I asked the question a few moments ago whether the inclusion of this amendment in the bill would, in the judgment of the Senator offering it, increase the revenue. His reply was that he felt that it would. Although he undoubtedly believes he is right, at the same time I understand Mr. Adams, one of the experts, in computing the possible income as compared to the income under the system prevailing previous to 1921, was very much in doubt whether it really would increase the income. That is the reason I make the statement that it is perhaps a contradiction, because we could assume that the life insurance companies would not be opposed to the inclusion of this amendment if it were correct that they would pay less taxes to the Government. So far as that point is concerned, it must be left open to speculation.

Prior to 1921, however, the life insurance companies, I am informed, were on the same basis as all other corporations, computing their capital losses and their capital gains as against their profits and income, and paying according to the schedules of those days.

I have here the report of one large mutual life insurance company, the Prudential of New Jersey, of the taxes they paid under the old system--the system which it is now proposed again to put into effect-from the year 1914 to the year 1921, when this new plan was worked out by the Internal Revenue Bureau, believed by them to be not only a more equitable plan, but, as I believe, a more remunerative plan to the Government.

In 1914 the Prudential paid on their net profits, under the higher schedules, of course, which were in effect $112,181.48. In 1915 they paid-I will not read the odd figures-$82,000. In 1916 they paid $104,000.

In 1917 they paid $182,000.

Mr. EDGE. Yes.

Mr. REED of Pennsylvania. Did I understand the Senator aright as saying that that great company did not pay 1 cent in taxation during the two war years?

Mr. EDGE. That is the report of the company, no doubt entirely accurate. Their losses during those years undoubtedly placed them in the position of owing the Government nothing. Their statement is sent as an argument which I am free to use, so apparently they are entirely prepared to defend it.

As I have already stated under this new plan-which is rather an involved one, and I will not attempt to go into detailsthe tax is paid upon the reserve. Under the law they are compelled to increase their reserve every year; so that automatically, whatever their losses may be from investments, the Government must receive an increased amount year by year. Even though they had a bad year, as they did in 1918 and 1919, and did not pay the Government anything, they would be compelled to pay in this same increasing ratio.

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

Mr. EDGE. I do.

Mr. COPELAND. I think I am right in saying that in the years 1918, 1919, and 1920 these companies suffered losses.

Mr. EDGE. In 1920, in the case of the Prudential, they paid $638,000.

Mr. COPELAND. I am reading from the figures of the Security Mutual.

Mr. EDGE. The Senator from Pennsylvania very effectively, as he always does, pointed out the small amount of taxes paid

He is entirely correct in the figures that he used. The figures that I have are tabulated from the legal reserve life insurance companies of the United States having, in the various years, from 85 to 90 per cent of the total assets of all the companies of the United States. They show that the revenue paid to the Government by those companies increased from $8,159,000 in 1921, the year this change was made in the system of computing taxation, to $16,388,000-the figures that were used by the Senator from Pennsylvania-in 1926, or a gain in revenue to the Government from 90 per cent of the insurance companies of the country in five years of over 100 per cent.

Mr. FLETCHER. Mr. President, may I make an inquiry of the Senator? This proposal does not mean to change the system that was adopted in 1921 at all, does it? As I understand, it merely adds certain sources of income that are not embraced in the present law.

Mr. EDGE. Oh, yes, Mr. President; it changes the system entirely, because it goes actually and absolutely back to the old system or reckoning capital losses, which now are not considered at all.

Mr. FLETCHER. I can not see that.

Mr. EDGE. I am quite sure the Senator from Pennsylvania will agree with my statement.

Mr. REED of Pennsylvania. I did not hear the statement. Mr. FLETCHER. I was expressing the view that the amendment of the Senator from Pennsylvania did not change the present system of taxing these corporations.

Mr. REED of Pennsylvania. Not in the least. It simply adds this additional income, which now escapes inclusion.

Mr. EDGE. The Senator will agree that it does change it to the extent of bringing into the computation the capital losses, which they could not possibly do under the present system. Mr. REED of Pennsylvania. Absolutely. It taxes the net gain; that is all.

Mr. EDGE. Naturally; that is all the discussion is over.
Now, let me finish these figures.

I have already demonstrated that under the new system the insurance companies have paid, without deducting capital losses, an increase of over 100 per cent in five years, I want to compare that with the payments to the Government from all other corporations in the country.

From the figures of the Federal Internal Revenue Department it appears that the total tax received on account of the Federal-income and war-profits tax paid by all corporations for the year 1921-all corporations, including insurance companies— was $757,571,432. The amount of Federal income tax paid by all corporations for the tax year 1926, five years later, was $1,181,005,366, an increase in the five-year period of 68.3 per cent. Remember, the life insurance companies during that time increased their payments to the Government over 100 per cent. By comparison, while the income from all other corporations was increasing in the five-year period 68.3 per cent, the income from life insurance companies was increasing 100.2 per cent, or 46.7 per cent faster than the revenue from all corporations.

In other words, the system under which we are now taxing the life insurance company reserves has brought into the Treasury an income of over 46 per cent more than the income brought into the Treasury from all other types of corporations who could compute and credit their capital losses; and recall that during the time these comparisons are made the taxes were reduced four times; so that, of course, the schedules at the commencement of the comparison would be on the basis of very much higher rates per thousand-dollar profit.

Mr. President, again I can understand that the question will be raised: "If they pay more now, why should they be so anxious to retain the present system?' There are several reasons which appeal to me as very forceful.

The present system secures more money for the Government. Both the companies and the Internal Revenue Bureau are familiar with its operation, and the companies charge against their expense accounts the approximate amount they know they will be compelled to pay; and they are satisfied with it. On the other hand, if capital gains and losses are to be included in income, in all fairness-I might ask the Senator from Pennsylvania why he has not considered this pointunderwriting profits and losses should also be included, which they are not in the amendment offered. Again the Government would lose the certainty which it now has of a steady increase every year in the volume of the tax from life insurance companies, as well as throw the computation of the tax on these companies back into the endless confusion which existed prior to 1921. The third reason is because, in a bill which is designed to reduce taxation, Congress should not seek ways and means of imposing additional burdens upon institutions which

of the land.

A mutual life insurance company, in my judgment-a life insurance company, particularly, and in that respect I agree with the Senator from Alabama [Mr. BLACK]-is serving a public purpose of an entirely different nature than almost any other corporation we could consider; and if it is a mutual company, as most of these companies are, it is not a question of profit to any individual. We well know what the word "mutual" means. The lower they can keep their expenses, the lower, of course, they can make their premiums, and every one is a stockholder in the company. In other words, they are mutually serving each other.

Mr. REED of Pennsylvania. Mr. President, will the Senator yield?

The PRESIDING OFFICER (Mr. LA FOLLETTE in the chair). Does the Senator from New Jersey yield to the Senator from Pennsylvania?

Mr. EDGE. I do.

Mr. REED of Pennsylvania. It has been called to my attention that mutual companies other than life and fire are not exempt from this kind of taxation. A mutual casualty company or a mutual marine insurance company is subject to the sort of taxation that I suggest these other companies should be. Mr. EDGE. I believe that is correct.

In conclusion, Mr. President, I again state that I can not but speculate as to whether the Government will receive more money or less. My personal opinion is that with the encouragement to consider wash-off losses, and so forth, which we well know exist all over the country, and are taken advantage of, the Government would not secure more money; but if they did secure more money, it does seem to me a contradiction, after four successful efforts to reduce taxation, to concentrate on what would affect directly half the population of the country, especially if they are in mutual companies, as most of them are, and raise their taxes.

Mr. BLACK. Mr. President, will the Senator yield for a question?

The PRESIDING OFFICER. Does the Senator from New Jersey yield to the Senator from Alabama?

Mr. EDGE. I understand so.

Mr. BLACK. If this tax is imposed, would it not in reality, so far as those companies are concerned, simply be raising the amount of premium paid by every policyholder in the United States?

Mr. EDGE. If the result of this action should be to increase taxation, it could not have any other effect.

Mr. BLACK. Then it would simply amount to taxing every clerk or mechanic or carpenter or mill owner or anyone else who has insurance in a mutual company?

Mr. EDGE. Precisely. It is computed that half of the population of the country have some type of policy in life-insurance companies.

Mr. NORRIS. Mr. President, I should like to ask the Senator from New Jersey a question.

The PRESIDING OFFICER.

Does the Senator from New Jersey yield to the Senator from Nebraska? Mr. EDGE. I yield.

Mr. NORRIS. I noticed particularly that the Seflator from New Jersey, just before the Senator from Pennsylvania gave up the floor, asked him a question about mutual companies and stock companies. I am referring now both to life and fire companies and to every other kind of insurance. I judged from the Senator's question that he was under the impression that we ought to treat those companies differently; and I should like to hear the Senator on that point. I note what the Senator from Pennsylvania says, that they ought to be treated exactly the same.

I have always labored under the impression that a mutual company perhaps was entitled to different treatment from a stock company, because a mutual company has no profit; it is not organized for profit; there is not anyone making any profit out of its transactions; whereas in the case of a stock company, although it is perfectly legitimate and perfectly honorable, one of the main objects of the incorporators is to make money.

Mr. EDGE. There is that distinction. The Senator is entirely correct. I asked the question with the thought that a mutual company had somewhat a more appealing and stronger argument; but I do believe that both mutual and stock companies should be treated alike on this basis of taxation; and, as I have tried to develop, my own conviction is that the Govern

they are stock or mutual companies, than it is to put them back in what might be termed the semitax-dodging class.

Mr. NORRIS. I would like to ask the Senator another question; and I am only seeking light on this. I have not as definite ideas as some of those who have studied the question more. The profits to be taxed, or which this amendment would tax, which are not now taxed, as I understand it, come from the investments of the companies?

Mr. EDGE. Stocks, bonds, rents, real estate, and that sort of investment.

Mr. NORRIS. Of course, in taxing those profits I assume it would be net profits, because I can easily see how, especially in years of declining markets, when the value of their investments might very materially be decreased, there might be a loss instead of a gain.

Mr. SMOOT. Mr. President. may I suggest to the Senator that mutual companies other than mutual life insurance companies are treated differently?

Mr. NORRIS. That means mutual fire insurance companies? Mr. REED of Pennsylvania. Mr. President, a mutual fire insurance company now pays a tax on its capital gains. A mutual life insurance company is now exempt. Mutual companies other than life, as the Senator will see by looking at section 208, are taxable in the same manner as other corporations. That is affirmatively provided in the bill. All that we do is to exempt the stock companies doing every kind of insurance and the mutual life companies from capital-gain taxes; but a mutual fire or a mutual marine or a mutual casualty company pays the kind of a tax I am urging that the others should

pay.

Mr. SMOOT. Mr. President, I want to say to Senators that the change in the basis of taxing all kinds of insurance companies was made in 1921. I do not think there is an item in the revenue law to which more time was given than to the effort to arrive at a basis of taxation to which all the companies would agree.

Mr. COPELAND. That was in 1921?

Mr. SMOOT. Nineteen hundred and twenty-one. The basis of it was arrived at at that time and put in that law. I think there were at least three weeks given to the insurance companies before we could get them together. The provision in the law of 1921 relating to the insurance companies was put into form by the unanimous agreement of all of the companies, mutual and otherwise. The only insurance companies, the provisions as to which have been changed since that time, are the mutual companies-that is, I mean the companies insuring against hail and things of that sort.

Mr. NORRIS. We do not tax them?

Mr. SMOOT. We do not tax them at all.

Mr. REED of Pennsylvania. Mr. President, this much ought to be borne in mind. These companies never did pay any excessprofits taxes. There is not a case on record of any insurance company that ever paid a nickel in excess-profits taxes, while other corporations were doing it. These companies, even the They never paid any of those taxes, while the other corporastock companies, were always exempt from capital-stock taxes. tions were paying.

Mr. COPELAND. Mr. President, will the Senator yield?
Mr. REED of Pennsylvania. I yield.

Mr. COPELAND. The Senator bears in mind, of course, that at that particular period-1918, 1919, and 1920-we had the largest death rate that we have ever had in the history of our country. In the fall of 1918, in six weeks, 35,000 people died in New York City from influenza.

Mr. REED of Pennsylvania. But their deaths in the fall of 1918 did not affect the fact that these companies got cut of paying taxes in 1917.

Mr. SMOOT. Mr. President, the Senator knows. I think, that the Government now has claims for excess-profits taxes against certain insurance companies for the period when excessprofits taxes were in force.

Mr. REED of Pennsylvania. That may be.

Mr. SMOOT. That has not yet been finally decided.

Mr. REED of Pennsylvania. But the Government has never received a nickel in excess-profits taxes from those corporations. Mr. SMOOT. And will not, until that question is finally decided; but the claims have been made against them.

Mr. REED of Pennsylvania. One thing more. I tried two years ago, when we had the 1926 act before us, to call the attention of the Senate to the fact that these companies paid no capital-stock tax at all, and that therefore, when we raised the rate on all corporations to 13% per cent, there was no reason why their taxes should not go up to 13%; but the Senate would not do that. It left the rate at 12 per cent, when other corporations were paying 132 per cent.

I have no brief against insurance companies. The insurance business is a highly praiseworthy one, and, so far as I know, at present it is run in a perfectly honest and aboveboard and proper way, and I am not trying to persecute them, but I can not see why in the world any one business should be singled out to be the pet of the tax law the way this business has been, exempted from paying excess-profits taxes, exempted from the payment of the capital-stock tax, exempted from the raise from 12% to 13%, exempted from the taxes on capital gain. Mr. COUZENS. Mr. President, will the Senator yield? Mr. REED of Pennsylvania. I yield.

Mr. COUZENS. I would like to ask the Senator if, while I was out, he gave to the Senate the stock quotations on the stocks of these companies?

Mr. REED of Pennsylvania. No, Mr. President. I did not, because I do not think that affects the justice of it, after all. Mr. COUZENS. It points out how valuable the stock of these corporations is.

Mr. REED of Pennsylvania. That is true.

Mr. COUZENS. And they are made valuable by these exemptions which the Congress gives them.

Mr. REED of Pennsylvania. I think that is one reason why the stocks are so high.

Mr. SMOOT. Mr. President, will the Senator yield?
Mr. REED of Pennsylvania.

Mr. SMOOT.

other fact.

Mr. NORRIS.

I yield.

I want to call the Senator's attention to one

Mr. President, will not the Senator let me ask the Senator from Pennsylvania a question about what he said, before the Senator from Utah gets on to some other subject.

Mr. SMOOT. This is right in line with what has been said. It will take just a moment.

If in 1921 we had not arrived at the agreement as to the taxation of insurance companies, from that year on they would not have paid a single, solitary dollar to the Government, because of the fact that they were holding the securities that they had bought, to the face value of over a billion dollars, and every one of those securities was low; they would have found them almost worthless; they would have unloaded them at a loss, and would never have paid a dollar to the Governmenit. But in the compromise that was taken into consideration.

Mr. NORRIS.

Why should they pay if they had a loss?

Mr. SMOOT. In the compromise that was made at that time we not only took out the question of losses on capital assets but of gains as well.

Mr. REED of Pennsylvania. Mr. President, I can answer that. Under the tax law of 1918 and under the 1921 law it was a scandal the way the taxpayers registered off losses in order to avoid tax liability. These companies could have done it just as other companies and other individuals did, but the law of 1921 was not the last word in wisdom, and by subsequent legislation, in 1924, we made that kind of washed sales impossible, and we did not allow taxpayers to eliminate their tax liability by that kind of performance. So that while it was a strong argument in 1921 against taking into account capital gains and losses with these companies. it has ceased to be an argument now, because it is no longer possible for them to charge off losses that are not made in good faith. The Senator, I know, will agree with me.

Mr. SMOOT. Yes; but I want to say to the Senator that the great bulk of the securities they were holding were Liberty bonds, and they were receiving 44 per cent on those Liberty bonds. They have been called in, and now they are receiving 3% per cent on short-time certificates, which will show in next year's returns. Their gains will be cut to the extent, at least, of, I should say, 10 or 15 per cent.

Mr. REED of Pennsylvania. I would not touch that anyway, and we could not, because all of that interest is tax free, whether it is 44 or 3.

Mr. SMOOT. I am now referring only to the fact that their profits as shown on next year's returns certainly can not be what they were before, because of the fact that they had, I think, over a billion dollars' worth of those bonds, and they have been called, and now in place of the 44's they are getting a short-time certificate bearing 3%.

Mr. REED of Pennsylvania. Whatever interest they get on Liberty bonds does not affect their tax, because they are wholly tax free.

Mr. NORRIS. I would like to ask the Senator if it is not true that even with Liberty bonds, if they buy and sell and make a profit, they have to pay a tax on the profit? Mr. REED of Pennsylvania. No, Mr. President.

Mr. NORRIS. They would under the Senator's amendment? Mr. REED of Pennsylvania. They would under my amendment; yes.

Mr. NORRIS. The thing I wanted to ask the Senator before the Senator from Utah interrupted was this. The Senator. speaks of a tax on capital and a tax on capital gains. How does he apply that to a mutual company, which has not any capital, and necessarily can not have any capital gains?

Mr. REED of Pennsylvania. The phrase "tax on capital gains is a sort of a technical term that has grown up under these tax laws, and it is defined in the act to mean gains from the purchase and sale of capital assets.

Mr. NORRIS. Does a mutual company have capital assets? Mr. REED of Pennsylvania. It has capital assets, though it has no capital stock.

Mr. SMOOT. All their reserve is capital.

Mr. REED of Pennsylvania. It has a balance sheet, and on one side it puts its assets, whether bonds or buildings, and on the other its liabilities; but it has no capital stock.

Mr. COPELAND. Mr. President, will the Senator yield?
Mr. REED of Pennsylvania. I yield.

Mr. COPELAND. May I suggest to the Senator that we have a vote on this if he is willing?

Mr. REED of Pennsylvania. I am perfectly willing to have a vote on it. Perhaps the Senator will let me finish what I was starting to say.

Mr. COPELAND. Certainly.

Mr. REED of Pennsylvania. Mr. President, it is true that this system of taxation of insurance companies was worked out after long hearings in 1921. I think it is equally true that the decisions that were made in 1921 can be improved upon now. Otherwise there would have been no reason for passing tax reduction bills in 1924, 1926, and this year. I think the experience under this has proven that a revision in this regard is, necessary, and I think Senators should notice that instead of adopting the philosophy of favoring the mutual companies the present tax law does not give the mutual companies other than' life insurance companies any of the benefits that it gives to stock companies.

If I were a very rich man and wanted to form a holding company in which I could put my assets and pay the least possible tax, I would buy up some small-stock fire-insurance company. It makes the finest holding company for a rich man imaginable, because all of its profits from these transactions are wholly tax free, whereas these other companies have to pay taxes on them. That is just a little tip thrown out for people who want to dodge taxes in case the Senate decides to retain the provision of the present law.

Mr. BLACK. Mr. President, if the Senator will yield, I want to ask him a question. If these amendments are divided up, and the Senator will explain to me which amendment refers to fire insurance and which to life, I will be better able to vote as I think I should vote.

Mr. REED of Pennsylvania. Yes, Mr. President; the first amendment to be voted on is that dealing only with life-insurance companies. The second amendment will deal with section 204, on page 145, really referring to page 146, where it deals with insurance companies other than life or mutual. That means all stock companies in the business of fire and marine insurance.

Mr. BLACK. That is the second.

Mr. SMOOT. It is offered all as one amendment.

Mr. REED of Pennsylvania. I should like to have these amendments voted on separately. There are six in all.

The PRESIDING OFFICER. The clerk will report the first amendment for the information of the Senate.

The CHIEF CLERK. On page 141, line 4, strike out "and rents" and insert in lieu thereof "rents, and the sale or other disposition of property."

Mr. HARRISON. Mr. President. I merely want to say a word. I am going to vote against the amendment. I do not believe that the matter has been sufficiently considered. For weeks the Committee on Finance had very extensive hearings. At the last, when there had been a good deal of delay, as we thought, and we were anxious to pass some kind of a revenue bill, this question was brought up. Along at the end of the proposition when the hearings had all been closed, the matter was suggested for the first time. It was thought that it was a matter of such importance that the insurance people should have a hearing. That was quite true. I think that was the opinion of the committee. A time was fixed, but we saw it was going to delay us and, in order to keep from delay, we reported out the bill without the hearings.

Mr. REED of Pennsylvania. Mr. President, will the Senator permit a question

Mr. HARRISON. Certainly.

Mr. REED of Pennsylvania. Is it not true the Finance Committee worked first on amendments made by the House to the present law, and that as soon as amendments from the floor, so to speak, were permissible in the committee, I presented this one?

Mr. HARRISON. That is true, but the Senator will agree with me that that was right at the close of the hearings. I do not think we had over two or three meetings after the suggestion was made.

Mr. REED of Pennsylvania. Necessarily it was at the close. I was barred from offering it earlier because the committee was first considering changes made by the House in the present law. Mr. HARRISON. I do not mean the Senator delayed it in such a way that it was too late to get a hearing, but the Senator from Connecticut [Mr. BINGHAM] felt an interest and thought that his people ought to be heard. I think a time was set, but we did not think the bill ought to be delayed on that account.

Mr. REED of Pennsylvania. I call for the yeas and nays. The yeas and nays were ordered, and the Chief Clerk proceeded to call the roll.

Mr. REED of Pennsylvania. I see no necessity for a yea-andnay vote, and I shall not, therefore, ask for one.

The VICE PRESIDENT. The next amendment of the Senator from Pennsylvania will be stated.

The CHIEF CLERK. On page 144, line 11, strike out "and," and after line 11 insert a new paragraph, to read as follows:

(9) Capital losses: Losses sustained during the taxable year from the sale or other disposition of property; and.

On page 144, line 12, strike out "(9)" and insert in lieu thereof "(10).”

The amendment was rejected.

The VICE PRESIDENT. The next amendment of the Senator from Pennsylvania will be stated.

The CHIEF CLERK. On page 146, at the end of line 10, insert "the sum of (A)"; and in line 16, after “Commissioners," insert a comma and the following: "and (B) gain during the taxable year from the sale or other disposition of property."

The amendment was rejected.

The VICE PRESIDENT. The next amendment will be stated. The CHIEF CLERK. On page 149, line 1, after "incurred,” insert "as defined in subsection (b) (6) of this section"; and after line 1 insert a new paragraph, to read as follows:

(5) Losses sustained during the taxable year from the sale or other

I

Mr. WALSH of Montana (when his name was called). have a pair with the Senator from Vermont [Mr. DALE]. In his absence I withhold my vote.

Mr. WATSON (when his name was called). I have a pair with the senior Senator from South Carolina [Mr. SMITH], which I transfer to the senior Senator from New Jersey [Mr. EDGE], and vote "nay."

Mr. WHEELER (when his name was called). I have a general pair on this question with the Senator from Idaho [Mr. GOODING]. Not knowing how he would vote, I withhold my vote.

The roll call was concluded.

Mr. REED of Pennsylvania. This amendment would subject stock fire insurance companies to the same tax on capital gains. It is the same tax as mutual fire insurance companies now pay. In rejecting the amendment, as the Senate will doubtless do, I want the Senate to know that it is favoring stock companies, to the disadvantage of mutual companies.

The VICE PRESIDENT. The question is on agreeing to the amendment of the Senator from Pennsylvania.

The amendment was rejected.

Mr. COPELAND. Mr. President, I have two short amendments to offer. I send forward the first one.

The VICE PRESIDENT. The clerk will report the amendment.

The CHIEF CLERK. On page 105, after line 25, insert a new

66

Mr. BRUCE. Mr. President, I ask to be excused from voting, as I am a director and general counsel of a life insurance company.

The VICE PRESIDENT. Will the Senate excuse the Senator from Maryland from voting? Without objection, it is SO ordered.

Mr. JONES. Mr. President, I desire to announce the following general pairs:

The Senator from Delaware [Mr. DU PONT] with the Senator from Florida [Mr. TRAMMELL];

The Senator from North Dakota [Mr. FRAZIER] with the Senator from South Carolina [Mr. BLEASE];

The Senator from New Hampshire [Mr. KEYES] with the Senator from New Jersey [Mr. EDWARDS]; and

The Senator from Maine [Mr. GOULD] with the Senator from Louisiana [Mr. RANSDELL].

The result was announced-yeas 21, nays 45, as follows:

SEC. 121. INTERNATIONAL BRIDGES.

In the case of income derived from the operation of a bridge between the United States and a contiguous foreign country, the Secretary of the Treasury is authorized to enter into an agreement in respect of any taxable year with the proper authorities of such foreign country, making an equitable apportionment as between the United States and such foreign country of the income and deductions allocable to the operation of such bridge. If such agreement is entered into, the tax imposed by this title in respect of such income for such year shall be considered to be the tax based on the net income as computed under such agreement. Any tax computed under the section shall not be reduced by any credit as provided in section 131 (relating to the credit for foreign taxes).

Mr. SMOOT. Mr. President, so far as I can I would like to accept the amendment.

Mr. BORAH. Mr. President, may I ask if this is authorizing an agreement to be made with a foreign country by the Secretary of the Treasury?

Mr. SMOOT. I can state briefly the object of it.

Mr. BORAH. I know what the object is, but if we are going to make an agreement with a foreign country binding upon the respective countries, I should think we would want some one to make the agreement besides the Secretary of the Treasury. It would have to be made in the nature of a treaty.

A message from the House of Representatives, by Mr. Chaffee, one of its clerks, announced that the House had adopted a concurrent resolution (H. Con. Res. 38) providing that the action of the Speaker of the House of Representatives and of the Vice President in signing the bill (H. R. 9568) to authorize the purchase at private sale of a tract of land in Louisiana, and for other purposes, be rescinded, and that in the reenrollment of such bill the number "58" be stricken out and the number "158" be inserted in lieu thereof, in which it requested the concurrence of the Senate.

H. R. 4660.

H. R. 10503. An act for the relief of R. P. Washam, F. A. Slate, W. H. Sanders, W. A. McGinnis, J. E. Lindsay, and J. T. Pearson;

H. R. 11405. An act to acquire an area of State land situate in Lassen Volcanic National Park, State of California, by exchange;

H. R. 11621. An act to authorize the Secretary of the Navy to advance public funds to naval personnel under certain conditions;

H. R. 11724. An act to provide for the paving of the Government road, known as the Ringgold Road, extending from Chickamauga and Chattanooga National Military Park, in the State of Georgia, to the town of Ringgold, Ga., constituting an approach road to the Chickamauga and Chattanooga National Military Park;

H. R. 12067. An act to set aside certain lands for the Chippewa Indians in the State of Minnesota ;

H. R. 12192. An act authorizing the Secretary of the Interior to accept a deed to certain land and issue patent therefor to the

city of Buhl, Twin Falls County, Idaho;

H. R. 12446. An act to approve a deed of conveyance of certain land in the Seneca Oil Spring Reservation, N. Y.; and H. J. Res. 263. Joint resolution authorizing the president and fellows of Harvard College to erect on public grounds in the District of Columbia a monument to Maj. Gen. Artemus Ward. CONSTRUCTION OF MILITARY POSTS

Mr. REED of Pennsylvania. Mr. President, I ask unanimous consent that the Army housing bill, H. R. 11134, may be considered at this time. I understand the Senator from Utah

H. R. 5322. An act for the relief of John P. Stafford:

H. R. 5548. An act to authorize payment of six months' death gratuity to dependent relatives of officers, enlisted men, or nurses whose deaths results from wounds or disease not resulting from their own misconduct;

H. R. 5644. An act to enable an enlisted man in the naval service to make good time lost in excess of one day under certain conditions;

H. R. 5718. An act to amend the act entitled "An act to readjust the pay and allowances of the commissioned and enlisted personnel of the Army, Navy, Marine Corps, Coast Guard, Coast and Geodetic Survey, and Public Health Service";

H. R. 5826. An act authorizing the Secretary of the Navy, in his discretion, to deliver to the custody of the Louisiana State Museum, of the city of New Orleans, La., the silver bell in use on the cruiser New Orleans;

H. R. 5930. An act for the relief of Jesse W. Boisseau; H. R. 6152. An act for the relief of Cromwell L. Barsley; H. R. 6195. An act granting six months' pay to Constance D. Lathrop;

H. R. 6842. An act for the relief of Joseph F. Friend; H. R. 6854. An act to add certain lands to the Montezuma National Forest, Colo., and for other purposes;

H. R. 7142. An act for the relief of Frank E. Ridgely, deceased;

H. R. 7895. An act for the relief of the Lagrange Grocery Co.;

H. R. 7897. An act to ratify the action of a local board of sales control in respect of contracts between the United States and the West Point Wholesale Grocery Co., of West Point, Ga.; H. R. 7898. An act to ratify the action of a local board of sales control in respect of contracts between the United States and the Lagrange Grocery Co., of Lagrange, Ga.;

H. R. 7903. An act to authorize the erection at Clinton, Sampson County, N. C., of a monument in commemoration of William Rufus King, former Vice President of the United States; H. R. 8031. An act for the relief of Higgins Lumber Co. (Inc.);

H. R. 8440. An act for the relief of F. C. Wallace;

H. R. 9046. An act to continue the allowance of Sioux benefits; H. R. 9355. An act to provide for the acquisition of certain property in the District of Columbia for the Library of Congress, and for other purposes;

H. R. 9620. An act for the relief of E. II. Jennings, F. L. Johanns, and Henry Blank, officers and employees of the post office at Charleston, S. C.;

H. R. 9365. An act to erect a tablet or marker to mark the site of the Battle of Kettle Creek, in Wilkes County, Ga., where on February 14, 1779, Elijah Clarke, of Georgia, and Colonel Pickens, of South Carolina, overtook the Tories under Colonel Boyd, killing him and many of his followers, thus ending British dominion in Georgia;

Mr. SMOOT. No.

Mr. REED of Pennsylvania. There was no objection whatever to the bill on the call of the calendar last night except from the Senator from Illinois [Mr. DENEEN], who raised a question as to a committee amendment concerning Scott Field. I have talked it over with some members of the committee, and they are all willing that we should recede from the committee amendment. It will lead to no discussion. I ask that it may be passed because it is imperatively necessary in the preparation of the Budget.

The VICE PRESIDENT. Is there objection to the present consideration of the bill?

Mr. FLETCHER. I thought the amendment was a good amendment. I have no objection to the Senate taking a vote on it. I am not going to interpose any objection, but on the showing before the Committee on Military Affairs, I thought the amendment was a good amendment.

Mr. REED of Pennsylvania. I ought to say to the Senator that in agreeing to the item I feel it my duty to warn him that the Appropriations Committee is absolutely set against any appropriation for Scott Field, and the insertion of the provision in this bill does not imply any agreement to appropriate any money for it.

Mr. FLETCHER. It is merely authorized, and then the question is left to the Appropriations Committee to make the appropriation or not.

Mr. REED of Pennsylvania. Precisely.

Mr. FLETCHER. With that understanding, I am not disposed to delay the bill at all, but I know that the showing before our committee was that this was a proper amendment. Mr. ROBINSON of Arkansas. I thought the Senator from Pennsylvania announced his purpose to ask that the amendment be disagreed to.

Mr. REED of Pennsylvania. The committee struck out the provision regarding Scott Field. Now we restore it in order to get the bill through, but there is no agreement that there shall be any money appropriated for it.

Mr. SMOOT. Is the bill up for consideration?
Mr. REED of Pennsylvania. It is.

Mr. SMOOT. I have an amendment which the department has asked me to offer to the bill. The amendment is on line 13, page 2, after the numerals "$180,000," to insert

Fort Douglas, Utah, officers' quarters, $75,000, noncommissioned officers' qurters, $50,000.

The Senator from Pennsylvania knows about the amendment. The VICE PRESIDENT. Is there objection to the present consideration of the bill?

There being no objection, the Senate, as in Committee of the appropriations for construction at military posts, and for other Whole, proceeded to consider the bill (H. R. 11134) to authorize purposes, which had been reported from the Committee on Military Affairs with amendments.