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valuable assi-tanee to Income-tax officers by the public. Suspicion that prevailed under secrecy clause has been swept aside as taxpayers now know tlmt they may know whether their neighbors make full and accurate returns. Carefulness and honesty In making income returns have been promoted. The most significant fact is that since repejil of secrecy clause income-tax field auditors have been unable to find back income taxes withheld in any way comparable with amount of back income taxes withheld under secrecy clause.

The same arguments against milking income-tax returns public- records were put forward. In the Wisconsin Legislature when it had under consideration the repeal of the secrecy provis'ons regarding income-tax returns, that wvre made in this body in 1921, in 15)24, and in 1!>26. The opixments of publicity for income-tax returns charged that if they were made public, competitors in business would seek to obtain each others secrets. that there would be grave injustices to the taxpayer if the records were opened to public inspection. But that has not been the experience of the State of Wisconsin witli publicity income-tax returns.

I quote from one of the commissioners, at that time, of the Wisconsin Tux Commission, Mr. Atwood. Ho said:

Comparatively few instances in which income-tax returns have been examined since the secrecy clause was repealed, but an increasing number of such examinations made in recent months. There Is no case of known misuse of these returns, nnd publicity feature has in no manner interfered with the administration of the law.

The Wisconsin Tax Commission placed no restriction upon the examination of (he returns whatsoever except to provide that they must be exanvned within the office of the commission. They have found, as stated by Commissioner Atwood, no single case of the misuse of the privilege on the part of any citizen of the State.

Mr. Pre-sident. it is instructive in connection with the question of the publicity of income-tax returns to refer to the experience of the Ft'di ral Government during the sixties. I quote now, as I quoted in 192(5, from an editorial written by Horace Greeley in the New York Tribune of May 24, 1866:

The Evening Post has a Washington dispatch which says:

"The Committee on Ways and Means have agreed to an amendment of the tax bill providing that lists of Income shall not be published nor furnished for publication, but they shall be open to private Inspection at the office of the collector.

'• We would like to believe this untrue. We believe that publicity given to the returns of income submitted by individuals to tax gatherers lias already put millions of dollars in the Treasury and gone far toward equalizing the payments of the income tax by rogues with that of honest men and saved thousands from being imposed upon and swindled by false pretenses of solvency and wealth, made on purpose to incur debts preordained never to be paid. The knave who sought credit on assumption of wealth belied by their returns of incomes, of course, hate publicity given to those returns, but why should any honest man seek to pass for any more (or less) than he Is worth?"

Iii another editorial, written January 26, 1865, the New York Tribune said:

We learn that the publishing of the list of income taxpayers In this oily, against which there has been so much absurd outcry, is likely to prove lienelicial to the revenue ax well as to the consciences of some of our "best citizens." Already, as we understand, considerable sums have been relumed to the assessors and paid to the collectors by persons who have discovered "errors" In their original returns of incomes since the publication of the lists referred to, and assessors have received valuable Information in reference to the Incomes of some gentlemen who should but have not yet amended thejr returns.

Mr. President, the effort to prohibit the publicity of incomelax returns continued until 1870. when the tax dodgers were finally successful in having the cloak of secrecy thrown around income-tax n turns. After the adoption of the secrecy provision the number of rt turns decreasd. and presumably the tax, by 20 per cent. In this connection I quote from a speech made by Senator La Follette in 1921:

The statistics published by the Internal Hevenue Hureau arc such that comparisons In all the classes of Incomes taxed arc not possible, but n comparison of the returns of those reporting incomes over $2.000 Is almost conclusive.

This fact is very much in point, since it shows what happened when the Government reversed the policy of publicity of incometax returns and adopted the policy of secrecy, which is a boon to every individual who desires to defraud the Government in the making <;f his income-tax return. I continue to quote from Senator La Follette's speech:

In INTO, when the returns were published, the number showing Incomes over $2,000 were 94,887. In 1871, when publicity was prohibited,

the number fell, to 74.000—that is. from f>4,000 to 74.000—then to 72,000 In 1872, and this In spite of the fact that, as shown by Individual bank deposits, bank clearings, etc.. 1871 and 1872 were moreprosperous years than 1S70. Similarly III North Carolina, when the income-tax returns under the State law were published by the Hon. .Tosephus Dnnleli in his paper, the News and Observer, the tax collections immediately more than doubled.

Mr. President, on numerous occasions when this issue has been before the Senate, an address made by former President Harrison has been quoted; it is just as pertinent to-day Uh when he delivered it on the 22d day of February, 1W)8, before the Union League Club, of Chicago. President Harrison taid:

The special purpose of my address to-day is to press home this thought upon the prosperous, well-to-do people of our communities, and especially of our great cities, that one of the conditions of the security of wealth Is a proportionate and full contribution to the expenses of the State and local governments. It is not only wrong, but It is unsafe to make a show in our homes and on the street that is not made in the tax returns.

It is a part of our Individual covenant as citizens with the State that we will honestly and fully, in the rate or proportion fixed from time to time by law, contribute our just share to all public expenses. A full and conscientious discharge of that duty by the citizen is one of the tests of good citizenship. To evade that duty Is a moral delinquency, an unpatriotic act. * » *

Continuing to quote from former President Harrison's speech:

I want to emphasize if I can the thought that the preservation of this principle of a proportionate contribution, according to the trne value of what each man has, to the public expenditures is essential to the maintenance of our free institutions and of peace uud good order in our communities.

Mr. Lincoln's startling declaration that this country should not continue to exist half slave and half free may be paraphrased to-day by saying that Ibis country can not continue to exist half taxed and half free.

We have too much treated the matter of a mini's tax return .-is a personal matter.

We have put his transactions with the Slate on much the same level with his transactions with his banker, but that is not the true basis. Each citizen him a personal interest, a pecuniary interest, in the tax return of his neighbor. We are members of a greater partnership, and it is the right of each to know what every other member is contributing to the partnership and what he is taking from it.

Also, Mr. President, I quote from Prof. C. C. Plehn, whose

book Introduction to Public Finance contains a pertinent comment upon the question of Hie publicity of tax returns. Professor Plehn is an eminent authority upon finance and taxation. For more than 25 years he has been a distinguished member of the faculty of the 1'iiiversity of California. He was formerly president of the American Economic Association and of the National Tax Conference. He says:

To a people unaccustomed to an income tax It may seem that one's income Is a very Intimate, personal, and private affair, and there Is n natural dread of letting one's business rivals know one's business. But as a matter of fact the income-lax statement or return would be no more likely to be examined out of sheer curiosity or for purposes of gossip than arc the proper!}-tax returns, about which no such veil of secrecy Is drawn.

I may state. Mr. President, that the experience of tile State r,f Wisconsin during more than live years of publicity of incometax returns confirms the statements made by Professor Plehu— and the business rival generally has better information already—

And this is an important point—

than he could possibly obtain from the returns. Against such dark secrecy it may well be urged that it is very important to feel assured that all incomes—my neighbors as well as mine—are fairly and truly assessed, a thing that can never be if the final assessments never s**e the light of day. I'enr of publicity is a bogle man. This does not mean, however, that publicity should be used as a means of dureoa. to force assessments in excess of what is right, just, and rtmnl.

Mr. President, we have had enough of secrecy in the operations of this Government, as shown by the experience of the past few years. It was secrecy that nmile it possible for Albert B. Fall to barter away the Nation's oil reserves. If it is desired by the executive «nd the Itgislative branches of this Government to increase the revenue in accordance with the provisions of law, then no greater step in thai direction can be taken than to remove the secrecy which now surrounds Federal income-tax returns.

The proposal for the publicity of income-tax returns bus met the constant opposition of the Treasury officials. Mr. President, if the administration, of the Bureau of Interim! Kevenue is above reproach and suspicion, if it is consciously and fully discharging Its <luty under the law. why should it find it necessary tit reach out its hand, through the influence of eommitties. to prevent the inauguration of a policy which prevails throughout every other branch of our Government?

Of course. Mr. President, it is not difficult to understand why the present Secretary of the Treasury, Andrew \V. Mellon, should be opposed to publicity of income-tax returns. He has disclosed within the last few weeks the fact that secrecy is inherent in his nature. It was only when the Public Lands Committee, by the aid of a magnifying glass, found (be lirst name of the Secretary of the Tieasury upon a memorandum of Mr. Platt. who hud died, that Mr. Mellon came forward and told of the proposition made to him in the fall of 1S123 by Will II. Hays.

He came at the request of (he committee, but for more than five years he had remained silent and had not volunteered the information in his possession to u committee of the Senate which he, as every other citizen, knew was trying to ferret out and to get to the bottom of the most colossal conspiracy ever conceived and consummated to defraud a people in the history of the world. If he could, in good faith, plead ignorance of the conspiracy at the time when Mr. Hays approached him in the fall of 1!)23. he could not do so after January, 1924, because then the fact had been brought out under cross-examination of the Senator from Montana [Mr. Wai.sh] that Edward L. Doheny had sent $100.000 in cash in a black satchel by bis son to Albert B. Fall.

When Andrew W. Mellon became Secretary of the Treasury lie took an oath to defend his country against its enemies, both foreign and domestic; and yet he chose to remain silent for more than five years while the Senate was endeavoring to expose a conspiracy, by powerful individuals, to defraud the Government, far more insidious and more destructive of our institutions than any attack made by a foreign power.

Mr. HEED of Pennsylvania. Mr. President

Mr. LA FOLLKTTE. I yield to the Senator from Pennsylvania.

Mr. RKED of Pennsylvania. If Mr. Mellon had not remained .silent, what useful information could he have given?

Mr. LA FOLLETTE. He could have given the Committee on Public Lands the useful information that Will H. Hays had approached him and had sent to him by a messenger in a package $50.000 in Liberty bonds, and that Mr. Hays had subsequently seen him about the package and asked him in exchange for those ijsno.OOO in Liberty bonds to contribute $~>0.000 to the Republican National Committee.

Mr. REE1J of Pennsylvania. He could have given the information that Sinclair had contributed to the Republican campaign fund and that they had tried to hide that contribution by putting it in Mellon's name and that Mellon had refused to be a party to it, but I do not see how that would have helped anything. •

Mr. LA FOLLETTE. That would have helped the committee materially. If the committee had had in its possession those important facts early in its investigation, this entire story would have been unraveled years before it was.

Mr. NOltRIS. Mr. President, may I interrupt the Senator from Wisconsin?

Mr. LA FOLLETTE. I yield to the Senator from Nebraska.

Mr. NORHIS. I should like to call to the attention of the Senator from Wisconsin the fact that those bonds were the very bonds in which the Continental Trading Co. was dealing. Everybody in the country knew that, because the investigation had been going on for a long while. Mr. Mellon knew, from his conversation with Hays ami his examination of the bonds when he had them in his possession, that they were 3V& per cent Liberty bonds in which the Continental Trading Co. was dealing and about which the committee was trying to obtain information.

Mr. HEED of Pennsylvania. Will the Senator yield to me?

Mr. LA FOLLETTE. I yield.

Mr. REED of Pennsylvania. 1 will have to take issue with the Senator from Nebraska, for I do not believe that at the time that happened Mr. Mellon had ever heard the name of the Continental Trading Co., or that he or the country as a whole or the investigating committee had ever heard its name, or that there were any bonds owned by that company, or that certain oil companies had been defrauded of the $3,000,000 which was put into Liberty bonds. I do not think anything of that kind was known. You can not charge Mr. Mellon with knowledge of what nobody knew at that time.

Mr. NOlililS. I can charge him with what he admitted that be knew, and in his testimony he said they were 3'/> per cent Liberty bonds. That occurred, perhaps, before a considerable

portion of the investigation had taken place, but the investigation went on for several years: the committee was trying to disclose the operalions of the Continental Trading Co. which was dealing in these bonds. He knew also that Mr. Hays had not told all the truth to the committee. He heard him testify after he had given him these $30,000 in bonds, but lie did not tell the committee anything about Mr. H-iys giving them to him until his attention was afterwards called to it. and then he admitted it.

In other words, Mr. Mellon knew what, kind of bonds these were: and he must have known, as everybody in the United States knew from the investigation that went on after that, that this committee was trying to trace this kind of bonds, and that, they were the bonds that were dealt in by this trading company. He knew that while all that investigation was going on, and yet he never disch sed it to anybody or to the commitee until his name was discovered upon the impcrs of a dead man that had oven brought into evidence before the committee. TlKm he came out and told what he knew. He knew that all those years.

Mr. REED of Pennsylvania. Why. Mr. President, he does not know it yet.

Mr. NORRIS. That is to (barge him with an ignorance that everybody knows it would l>e wrong to charge him with. The newspapers were full of this investigation from the beginning until the final disclosures. It is fair to say that everybody who read a newspaper in the United States knew that the Committee on Public Lands and Surveys were trying to trace these bunds. They had had all kinds of witnesses subpoenaed. Mr. Mellon knew then, when they were tracing them, that Will Hays had fiffered him $50.000 of bonds of that issue. Why did he not tell the committee. "Here is a clue that may lead to something. Will Hays has tried to give me these bonds and get inr.nry instead.'1 In fact, when Mr. Hays presented those bonds to him he knew that it was a dishonorable deal in which be was asked to participate. lie himself said in the testimony that he wondered why Will Hays could not give the bonds themselves to the committee instead of trying to trade them to him and get money instead as a contribution which the record would have shown to lie a contribution from Mr. Mellon, though it would have been no contribution whatever from him.

In other words, Mr. Mellon was asked by Mr. Hays to do an illegal and a dishonorable act. He dec-lined to do it. to his credit lie it said: but he remained silent about it even after Will Hays had been on the witness stand and had not disclosed that transaction that he had attempted to put through with Mr. Mellon. If Mr. Mellon had let the committee know the knowledge that he possessed when he found out that that was what they were trying to ferret out and get evidence about, it certainly would have assisted the committee very materially in making the investigation that they were making.

Mr. REED of Pennsylvania. Mr. President, will the Senator from Wisconsin yield to me?

Mr. LA FOLLETTE. If the Senator will please be very brief, because I wish to conclude my remarks.

Mr. REED of Pennsylvania. I shall try to be very brief.

I do not think Mr. Mellon knows to-day that the bonds that were offered to him were part of the loot that went through the Continental Trading Co.

Mr. NORRIS. No; but he knew they were of that issue. He testified to that himself.

Mr. REEI> of Pennsylvania. There are three-quarters of a billion dollars of that issue out in the hands of the public today: and I do not think the Senator from Nebraska knows that those were part of the bonds that came from the Continental Trading Co.

Mr. NORRIS. Mr. President. I know that as well as a man can know anything without having personal knowledge of it. Those bonds came from Mr. Sinclair. He gave them to Mr. Hays. Mr. Hays undertook to give them to Mr. Mellon.

Mr. REED of Pennsylvania. Yes; that is all true.

Mr. NOHRIS. Thai mm h Mellon knew at the time they were presented

Mr. REED of Pennsylvania. Yes: that is right.

Mr. NORHIS. He knew that they were bonds that cam? from Sinclair.

Mr. HEED of Pennsylvania. Yes.

Mr. XORRIS. Subsequent to that date they had Sinclair on the stand: they had all kinds of witnesses on the stand trying to trace those bonds. Mellon knew a.lso that they were 3VS per cent Liberty bonds.

Mr. REED of Pennsylvania. Yes.

Mr. NOltRIS. And if he ever read anything in a newspaper he knew that the proceeds of money that came to this trading company were invested in that kind of bonds! He knew all tho.se things. They came from Sinclair. Tliey came through Will Hays. They were 3V- per cent, bonds. He knew that the trading company was dealing in 3>/j per feiit bonds; that they were tlio kind of bonds this loot had been invested in. Knowing that, and remaining silent, it seems to me he came very far from doing his duty as an American citizen, and particularly as a public official.

Mr. LA FOLLETTE. Mr. President

Mr. REED of Pennsylvania. Just a moment, and tlien I will not interrupt the Senator from Wisconsin further, because we are taking an unconscionable amount of his time.

There are three-quarters of a billion dollars of those 3% per cent Liberty bonds outstanding. They are the only Liberty bonds that are completely tax-free. They are owned practically entirely by rich individuals, because the other kind of Liberty bonds pay a higher rate, and are tax-free in the hands of corporations. It stands to reason that Sinclair, who was then believed to be one of the rich men of America. h:id hundreds of thousands of dollars of tho.se bonds: and I do not know to-duy, nor does any other Senators know, whether these bonds that Hays had, which came from Sinclair, were part of the Continental bonds or whether they were not.

It is probable that Sinclair, like other rich men. had boxes full of those bonds. It is the best way of escaping the surtax that has yet been discovered. It is probable that he has a lot of them to-day; and we are just guessing when we say that they came from the Continental Trading Co. We do not know what the numbers of them were. Sir. Mellon did not know that there was a Continental Trading Co. He did not know that it had any bonds. He did not know that it had 3Vi per cent bonds.

Mr. NORRIS. He did if he read the papers.

Mr. REED of Pennsylvania. Perhaps I ani unduly ignorant, but I read the papers all I get time to do. and I did not know until this minute that the Continental bonds were 3% per cent bonds.

Sir. WALSH of Montana. Mr. President—-
Mr. LA FOLLETTE. I yield to the Senator from Montana.

Mr. WALSH of Montana. For the sake of having a little accuracy with respect to this matter which has become the subject of discussion. I should like to make a brief statement.

Mi'. REED of Pennsylvanin. Does the Senator mean to say that what I have said is inaccurate?

Mr. WALSH of Montana. No: not at all; but the fact about the matter is that prior to the time that these bonds were turned over to Mr. Mellon or offered to Mr. Mellon, the Treasury Department, the Secret Service branch of the Treasury Department, at least, know all about the Continental Trading Co. transaction.

Mr. REED of Pennsylvania. Prior to Hays's visit to Mellon?

Mr. WALSH of Montana. Prior to Hays's visit to Mellon.

Mr. REED of Pennsylvania. Mr. Mellon said he had never heard of them.

Mr. WALSH of Montana. Mr. Mellon told us that he had never beard of the Continental Trading Co.. and had no notion where the bonds came from. The fact, however, is that prior to the time the bonds were delivered, the Treasury Department knew about the transactions of the Continental Trading Co., knew about the contracts they made, and knew about their investments in Liberty bonds. But whether Mr. Mellon knew that the bonds that were tendered to him were Continental bonds or not. he had information in the month of November. 15123. as he told us. to the effect that Sinclair had turned over something like $300.0(10 in bonds to Mr. Hays. The evidence developed that it was $200.000. Mr. Mrllou's information about the matter at the time he received the bonds was that something in the neighborhood of .$300.000 in bonds had been turned over bySinclair to Hays.

In the spring of 11124 the trial of the validity of the lease of the Teapot Dome came 011 in Wyoming. Whether the bonds that were turned over to Fall came from Sinclair or not, it would have been a most jtersuasive piece of evidence in the trial of that case to show that Sinclair, having gotten this lease from Fall, had turned over to the Republican National Committee $200.000—$300.000, as Mr. Mellon staled it—to meet the obligations of that committee. In other words, it seems to me that Mr. Mellon can not be excused from failure to convey to the Government attorneys the information he had in November, 11123, that Mr. Sinclair had contributed to the Republican campaign committee- during the preceding year $260,000 for the purpose of making up its deficit.

Mr. REED of Pennsylvania. Mr. President, the Senator does not mean, does he

Mr. LA FOLLETTE. Mr. President. I ask the Senator to let me finish my remarks. I wish to be entirely fair to him.

Mr. KEED of Pennsylvania. All right, Mr. President.

Mr. LA FOLLETTE. I desire to finish what I have to say concerning the pending amendment.

The PRESIDING OFFICER The Senator decline* to yield further.

Mr. LA FOLLETTE. I do not like to say that I decline to yield further. 1 yield if the Senator desires me to; but it is getting very late.

Mr. REED of Pennsylvania. The Senator has been very good-natured already. I am much obliged to him.

Mr. LA FOLLETTE. Mr. President, secrecy over the affairs of government was, in my judgment, largely responsible for the successful consummation of the looting of the iraval oil reserves. The experience of this Government between the sixties and 1S70 demonstrates that publicity of income-tax returns was a very important factor in the collection of the taxes due under that law. The experience of the State of Wisconsin between 192.3 and 1928 is also very persuasive that the publicity of income-tax returns results in the collection of the tax due under the law.

We have had enough of secrecy in government. To continue it. further with regard to Federal income-tax returns i.-s to give advantage to the tax dodger and the individual with enormous resources of wealth to escape his just share in the burden of government and in the payment of the enormous debt now upon the people of the United States growing out of our participation in the war.

To my mind, this issue is simple and clear-cut; and every Senator, when he casts his vote upon this question, must fa»-e that issue.

I trust that, the amendment sponsored by the Senator from Nebraska will prevail.

Mr. REED of Pennsylvania. Mr. President, we tried this experiment once. I think it is fair to say that it met with the condemnation

Mr. LA FOLLETTE. Mr. President, will the Senator yield to me?

Mr. REED of Pennsylvania. I yield to the Senator from Wisconsin.

Mr, LA FOLLETTE. Is the Senator referring to the fact that the amount of income paid by taxpayers was made public?

Mr. REED of Pennsylvania. Yes.

Mr. LA FOLLETTE. I think even the Senator from Pennsylvania will admit that it is not a fair statement to say that we tried publicity of income-tax returns once, having in mind the period in which the amount of tax paid by the individual was made public. The Senator must admit that they are two very different propositions.

Mr. REED of Pennsylvania. Then, Mr. President, I will start again. We tried an experiment in publicity once; ami we published, and the newspapers spread abroad, lists showing the amount of tax paid by various income-tax payers throughout the United States.

It happened in my own collection district that many applications were made for the right to inspect the returns of taxpayers. The collector of internal revenue in that district told me that all of the applications could be divided into two classes: First, ladies contemplating divorce, or contemplating an application for alimony; .second, curiosity seekers, persons whose sole motive was curiosity to know the private business of prominent individuals. So far as he was able to discover, that collector told me, the making of returns subject to inspection, and the publication of the lists, had not resulted in the addition of a single penny to the revenue of the United States.

It did result in the publication and creation of the most authoritative "sucker" lists, as they are called in slang, that the country has ever seen. I received several adv-Ttiseme-nts from a concern in New York offering to furnish lists showing the persons in the whole United States, or in any Stnte. having incomes of more than any specified amount, and it was explained that this was particularly valuable for people who wanted to sell things by mail or by solicitation otherwise.

If that is what we are trying to do, this is the way to do it, but there is an old-fashioned maxim that used to be very popular with the people of our race, that one of the cardinal virtues is to mind our own business:, mid when we take the intimate affairs of the citi7.cn and spread thorn needlessly before the public gaze, we are doing an indefensible injury to that citizen.

It is all very well to say this will avoid tax evasion, hut we all know from our personal experience how close is tlu» scrutiny given to the tax returns now filed. We have created a great, new system of government. In its creation it was open to much criticism. You can not take thousands of new employees into the service and confront them with tax returns of the utmost complexity and get any other result hut a record of inefficiency and irrenihiritics such as were revealed by the Senator from Michigan and his committee. Of course, that was bound !<> happen, and it did happen, under both Democratic and Republican administrations. It could not be otherwise.

Thnf administration has improved constantly. If we would pay adequate salaries in that bureau, we could develop good men and keep them. As it is now, we develop good men, and then some company takes flu-m away, or they are hired by tax experts.

Mr. COfZENS. Mr. President, will the Senator yield?

Mr. RKKI) of Pennsylvania. I yield.

Mr. COUZENS. Does the Senator menn that the Commissioner of Internal Revenue needs more salary to stay on the job?

Mr. REKD of Pennsylvania. No: I do not mean that at all. I refer to I he experts in the bureau.

Mr. COIT/ENS. The commissioner has been here a long time, and he has condoned and continues to condone some of the practices that have existed ever since he has been in the bureau—in 1921.

Mr. KKKD of Pennsylviinin. I have found fault with his decisions from time to time myself. I dare say every Senator here would disagree with his conclusions in simie cases, and 1 dare say that if anyone of us Whs Commissioner of Internal Revenue he could point out decisions we would make with which he would not agree; but. on t)n» whole, the administration of Commissioner Kliiir has been thoroughly honest and reasonably efficient arid effective.

Mr. WALSH of Montana. Mr. President, will the Senator yield?

Mr. REED of Pennsylvania. I yield.

Mr. WALSH «f Montana. I want to inquire of the Senator whether under the laws of his State the returns of the <'iti/.en for purixises of taxation are public records?

Mr. REED of Pennsylvania. My impression is that the total yon return for taxation is n public record, but the return itself is not. 1 am not sure of that, however. I have never known of any case where a return has been published.

Mi-. WALSH of Montana. Is not that the general rule?

Mr. UEKD of Pennsylvania. That the total amount of the retiu-n is published?

Mr. WALSH of Montana. Xo; that the return of every individual, every taxpayer, is a public record, ojien to the inspection of anyone.

Mr. REED of Pennsylvania. No, Mr. President; I do not think so.

Mr. WALSH of Montana. That is the rule in my State.

Mr. LA FOLLETTK. Mr. President, it is the. rule in practically every State, so far as property taxes are concerned.

Mr. REED of Pennsylvania. Yes; so far as real estate wes.

Mr. C.OUZENS. It is also true so far as personal property is concerned in most States.

Mr. REED of Pennsylvania. It may be. I have never known them to be published in my State.

Mr. WALSH of Montana. They are not published in my State either, but yon can go to the assessor's office and examine anything you want to examine.

Mr. REED of Pennsylvania. I am not so sure of that as to Pennsylvania.

Mr. WALSH of Montana. What basis could there be for requiring a return as to real estate to be made public and a return as to personal property not?

Mr. REED of Pennsylvania. Because the ownership of real estate is a public matter. The details of one's income are very far from being a public matter.

Mr. WALSH of Montana. 1 am not speaking about income. I suppose in most States there is a property tax.

Mr. REED <if Pennsylvania. Yes.

Mr. WALSH of Montana. An ad valorem property tax.

Mr. REED of Pennsylvania. That is correct.

Mr. WALSH of Montana. And, of course, that is based upon the assessment of the property. I have had some experience in these, nmlters, and I never heard of a State in which those returns of the assessor's office were not open to the inspection of anybody who cared 'to inspect them.

Mr. REED of Pennsylvania. My impression is that with us the record is only open to inspection upon the showing of some righl to inspect; but of that I am not sure enough to make a dogmatic statement.

Mr. LA FOLLETTE. Mr. President, I can not speak of the time since I'.rjfi, but in that year I made some inquiry and found that the property tax returns in every State in the Union were public records.

Mr. NORRIS. Mr. President, will the Senator yield?

Mr. REED of Pennsylvania. I yield.

Mr. NORRIS. Perhaps I can refresh the Senator's memory as to the law in his State, with which, of course, I are not particularly familiar, and I am willing to take the Senator's word for it, but I wonld be very much surprised to find on examination that in the State of Pennsylvania the return of the assessor is not a public document.

Mr. HEED of Pennsylvania. I did not say it was not. The return of the assessor is public.

Mr. NORRIS. That itemizes the property. That tells every item.

Mr. REED of Pennsylvania. No; on the contrary, It merely gives the aggregate.

Mr. NORRIS. I do not understand how the assessor can make a proper assessment without itemizing the property. He tells the amount of bonds the taxpayer has and the number of horses he has and the number of cuttle and hogs he has. He gets ihe number of mortgages that he has, and in most States, I think, he permits a deduction for the debts that the taxpayer owes, figured from the evidence of indebtedness.

I want to ask the Senator, with a view of refreshing his memory on the general subject, whether the law of his State does not provide for an equalization of taxes by a board, a county board or commission, that has the power to increase anybody's assessment or to diminish it, and whether the law does not provide two tilings; first, that the taxpayer himself can complain before that board that he is assessed too high, and then, upon hearing, the board can either increase the assessment or reduce it.

Mr. REED of Pennsylvania. Yes; that is the law.

Mr. NORRIS. There is another thing that may happen. The other thing is that some other taxpayer may go before the board and complain that some taxpayer, naming him, has not been assessed high enough. Is not that possible?

Mr. REED of Pennsylvania. I believe not.

Mr. NORRIS. My familiarity with the laws of the various States on that particular subject is not. universal, I admit, but in several States with which I am familiar, particularly my own State, that is the law, and I myself do not see how a board of equalization could properly adjust matters unless somebody were given the authority to make a complaint against a taxpayer, and he could not make that complaint without an examination of the record which showed what the assessment was.

Mr. REED of Pennsylvania. The board itself has the right to increase the assessment, but no other taxpayer has any business to interfere.

Mr. NORRIS. I understand he does not have any business to interfere, but he has a right, I think the Senator will find— I do not believe there is a State that does not give that right— to make complaint that somebody else has not been assessed high enough. That is a common thing that occurs before boards of equalization.

Mr. REED of Pennsylvania. Anybody lias a right to do it; and, of course, it is often done in real-estate taxation. There in no question about that.

Mr. NOURIS. H«jw could one do that unless the return of the assessor were a public document, so that he could examine it?

Mr. REED of Pennsylvania. The a^sess^nenf of real estate is public, and the aggregate amount of personal property assessed to any individual can be learned; but the details of the returns made by individuals are not public records, as far as I have ever heard, in the sense that anybody can examine them.

Mr. COUZENS. Mr. President, will the Senator yield?

Mr. REED of Pennsylvania. I yield.

Mr. COUZENS. I wish to say that in Michigan, for example, each taxpayer i<t required to flle a statement not only of his reiil estate but of his cash on hand, the amount of his family jewels, the amount of his furniture, and the amount of his investments, and in every one of those cases any citizen may go in and look at the record. I know that, because in my own last campaign one of my opponents went !n and got the record and looked it all over to see if he could find some defect in my return so as to make it a campaign issue. So I know from actual experience what they may do in my State.

Mr. REED of Pennsylvania. It adds to my pride in Pennsylvania to know that such a thing is not possible there.

Mr. President, I do not mean to take any more time on

Mr. HEFLIN. Mr. President, I wish to ask the Senator from Kansas if he wants to have an executive session.

Mr. REED of Pennsylvania. Is the Senator aware of the fact, that I have the floor?

Mr. HEKLIN. I want to have a vote on the resolution. I probably can occupy an hour on it.

Mr. REED of Pennsylvania. I nm willing to yield to the Senator for a question If he asks me one, but he interrupted me iu the middle of a sentence.

Mr. HEFLIN. 1 thought the Senator had finished.

Mr. REED of Pennsylvania. I had about finished. It seems to me that any possible increase in the tax yield that can result from this kind of publicity is far more than offset in the loss of respect for that right of privacy to which we ought to pay some attention.

We all recognize a right of privacy in the Individual, but somehow more and more iu our legislation we are ignoring it. The very Senators who inveigh against secrecy of tax returns want to conduct their business privately. They seal the envelopes in which they wend their letters; (hey have blinds on their windows. They admit there is such a right. Why should it not apply also to the intimate details of a man's personal affairs? Why should it be possible for one's competitor to learn all the details of his business? It seems to me we are doing a positive damage, to American business when we throw such records open to public inspection.

Mr. BLAINE. Mr. President, will the Senator yield?

Mr. REED of Pennsylvania. I yield.

Mr. ELAINE. I would like to ask the Senator what details of business there are in an income-tax return.

Mr. REED of Pennsylvania. I will tell the Senator; that is a good question.

Mr. BLAINE. It is nothing but a statement of the business. There are no secrets of the business in it.

Mr. KEED of Pennsylvania. Are there not?

Mr. BLAINE. No trade secrets.

Mr. REED of Pennsylvania. Suppose the Senator is in some kind of merchandising •business. Ilis tax return has to show his gross income, his gross sales. It has to show the amount of his clerk hire. It has to show the cost of his wares. It has to slu.w every item of deduction and the reason for it. It has to show all of his bad debts in detail, with the name of the bad debtor, and the reason why the debt can not be collecled. It has to give all sorts of stuff that, if slated gratuitously, would be positively ruinous against the individual. Is there not some objection to making all that public?

Mr. BLAINE. Of what benefit is that to his competitor?

Mr. REED of Pennsylvania. It 1st of great benefit to his competitor to know the intimate details of the business. Suppose the Senator and I were in active competition, and I discovered by his income-tax return that he had been doing business at a loss for the last two years; would it not be very likely that I would try harder to drive the Senator out of business than Lf I did not know how his affairs were going? Suppose every corner grocer had to make his business public in such detail; what chance would he have against the chain store that wanted to drive him out of business? There is all that to consider, more than the mere gratification of the curiosity of the public. Suppose my rival practicing law sees that my income from my practice is going down little by little cadi year; what business is it of his to know that, or of the Government to tell him that?

Mr. NOHRIS. Mr. President, if the Senator will yield there; does the Senator think for a moment that his rival in the law business will not know without looking at hl.s tax return whether or not his income is going clown? Does not the Senalor himself know whether the business of his rivals in the practice, of the law, if he has rivals, is increasing or decreasing, whether they arc prospering or not?

Mr. REED of Pennsylvania. No; I do not know that

Mr. NORK1S. Let me ask a further question. The Senator thinks I hut if a man is about to fail it ought not to be published, because his rivals would push him on over the precipice if they could. What would he say about the man who loans the one who is failing a lot of money and loses it, who would not loan it probably if he knew the mini was not doing a prosperous business'/ Would it not be good for society if it prevents these men from dragging a lot of others down when they go down?

Mr. REED of Pennsylvania. If he is the kind of a banker who loans money without a statement, he deserves to lose his money.

The PRESIDING OFFICER. The question is upon agreeing to the amendment submitted by the Senator from Nebraska.

Mr. REKD of Missouri. Mr. President, I nm not going to delay the Senate, and I am not going to argue the question. I agree perfectly with the idea that a man in private business has a right to keep his business secret, as he has the right even to peal his letters, as the Senator from Pennsylvania [Mr. Kked! states. That is all true up to the point where lie comes iu contact with the public and the public has business with

him, and at that point the argument which has !>een advanced fails.

Mr. REED of Pennsylvania. Would the Senator approve of leaving the mucilage off of official envelopes used by the Treasury Department? That is the business of tlie public.

Mr. REED of Missouri. My friend from Pennsylvania is so intelligent and I have such rospwt for him that I will not characterize that argument. But I will say that fhe Treasury has the right to write letters to a particular individual concerning negotiations in business that' are going on. When the Treasury has acted for the public, it is a mere agent that has acted for a great principal, and the principal has the right to know what the ugent has dom>. I do not possess that childlike faith which leads me to believe that if we appoint n man to a public office or hire him as a clerk in a public office we have thereby transformed him into either a perfect man or an angelic creature.

We have had plenty of rascals in public office. Some of them have been discovered and some have not The whole business world proceeds upon the idea that there must be checks and safeguards. There is not a bank in the United States that does not have a method devised for checking over the accounts of every clerk in the bank. There is not a State in the Union that has not devised a plan for checking over the accounts a'.id business of its banks. The right of the principal to know what is going on with reference to the public business is a right that ought never to be denied.

Now. what is the objection to the publishing of tax returns or having them open for inspection? The objection is that it exiioses the private business of the taxpayer. Hut, as has already been said, every State in the Union has a law which provides for the levying of taxes, and I know of no State where those tax returns are not open to inspection and examination under any proper rules or conditions. 1 know of no great wrong or Injury that has ever come from that fact. It might be emhnrrnssing to the man who represents that he is worth a very large sum of money, and it frequently has been, to find his tax returns drawn on him in order to show that that was a false I statement. Conversely, when men have claimed in court and out of court that they are worth only a small sum of money it has frequently happened that their State tax returns have been presented to contradict them.

The only exception that is proposed to be made is with reference to taxes made to the Federal Government. The argument is that that exposes private business conditions, private business conditions that have already been exposed if there is an honest return made to the State officer of the State iu which the business is located. But suppose that the facts are exposed. Suj>pose the facts of a man's income or a corporation's income is exposed. It is based upon the taxpayer's own statement. It is therefore nothing but an exposition of an admitted tiuth which he has written down and to which he has subscribed his name There is no chance for misrepresentation of his bxisiness. a tiling which may be done by a business rival at any time and which frequently is done.

Besides all that, there is nothing in the argument of business rivals learning the Income and business conditions of the other party to that rivalry, for it is a fact that everybody knows that business institutions are required regularly to make statements to their creditors of their condition. A business institution refusing to do so very soon loses its credit standing. These reports, not only those which are made to business institutions upon demand, but reports which are made to the commercial agencies upon request, are printed and appear in Dun's and Bradstreet's reports, and in a supplementary report, which they constantly put out when inquiry is made by a subscriber. Those supplementary reports contain not only what the individual has admitted in a return to the commercial agency, but they are a compendium of information that has been gleaned from every other possible source.

Mr. President, we know entirely too little of what has been transpiring in the Treasury of the United States. I take it that the Senate will be astounded when I state that the Treasury has purchased Government bonds nt a premium, at a price that has run to over 114—that Is, a premium of over $14 to the $100.

Mr. KEED of Pennsylvania. Mr. President, the Treasury has not purchased a single one of those bonds since they were issued.

Mr. REED of Missouri. What bonds?

Mr. REED of Pennsylvania. The Treasury 4% bonds of 1052. Those are the only ones that, have ever reached such a premium.

Mr. REED of Missouri. I have in my office a letter of the Assistant Secretary of the Treasury stating the price that has been paid for bonds and the amount of bonds, and there has been paid over 114 for certain bonds. If that is not true, some

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