.

I am proud to say that the author of that law was a Representative from my own State, Mr. RAMSEYER, of the sixth district. The bill was further amended on motion of another Representative from my own State, Mr. Green, the distinguished chairman of the Ways and Means Committee. We laid down a principle of taxation that was far-reaching and which was just in every particular. We defeated the Mellon tax plan as to that great proposition, and the Senator from Mississippi helped us do it. Then two years rolled around, and who is it who has backslid or changed? Who is it who has changed front on this proposition of taxation? There is not one of the progressives to-day but will right now vote to put the estate-tax rate back up to 40 per cent, where it belongs.

In addition to the 40 per cent rate, there was only a 25 per cent rebate, I believe I am speaking now entirely from memory-in that bill. However, two years later, after this backsliding had occurred, there was a rebate of 80 per cent to the States. That, of course, creates a kind of competition or rivalry and contest as it were between the State governments and the National Government. That was put in for a backsliding purpose, in order ultimately to defeat the estate tax itself. Who did that? It was not the progressives on this side of the Chamber; no; that move was led by the distinguished Senator from Mississippi and others on his side of the Chamber. What brought about this change of sentiment, this change of position?

The great estates of this country valued at $10,000,000 and more that were taxed up to 40 per cent have been accumulated by profits, largely excess profits, off the people of the whole country. Such estates form the most just subject of taxation we have, and the tax collected ought not to be rebated to the State, because in only a few States live the owners of most of these great estates, and when we rebate 80 per cent to the States, five or six States in the Union get that special benefit at the expense of all the other States. Yet the great backslider on this proposition was the Senator from Mississippi himself.

In whose interest is this backsliding? For whom is he speaking now? In 1924 he was speaking and voting in the interest of the common people of the United States. Who is to be benefited by this tax reduction he is now proposing? I glean the facts from his own speech, in which he says:

Here is the United States Chamber of Commerce, just adjourned after its meeting in Washington, composed of hundreds of thousands of members comprising business men 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 be 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 is necessary to run the Government economically.

The United States Chamber of Commerce seems to be the organization in whose interest this "backsliding" was done. Again, the Senator said:

I say to Senators on the other side of the Chamber that they do not fool and they have not fooled the United States Chamber of Commerce.

Mr. President, I have not any desire to fool the Chamber of Commerce of the United States. I am ready to figure out most all the time what it wants and then go the other way as a safe

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general deduction; and when we passed the tax bill in 1924 we did not do it at the suggestion of the United States Chamber of Commerce; we were not following the lead, nor was the Senator from Mississippi following the lead, of that great profiteering crowd in 1924. Backsliders! Senators who make such a charge had better think of their own records before they accuse anybody of "backsliding." I know of no progressive on this side of the Chamber who has changed his position on a single principle relating to national taxation since 1924. It is the Senator from Mississippi himself who has changed and taken this other view. Now, what about the corporation tax? I am for a graduated corporation tax.

Mr. FLETCHER. Mr. President, may I ask the Senator a question?

The PRESIDING OFFICER (Mr. BINGHAM in the chair). Does the Senator from Iowa yield to the Senator from Florida? Mr. BROOKHART. I yield.

Mr. FLETCHER. Do I understand that the Senator is opposed to crediting on the Federal estate tax the amount of the inheritance or estate tax paid to the State?

Mr. BROOKHART. Yes; and I will tell the Senator why. Mr. FLETCHER. I am not sure, but I think the Senator from Mississippi opposed the continuance of the Federal estate tax and contended that that field of taxation should be left to the States. I think he was also opposed to the credit of 25 per cent in the act of 1924 and the credit of 80 per cent in the act of 1926, and now to be continued, according to the action of the other House. I think the Senator from Mississippi was opposed to both those propositions. I am glad to hear the Senator from Iowa is opposed to the credit arrangement, which is an effort, pure and simple, to coerce the States, and I should like to see him opposed to the Federal estate tax entirely, because I think that field should be left to the States.

Mr. BROOKHART. Mr. President, I will be glad to explain briefly my position upon both of those propositions.

I do not believe in a double estate tax. I should like to see it arranged so that the estates accumulated in intrastate commerce should be taxed only by the States and the estates accumulated in interstate and foreign commerce should be taxed only by the Federal Government. I think that is the logical division of this estate-tax proposition. A proposition of that kind is probably very difficult if not impossible of administration, however, because it would be impossible to untangle them. I should, therefore, instead like to see the States limited to estates of different amounts, so that small estates of $100,000, $200,000, or $300,000—whatever will be a reasonable divisionwill be left to the States to be taxed and the large estates will be taxed by the National Government.

I am entirely opposed to any rebate whatsoever, and I will illustrate that.

Let us take Henry Ford's estate; and I take that only because everybody knows so well something of Henry Ford's great business. Let us suppose that estate were to be taxed now, and we will suppose it is $2,000,000,000. I have no doubt it is more than $2,000,000,000. Under the present rate of 20 per cent that estate would then pay $400,000,000 in taxes, and under the rule of rebates $320,000,000 of that, or 80 per cent of it, would go back to the State of Michigan, although perhaps that vast sum was created as much by the State of Florida as it was by the State of Michigan; and it is unjust that any portion of that should be turned back to Michigan in any different way or any different degree than to the State of Florida. Therefore that money should remain in the National Treasury, and it should go to pay for building our roads.

I am in favor of the Government building roads without State aid. I have supported in this session a $50,000,000 road bill presented by the Senator from Tennessee Mr. MCKELLAR]. I have voted to report out that bill. That is a Federal aid bill. I have supported a bill providing for another Federal road from the Atlantic coast to the Pacific coast, introduced by the Senator from Delaware [Mr. DU PONT] that is to be built entirely by the Federal Government itself. These estate taxes, with the tax properly levied, are the best basis for dealing with that situation.

I think that answers the Senator's question so far, at least, as my position is concerned.

Now, I want to say a word about the corporation tax.

I am for a graduated corporation tax, but it ought to be graduated on the right basis. The right basis is the rate of income on the fair and honest capital investment. For instance, if a corporation has a 4 per cent earning upon its capital investment-and I mean by that an honest capital-it ought to have a low rate, perhaps 2 or 3 per cent. We ought to start at a low graduation. If it has an earning of 44 per cent that

rate ought to be increased perhaps 1 per cent or more, and the graduations ought to be made on that basis; and after we reach the grades of excess profits they should be graduated up still higher.

What is an excess profit in the United States? I should like to define that again. I have had occasion to do it a few times. I say to you that the American people are only producing 5% per cent, with all their capital, all their labor, all increase in property value, and all depreciation of the dollar added together. If, then, the average earning of all the country is but 52 per cent, you are reaching an excess profit when you pass 51⁄2 per cent; and then the rates should be increased.

Again, we have a difficulty of administration in that matter, because to go out and survey the value of all these corporations is almost an interminable job. Look at the difficulty we have had in determining the value of the railroads. I think the Senator from Massachusetts [Mr. WALSH] raised a great and a vital question to the future of our country when he said we had created corporations in this country that had run away with the very powers of our Government. That is true. I have contemplated preparing a bill that would call for a regulation of these corporations; and I think the time will come when we must take all these corporations in interstate commerce into Government charter, and the value of their capital must be put upon a gold-dollar basis-a cash basis. It must not be an inflated value. As soon as we have made that regulation and have established that basis for corporate capital, then we can tax them with a proper, graduated corporation tax; and I am ready for that at any minute.

Mr. President, I should like now to ask the chairman of the committee in reference to who pays the taxes to the Government of the United States. I want to see if anybody else outside of the members of the Chamber of Commerce of the United States is going to be benefited by this fake, camouflaged tax reduction that the Senator from Mississippi is advocating.

In the report on this bill I find that we collect from customs $585,000,000 and $2,000,000 of tonnage tax. Then comes current income tax, $1,890,000,000. Does that include the corporation tax, I will ask the chairman of the committee?

Mr. SMOOT. My attention was distracted. I did not hear the Senator's question.

Mr. BROOKHART. In the report of the committee on page 2, in setting out the amount of taxes authorized for 1929, according to the estimate-this is only an estimate, but it is not far different from the old law-the current income tax is given as $1,890,000,000.

Mr. SMOOT. That includes the corporation tax.

Mr. BROOKHART. That is corporation tax and individual income tax both. In that you reduce the little corporations by raising their exemption from $2,000 to $3,000?

Mr. SMOOT. That is true.

Mr. BROOKHART. Then I want to call the attention of the Senator from Mississippi to the fact that I put in the RECORD some time ago figures of Mr. Hoover showing that since 1922 177,000 corporations in the United States have operated at a loss and have had no tax whatever to pay and are exempt from tax on that account, so that the little corporations of the country are not paying this great tax. It is the big corporations that are paying it. In fact, it is the big fellows that are paying most of the Government tax, except the indirect prices that are put upon the people, perhaps, by the customs duties.

Mr. SHIPSTEAD. Mr. President

The PRESIDING OFFICER. Does the Senator from Iowa yield to the Senator from Minnesota?

Mr. BROOKHART. I do.

Mr. BROOKHART. He pays that indirect tax? Mr. REED of Pennsylvania. Tobacco taxes are the most of it.

Mr. BROOKHART. He smokes his cigarette and pays his tax, and then when the cigarette king of the United States and the world dies we rebate 80 per cent of his taxes back to the State in which he lived.

Mr. President, I think this tax-reduction talk is political talk. I think its appeal is to the profiteer and to the campaign contributor. I think he is the fellow that gets the benefit. If any benefit is going to come from the other side of the Chamber for this illogical and unreasonable talk of tax reduction, it will be an increase in campaign contributions; and I think you will be worse fooled by the United States Chamber of Commerce than the Senator from Utah has ever fooled us progressives.

Mr. HARRISON. Mr. President, may I ask the Senator a question?

The PRESIDING OFFICER. Does the Senator from Iowa yield to the Senator from Mississippi?

Mr. HARRISON. While I am on my feet, let me ask the Senator whether he is in favor of the committee amendment or the amendment of the Senator from North Carolina [Mr. SIMMONS] with reference to the reduction of surtaxes?

Mr. BROOKHART. I am not sufficiently familiar with the bill to understand just what items the Senator refers to. Mr. HARRISON. That is the pending question. I thought perhaps the Senator did not understand it.

Mr. BROOKHART. I am not for reducing any of those taxes. I would increase them, as I said, and I would increase the estate tax away up.

Mr. HARRISON. But when the Senator is called on to vote on the pending question, and will have to support either the amendment offered by the Senator from North Carolina or the Committee amendment, does the Senator know now how he is going to vote?

Mr. BROOKHART. I think I do.

Mr. HARRISON. How is the Senator going to vote?

Mr. BROOKHART. I am going to vote for the committee position.

Mr. HARRISON. I see.

Mr. BROOKHART. Mr. President, I think, then, I shall vote against the whole bill. I certainly shall unless there are some provisions dealing with questions of administration that it is desirable to pass. I do not believe in tax reduction at all at this time. I know it is not for the benefit of the people of the country to reduce these taxes. Now is the time to pay this debt, while we have the money, and while the profiteers who made the money out of the war are still at hand to be taxed for that purpose.

Again, Mr. President, I desire to inquire, Is there any provi sion in this bill for the $400,000,000 that has been provided in the farm bill that has passed both Houses of Congress? Is that included in this estimate?

Mr. SMOOT. That would come in an appropriation bill, not in this bill. If that bill becomes a law, whatever expense may come from the enactment of that law will have to be taken

The

Mr. BROOKHART. That is what I was coming to. Senator from Minnesota very properly asks how the Senator from Mississippi, with all his talk of tax reduction, is going to reduce taxes on the farmers of the United States or on the laboring people of the United States. I quoted, I think before the Senator from Minnesota came in, the statement of the Senator from Mississippi [Mr. HARRISON] that he is reducing taxes for the members of the United States Chamber of Commerce They are his clients in this great patriotic system of tax reduction in this campaign year.

I notice here an item of "Miscellaneous, $630,000,000.” Will the Senator from Utah explain who pays those items, mainly? Mr. SMOOT. That includes all payments which we receive from railroads and other sources, such as small taxes that will be collected.

House, I think, began considering Saturday. Mr. BROOKHART.

estimates?

But has it been included in these tax

Mr. SMOOT. It has not.

Mr. BROOKHART. Then, if that bill should become a law, it will create a deficit; will it not?

Mr. SMOOT. It all depends upon how much money would have to be appropriated for the first year. If the full amount of appropriation were made, of course then there would be a deficit right off. There is no question about that.

Mr. BROOKHART. The Senator will concede that if we handle the exportable surplus of agriculture the first year, it would take it all and more, too; would it not?

Mr. SMOOT. Yes; if they handle all of the products that are provided for in that bill, the $400,000,000 will not be sufficient. Mr. SHIPSTEAD. Mr. President, is the Senator talking

Mr. BROOKHART.

Yes.

Mr. SHIPSTEAD. If the Senator will permit me, with regard to the farm bill, I think if the Senate will investigate the

Widows and minor children receive the same rate, whether Civil War or war with Spain service; that is, $30 per month plus $6 per month for each minor child under 16 years of age.

There are approximately 150,000 survivors and 250 nurses of the war with Spain, the Philippine insurrection, and the China relief expedition now on the rolls at the varying rates above indicated. To increase these to the rates now paid to the Civil War pensioners would cost approximately $63,350,000.

Section 2 of the bill grants title to any soldier, sailor, marine, or nurse, entitled to the benefits of the World War compensation act as amended, their widows, children, or dependent relatives, and at the rates now provided for service during the war with Spain, the pension therein provided being in addition to all other pensions, bounties, and compensations granted on account of service in the military or naval forces during the World War; that is, for survivors at rates from $20 to $30 per month, proportioned to the degree of inability to earn a support; or if by reason of physical or mental disabilities, regular aid and attendance of another person is needed or required, at $72 per month, provided the disabilities are not the result of vicious habits and the applicant is not an inmate of a State or national soldiers' home; or, regardless of physical condition, for attained ages, as above specified; widows and children at $30 per month, plus $6 for each additional child under 16 years, and dependent parents at the rate of $20 per month.

Approximately 3,400,000 veterans of the World War and 110,000 dependents have been awarded adjusted compensation. Assuming that 10 per cent of the survivors have at least a 10 per cent disability, thereby entitling them to $20 per month under the bill, and that all the dependents would be eligible to the proposed pension, the cost of this item would be approximately $73,800,000.

Mr. HARRISON. Mr. President, I was somewhat surprised

at some of the utterances of the Senator from Iowa [Mr. BROOKHART], and I was not surprised at other utterances of the Senator. I know that there are some things about which he and I are in disagreement, and there are other propositions on which we have joined battle lines together.

I was surprised at that part of the Senator's speech referring to the soldiers of the country, and seeking to give the impression that I was opposed to that body of our citizens being taken care of by reasonable and adequate appropriations. The Senator knows I have never voted against an appropriation to take care of the needs of the soldiers of this country.

Mr. BROOKHART. Mr. President, will the Senator yield? Mr. HARRISON. I yield.

Mr. BROOKHART. I am very much delighted to hear those remarks from the Senator, and I will say to him that if he will lead his side of the Chamber, we can get votes on this side to pass that pension bill right now, and eat up $140,000,000 of tax reduction.

Mr. HARRISON. So, Mr. President, I have always tried to vote to take care of the needs of those who fought for this country. I admire the gallantry and the fine war services rendered by the distinguished Senator from Iowa; but when the Senator from Iowa criticizes me for my views with reference to tax reduction, I am complimented that I find myself at variance with his views.

The Senator stated, in answer to a question which I propounded to him, that he was against any tax reduction. By his vote two years ago he indicated that he was against any tax reduction then. He also stated in his speech that he would now increase the surtaxes in the higher brackets to 40 per cent if it were within his power. I doubt not that the Senator would go even higher than that and vote for the old war-time surtaxes and make the rate 65 per cent.

Mr. BROOKHART. Mr. President, will the Senator yield? Mr. HARRISON. I yield.

Mr. BROOKHART. The Senator is in error as to the surtaxes.

I was talking only of the estate taxes.

Mr. HARRISON. I thought so. Very often we hear men discuss on the floor of the Senate something about which they know absolutely nothing, and here is the Senator criticizing me for votes cast in the past and for my views with reference to tax reduction when he does not know what the surtax is in the higher brackets in the present law.

That is just carrying out my idea as to the Senator's information. I asked the Senator as to the pending amendment, which is the amendment reported by the committee reducing surtaxes, and the Senator said he was not familiar with that amendment. I asked him whether he was for the amendment or for the substitute offered by the Senator from North Carolina and he said he did not know. I am not surprised because he did not know anything about this subject matter.

That was a frank admission. Then, after he stated he did not know what was the issue here, he admitted that he was for the committee amendment.

Mr. BROOKHART. Yes; and the Senator forgot I indicated I was against the entire bill.

Mr. HARRISON. Oh, yes; the Senator said he was against the whole bill. In other words, he is "agin" everything except, I believe, that he would repeal the present estate tax law, although he paid high eulogy to the distinguished Congressman from Iowa, who was recently chairman of the Committee on Ways and Means, and who not only conceived but put through the House that law. The Senator from Iowa is blowing hot and cold by paying high tribute to the Congressman from Iowa and yet condemning his handiwork. The whole coalition over there, as I understand-and the Senator can deny it if he will-and the reason why he is voting with them over there is because there is some understanding with reference to the estate tax.

Mr. BROOKHART. I must correct the Senator in reference to Congressman Green's position. He opposed any change in the estate tax law as ardently as it was possible for him to do. Mr. HARRISON. Congressman Green conceived, as I understand, the present plan and engineered it through the House, and it is now the law. At any rate he got that credit. Mr. BROOKHART.

Congressman Green opposed the rebate. entirely, but it was forced upon him. Recently we had a dis

cussion here in which it was said that he was elevated to the bench because he had opposed the rebate plan.

Mr. HARRISON. That is immaterial. The Senator started out by quoting from a speech I made on Saturday. Really, I am sorry that he did not read more of it, because it was a good speech. When the Senator quotes from me he is then making a good speech. It is only when he gets away from quoting me that he falls into error. He was defending the proposition that he and his friends were not backsliding, but that I was backsliding, and then he began to talk about the estate tax. I have been consistent in my position with reference to the estate tax. I have never backslidden at all on the estate tax. My position is known by my votes and by my utterances. I do not believe in double taxation. I voted against the imposition of the estate tax by the Federal Government. I voted not only once but many times for the repeal of the estate tax.

I am delighted that it was not put in this bill. It is not in this bill at this time. The House has not touched the estate-tax feature of the law at all. The Senate Committee on Finance, when it first took action, voted to repeal it on the recommendation of the Treasury Department, but when they found that there was a threat in the Senate that if they brought out a provision repealing the estate tax there would be a filibuster employed and that tax reduction would be denied to the American taxpayers, they changed their tactics. When they were served with notice by those who will be in conference upon the part of the House that if we touched the estate tax in the Senate, if we repealed the estate tax, there would be no tax reduction at all at this time, then it was that the majority members of the committee turned about face, rescinded the action they had taken in the Finance Committee, and so there is no question pending here with reference to estate taxes.

I feel at this time that if the proposition should arise, that I do not think I would join in for a repeal of it on this bill because of circumstances surrounding the question. I am going to do nothing that will prevent tax reduction during this session. I fear that will. My position has been entire consistent. Now, coming to the proposition of the Senator about the great

Mr. BROOKHART. I am in favor of a surtax; yes.

Mr. HARRISON. I know; but there is a great deal of difference between that and being in favor of the rate in the present law. Is the Senator in favor of the rate of surtax in the higher brackets as in the law? [After a pause.] The Senator does not know what the rate is now, does he?

Mr. BROOKHART. No; 1 am not familiar with it.

against Mr. Mellon and against those in the Senate who thought as he did with reference to reduction of surtaxes, the Senator said that I changed my position in 1926. No; I have never changed my position. I have certain views with respect to tax reduction. Those views are the views for which my party has ever stood. That is, that in the granting of reductions we should first give relief to those who need it most. That has been the policy of my colleagues in the House and of my col

leagues in the Senate. Our record has been made. It was because Mr. Mellon would have the favored rich get the greatest reduction and refuse it to those who need it most, that we battled him in 1921 and again in 1924. It was in that suggestion, where the Secretary of the Treasury and you on that side tried to give 1,200 of the 3,585,895 income-tax payers in America 51 per cent of the total reduction.

It was in the benign pages of that proposal that incomes of $5,000,000 were to be benefited by a reduction of $1,335,832, while incomes of $3,000 were to receive only $8.75 reduction. This Senate amendment is patterned from the same plate and italicized from the same idea.

It was under the whip and spur and united effort of Senators on this side of the aisle that we forced consideration in 1921 and again in 1924 of tax reductions to eliminate millions from the payment of normal taxes, to eliminate millions from the payment of surtaxes in the lower brackets, and to relieve many millions more by giving reductions, not as great in the higher brackets as Mr. Mellon and those who believed as he did in the Senate and in the House wanted, but we relieved them appreciably. This was done under the influence of the Democratic minority in the House and in the Senate, and ours is the credit more than those on the other side of the aisle. What was done we forced to be done. We did not give in 1924 the reduction to 20 per cent, may I say to the Senator, which is the present rate in the higher brackets, until we had eliminated from the payment of taxes the millions of whom I have spoken, and the other millions who had had their taxes reduced in the lower brackets.

Upon what theory of government is it that a man should sit here in the Senate of the United States and, when we have surpluses piled up in the Treasury, continue to keep the taxes high just because he has the power to do it? Taxes should not be levied except in sufficient amount to run the Government. When we do not need the taxes why should we continue to impose them? I would not vote to increase the taxes now in the higher brackets, although I am opposed to reducing them in the higher brackets at this time. I hope the time will come when we can give a further reduction in the higher brackets, but that time is not here now. So when there is a surplus, as there is now a surplus, amounting last year to $400,000,000, and every reason to believe it will be a like sum this year, we must reduce taxes, and the question presented to us is where we shall cut.

We on this side of the Chamber believe in reducing the taxes for those who have had the least cutting of taxes in the past, and that is why we started in the beginning to eliminate the nuisance taxes, the war-time taxes that were never known by this Government except when our Government had been thrust into the midst of war. We have made our efforts to do away with those taxes. In some instances we succeeded and in others we have failed.

If it had not been for our aggressiveness and our united efforts the tax on automobile parts would not now be eliminated from the bill. I dare say that the distinguished Senator from Michigan [Mr. COUZENS] knows that to be quite true, because he was the only member of the Finance Committee on the Republican side who in the beginning favored the elimination at this time of the tax on automobile parts. We Democrats were united on the proposition, and it was a Republican fear that they would be defeated on the floor of the Senate if they rejected our proposal which caused them finally to agree to eliminate the proposition.

Mr. COPELAND. Mr. President, will the Senator yield? The PRESIDING OFFICER. Does the Senator from Mississippi yield to the Senator from New York?

Mr. HARRISON. I yield.

Mr. COPELAND. I want to be clear in my mind about this matter. As I understand the Senator from Mississippi, the Republicans were not willing to have the tax taken off of automobiles, and it was only as a result of the persistence of Democrats that the change resulted in the bill?

Mr. HARRISON. On a record vote in the committee they voted us down, and even when the distinguished Senator from Michigan [Mr. COUZENS] voted with us, we were unable to carry the proposition. The only reason why they turned turtle on the proposition was because they knew they could not stand the assault in the Senate, and that the tax would be eliminated on the floor of the Senate. Two years ago, in consideration of the 1926 tax bill, we made a proposal to eliminate this tax. We voted the proposition out here. On this side of the aisle we voted solidly to repeal the automobile tax, but many Senators on the other side of the Chamber voted against us. Theirs were the only votes that were recorded against it, but there was a sufficient number over there to retain, finally, the tax. I think my friend the Senator from Iowa [Mr. BROOKHART], who took

| occasion to criticize me this morning, voted with us on that question when we put it over in the Senate at that time.

Mr. BROOKHART. Mr. President, I did not quite understand the Senator's proposition.

Mr. HARRISON. Two years ago the automobile tax came up for elimination. The Senator voted with us on that, I think. Mr. BROOKHART. I may have voted for that, possibly, but I voted against the whole bill.

Mr. HARRISON. Oh, yes; the Senator voted against the whole bill. He voted against the whole proposition. But after we had passed the amendment eliminating the automobile tax and the bill went to conference, then it was that the conferees repudiated what the Senate did. Mr. Mellon said, "Oh, the Treasury will not stand for it. You have written a bill that reduces taxes nearly $500,000,000, and the Treasury will stand for only about $300,000,000. You must eliminate that provision whereby you take the tax off of automobiles." Senators relied on the recommendation and statement of the Treasury Department and were forced to recede from the action of the Senate. The Senator from Utah was then chairman of the conference and the first to retreat. When the bill was finally incorporated into law that tax was restored.

Notwithstanding the advice given by the Secretary of the Treasury, which was relied upon by Republican Senators, that we could not cut the tax any further than he said and notwithstanding that we reduced the taxes $383,000,000, there was a surplus at that time in the Treasury of over $300,000,000 and the next year it climbed until it reached over $600,000,000.

Those are the facts, and they will not be denied, and yet the Senator from Iowa says the Democrats should not have reduced the surtaxes. In 1926 we undertook to reduce them, and it was our amendments to the bill relating to the reduction of the surtaxes that were finally adopted in the committee. It was our appeals which brought about and gave great reductions to millions of moderate means. Yes; we had reduced it some in the higher brackets, but the Treasury could stand for that cut.

Here are corporations, as I have pointed out, which the Senator from Iowa says I am defending. That is all right. I am glad the time has come in America when every institution and every class of people can be defended, as they ought to be defended, when they are in the right. My party believes in equal and exact justice to every man in every class of business in the country, and as long as a corporation confines itself within the law I care not how big and prosperous it may become. I want to see it treated fairly.

Corporations are no bugaboo to us as Democrats. Treat them decently, treat them fairly, and do not look at them as though they were assassins, as my friend from Iowa would. He is obsessed against corporations. The man who has a little money, made by his own efforts and zeal, should pay it all to the Government, according to the Senator's theory. That is not my idea of government. That is not my philosophy of life. Deal equitably with all men; deal impartially with all of our citizens. Corporations are but aggregations of individuals who subscribe to the stock of the corporations and own it.

People in New York own stock in corporations in my State; people in my State own stock in corporations in Michigan. Upon them depends in a large degree the prosperity of the country. If we have a great surplus in the Treasury, why should we want to destroy them and at the same time destroy the business of the country? No; as I pointed out on Saturday in 1909 there was only a 1 per cent corporation tax levied upon the corporations of the country, and during the World War we shot it up from 2 per cent until we had levied a 121⁄2 per cent corporation tax, an excess-profits tax in addition to that, and in addition to all that a capital stock tax. There is no class of people in America from whom more taxes were exacted during the war than the stockholders of corporations, and yet despite that high increase from 1 per cent corporation tax to 121⁄2 per cent two years ago, in peace times, the majority of the Republican Party increased it to 13% per cent, when we were reducing the taxes of everybody else.

I say, Mr. President, since we have reduced the tax on individual incomes, since we have lowered the normal tax, since we have eliminated millions in the lower brackets from the payment of the surtax, the time has come when the stockholders of the corporations of the country are entitled to some tax reduction. So we on this side of the Chamber put the question to the Senate as to whether or not it would reduce the corporation tax to 11% per cent as the other House had voted to do. There was not a division in the House on that proposition. The Republicans from the Senator's own State, Democrats from my State, all unitedly voted to put into this proposed law a reduction of the corporation tax to 11% per cent; and yet on the roll call the distinguished Senator from Iowa and all Senators on the other