1916~ CONGRESSIONAL RECORD-. SENATE. 13075 ·--- -- PORTLA!IID, OnEG., August 2-2, 1!116. SENATE. · Ron. HmRY LAN:e, United- States Senate, Washington, D. a.: TnunsDAY, August 24, 1916. I earnestly protest agaiust prohibition of deduction of increase in reserve as basis for Income tax as applied to all classes of Insurance ; (Legislative day of Monday, Attgttst 21, 1916.) also protest against tax of 50 cents per thousand on ca{)ital stock and surplus. · .And I am strongly opposed . to the continuance indefinitely Tile Senate reassembled at 11 o'clock a. m., on the expiration ot stamp tax en msurance policies and ask your aid. of the recess. . JAC. Mel. WOOD; Mr. SMOOT. Mr. P1·esident, .I suggest the absence of. a 814 Railway Efechange. quorum. r-- PORTLA~D, OREG., August ZiJ,, 1916. The VICE PRESIDENT. The Secretary will call the roll. Senator HARRY LANE, The Secretary called the roll, and the following Senators an Washington, D. a.: swered to their names : We earnestly protest against prohibition of. deduction of increase in reserve as basis for mcome tax as applied to fire insurance companies ; Ashurst Jones Nelson Smoot also protest against tax of 50 cents per thousand on capital stock and Brandegee Kenyon O'Gorman Sterling surplus. .And we are strongly opposed to the- continuance indefinitely Chamberlain Kern Penrose Taggart of stamp tax on insurance policies and ask your aid on these points• Culberson Lane Pittman .Thomas . LYMAN & SENGSTAKE, Curtis Lea, Tenn. Robinson Thompson Vardaman 5n Neny Building. ~~~~~am ~~~~~ber ~~~f:.~d Wadsworth Gallinger McLean Simmons Weeks PORTLAND, OREG., August 22, 1916. Hardwick Martin, Va. Smith, Ga. Williams Ron. HARRY LANE, - Hitchcock Myers Smith, S. C. United- States Senate, }Vashington, D. a.: Understanding that a blit" has passed the House and is before the Mr. JONES. I desire to announce that the juillor Senator Senate, with modifications proposed by ' the Senate that have not been from Michigan [Mr. TowNsEND] is necessarily absent on account approved by the Bouse, providing that there must be a stamp tax -on policies Issued by insurance companies, also that income tax on capital of illness in his family. I will allow this announcement to stock and surplus has been doubled, and believing that the blll is most stand for the day. discriminatory in that all other corporations are exempt from stamp The VICE PRESIDENT. Thirty-nine Senators have an tax provision I urgently request that you use your efforts to oppose the continuation of the stamp-tax requirement on policies. This feature swered to the roll call. There is not a quorum present. · The of the present law is most Inconvenient and expensive, and it is a tax Secretary will call the roll of absentees. that must ultimately be borne by tbe public. The Secretary called the names of the absent Senators, and JOHN D. COLEMAN, Mr. BRADY, Mr. OLIVER, Mr. OVERMAN, and Mr. RANSDELL an 611 Board of Trade. swered to their names when called. PORTLA~D, OREG., August 21, 1916. Mr. GRONNA,-1\!r. HUGHES, Mr. STONE, Mr. CHILTO~, and Mr. Hon. HARRY LANE, PHELA...~ entered the Chamber and answered to their names. United- States Senate, Washington, D. a.: The PRESIDING OFFICER (Mr. LEA of Tennessee in the My attention has been called to a bill which has passed the Honse and Is before the Senate, with modifications proposed by the Senate clmir). Forty-eight Senators have answered to the roll call. which have not been approved by the House, to the efft•ct that there There is a quorum present. must be a stamp tax on policies issued by. insurance companies ; also an income tax. on capital stock and surplus and that same has been 'l'ARIFF COMMISSIO~. increased 100 per cent. Furthermore that this bill is discriminatory In that all other corporations are exempt from the stamp-tax provision. Mr. THOMAS. 1\Ir. President, this morning I received a letter I most vigorously oppose the continuance of the stamp tax on policies. from the executive secretary of the National Retail Dry Goods While this is passed along to the policyholde.rs Indirectly i.n premium charges. nevertheless, it is because of loading charges of this kind, Association in regard to the compensation of the memb_ers of which are unexplainable to the general public, that insurance corpora the proposed tariff commission, which I ask may be printed in tions are constantly on the defense and the object of violent legislative the RECORD without reading. attacks throughout the entire country in explaining the reasons why the public have to pay the bills, all of which results in radical and There being no objection, the letter was ordered to be printed extreme prejudicial legislation as against insurance corporations. in the RECORD, as follows : PAUL C. BATES. NATIONAL RETAIL DRY Goons ASSOCIATION, Ne-w York, Aug1tst fl, 1916. PORTLAND, OREG., August !1, 1916 •. llon. CHARLES S. TllOMAS, Hon. HARRY LANE, United States Senate, Washington, D. a. United States Senate, Washington, D. a.: DEAR Sm: We notice that it is proposed to place the salaries of the Insurance interests and agents · here consider that stamp-tax require members of the new tariff commission board, the bill for which is now ment is unfair, Inasmuch as all other corporations have been relieved before Congress, at less than salaries paid to the Federal Trade Com of same, and especially so in view .of btll providing 2 per cent income mission members. tax on· insurance corporations, which is 1.00 per cent increase1 and the It seems to us that this board, ~f properly empowered and if its per 50 cents per thousand tax on capital stock and surplus. As cttizens of sonnel is of such a c-.baracter as to command respect of the business Oregon we urgently request you oppose this unfair legislation. interests of the country, should rank in importance with the Federal JAs. N. McCuNE, Trade Commission. If the compensation of its members is placed at Secretary Unilertor-lters Equitable Rating Burea-u. less than that of the Federal Trade Commission members, we should consider such action a reflection upon the members of this tariff com SALEM, OREG., August 23, 1916. mission board, and this fact alone will have a tendency to keep from Senator HARRY L.-\Nl!l, the board th~ class of men lt seems necessary to secure to insure gen Washington, D. a.: eral respect and fullest success. In the matter of Federal revenue bill I earnestly protest against pro 'l'he National Retail Dry Goods Association therefore urges Congress hibition of deduction of Increase in reserve as basis for income tax not to cripple this important commission by such a course, and we sin as applied to tire insurance companies ; also protest against tax of cerely hope that in Its deliberations Congress will decide- to provide 50 cents per thousand on capital stock and surplus, and I am strongly salaries for the membC'rs of the tarifl' commission board at least equal opposed to the continuance Indefinitely of stamp tax on insurance to those of the Federal Trade Commission. policies, and ask your aid on these points. Very truly, yours, W. M. BURGHHARDT, Jr. NATIONAL RETAIL DRY Goons ASSOCIATION, E. L. HowE, Efeecutive Secretar-y. ASHLAXD, OREG., August 23, 1916. Senator HARRY LANE, TAX ON INSURANCE COMPANIES. Washington, D. a.: In the matter of Federal revenue bill I am strongly opposed to the Mr. LANE. I present certain telegrams, which I ask may continuance indefinitely of stamp tax on insurance policies. I earnestly nppear in the REcoru>. protest against probJb1tlon of deduction of increase in reserve as basis The PRESIDING OFFICER. Without objection, it is so or for income tax as applied to fire insurance companies ; also protest against tax of 50 cents per thousand on capital stock and surplus, and dered. ask your aid on these points. The telegrams are as follows : G. F. BILLINGS. roR:L.1ND, OREG., August 2~, 1916. Mr. GRONNA. I send to the desk a number of teJegrams, Hon. llAnRY LANE, Washinqton, D. 0.: which I ask to have printed In the RECORD. Most of them are Insurance agents and interests here conslller that stamp-tax require protests against the double taxation on insurance companies. ments are unfair, inasmuch as all other corporations have bePn relieved Thel-e being no objection, the telegrams were ordered to be of same, and especially so tn view of bill providing 2 per cent income printed in the RECORD, as foJlows : tax on insurance corporations, which is 100 per cent increase, and the 50 cents per thousand tax on capital stock and surplus tax on insur GRAND FORKS, N. DAK., August U, 1916. ance is a tax on the J?Ublic. As citizens of Oregon urgently request Senator A. J. GRONNA, you to oppose this unfrur legislation. Washington, D. a.: McCargar, Bates & Lively ; Hartmand & Thompson ; Rodgers Are advised amended revenue 'bill provides increased income tax Hart Gibson, Dooley & Co.; Davie E. M. Dunne; Jas. against insurance companies and continues stamp tax, while other lines Mclwood. & Co._j Harvey_ O'Bryan; Martin & Campbell; are relieved from stamp tax. We maintain Insurance second only · to A. H. Bu·rell '-.:O.; Gerlm~er & Co.; F. E. Atkins; G. transportation in importance and necessJty to dally business of the Rosenblatt & Co.; Pettis, urossmayer Co. i._..W. G. Lloyd, country, and vitally affects all individuals and business interests, large Adjuster; W. J. Clemens; Wakefield, J.fries & · Co.; and small. · As insurance men and as purchasers of insurance, and on Whitm1r, Kelley & Co. behalf of thousands of individual purchasers of insurance, we protest 13076 CONGRESS! ON .A.L RECORD-SENATE. .AUGUST 24,
against this unJust. unwaiTanted attack on insurance business. State and local taxes alrE'ady very heavy; all efforts to dectease cost to pur read twice by its title and referred to the Committee on Public chaser are dE'fE'atPd by such unjust speciaL taxation, which increases Lands. operation expense and cost of insurance protection. Thousands of pur H. R. 17501. An act granting the consent of Congress to the chasers in this Sfate an 1\Ir. BRADY. I wi ·h to ask the Senntor whether he 1:Uu · not nation of Europe :mel a general indu. trial in\asion of our home reali7.e at that time and does not realize now that it was only market as soon as peace is declared? a terupornry m0a.:mi·e anu \vould not afford permanent relief It i · argued that the ta ·k of rai ·ing re\·enuc for the GoYern to the industrie · of the country. ment is a very difficult one, that it mu t be rai ·ed from some l\11:. PE:~TROSE. There is no doubt of that. source or other, and the que. tion is naturally a ked, What . 1\Ir. BRADY. I n. ·]{ the Senator w·hether he thinks it would woultl the UepulJlicans tlo or pt·opo e were they framing a not !Je !Jetter at this time or as near in the future as possible reYenue meastu-e? This inquiry will inevitao1y arise, and the to enact an adequnte protecti\e-tarlff law that would not neces answer to it is en ily at hand. The Republicans are not re sitate nn emergency measure such as is introduced at this time? sponsible for the lavish and reckless way in which the public 1\Ir. PENHOSE. The Senator is entirely right on that. The revenues have been squandered; they nrQ not rcspon iblc, out, antidumping clause is not a. bad thing to have in tariff legisla in fact, have generally opposed many of the ill-adyised, ill-con tion, out it is only a. make hift. 'Ve mu t ha\e the permanent sidered, and untimely projects for which millions hnYc oeen protecth-e schedules with stringent regulation against under appropriated and 'vhich I ha>e already referred to. valuations, and nn honest and rigid enforcement of laws against The Republicans ha\e enden-rored at eyery turn to check this undennluation at the port of entry. The Senator is entirely extravagance and to keep the appropriations within the rev rigllt on the question, and I am glad he has risen to drive home enues. The party in the minority at the present time is not the point. responsible for the loss of over $100,000,000 from customs rev This antidumping clause in the pending bill is entirely ineffec enue by reason of the free list and the low rates of duty in the tive and will nccomplish no purpose whate\er. It does not present tariff law. They view with abhorrence and astoni lt matter wllether it is pa eel or omitted. The proviso alone de ment the apparent recklessne. s in ereatlng places and making stroys its effectiveness in declaring- appropriations, as if even a public treasury as \Yealtby as that That such act or acts be and prevents the allotting of funds equitably for the different Is now on the Supreme Bench. Th'e provision was pronounced season'> of the year. inoperative, it being declared that the 5 per cent discount to Two of this year's great supply bills, one appropriating fund~ American vessels can not be given without impairing the for the Post Office Department and the other for the Indian stipulations of existing treaties between the United States and Bm>eau, failed of passage last 1\larch. All the work of pre various other powers, and consequently the subsection was de paring estimates, plunning new projects, and the intelligent clared inoperative. Acting on this opinion the Secretary of the continuation of former works has been absolutely wasted by Treasm·y instructed the customs collectors to make no allow the failure of these bills. The affairs of those two branches ance of discount on duties under this provision. An appeal was of government had to be conducted under plans nearly two taken by the importers to tbe Board of General Appraisers. years old, which ar~ absolutely foreign to conditions at the Their ruling resulted in further confusion, and, neitber side be present time. A tremendous waste of time and money is in ing satisfied, tbe case was taken to the Court of Customs Appeals evitable, and the service that should be rende1~ed to the public mor~ than a year after the law had passed. It is interesting to has been seriously impaired. recall the report of the majority members of the Ways and Thus in the present Congress the chairman of the Committee 1\leans Committee on the 5 per cent provision, when they defined on Appropriations of the House of Representatives was com it as- - pelled to report n bill extending the appropriations made for the A discrimination in favor of American shipping, designed to bullll up necessary operations of the Government for the fiscal year 1916 our merchant marine and kePp at borne millions of dollars now being during the month of July of the fiscal year 1917. The enact paid to foreign vessels to carry our products to foreign markets. ment of this bill, he declared, was made necessary because of The provision in general was quite clum.sily drawn and sub the failure of the final passage of eight appropriation acts ject to oq:ter points of litigation. During the debate in Con before the beginning of the fiscal year 1917, namely, AgricuJ- gress the Republican Members repeatedly warned the Demo . ture, Army, District of Columbia, Military Academy, Navy, cratic majority that, quite apart from its policy, the phrase Pen~ion, Post Office, nnd sundry civil. ology was meaningless and should be corrected to become What excuse, l\lr. Presi<.ient, can tbc.=>re be for such a make effective. It was pointed out in the debate that its provisions shift method of conducting the legislative business of the coun would apply to goods coming in vessels of every country with try-to sit here all winter and keep Congress in session all which we had a favored-nation treaty; but those arguments through the summer until the 1st of September, and, even theu, were unheeded. The Government then carried the case to the have 8 or 10 of the great supply bill§ not ready at the begin United States Supreme Court. Owing to the fact that l\lr. .Jus ning of the fiscal year, and having to resort to a joint resolution tice Day is ill, l\1r. Justice McReynolds is disqualified from continuing the old appropriations in order to keep the depart passing an opinion, due to the fact that he passed on the case ments running until the bills can be acted upon? The.se things while Attorney General, and that Justice Brandeis has not heard have never happened under Republican control of Congress, and the case argued, it can not be passed upon until after the fiscal they are a distinct admission of incapacity in managing th~ year, and $25,000,000, the total of the rebates whkb will have affairs of the Government. to be paid out of the United States Treasury, will not appear Those of us who have been sitting here for a rart of the in the disbursements for the fiscal year 1916, but will in 1917, summer recall that the agricultural appropriation bill was not provided the court sustains the contention that the provision sent to conference until July 18, considerably after the begin is illegaL ning of the fiscal year. I have not at hand the date when it And, Mr. President, we have the $25,000,000, which could was finally sent to the President for approval, but I recall that properly be referred to in connection with this supposed refund the chcirmnn of the Committee on Agriculture and Forestry for the purchase of the Danish Islands. I do not say that these having the bill in charge left Washington while the bill was expenditures are normal annual expenditures of the Govern under consideration and has not appeared ir. the Senate since ment; that to my mind is a technical distinction; but I do say that time. The military bill was sent to conference on July that they are expenditures that money will have to be drawn 29 and only passed this body yesterday, upon the President's from the Public Treasury for, and that they will have to be veto, after two months of the fiscal year for which the avpro paid out of current revenues or by bond issues. Whether they priation was intended had elapsed. are, strictly speaking, current expenditures for the maintenance In the same way the Military Academy bill went to con of the Gov(>rnment or not. or whether they are for luxuries, or ference late in July; the naval bill did not go to conference the re~ult of errorR and blun<'lers in legislation, the fact remains until the 27th of July; and it was only a few days ago that it that they are liabilities, and I think that in the discussion of a _passed the Senate, when the conferees, after a prolonged dis- revenue bill and in the consirleration of the revenues which -cus ion, agreed on the report, and the bill has become a law, are likely to be bad under the bill as well as under existing law, two months of the fiscal year for which the appropriations were we have a right also to take into consideration everything for intended having elapsed, thus delaying the great projects con which appropriations have been made or for which authoriza tained in the bill-the building of dreadnaughts, cruise1·s, and tions have been made, as liabilities against those revenues; other vessels of the Navy, and many other projects connected and there will not be much difficulty, Mr. President, if we take with preparedness contained therein. I can find for these them all into consideration, in showing that neither this revenue delays. .Mr. President, absolutely no excuse; but I find only bill nor other revenue bills will raise enoug·h money to pay fot• incompetence and wasteful methods ensuing therefrom. It will all the unnecessary and ill-advised projects authorized by the doubtless be argued in connection with the naval and military present Congress, in addition to extravagance and waste in bills that the delay in the matter of preparedness was the cause every direction. of tlle delay in these measures. But even the delay in taking 1\lr. President, I have some further obsel"Vations to make upon up the question of preparedne8s is one which the American the pending bill, but I will now yield the floor, as I am in people are supposed to condemn the party in power for most formed that there are other Senators who desire to -address the severely. In this connection the President bas changed his Senate. mind quite frequently, and only within a comparatively recent 1\lr. SHAFROTH. Mr. President, the Senator from Pennsyl period bas be awakened to the necessity of preparedness. We vania has commented upon the present prosperity in this coun should have begun preparations for preparedness as soon as the try; he has stated that it exists because of the European war, war in Europ(> broke out and not awaited and postponed the and that it is really a prosperity of manufacturers of war mate inevitable problem until this :ate day, in the midsummer of rials. I wish to read into the RECORD just a few statements 1916. that seem to absolutely negative his contention, and which I have referred to the negligent method of conducting the show that the prosperity which we are now enjoying is general public business and have also referred to the extraordinary ex and unprecedented in extent in the history of this country. I penditures which have been made without any regard to the desire to read, first, an extract from an editorial in the Wash resources of the Treasury for many ill-advised projects. I re ington Post of August 13, 1916. The Washington Post is an f~r. in passing, to one more instan<'e where the revenues have able, conservative, independent newspaper. It can not be said been depleted by improvident methods of legislation. I refer to be an administration organ, as it has opposed more of the to the case now before the Supreme Court, where the court is policies of the pre~ent administration than it has advocated. e:'l..'l)ected to interpret the meaning of the provision in the present Mr. GALLINGER. Not of late. tariff Jaw proposing to give a 5 per cent discount in customs Mr. SHAFROTH. Well, I do not know about that; but the duties on merchandise imported in American vessels. Thus far editorials in the Washington Post which I have in mind have that clause bas failed in its purpose, just as the tariff measure. been published during the past year. That paper _has an edi of which it is a part, failed to provide adequate revenue. The torial writer who bas been collecting stntistics from Brad question was raised immediately with the Secretary of the street's, Dun's, and other statistical agencies, nnd he has pro Treasury as to the validity of the 5 per cent discount rrovision. duced a series of able editorials which show the condition of He appealed for advice to Attorney General 1\lcReynolds, who the country to-day and for the past year. He has nbun nuthority for the statements he makes. In the editorial of 1916, which I bold in my l1and. It shows a gain in bank clear August 15, 1916, which I JJaye mentioned, this language is used : ings of $240,418,000 o-rer those of the preceding week, and a Every section uf the Union-North, South, East, and West-reports gain of $940,754,000 O'\"er those of the corresponding week of unprcct·dented a.ctJvities in every line of busfness affairs. 'l'h<' banks of thc country arc in the very best of condition, with am last year. It shows an increase of from 7.3 per cent to G9.1 per ple sums of cash at the disposal of tho,se worthy of credit or financial cent in the clearings of every city in the Union except Albany, support. . N. Y. Why, Mr. President, those are gigantic figm·cs. They in The manufacturers neYPr before have had such large unfilled orders as now and nevPr have paid out such huge sums to skilled and un- dicate transactions in all lines of business. They indicate tha skillcd labor as at prcsPnt. · the.re is activity in every branch of indush·y. Sucb enormous The mlnlng districts are swarming with men making overtime in gains as those must of necessity demonsh·ate that pros'Derity in many •.ases,, and this at rates of pay fur beyond the records of recent years. all branches of business exists in the United States. Tllc railway companies are making immense <'arnings, and their em Some time ago I had a conh·o'\"er.Jy with the Senator from ployees are now getting pay on tho highest record schedules, and Kansas [Mr. CunTis] relative to the number of failures that hoping to get more. had occurred in the United States, and be had some statistics Mr. President, ·I quote from the issue of tbe Washington Post which be read into 'the RECORD which I find are not exactly in of August 15, 1016, an editorial entitled "Huge expansion in accordance with what Dun's Re\iew gives concerning these building operations," as follows: failures. I want to put into tl1e RECORD the numQ.er of these The rost has several times directed the attention of its readers to fBilures, and also tho amount of the liabilities involved in them. the great building boom which is in evidence in every State of the Union, and which must be accepted as indubitable evidence of the pros For the calendar year 1914 the failures were 18,280 and the perity ot' the masses of the people. liabilities were $358,053,859. In 1915 the failures were 22,102 It is an evidence of financial ease, nn e;idencc of the confidence of nncl the liabilities were $300,680,874, a decrease of $58,000,000. owners and investors in continuing good times, an evldenct> ot' expan sion iu the business affairs of the Union, for it means not only huge The number of failm·es from .January 1 to Jq.ne 30, 1916, demands for all rlasses of materials which enter into consh·uction but amounted to 9,495, with liabilities of $111,241,421, showing it fm·nishes tonnages to the transportation lines and gives steady em ployment at high wages to skilled workers. exactly the condition which I was contending for at that time, Returns from all sections of the .country for the month of July, re namely, that there were a smaller number of failures in 101G ceived by Dun's Review from 87 centers of business, show that the than in 1915, and tllat the liabilities were enormously less. permits for new con~tructlon during that month contemplate an ex penditure of $103,016,666, an increase of nearly 73 per cent, as com I have calculated, according to this list, the number of failures pared with July, 1915 and the liabilities for the fiscal years, because we have just hnd Of tbis large sum the permits in the city of Greater New York in the close of a fiscal year. The number of failures for the fiRcal volved $50,526,144, but this aggregate in the one month was occasioned by the rush to obtain permit~ for construction before the new law year 1915 was 22,477, and the liabilities for the fiscal year end· which limits the height of buildings went into effect. ing .June 30, 1915, were $361,541,664. For the fiscal year 1910 We include below statistics covering the valuation records of permits the number of failures was 18,857, showing a decrease of 3,620 ·ssued from January 1, 1915, to August 1, 1915 ;_ also those covering the sanw months ln thE: present year. It will be noticed that every in the fiscal year 1916 as compared with those of the fiscal month in 1916 shows a decided increase as compared with the corre year 1915. 'rhe liabilities for tlle fiscal year 1916 were $233,- sponding month of 1915: 334, 76Q-an enormous decrease-a decrease from $361,000,000 to $233,000,000 as between the fiscal year 1915 and the fiscal yea1· 1916 1915 1916. Mr. President, it is just as I contended at that time. It tnke.c:; July, R7 cities...... ••...•..•..•....•••••••...••...... $103,016,666 $59,597' 079 time for failures to mature. A man's failure may be caused by June ,~ cities...... , ...... 72,40~,4S3 57,733,981 some kind of indiscreet investment or injudicious extension of 100, 14!1, 723 74,372,076 credit made some years before the failure actually takes place. 76,927,86') 66,930,612 In fact, companies usually delay failure as long as possible; the ~r~:~TI~~~:: :::::::::::::::::::::::::::::::::::::::: 72,933,633 63,39~. 427 47,580,578 40,105,569 real cause of t11e failure often goes back to a time three or fom· r::~;;; sf~l~~e~::::::::::::::::::::::::::::::::::::::: 46,378,478 34,013,69:.! vears before the actual failure takes place. For that reason the 1------1------Sinco Jan. L...... •••...... ••..•...... 519,395,431 396,143,436 failm·es that took place in 1915, though they were large, were not caused during that year. · They were caused by indiscretions The total for the first seven months of 1916 exhibits a gain of fullv in business transactions occurring no doubt one, two, three, and 30 per cent, as compared with the seven months of 1915, amounting to perhaps four years before that time. . nearly $125,000,000 in values. When the farm-loan banks get into practical operation huge adcllUons I have heard it said as to bank faiiUl'es that the banks had to the values will be added montbiy to new construction work In the been in a failing condition for 10 years, and yet by reason of United States, and material men and members of the various building covering up thPir accounts they had not been exposed. But, Mr. trades will enjoy unparalleled prosperity. President, for the fiscal year ending .June 30, 1916, we show that Mr. President, if there is any indication that points clearly there are nearly 4,000 less failures than in the fiscal year 1915, to the condition of ousiness in the United States it is the build and in addition to that there is a decrease in the liabilities of 'ng operations of the leading cities of the Union. those failures f-rom $361,000,000 to $233,000,ooo-an excellent Mr. FLETCHER. blr. President--. showing ·in fnvor of the existence of good business conditions 1\Ir. SHAFROTH. I yield to the Senator. in the United States. There are always a large number of fail· .M:r. FLETCHER. I sl.1ggest to the Senator that doubtless ures for fraudulent purposes, and they take place both in good the claim of the Senator from Pennsylvania that the prosperity and bad times. of the country at present is· only temporary is based upon his l\Ir. President, these facts, it seems to me, should be sufficient belief tl1at the Republicans will win in the approaching election. to con\ince everyone that there is great prosperity not only 1\Ir. SHA.FROTH. Well, 1\Ir. President, he will be mistaken among the manufacturers of war materials, but in all the occu in that. r do not think his prognostication will be verified. pations and industries of the land. Here is an indication, gathered from statistics as to the increa~e in building operations during a seven months' period in more Mr. President, I have a number of clippings here which I de than . 80 of the principal cities of the Republic, scattered sire to add to my remarks without reading them. throughout the entire Union. These figures show an increase The PRESIDil'\G OFFICER. In the absence of obJ~~tlon, of $125,000,000. In view of those figures it seems to me it is permission to do so will be gr·antecl. idle to talk about there being no prosperity, or to state that, if The extracts referred to are as follows : there is prosperity, it can be nttributed only to war conditions. [Associated Press dispatch of Oct. lG, 19Hi.] None of the materials used in building operations forms a part of the shipments to foreign countries, nor is the demand .for P.W~tb R;~~~~: c~ri·~ ts diminishing in force, the title of business. ts rising at an accelerated pace and an era of wide-spread activity is In buil [Associated Pr~ss dispatch to D~nver · Post of Oct. ~0, 1915.] retarding retail trade in the East, by growing concern over high prices, and by the less pleasant al:'pect of Mexican affairs. Shortage of goods, BUSINESS CO~DITIONS CO:STINlJ E GOOD, SAYS DU::II ' S WEEKLY llEVIEW. steadily climbing prices, and widespread complaints of inability to get Dun's Review says: ~upplies, either of raw materials or semimarlufactured products or ''Not only is there no step backward in general business, but each finished goods; due in part to insufficient production or lack of trans week the pendulum of progress swings. over a wider arl:'a and confidence portation facilitiPs, · create fears of further acuteness in this respect, 1s further strengthened. Hecl:'nt vagaries of weather have not been con-. but rather accentuate buying not only for filling-in purposes but for ducive to the be!'.t results in retail· distribution, yet substantial gains fall delivery as well." are neverthelesl" apparent in this direction. The forward movement [Extract from eclltorlal of Washington Post of Jan . . 16, 1916.] gathers momentum in spite of various oppohlng influences, such as the unstabili ty of foreign · ex<:hang:e. thl' congl:'stion of freight at terminal BUSINESS STEADILY ExrANDING IN VOLU~lE AND INCUEASING IN VALUES, p cints. an<.l continued d1ssml.'ion in the :anks of labor ; and while ex pan ~; irJ n il" still most pronounced m war lines, the whole conditions ~nd The pushing forward of extensions to Industrial establishments, the pr.v~pect t> are much less checkPred B.lld irregular than formerly. increase of capacities to output in mines, mills, shops, and factories ; " Few di~>cordant notes mar the cheerful tone of repo1·ts from the the construction of new mills, new shops, new factories continue to leading centers and trades, and, since popular impressions largely control be marked features of business in the united States. events,. the notable improvement in sentiment bas an important bear The increase of wages .of employees in important branches of em In~ upon the future trend of affairs. No one now doubts that the ployment of labor is an accompaniment of the expansion of outputting. bnghter day bas definitely dawned. but change of spil·it finds expression The fact that building operations noted in December, 1915, were of in the launching of many deferred undertakings, while more new en a ·value, take the country over, of more than 65 per cent increase as terprises are being started than for several years past. Instead of the compared with the total of December, 1914, is most significant and marked ht>sitancy and caution previously manifest, large projects are speaks very encouragingly for building work during the present yeat·. conceived and carried into effect in a manner that attests the increased The balance of trade in favor of · the United States of rising confidence pervading the commercial world. $50,000,000 as the result of the first week of 1916 exports and im "Weekly bank clearings, $3,990,733,378." ports indicates that the high tide of the last four months of 1915 is still running in full force. The fact that exports of coal during the year 1915 were double those of 1914 tells the story of prosperity tn the mining regions north, [From Current Events of Nov. 19, 1915.] south, and west of the District of Columbia, as well as of the rail ways which transport the coal and the ports which arc benefited by STEEL SHOWS THE BOOM. the greater commerce it brings to their people. , . The United States Steel Corporation began this month with unfilled orders for 6,165.452 tons of steel. That is the largest amount for years, and il' an increase of R47 834 tons over the figures of October 1. [Extract from editorial of Washington Post of Apr. 2, 191G.l Most of the steel is said to be for railroads, l>ridges, steel-frame build ings, and manufacturing. This seems to show a healthy state of gen ENORMOUS DEMANDS OB' THE PUBLIC FOR MANUFACTURERS' PRODUCTS eral business. AND MERCHANTS' STOCK OB' MERCHANDISE. As all business men well know, fo1: the first three months of 1916 labor in every branch, labor skilled and unskilled, was employed in [Associated Press dispatch of Dec. 4, 1915.] greater numbers of persons and in a greater percentage of the available total than ever before in the history of the United States at that · BUADSTREET'S WEEKLY llEVIEW. period of the year. The reports of State and National officials have NEw YonK, December ~. also shown that during the last quarter of 1915 the average wage Bradstreet's says : paid was higher than at any other period of our records. "Apparently the week has been the bu-siest 1n a long time. Activity The past three months have witnessed advances in wages of em ln trade as well as In leading industriP.s 1::; · unabatPd-is more marked, ployees over those paid in 1915 to an extent that has increased the in fact, than heretofore. Jobbers, wholesale dealers, retailerst manu daily, weekly, monthly earning power of more tha-n 1,000,000 of our facturers, and bankers are a unit in reporting activity, and solo up for industrial workers. . months to come is the condition of numerous Indm;;tries. Complaints Our mills, our furnaces, our factories, our shops, our manufacturing spring from inability to ·get supplies and from chagrin at not having establishments, and ·our mines are not only crowded with employees bought at lower. price levels than now prevail rather than from a lack earning good wages, but the unfilled orders upon the books of the of demand. companies, firms, or individuals controlling these are so large that "Incidentally, the steady demand being made for immediate sbip they guarantee full capacity output for many months ahead, and this mPnts corroborate reports as to depleted stocks, a widespread condition. is in itself a guaranty of steady, constant employment to the workers, Industry swings along at an acr:t've gait,· thP Iron and stPel trade 1Pad- heavy pay rolls, and enormous demands for materials. 1ng, with mills unable to supply demands, despite augmented capacity, Some of the great steel companies are already booking orders for wblle new domestic business · i!;f uncb·ecked by -lliglier prices. But in hundreds of .thousands of tons of their outputs for delivery to their other industries the circuit of activity is · wid~ning. · · · · customers in 1917. "Weekly bank clea.rings, $4,913,174,000." [Extract from editorial of Washington Post of Mar. 26, 1916.] [Associated Press dispatch of Dec. 11, 1915.] . There are no persons idle 1n this country now who are capable of DUN' S REVIEW. work and desire employment. Farms, mines, shops, mills, factories, the trades-all offer employment to persons capable of doing the .NEw YORK, December 11. necessary work, and they offer steady jobs and at wages that have Dun's Review says : never been surpassed in amount. " There is no longer complaint of deferred buying, but of difficulty in There never were so many people in the United States as there is mePting the Rteadily expanding requirements. Consumptive demand at this writing; there never was so large a percentage of the popu exceeds supply in some lines and distributing channels are obstructed lation employed as there is now, and never at such continuous work by the congestion of freight, rail and over-sea shipping facilities still and such high av.,rage s·cale of pay as the present moment. being inadequatE' to cope with the rush of traffic. This tends to act as With the opening of thE' spring the calls for labor in thls country a brake on commercial pro~ress, yet the forward movemE-nt has not will grow more urgert, and the buRiness activities, already unparalleled perceptibly sla•·kened either in domestic or foreign commerce. On the 1n extent, wili become still mflre extendt>d. contrary, exports in spite of the shortage· of vessels and other ob With the opening of the spring the earning powers of our 100,000,000 stacles, continue in notably heavy volume, while internal trade is fur of inhabitants will assume enormous proportions, and this earning ther swelled as the holiday sea:;;on approaches. Development of Christ power carries with it a purchasing power that will increase pro mas business fulfills the most optimistic expectations. portionately. "Weekly bank clearings, $3,831,001,525." If our Rales to foreign countries have exceeded all expectations and broken all records, RO bas the purchasing power of our own people, and the best records of the retail trade in the year 1915 will be far [Associated Press (News) dispatch of Feb. 27, 1916.] exeec>ded in the r£:tail trade of this country during the months of the TRADE AND INDUSTRY STILL MOVE BRISKLY AND PRICES ADVANCE--SUP year 1916. _ PLIES OF MONEY PLETHORIC AND COLLECTIONS GOOD, SAYS BRAD The ability of our people to pay for what they need or desire was STREET'S. never equaled in om· history, and our manufacturers and merchants have before them many months of huge demands for outputs and mer Bradstreet's to-morrow will say : · chandise. " Trade, as well as industries, still moves at a brisk pace; prices con The masses of the people are earning above and beyond any time in tinue to advance, deliveries of raw and finished materials are com the past; they have liquidated debts accumulated during the years of plained of as slow, railway traffic is congested, supplies of money are depression, and are now ready to use their earnings in current pur· plethoric, collections are good and ·buyers of some lines, fearing Insuffi chasing for their needs. cient tmpplies or still higher prices, have put out orders for fall delivery. In brief, most producing units of the. country are choked with orders, and instead of . st>eking busint>ss for far-off shipment the tendency is [Associated Press (Washington Star) dispatch of Apr. 23, 1916.] to move. more slowly·in this respect. · ~ - "There is, however, a . di:-positi.on tn parts. of, the country to proceed S1'EEL lULLS AnE CROWDED WITH ORDERS JrROM RAILROADS. with caution, to a&k tf prices are not soarJng too .rapidly, and to ques The railroad companies, !arge and small, are still ordering rails for tion the ·ability Of purveyors to -obta.iri normal TOfits on final selling 1917 shipment as heavily as th<' mills can be induced to make sales • prices. But ..Lh1s recurrmg note of .d-oubtfulness must be considered in .'!'be manufacturers find much difficulty in declining orders from im conjunction with tp(; fact that consumptjon is at an insatiable rate, portunate buyers. Trolley lines, industrial roads, and manufacturers that incomes of profit-sharing investments keep on rising,. that wages of frogs and switches, as well as contractors of railroad construction, as well as employment are good, and that the consuming power of the also arc anxiously making efforts to secure places on rail-mill schedules public has ·been greatly Increased." before May 1. · In the past week contracts for light and heavy sections, rPported specifically, amounted tQ nParly 150.000 tons, including 30,000 tons for the Great Northern, 28,000 tons for the Southern Railroad, 12,000 [Associated Press · (Denver Post) · d1spatch of Mar. 25, 191G.] tons for the Ches:tpeake & Ohio, 6,000 tons for the Clover Leaf, 15.000 Bradstreet's sa:vs : . · tons for the Pere Marquette, and 3,700 tons for the Lake Superior & "A tale now rather commonplace is told by this week's reports. A Ishpeming. Four southern roads boughr -an aggregate of 35,000 tons prominent characteristic is- unprecedented -activity in all of the larger standard sections.- 'rhere were also or(!ers of. girder rails and light lines, distributing as well as manufacturingt with, however, a rift or .sections aggregating 16,000 tons. Since the 1st ot April rail c.ontract;; two ln tht.> steady, easy QnftQw being furnisheu by the inclement weather have amounted to nearly 800,000 tons. LIII-823 ' - 13084 CON(}RESSIONAL REC.ORD-SENATE. AUGUST 2·±, [Associated Press dispatch of May 2s," 1916.] according to' ii statement given Staument of recefpUJ and dlsbttr&ementR, ji8cal year& 191!1 to 1918, inclu.'live. ------·------~------1913 1914 1915 1913 RECEIP'tS. Ordinary receipts...... $724, 111, 229. 8! $734,673,166. 71 $697,910,827.58 $779, 718, (}10. 30 (1) 2, 86~ 995. 2R ~~~~~'in:~~~~::·.~~~:~-~:::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::: ·· ·· 23;4oo;850~ oo· · ·· ·23; wi;222~ so· 22, 4.86, 955. 00 58,352,-102.50 Total receipts ...... 747,512,079.84 757,694,389. 21 720,397,782. 5R 840,9-10,438. 03 I======F======I~======I======DISBURSEME!'.'TS. -~~=~y~~l~~~~~meiit8·.:::::::::: :::::::::::::::::::::::::::::::::::::::::::::::::::::::::::: 6ft:~~:~~:~ '~:~~:~: ~~ ~:~~:~~: g · ~t~; ~:~~ Public debt disbursements...... 24,191,610.50 26,961,327.00 17,253,491.00 24,668,913.50 1------~------~------I------Total disbursements...... 748,703,574.04 762,042,758.47 777,840,292.33 766,620,290.76 1======1======1 ;======1======~ Excess of ordinary receipts o"er ordinary disbursements...... 41,340,524.33 34,418,677.00 . . • • • . . . . . • • • . . • . . 55,270,391.11 Excess of ordinary disbursements over ordinary receipts...... 33,488,931.53 •••.•...... ••••• Excess of Panama Canal disbursements over Panama Canal receipts...... 41,741,258.03 34,826,941.76 29,187,042.22 14,633,732.79 Excess of public debt receipts o-ver public d.ebt disbursements...... • ...... • . • ...... 5, 233,464.00 33,683-,489. 00 Excess of public debt disbursements over public debt receipts...... 700,760.50 3, 9{0, 104. 50 ••••••••.•....•••••••••...... •..• Excess oi all receipts over all disbursements ...... 74,3:JU,l47.32 Excess of all disbursements over all receipts...... 1,191,494. 20 4,348,369.26 11,333,308.97 311,970,897. 96 ~~~: ~~illi6::: :::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::: ~:~: ~6:: ~: ~ ~~:~: ~~: ~ ,~~: ~f: !~:f. 306,228,452. 76 · Tncluded in ordinarv receint~ •or 1915. 2lncludes S6,636,592.60 grants from ~he Treasurv for de!iciencies in ooshl revenues in ordinary disbursements, and !4,695, 716.37 paid !rom p03t31 balances. These Bums will make the $11,000.000 difference in the last two figures in third column. ____ NoTE.-Figures Jor 1916 subject to slight cnange after illl:lt revision o. accounts. Mr. SMITH of Georgia. I call attention to the fact that in 1\Ir. SMITH of Georgia. I decline to yield for anything but a spite of the prophecies of evil which have come from the other question. The Senator can ask me any question he wishes. side of the Chamber, we have the gratifying result for the fiscal Now, Mr. President, I come to the appropriations for 1917. year 1916 of an excess of all receipts over all disbursements, \Ve have heard the most remarkable statements from the two amounting to $74,320,147. The prophets of evil were mistaken. great leaders of the Republican Party, the Senator from Penn· Their lamentation it was necessary to make in advance, because sylvania [Mr. PENROSE] and the Senator from Utah [Mr. 1t could not be vresented as a criticism afterwards. SMOOT]. We have heard the facts that they have presented, Mr. CURTIS. Mr. President-- . by which they expect to win the Progressives of this country The PRESIDING OFFICER. Does the Senator from Georgia in support of their candidate whom they selected and nominated yield to the Senator from Kansas? at Chicago. I desire to take up the appropriations and discuss 1\Ir. SMITH of Georgia. Yes. them somewhat in detail. I have a statement from the Treas Mr. CURTIS. The Senator realizes, does he not, that the ury Department which I bad intended to put in the RECORD, Secretary of the Treasury, in his annual report submitted to but a.s the Senator from North Carolina [Mr. SIMMONS] put a this Congress, estimated that there would be a deficit for the statement from the Treasury Department into yesterday's REc year ending July 1. 1916. of $64.000,000? · ORD I wlll base my discussion upon that statement rather than ·Mr. SMITH of Georgia. When? upon the '!ltatement which I have, which is made up in somewhat Mr. CURTIS. December 6. 1915. different form. Mr. SMITH of Georgia. Then, Mr. President, it is gratifying The statement is as follows: Statement, of appropriations tor 1916 and preseat condition ot bills tor to find that the Secretary of the Treasury, in anticipation of 1JJ17. showing increases tor 1JJ11 ovet· the preceding year. conditions, caused us to realize through additional legislation a most fortunate result, better even than be had hoped. Appropriations, Present condi· Increase 1917 Title of bill. 1 1\Ir. CURTIS. Mr. President-- 1916. tion of 1917 bills. over 1~16. Mr. SMITH of Georgia. I will yield to the· Senator for a question, but not for a speech or for any comment. Army ...... $101,974, 195.87 ) $267' 596, 530. 10 $165, 622, 334. 23 Mr. CURTIS. I want to ask the Senator if, instead of the Agriculture ...... 22,971,782.00 2 24,948,852.00 1, 977,070.00 surplus being the amount given by the Senator in the statement Diplomatic... - ...... 4, 061,280.01 2 5. 355, 096. 66 1, 293, 816. 65 District of Columbia .•••.•.••. 11,859,584. 45 8 13, 827, 734 . 72 1. 968, 150. 27 2 made a minute ago, whether the excess of ordinary -receipts was Fortifications ...... •••... 6, 060,216. 90 25, 747 t 550. 00 19,687,333. 10 not $55,000,000 instead of the seventy-odd million dollars given Indian ...... 9, 771,902.76 2 10, 967' 644. 88 1, 195,742. 12 by the Senator, not excluding Panama Canal or public-debt Le~islative ...... 36, OOt, 799. 75 2 37,925.690.25 1, 020, 890. 50 Military Academy ...... 1, 069,813. 37 21,225,043. 57 155,230. 20 transactions? Navy •••..•...... •.••••••••• 149,661,864. 88 I 316, 726, 556. 54 167,064, 691.66 Mr. SMITH of Georgia. I will answer the Senator. My state Pensions ...... 164 t 100,000. 00 2 15~ , 065.000. 00 2 6. 035,000. 00 Postal Service...... 313 , 364,667.00 2 322. 937' 679. 00 9, 573,012. 00 ment was absolutely accurate, and the statement which I have Rivers and harbors ...... 30,000,000.00 2 40.598,135.00 16, 598,135. 00 already put into the HECORD shows that the excess of ordinary Sundry civil ...... 126, 922, 750. 79 t 128, 299, 285. 24 1, 376, 534. 45 receipts over ordinary disbursements was $55,270,391, while the Total-annual appropria- excess of receipts over all disbursements from all sources was tions...... 978, 722,857. 78 1, 354,220,797.96 375,497, 940.18 $74,320,000. the figur~ that I gave. Permanent and definite appro priations, exclusive of I have given for publication in the REcoRD an accurate and $4,000,000 for militia in 1917, exact statement of the figures for each one of these years. fur duplicated in Army act..... 121,567,207.00 • 131,07-l, 673.00 9,-507, 466.00 nished by the Treasury Department. and I am simply comment Total annual and per- ing upon some of those figures, which will appear in the RECORD. manent appropria- It is certairily a gratifying result that the last year of the Demo tions ...... '" 1, 100,290,064.78 1, 485,295, 470.96 385,005, 406.18 cratic administration, in spite of the prophecies of evil, in spite Good roads...... 6,000, 000.00 6,000,000.00 Rural credits, Farm Loan of the wail of woe in advance, left in the -Treasury over $74,- Board, including organiza- 000,000 of additional surplus. tion~...... 6,100,000.00 6,100,000.00 Mr. CURr.riS. Mr. President-- Miscellaneous appropriatioru, The PRESIDING OFFICER. Does the Senator from Georgia inclu~ the expected ap- yield to the Senator from Kansas? propriatiOn oi $l,OOO,OOJ "or Mr. SMITH of Georgia. For a question. floods, etc.. in 1917 •.••.•.... 2, 330, 603. 34 2,00:1, OOJ. OJ ~ 3.3J, 603. 34 Deficiency appropriati01:~sJ Mr. CURTIS. Does the Senator deny that nearly all of that claims nn;l judgments (6:ia came from enormous profits in the sale of war materials? Cong., 3d sess., 191-"i, and 1\lr. SMITH of Georgia. Yes; I deny it. The Senator has his prior yearsL ...... 12,316, 3-13. 9J l Agreed to in conference: answer. 2 Enacted into law. Mr. CURTIS. Mr. President, the Senator will have hard a In conference. • Decrease. work making anyone belie\e that they came from any other 6 S6,00o,ooa of lnterest-bear.ing deposits from Treasury in farm-loan banks author source. ized. 13086 CONGRESSIONAL RECORD-SEN .Li_TE ~. AUGUST 24, Statemen t of _approprin1io71S (or 1916 and present condition of bills for But now we are told tll.nt it \\i ll he very expensive nncl almo~t 1917, sllo·w-ittg i11crcascs for 1911 over the preceding year.-Oontinued. impossible to buy the ship~ . . I think that is possibly t rue, atHl I think the purchase m:ty necessarily be defetTetl for some 'l itle of oiL. Appropriations. Present condi- lncre3Se, L l7 19lti. tion of 1917 bills. over 1910. time; but why was it deferred? \Vhy did .we not make the purchase more than 12 months ago? It was becmtBe of thE> nt must solid vote of the other sicle of this Chamber, bncl\C Assistant Postmaster General. I want to go on with a discus develop his farm; it will help build up rural life; it will help sion of these figures. I want to take from them the misleading strengthen that great body of our people-the very backbone ·of effect of their use as they have been presented by the Senator the Nation. The Senator from Illinois [1\Ir. SHERllA.N], who from Pennsylvania and the Senator from Utah. honors me with his presence, feels no deeper interest in them I have shown that the total appropriation in 1917 was $1,572,- than do I. Will anybody question the advisability of that ap 000,000. I have shown that $60,000,000 of that was for the propriation of $6,100,0001 I do not think so. sinking fund and $325,744,000 for the Post Office Department, A part of this increase is for agricultural · extension work, neither of which is considered in estimates of appropriations. carrying the work of the agricultural colleges and of the e}..-peri They are always eliminated in final calculations of the appro ment stations to the homes of the farmers, in order that those priations for the expense of the administration of the Govern who have not been able_to attend the agricultural colleges may ment. have laid down at their doors by demonstrators, by masters of The Post Office appropriation is an authorization to use in the the subject, that information which for 50 years we have been operation of the Post Office Department money which the Post gathering in the agricultural colleges, for 25 years in the ex Office Department will take in and turn in to the Treasury. periment stations, and for more than 25 years in the Agricul The other is the standing appropriation for refunding the Gov tural Department. That expenditure amounts this year to ernment's indebtedness. something like $6,000,000. I have not the exact figures before Deducting those two figures from $1,572,000,000 we have me. Will the Senator from Pennsylvania or the Senator from $1,185,000,000, the appropriation for 1917. Utah go to the. Progressives of this country and attack that Now, how much of that is for preparedness, added for the increase? coming year by the call of the people of this country? I do not Ten millions of the increase is for river and harbor increa cs concede that it was supported more earnestly by Republicans over last year; but when I turn back to 1913 I find that the than by Democrats. No Republican was more for it than I was Republicans then appropriated as much for rivers and harbors for it. I believed in strengthening the Army and I believed in as the Democrats have appropriated at this session. Frankly, strengthening t11e Navy, and I voted for every dollar of those I think there ought to be a little more critical examination of appropriations, and I am proud of it. · river and harbor bills. I think that the bulk of the items in But how much extra did we put on for that reason? Three those bills are good, but I think considerable trash gets into hundred and ninety-one million dollars. The Senator from them. I think trash got into the bill in 1913, when the appro Utah concedes $390,000,000. The exact figures are a little over priations were as big as they now are, and I have no doubt there $391,000,000. Do the Senator from Pennsylvania and the Sena is some trash in the bill which we have passed at this session. tor from Utah e}.."J)ect to fool the Progressives of this country? I believe that we ought, without ~·egard to parties, to study the Do they expect to deceive them into believing that there has question and thin out the trash. Legitimate and proper river been reckless Democratic extravagance in that appropriation? and harbor appropriations ought to be made; but no money If not, why have they not frankly deducted it and come down should be spent except where real substantial benefit can be to the real figures? · shewn, not simply to the locality from having the money spent The only criticism that the great colonel would make would be but from the results to be brought about ~ y the expenditure. that we had not appropriated enough. He would probably have Mr. President, the expenditure last year being $729,916,000 doubled it. Are his followers to line up at once behind the and the increase being about $54,000,000, if you will go through Senator from Pennsylvania and the Senator from Utah with the various bills and hunt for the places where the increases wild huzzas in condemnation of the Democratic administration occurred you can easily find them. One was in the District of and t11e Democratic Congress because the Senator from Penn Columbia, amounting to nearly $2,000,000. What Republican sylvania and the Senator from Utah attack our appropriations opposed that expenditure? One was a million and a half dol as being extravagant? Honesty and candor require that they lars, in roUl)d numbers, increase for the Diplomatic Service, deduct this amount, which they voted for and conceded was an expenditure caused by the increased burden placed upon the right, and in the handling of appropriations come down to the State Department growing out of the international war. So normal appropriations. we will find them; so they come down; so we pick out items When we deduct that amount we have left $794,000,000. Why bri~>:ging the total almost down to last year's appropriations. do they not talk about $794,000,000 and be frank? Ah, I warn Nobody can criticize them. Where are the items in those dif· them that the Progressives are not a class 6f men to be cap ferences that the Senator from Pennsylvania and the Senator tured by misleading statements, even- though handled by the from Utah criticized when they were being made? Where are two great leaders of the party, the Senator from Pennsylvania the speeches they made aga~nst them as they were going and the Senator from Utah. through? Now, let us think a little about some of these items. Six Ah, 1\.lr. President, it would be almost as high a service to million dollars of the increase is for good roads to help stimu watch the appropriations as they came along, and, if they were late the development of good roads all over the United States, to improper, to criticize them then as it is after they have been cooperate with the States, to furnish knowledge of how roads passed to seek to arm.l'se party prejudice against them when should be constructed, to aid in their selection, and to contribute you did nothing but vote for them as they passed along. something toward their construction. I realize, however, the exigency that confronts these two A good road i_n Virginia is a matter of interest and value to great statesmen and great party leaders. They have named a resident of l\Iaryland or of the District of Columbia. The good their candidate; they have picked him and put him over 'vith road problem is, in a serise, a national problem. What we have adroit skUI ; and now the burden ·is on them to elect him. There done has been to provide a wise cooperation between the Gov stands off the Progressive vote of the country, and the respon· ernment and the State, to stimulate the construction of good sibility falls upon the Senator from Pennsylvania and the Sena roads. I want the Senator from Pennsylvania and the Senator tor from Utah to corral the Progressive vote. What a de _ from Utah to attack that appropriation and to go to the Pro- lightful task is theirs! The Progressives in many ways are a . gressives on it. . splendid body of men, sometimes misguided, but earnest and Another appropriation is $6,100,000, estimated, in 1917 for patriotic in their purposes. rural farm-loan associations. This is an effort to bring down I am not afraid to submit fairly, item by item, the record the rate of interest that the farmers of the country pay. It is of the Democratic Party to them and to let them vote on it. an effort to collect their various mortgages, to put them together, I will do it, and willingly do it, despite my recognition of the in an organized way to pass upon their titles, and to give the tremendous influence, so justly and deservedly exercised, by indorsement of the farm-loan organization to titles, to watch the. Senator from Pennsylvania and by the Senator from Utah . the collection of the mortgages and the interest in an organized upon the Progressives. · way, and to raise the money by issuing bonds-bonds of the Mr. President, I have some additional remarks whiC'h later association-which are secured dollar for dollar by mortgages on I shall present on this bill, but for the present I do not on farms, put in a shape where they will be an attractive invest desire to discuss this feature of the measure further. ment for the average investor, who sin;lply desires a reasonable 1\Ir. SHERMAN. 1\ir. President, unless prevented by the act rate of interest and ·no care or doubt about the certainty of the of God or the public enemy, I shall draw on old Father Time payment of the principal. It is an organization to eliminate for probably at least a couple of how·s. I give due and timely the doubt about the secw·Ity offered and to transfer the respon notice to the brethren in the Senate, so that they may COlH.luct sibility of collection to the organization. themselves accordingly if they have other and more important I have no doubt it will bring down from 2 to 4 per cent, and business elsewhere. perhaps more, the rates of interest now paid by the farmers of l\Ir. KENYON. 1\Ir. Pre ident-- the country on their mortgage loans. It is estimated that they The PRESIDING OFFICER (l\:Ir. MAnTINE of New Jersey in carry $4,000,000,000 of farm-mortgage loans. It will help the the chair). Does the Senator from Illinois yield to the Senato·r small farmer to pay for his farm ; it will help the small farmer to from Iowa? 1916. CONGRESSIONAL RECORD-SENATE. 1·3089 Mr. SHERMAN. Yes, sir. 1913; they have it now in both branches of Congress; they have l\Ir. KENYON. I simply desire to request that the Senator it in the executive departments. Every great governmental speak loud enough so that we may all hear him. department. every bureau-in fact, every agency charged with Mr. SHERl\1AN. Yes, sir; I shall endeavor to make my Re legislation, with administration, with the exercise of discre publican friends, as well as my Democratic ones, hear what I tionary power in this country-is in the hands of the ·Demo have to say. Whether I shall convince all of them or not I can cratic Party. not gua:rnntee, 1\Ir. President, especially as to those on the rna· So that if there was any delay, Mr. President, in the military jority side of the Chrunbd in the preceding calendar year, from all soure~>s, by every corporation, joint-stock company or cost of merchant shipping by delaying the passage of the ship association, or insurance company organized in the United States, no ping bill at the last session of the Sixty-third Congress, with matter how created or organized, but not including partnerships, a tax: the con tantly increasing price of everything, likewise our of 2 per cent upon such income; ami a like tax shall be levied,. as brethren on the majority side of the Chamber are responsible sesSt>d, collected. and paid annually upon the total ne~ il}-.come received in the preceding calendar year from aU sources wtthli': ~e Unit;ed for the greatly increased cost of preparedness. States by every corporation, joint-stock company or association, or m I remember full well certain messages delivered by the Chief surance company organized, authorized, or existing undm- the laws o:l! Executive. In one message he took occasion to remark that, any foreign country- \vhile the Old World was disturbed with war, we t.appily had So that it includes both domestic and foreign corporations. I peace. There were some nervous and excited souls, he said. continue to qu.ote from the bill- w-ho wished to prepare and to spend · considerable sums of includin~r interest on boncls, notes, or o-ther interest-bearing obliga~o ns money in military and naval incre~es; but be suggested that of residents, corporate or otherwise. and including the income denved no such appropriations were needed; that we 'vere at peace, from dividends on capital flto E'k or from :nl"t e:u-nings of resident cor porations, joint-stock companies or associations, or insurance c What is the purpose of a fire insurance poli-cy? It is to make corporations, joint-stock companies or associations; or insurance com reimbursement upon the happening of the contingent event, panies. \Yhetber it be fire or the hazards of the sea, whether it be some The amendment offered by the senior Senator from New conYulsion of the elements or the happening of some contingent York [Mr. O'GonMA.N] provides: event that is dependent upon man alone. The risks that are That th~ income embraced in a return of an insurance company co\ered by a great Yariety of stock companies aggregate, over 12 organized m the United States shall be credited wlth the amount re months, many hundred millions of dollars. They do not repre ceived by such company as dividends upon the stock or from the net {'arning of resident corporations, joint-stock c.ompanies, or associa: sent a matured liability. It is contingent. That contingent tions whose net income is taxabl'3,under thls title. liability is a part of the business and credit resources of this country. This amendment covers the remedy. The e diYid.enlls, of such companies. Large resources are balanced by nearly as carr;ring any kind of policy he pleases, paid out in the premium, large liabilities, leaving only a prudent margin of safety. but that much of it is exempted· as a premium on his thrift in . There is yet another burden carried by the fire insurance providing for the unseen contingencies of the future. So the compnny. The rates of fire insurance. ~re regulated. by the amount paid for life insurance is a deduction, just like a prop statutes of the several States. In addition to that, m every erty tax in that country, and has been for many years. State \\'here the regulation occurs they are charged a license Germany is conb·ibuting heavily, by governmental aid, to compulsory fee upon the business done, and, in addition to that, c~arges life insurance. m·c made for licensing their agents that represent them m the In the face of the great military and financial burden she is State. carrying, her fiscal policy has never been so extended as to tax This license fee is not a mere lic-ense fee; it is a reYenue the life-insurance interests of that empire. measure. Under the guise of inspecting and examining and Peaceful America is the only place I know of, .in the history licensing them to do business and protecting the policyholders, of legislation of the civilized powers, where it is proposed to tile State makes it a source of revenue; and the larger States . put this burden upon the life-insurance and fire-insurance in and some of the smaller ones, in proportion to their revenues terests of the country. We are at peace, and yet \\'e are penaliz· received from the taxation of property, show that they receive ing these great benefi.cial companies tlui.t protect our lives and many millions of dollars annually from this source alone. write risks upon our property to protect us from bankruptcy About $15,000,000 ai·e collected every 12 months from the l~e in case of disaster. insurance companies of the United States alone under the gmse What possible defense can there be for such a fiscal poli<'Y? of license fees. In fact, they are mere ·revenue measures, tax There is yet another provision, l\lr. President, in part 2, ing the companies for the privilege of doing business in the affecting corporations. There is an exemption made of a cer States. tain part of the capital stock of the company carrying a risk. Bet·e. t11en, are at least four burdens laid upon the fire insur Ninety-nine thousand dollars of the capital stock is exempte One hundred thousand persons are taken at a given age or at pose a manufacturer would can overhead charges, the mana birth. It is :p.oted each yeaT how many die, and the records gerial labor that is rendered at the different offices, the presi are kept of the hundred thousand human beings until the last dent, and other executive officers who have a general knowle it is, if it is earning·a profit and is still on the safe side; equally the alleged prosperity which they clafm 1s sweeping over the it does not make any difference how small the percentage ·is, country. if it is on the other side of the ledger I have lost something for Why, the rural-credits law is a joke in most places-an idle the year. It is, after all, the percentages that are significant, jest. We do not need that half so much as we need something Mr. President; it is the percentage that counts; it is the per- else. I know what the farmers of this country need. I think . centage that indicates the dii:'ection in which we are traveling. I can speak with as much authority for the farmers as can So in 1906-a Republican protective-tariff peace year, with anybody else in this Chamber. all the world-peace merchandise--our percentage of exports What we need in this country, in every place, North and was 58 per cent of our total foreign trade and our imports were South as well, is more farmers. 42 per cent; while in 1916, with Europe at war, wtth the nations What we need now is not so much 3 per cent money as a of the Old World in deadly conflict, with armed legions cover farmer who is willing to go out on the' land and work 14 hours ing all Europe, with the · pursuits of peace largely lost to the a day, who is willing to work . with his hands in sunshiri.e and industrial world, at that time, Mr. President, when they drew in storm ; a boy who is willing to stay on the fru·m, do that upon us .for vast sums, when they borrowed our money, when kind of work, and get the rewards and the sturdy, manly ~nde they bought our merchandise and sent us their gold, when they pendence that inevitably follow from a well-managed agricul exchanged their credit for our products-in that year, Mr. tural occupation. President, our exports equaled only 66 per cent of our foreign There is not a farmer in all the great Northwestern counh·y h·ade-8 per cent more than in a peace year! . that I know of who is not meeting the problem daily, Mr. Presi How much were our exports then? Four billion three hun dent, of getting farm help. Our educational system is to blame; dred and thirty-three million dollars, and only 8 per cent more public sentiment is to blame; the false sense of pride that some than in the peace year of 1906. I repeat, Mr. President, it is of us have is to blame. the per cent that counts ; it is the per cent which indicates the I would not give a rap, Mr. President, for an education in a direction in which we are traveling. • unjversity that sends the boy home with the degrees consequent Without referring to any tabulations which I have made, let upon a five years' course; I would not pay bis passage money me add in 1916 some invidious comparisons with 1913. We have across the ocean to old Oxford, if it brings him back home with segregated the peace merchandise from the war merchandise; degrees and still he is ashamed of his father, with his oiCI. over the peace years from the war years. The peace merchandise i.s alls and the work-hardened palms of his hands. If it only gives the kind that the ordinary person, not drawing lines too tight him degrees that start him on the highway to being a human by way of distinction, would understand comprises tho e articles loafer, and looking upon men who work with their hands as that do not enter directly into military or naval operations. I following a menial occupation it were better he never left home. do not include even footgear as a part of the munitions of war, ·Our universities and our colleges have done too much of that although every great St. Louis boot and shoe house has an in the last 30 years. .t~.nprecedented balance in its foreign trade caused by this form I have more respect for the man who will work with his of export. · hands and not be ashamed of it than I have for the Q'raduate of The war merchandise is the kind that enters, without further Harvard, Yale, or Oxford who will blush every time be is asked change of form, except the mere putting it together, if it be bow his father makes a living, and he says be is a farmer, or shipped- in the knocked-down form, directly into military or that he works on a farm or in a foundry or that he is a carpenter naval operations. In that division, therefore, between peace or a shoemaker or a blacksmith. merchandise and war merchandise is a most significant explana What we need in this country, Mr. President, is not rural tion of this difference of 8 per cent. credits; we need more men who will work. There is more lazi-· 1 take an of the peace merchandise of 1913-the last year of ness in this country than there is want. More men looking for a Republican protective tariff, when there was no thought of a job than are looking for work. war-and I figure all of the peace merchandise in· that year in I never have seen the time in my life since I left home at 13 one column. I turn to the identical articles in the war year of years of age that I have been out of a job, and I have been 1916 and figure them in another column. If I place the peace through a good. part of three Democratic admini trations, and merchandise of 1916 in the ledger alongside of the peace mer that is saying considerable. chandise of 1913-1916 being a war year and 1913 a peace year If I could not get my kind of a job, I took the kind I could get; the comparison is very significant. and as soon as I could do better I did so, as everybody ought to In 1916 the industrial energies of the great' powers of Europe do, I believe. However, as I have said, I never h.'l.ve seen the were engaged in battle ; they were not developing their export time yet that I was out of work. trade. The merchant shipping of England had in a large· part Instead of pluming ourselves on our superior wisdom as been withdrawn from peaceful transportation and had been statesmen who are going to solve the question of "back to the devoted to warlike naval ·purposes. The mines and the mills farm " with a rural-credits bill, with cheap money which will not cheapen elbow grease 5 cents on the dollar, we should do ~f England were turning out shells and guncotton. The em ployees who had been on the g1·eat pay rolls of England were something to get men who will farm. If you: do not, and if you carrying muskets in the field. gi'v-e them money, when you get through all you will huve will be a bad Government debt. In spite of those conditions our exports of- peace merchandise A good old Puritan, whose ancestors came from New England, in 1~13 were $100,000,000 more than the like identical articles once asked me why I was against the literacy test in th im of peace merchandise in 1916. In other words, in the war migration bill. I said, '' Because we are educating too many year of 1916 the exports of peace merchandise were a hundred American-born boys whose ancestors run back to the Mayflower million dollars less than the exports of the same articles not to work!' . in 1913. Down South, where you have a good many d.arkies, some of Our exports of peace merchandise have diminished, even in a you got an idea they ought to do the manual labor. I do no.t war year, with $2,197,000,000 of export trade, ending in June, think. there is anybody in the Senate that I know of shares· 1916-with that tremendous volume, the greatest in the history that idea. I have a very great respect and a positive liking for . of the Republic--{)ur exports of peace merchandise ~n the war many of you fellow Senators who come from down in that year of 1916, under a Democratic tariff. are $100,000,000 less, country, for you are pretty stalwart Americo.ns, but every once in round figureS., than the exports of similar articles in 1913. in a while there is somebody with a mistaken notion there that Let me draw the deadly parallel, Mr. President, with another anybody who goes out and digs in the ground or pushes a ju.ck double column. I take the war merchandise of 1913-a peace plane or swings an ax or pulls a crosscut saw is working just year-and compare it with the war merchandise of 1916-a like a negro. war year.' In that war merchandise I do not include either Why, the strength and the greatness of Germany are due t~ horses or the "Government mule," but still $73,000,000 worth the fact that her people will work at anything that is legitimate. of horses went out last year from our country and about Why is it that little Belgium once blo someu like a. garden? For $23,000,000 worth of mules. I exclude those in order to be the same reason. Colonies of Belgians came to my ection of the accurate and to be fair. The war-merchandise exports for country long ago, before the war broke out, and I know of t heir the year ending June 30, 1916, aggregated $1,500,000,000 more thrift and industry. Why has Holland with her dikes wrested than the exports of the war merchandise of 1913 ; and still it from the sea her fertile gardens? Because she will work; she.has· is said that all of this prosperity is ·caused by a Democratic done it with the labor of her own hands. The be t artificer. in tariff. _ the world come from the low countries ; the best polishers and. Our Democratic friends say, "Look at our export trade; look cutters of precious stones come from Antwerp and Amsterdam ; · at our direct taxes ; look at the Federal reserve act; look at and all of them work. England's glory and the greatness of her the Federal Trade Commission; look at the rural-credits bill; race is in the colonists who work, whom she bas sent around the' look at our legislation." That is given by them as the cause of world, from Plymouth Rock: to Australia. 1916. CONGRESSIONAL RECORD-SENATE. . 13095 Why, the rural-credits bill bas had no more to· do with the very large space in the rear as a kitchen, a place where break prosperity of this count ry than a canceled postage st~p in fast could be prepared. I went down by invitation. I did not diminishing the resources of the postal re\7 enue. know whether anything of that kind was occurring. I had been A ruraJ-cre ·They ai·e' so careful in terms they will not mention a specific ever saw; that it is proposed now to take time by the forelock -duty any more than they will mention a protective duty. They and to prepare, so that the manufachu·ers inuy de-velor' rbP- iu ·call it an incipient thing and they" call it a special tax. It is dustry here in order that we may be indepenuent anu suusist just like paying a tax to go out and sell 'vltisky and to manu- in that particular upo_n our own resources. Let us prepnre for facture tobacco, a special tax of 2! and 5 cents a pound. another grim reminder from the Commoner. How long does that continue? The thing will be in its in- Now, I come to discuss the antidumping clause. It is e. sen- cipient stages for a while after the war ends. Right now the tially different, as the senior Senator from Pennsylvania [l\Ir. war furnishes all the barrier needed. Consequently the time of PENROSE] pointed out this morning, from the antidumping clause the taking effect .of this act is limited to the time peace is con- that was proposed by ilie Republican minority in the summer of ·eluded among the belligerent nations in the Old World. Then 1913. It is s11ffieient ·to say that while n deathbed repentance for fi\e years the special taxes are·to be remitted, one-fifth each is not evidence of \ery great sincerity, it is better than no re year after the act becomes operative, until in fi>e years' time pentance at all. If an antidumping clause of any kind is of any they will be gone, provided, however, that if it be ascertained value now, it was of equal value in 1913. after the act becomes operative that they are not manuf~cturing War conditions will cease; the stocks of merchandise nre nc . at any time before the ·five-year _period runs out 60 per cent of cumulating, not only of dyestuffs but of all the nearly 5,000 the domestic consumption of dyes, the President may by procla- different al'ticles that pass through the customhouses of the mation suspend the whole of the Federal tax, of the special. I country. They will continue to accumulate until a h·eaty of -taxes of 2! and 5 cents a potmd, any time. It leaves, howe>er, peace is concluded. Then, unless there is a barrier built up, we ·a 15 and 30 per cent ad v!llorem duty in force all th~ time. know the vast ftood of imports tlmt will pour into the American · I turn here on the subJect of a permanent duty of 15 and 30 market. I do not believe in building the barrier any higher per cent ad valorem on dyes to the fact that sugar, wool, and than is nece. sary any more than I believe in buildinO' n Iewe chemicals \vere turned loose on the free list here in the summer along the ~lissis..;ippi any higher than is necessary. ~ ?f 1~13. I remember .the seuior Senator from Utah [~r. ~MOOT] When it is high enough you do not need to waste money nnd m his effort to preserve so111e semblance of protectiOn for the Ume by building it any higher when it is adequate to the highest dyestuffs of this country. I remember well when he stood in flood tide and to the crest of the \"Va>es that rush llown with the ·his s~at and warned those in .cluirge of that legislation that great snows and the great rains when the freshets come; but sometime there would be a barrier necessary to make the manu- I want it high enouO'h. If it is an inch too low or if it is only facture of dyes in this country permanent, so that we might be on a level with the flood it is too low and the;e might just as independent of other countries. Inside of two years from that -well be no barrier at au,' because the ,~hole of it will go. time, more or less, after the war broke out, the warning was I have heard at considerable length about the beauties of an verified by the actual market conditions of our own counh·y. income tax. I believe in the principle of an income tux; I Now, we go · back and put a duty that is 15 and 30 per cent ha>e uniformly -voted that way· I hn\e so announced myself on it permanently. There is no provision, so far as au.to- ·wherever it becainc proper to d~ so. An income tax leYied in . matically ending it or giving power to the President to end it; the way tllis tax is levied is unjust. - the~e ~s no provision for. endin~ it at !lny time. So it seems. to I have one objC'ction to the wording of that portion of this me It IS purely a protective tariff, designed to become operative bill relating to an income tax. The House bill is a better bill after th~ war shall have ended.- . . in at least one particular. The House bill provides an exernp- I;Ie~·e IS what Brother Bry~n says about a protectrre !anff. tion of $3,000 for ever~c person who is single. It also provides This 1s an extract from Bryans Commoner of·October, 191o: for an exemption of $4,000 for the llead of a family. The pres- REl'UBLICANS WILL LAUGH US OL'T OF C.H.IP.HGN. ent laW, Which iS fOUnd in seetiOn 2 Of the tariff act Of 1913, What Democrat will l.Je rash enougl,l to propose an increase in import provides for $4,000 exem11tion for a married person where the duties? The party has been trying for a geni!ration to reduce the tariff, husband and wife li\e together. There is many a hea That is the second period to which the .chairman ·of the · Now, let me explain in detail, 1\Ir. President, what I mean by COmmittee on Ways and l\1eans of the House alluded 'in his re that: In the New England States it is well known that the port, where he referred to the excise tax on corporations · inhabitants have availed themselves of every natural advan \~hich was ·introduced in the administration of President Taft. tage. Some of their soil, especially along the coast, is not I think that was caus-ed largely by a departure from sound fertile ; sometimes the winters are long in certain parts of protecti~e principles. I look on it as a result of the Canadian that section of the country; they have no mines of precious 1·eciprocity idea. Canadian reciprocity was advocated by Presi metals ; but they depend upon the mdustry, the thrift, the dent Taft ami ·was voted for by some Republicans. I criticize intelligence, the business ability, and the inventive genius of neither. It was voted for by Democrats, and could not have -their people to develop their resources .and to .accumulate some been passed except by the help of Demoeratic votes. . I do not of this world's goods. In every town '8lld mountain valley of criticize my Democratic friends for their action, but if I were New England, in every brook, every river or branch of a river, disposed to criticize anyone, I would omit them and criticize it will be found that they have utilized to the fullest nature's my Republican associates, because a Democrat would be con resources. Even the surface of the water is not allowed to go sistent in th::-.t particular at least, as be believes in a revenue to waste, buf the watershed is found by surveys, a dam is built, tariff or in free trade, and reciprocity is a modified form of free the brook is caught, the surface water is utilized, a reservoir trade, exchanging one benefit for another. ~eated, wa:ter power is developed, and the electric energy is So the contemplated loss of revenue in framing the schedules of used in manufacturing. · the tariff act of 1909 and the anticipated loss -of revenue by the Now, whether they are making currycombs .or. clocks ifi Con Canadian reciprocity act, in case Canada ratified it at the polls, necticut, whether they are manufacturing cotton goods in Rhode led to the introduction -of the excise tax. I think that is an Island, whether they are quarrying marble and granite in New unfair tax as a permanent soUI·ce of revenue, and I will explain Hampshire and Vermont, most of these business enterprises are why, Mr. President. carried on by corporations. It is not to escape individual re I beard at least three Senators in the summer of 1913, when sponsibility, because they pay their debts. It ls becau e ·of the the tariff act was under discussion and while we were framing business advantage that nece sarily goes with a -corporate form it, say that they proposed to take the taxes from the custom of existence. house, to cease collecting customs duties and put the tax upon If an individual dies, his administrator or executor must the wealth of the country. The distinguished chairman of the wind up his business. If he is in a partnership, it has the Committee on Ways and Means in the House at that time, who same effect, because the death of a partner acts as a dissolution is now an honored and useful Member -of this body, declared of the partnership and requires a settlement of its business. A that to be the purpose of that series of schedules. Last De c-orporation is endowed with perpetual life. Its shareholders cember, at the beginning of this session, or ve:ry near that time, may die, but th€ corporation exists. he renewed the explanation in this body. He said that the The shares pass to the heirs at law and the business of the tariff act of 1913 was designed to transfer taxes from the concern still goes on. If it is a going concern, all the share customhouses, to distribute them, and to impose them upon the holders may die, and it continues in its operation without in wealth of the country. terruption. So there is more than a mere escape of per (mal I shall not ar-gue at this time whether a tariff is a tax. That responsibility. There is the ~reat economic fact that our in sounds almost like a voice from the wildernes$ resurrecting dustries can not be qeveloped; our business can not be con ancient issues, and I do not care to take it up at this time. ducted; our manufactures can not be carried on ; our banks can What I do wish particularly to analyze is, whether the " tariff not be conducted; our great or small industrial enterprises in for revenue only," or a .. , competitive tariff," as it has been small country towns or the mighty metr.opolis can not be con denominated in the controversy in this body, has transferred ducted, save through the agency of a corporation. the burden of the duties collected at the -customhouses, on So, in New England. the manufacturing corporation is fre whomsoever the burden might have been, and placed it on the quently f-ound. In Louisiana, in the larger cities, it is fre wealth of the -country. I want to show just how that has been quently found. Some of what is classified as manufactm·ing accomplished. machinery is on the cotton. a:nd sugar plantations. There the Here are the three New England States of l\faine, New Hamp crude sugar requires a certain amount of mach!nery. The gin shire, and Vermont. Maine has an aggregate wealth of $1.069,- ning of the cotton 1llld the baling requires a .certain amount of 000,000; New Hampshire, $649,000,000; and Ve1·mont, $527,- machinery. This particular kind of property is not claRRified 000,000. The three together J)ay an income tax of $1,064,000. under the head of farm machinery or implements. So, in the Togethet· they have an aggregate wealth of $.2;200,000,000. larger manufacturing States of New York, Pennsylvania, Ohlo, North Dakota alone has a wealth :of $2,141,000,000; South Da Indiana, Illinois, Cc,nnecticut, Rhode Island, aud the New Eng kota. has $1.398,000,000. Together they have a wealth Qf $3.500,- land States generally, the corporation is a manufacturing con 000,000. That is the estimated wealth of those two State8 cern because that is the only way in which a continuous busi alone. The income tax paid by the three New England States ness can· be carried on. is $1,064.000, while the income tax paid by North and South If 25 farmers put in $25 each and form a company with a Dakota is $234.000. The two States of North Dakota and South capital of $100,000. they are · taxed upon their net income. Dakota, having 50 -per cent mOre wealth, pay one-quarter as .There are no exemptions for the corporation. much income tax as the States of M.aine, New Hampshire, and If the farmer keeps his $4,000 and lends it out at 5 per cent, .Vermont. · the current rate on good securities in the part of the country . Iowa has $8.,000,000.000 of wealth, while Louisiana has $2,100,- where land is worth from $150 to $250 ·an acre, farm loans are 000.000 of wealth. a little over one-fourth as much as Iowa has. available for from 5 to 10 years at 5 per cent, so be can keep hls Louisiana pays $702.000 on ac<·ount of the income tax, whHe $4,000 and loan it out at ·5 per cent in a kind of investment that Iowa. with nearly four times as much wealth, pays .$790,000 in he knows something about. He need not invest in a municipal come tax. One is a Southern State, so ealled, and the -other a bond or in United States Steel common and wait for it to come Northern State. It is as unfair applied to Louisiana compared up to 96 and a fraction. He does not need to speculate on any with Iowa as it is applied to the three New England States I thing of that kind. He can loan on an asset that he knows have named as compared with the two Northwestern States of about, because be plows it every day of his life, in the season. North and South Dakota. If he invested it at 5 per cent, be would get an income of $200 The two comparatively small States of Connecticut and Rhode out of the $4,000. n would take a long time before lie would lsland together have a total estimated wealth .of $3,250,000,000. reach the point where his investment, at 5 per cent. would make .They pay in the aggregate $3,825,000 income tax. Nebraska has him liable to pay an income tax:. If he is a single man, with an an estimated wealth of $3,700,000,000, and pays $492,000 income exemption of $3,000, he would have to have $60,000 and upward tax-less than one-seventh as much income tax as Connecticut of that before he would pay a cent of income tax. He would .and Rhode Island pay, although .she has a greater estimated have to have $80,000 if _he is the head of a family or a married wealth than that of the two New England States. ·man before he paid a cent. Let me take the State of Massachusetts, the total wealth of · So the farmer, when be keeps his $4,000 in a loan or a bond, which is estimated at $7,000,000,000, and which pays an income does not pay a dollar of income tax. I have no objectio.ns to that. tax: of something over $6.250.000. Compare that with the figures If 25 of them incorporate to carry on some busine , with a as to the State of North Dakota, which has over $2,000;000,000 capital of $100,000, and they make 5 per cent on the $1.00,000, of property. one-third as much wealth as Massachusetts, but pays they are taxed $50 on the $5,000 income. That taxes tbe ~5 only $136,000 'in income tax, which is less than one-seventieth of farmers just $2 apiece. It penalizes the farmer that much for tb.e amount .paid by l\1assachusetts. Under the present system changing the form of his investment. It puts a premium upon there is no distribution of the burden according to the wealth of keeping it .out, scattered in some way, so that manufacturing the country, but there is n distribution according to tbe classifica can not be conducted in his neighborhood by local capital. That tion of the wealth, the occupation, and the way it is employed. is the necessary effect. of it, 1916. CONGRESSIONAL ~ECORD-SENATE .. 13101~ It has the same effect upon a corn producer or a cattle raiser . ~here is another aspect of it, Mr. President, which, . I th'nk, in the Northwest or the Southwest that it has on the producer mdtta~es that the taxation is unfair as I have described it. I of cotton, sugar, or peanuts. That leads to the classification to a~ gomg to take Rhode Island aga.in, with 114,000 wage earners, which I alluded. Let me take the agricultural States first. $o5,000,000 of wages, and $280,000,000 of the value of their I will select the State of Iowa. I do not take my own State, -products, and put it alongside of Mississippi, for instance, with because wltile there is a very large assessed value of real 50,000 wage earners, $18,000,000 wages, and with only $80,- estate and a very large quantity of t11e wealth of that State in 000,000 of the total value of her products. The States all live stock, farm implements, and the like, there is likewise a run the same way. You penalize the States that develop their large amount of our wealth in manufacturing machinery. Some resources and fm·nisll employment for the- pay rolls of -the of the great factories in l\loline, Rock Island, Chicago, Peoria, country, that take up the idle men, that make it possible to and other points employ many hundreds of millions of dollars, make preparedness an assm·ed fact. They carry the burdens all of it in corporate form ; and so, being both an agricultural of this revenue bill. · and a manufacturing State, it is hardly a fair State for the l\fr. President, it is now 5 o'clock. I forbear to take more time. comparisons that I . intend to make. I choose, rather, my I believe that this bill ought·to proceed to a roll call in due time, neighboring State of Iowa, across the river, which is relatively and other Senators wish to be beard. more of an agricultural and less of a manufacturing State than I wish to conclude by recalling to the Senate the time when Illinois. . the senior Senator from Idaho [Mr. BoRAH], in the summer of The real estate and improYements of Iowa amount to $5,100,- 19~3, .s~id th~t. the most pathetic chapter in the history -Of Great 000,000. Their Jive stock amounts to $491,000,000. Their farm BIIt~I? s political economy was the decay of her farming com implements amount to $103,000,000. They pay $794,000 income mumhes; that great areas of her land were turned into game tax. Connecticut and Rhode Island together pay $3,825,000 preserves ; that her sons had gone to the fertile fields of other income tax, of which Rhode Island pays $1,103,000 and ConneCti countries around the world, and that her own plows bad rusted cut pays two million seven hundred and some thousand dollars in the furrow. That was true. The war broke out, and when income tax. Now, note that Connecticut has $1,450,000,000 of the ~ar bro~e out there came a change. Great Britain's leading real estate and improvements. It has only $22,000,000 of live men m Parbament and out of Parliament are now sayinc:r that stock and only $7,000,000 of farm machinery, as against the England must begin to produce her own foodstuffs. Sheo must $102,000,000 farm machinery of Iowa and the $491,000,000 of develop her colonial resources, and the resources of England, live stock and the $5,100,000,000 of real estate and improve Scotland, Ireland, and Wales. She must not depend upon her ments. But Connecticut has $167,000,000 worth of manufac merchant shipping to draw l1er foodstuffs from around the world. turing machinery. That is in those corporations I talked about She must not only be industrially independent, but she must be, a moment ago. In all the hills and valleys and in all her rivers as to the production of her provision supply, independent of the -that run down to the sea, in all New England, in all her cor rest of the world. porate undertakings necessary for manufacturing purposes, the So the war is driving the people of Great Britain back to the New England and other manufacturing States of the East and Inn d. The submarine has done more in two years to shatter Northeast have a large proportion of their wealth in manufac the free-trade doctrines of Cobden and the university professors turing machinery, which means shares of corporate stock when of Oxford and Cambridge than the arguments of free traders you trace it down to the individual owner. . for 150 years. When the Deutschland came into the pprt of So Connecticut has $167,000,000 of manufacturing machinery Baltimore it was an answer to all those who would make us as against Iowa's $58,000,000 of manufacturing machinery; but dependent upon the rest of the world for our supplies. It was the income tax paid by the single State of Iowa is less than the notice served upon us to develop om· own resources. because our income tax paid by the State of Rhode Island by nearly $200.000, merchant shipping, if we draw supplies from around the world and is only in round numbers about one-fifth of the· tax paid by can be cut off by a submarine from all the high seas where th~ the State of Connecticuf. Rhode Island, for instance, has $600,- tide ebbs and flows. So England has learned this lesson. 00<;),000 of real estate and improvements; it has about $7,000.o00 I now wish, in conclusion, to place in the RECORD, in the order of live _stock; about $1,883,000 of farm implements; it has $93,- I have used them, the tables to which I alluded at the beginning 000,000 of manufacturing machinery, as against in South Dakota of my address. $6,000,000 in manufacturing machinery. . South Dakota, on the The PRESIDING OFFICER (l\Ir. SMITH . of South Carolina other hand, has $38.000,000 of farm implements, $145,000 000 of in the chair). Without objection, it wm be so ordered. live stock, and $639,000,000 of real estate and improv~ments. The matter referred to i~ as follows: Free and dutiable -tmpa1·ts into the United States far years 1906 to 191G North Dakota has ·only $5.000,000 of manufacturing machinery, inclusit· e. , $49,000,000 of farm implements, and $125,000,000 of live stock, and $1,261,000,000 of real estate and improvements. . North Free imports. Dutiable im- Total imports. Duti- Dakota and South Dakota pays $234,000 income tax, while the Year. ports. Free. able. two small States of Connecticut and Rhode Island in income tax, manufacturing machinery, pay together 16 times as much; P.ct. P. ct. and it is because their property is in corporate undertakings 1906 ••••••••••• : .. : •• 1549, 621, 878 $676, 938, 668 Sl, 226, 562, 446 44.81 M.l9 for manufactw·ing purposes, and is liable to income tax, while 1907-..... _ ...... 644.029,761 790.391, 661 1,434.421,425 .f4.90 M.10 the farmer of North or South Dakota, having his land or his 1910 .... _,_, ...... ';55, 311,396 801, 636, 034 1, 556.947,430 48.51 51.49 1913 ...... -·--- 987,524.162 825,484, 072 1, 813, 008,234 54.47 45.53 income or his manufacturing machinery in such a way that it is 1914 ...... - ..... 1, 127, 502, 669 766, 422, 958 1, 893, 025. 657 59.54 40.46 not collected in an aggregate form in corporate holdings, escapes 1915 ...... 1, 03.3, 526, 675 IWO, 64.3, 065 1, 674, 169. 7.40 61. 7S 3K27 the tax altogether. . 1916 ...... 1, 492, 765, 118 705, 219, 724 2, 197, 98-J. 8i2 67.91 32.0;} Now, the in~oriie tax is fair enough. I think the corporation ought to pay it. I do not think the· excise tax on a corporation ;:~~d~~1!:rlrJ~~ Total which is manufacturing in character, and gives work to the Dutl~.:; col pay roll that absorbs some of these idJe men I talked about in Year. ordinary locted . receipts. Customs Direct 1913-).4, ought to be permanently burdened in that way, be duties. I _taxes. cause the manufacturer is an employer of labor. Here are some compensations, however, that go along With it. Per cent. Per cent. The State of Massachusetts, with real estate and improvements 1906 •• - ... - ...... - ; •.• - ..... - ~594 , 717, 942 ~300, 251. 878 50 50 1907 •••••• - ...... 663. 125, 660 332, 233, 363 50 50 of $4,100,000,000, and an area of 8,000 square miles, has an 1910 ...... ; ...... 675,511, 715 333. oo. 44~ fiO 50 average value per square mile of $512,000. Here is the State 1913 ...... _...... 724. 111, 230 318.891.~6 45 55 of li'loridu, which has in real estate and improvements $429, 1914 ...... 73-t. 673. 167 292, 320, 015 39 61 1915.- ...... : .... . 697,910.827 209, 786, 672 . 30 70 .484,000, with 54,861 square miles. That is an average value •1916 ...... - ...... 777,480,487 Hl,866,222 27 7J per square mile of $7,828. Rhode Islanc'l has $600.000,000 and over of real estate and improvements. It is 1,067 square miles The Dingley protective tariff act was in force in 1906 and 1907. The Payne-AJdi'ich p.-otectlve tariff act was in force in 1910 anll in area, and every one of its square miles is worth $563.024- 1913. the highest valuation per square mile of a·ny State in 'the The Democratic ft tJe-tra TotaZ foreign trade. Ordinary Internal revenue-Continued. Illinois ------$54, 541, 708. 18 Massachusetts------9, 197, (•Ofl. 78 Exports. Import~. Ohio ______.__ 27,699, 55ft 69 Indiana------29, G16, 283.. 01 $203,068,608.21 Ptrt !:ent. Pacem. Income 58 42 tax· 19061907 ••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••. ··········-·············································· 57 43 New York_ ~------ 45.230,085.17 51 ~9 Pennsylvanta ------13, 102, 434. 30 1910. • • • •• 0 •. ••• • ••• •. •• •• •• •• ..... ••• .... ••• ••• • •• • ro•• ••• •••• 1913 ••• -·· •••••••••••••.•••••••••••••••••••••••• -····· ••••••••• 57 43 . Illinois------·------10, 745, 841. 90 1914 ••••••••••••••••••••••••••••••••••••••••••••••••••••••••••• 55 ~5 Massachusetts ------... 6.862,017.90 1915 ••••••••••••••••••••••••••••...••••••••••• -· ••••••••••••••• €2 ' as 6.043,919.72 (6 3f ?!JYana::...-::-: ___ :::::=:::::: 1,224,528.04 1916 ••••••••••••••••••••••••••••••• •••••·• ••.•.••••••••••.••••• 83,209,427.03 Total imports of 1916, $2,197,984,842, under a Dt>mocrati<' free~ ~radt> AggrE>ga.te receipts internal revenue, 6 States , tariff di~tribot PCI on the pPI" <'PDts frN' of duty anti tbP p!'r <'Pnt. tiutiahlp · named------286, 278, 035. 24 under the RE>pub~kan protective-tariff acts tor the years 1906, 1907, Of total internal-r«:'vPnlle receipts of $512,740,769.58, the foregoing 1910, and 1913. with thl.' customs-duties reePipts for E'aC'b year esti six States pay 55.83 per cent. mate!\ at tbP average ad valorem rates on dutiable Import~ actually Illinois. · colleetPd In tbOSI' yPars showing the loss of rPv.-nue to be supplied by Ordinary internal revenue ____. ______$17,323.020.91 dl.rect taxation ondel" a Demoeratlc administration. 2 Republican tariff applted tfJ imports of 1916 (or yean named. E~::::::::::::=~=:::::::::::::::~::::::: ~:~~!:~~~:~1 Free of Doti Dutiable Year. duty. aWe. Free imports. imports Total -·------.:. ______54,541,70S. 18 In·come tax------10. 745, 841. 90 65,287,550. 08 Percent. Percent. . Total ------.. -- 1906 •.••••••••••••••••••••••• - 44. 81 55.19' f!lM, 87fi, fi78 n, 213,018,164 Pennsylvania: . Ordinary internal revenue ______12, 006, 044. 52 1907 •• •••••••••••••••••••••••• 44.90 55.10 S86, 85!, 784 1' 211, 040, 048 1910...... 4&51 51.49 1,066,198,807 1, 131, 696, 035 DO------Do ___ ,.... ______3,232,158.64 1913...... •...... •...... 54. ifl 45.53 J, 197, 193,320 1, 000, i01 J 522 3,399,505.07 - Do------13,077,361.76 Total tmpOl"ts fiscal year Pllding .Tune 30, 1916, $2.191.894.842. 31,715,069.99 IncomeTotal tax..._~ ------______: ______AvPrage ad valorem ratP on dutiable imports· unde-r RE>pnbllcan tarltr 13,102,434.30 wonld have <"Ollected, applled in 1916 for years named. ru follows: Total ______.;: ______Oustoms recei.pu if Republican Jn"Otecti"Ue rates were appliect "to· dutiable 44,817,504.29 imports. 1!Jl6. New OrdinaryYork: internal. revenue______1906-44.16 per cent ol 1,213,018,164 producin~ .••...•••••.•.•••••.•••.• !535,008,821 12,52{),067.94 1007-42.55 per cent of S1.211.040,048 producing ...... •. ·-...... 515, 237, 54-.'J Do ______------18, 524. 649. 74. I91o-4L52 per cent ol !1,131,696,035 producing ...... 469, 8&>, 193 Do ______------13, 950, 212. 89 1913--4(}.05 per cent ol U,.C00,70L522 producing . ..•....••..•.••••. ·-·... 400, 'i'SJ, 959 Do------7, 073~ lUi. 38 Do ______------3,925.936.09 It total Imports under Demot>ratlc tarttr of Octobt>r 3, 1913, ha.1 ~n 4,305,001. 52 45.53· per cent. dutJable as !:n 1913, the last year of a RE'publican tarur. Do.. ----·------the dutiable ~mports for tbe y«:'ars named below would have been as Total------ 60',298,983.56 follows: Income taX--·------45,230,685.17 Ye!V. Total imports. Dutiable. Total ------~---- 105, 529, 668. 73 Ordinary internal revenue and income tax~ IU1nois______65,287,550.08 11114 •••••••••••••••••••••••• ~-· ~ •••••••••••• -... Sl, 893,925,657 !862~ 294, 351 1 1915 ••••••.•.••••••••••••.••••••••••••••••••• _••••. 1,674,169,740 762, 249, 482 1916 .• •.••••••••.••••••••••••• -... •• • • • • • • • • • • . ••• • 2., 197' 98t,.842 1' ooo-, 742, 4Y8 Ohio------~~~~~~nia-==----======~~:33, ~i¥:743, 47ti.~~: ~~41 And a.t the average ad valorem rate of 40.05 per cent on dutiable Total------249, 378. 199. 51 imports for 1913. \\>'ould bave produced in customs: Ol'lio: Ordinary internal revenue------·------17, 997,1Ui. 02 ~~~t ::::::::::::::::: :: ~:: ::: ::~: ::::::::::::::::::: ::::::::::~::::::: ~~~;~: ~ DO------ 3,103,418.26 1916...... •. . • . •• . • . . . .•• . •...... • . . . • • • •• • . .• . • •. •• . • . . •• .• . . . • •. .. 400,797 37() Do.------ 1., 777, 839. 65 The foregoing e~timated cuRtoms, compared with $211.8fi:6,222 actu DO------4,8.21, 183.76 ally collectPCt tn 1916, 6how why . the ditl'erence of from $94,000,000 to nearly $190,000.000 must be met by dlreet taxes. Total------ 27,699, 556. 69 Total corporation an•l individual ineome-ta.x re- Income tax ------6,043,919.72 ceipts. fiseal year ending June 30, 1916______$124,867,430.28 3.3,143,476.41 Paid in- Total------~--.:_ ___ N~w York______$45,230,685.17 Popula-tion: . Pennsylvani!l---~-- 13,102,434. HO 9,113,614 llllnol~ ------10. 745, 841. 90 New York------illinoisPennsylvania______------_ 7, tHl5. 111 Ma.ssaC'husetts ------6, 8{!2. 017.90 5,638,590 75,940.979.27 AU the other 44 States______48. 926, 451. 01 Ohio------4,767,121 Total wealtL of the- foregoing 4 States _____.:___ 62.2116. 07-L 124. 00 Total (being 29~ ·per cent o~ the total popo·------Total wealtli of all tbP other 44 States______125.482, 9.96 966 00 lation of 91,972,266)______21.184.438 '£he four StatE's named pay tncome tax on each dollar of aggrPgate wealth of $0.001219. more than 1l mills. Total internal revenue______===== 512, 740, 769. 00 All of the othPr 44 1-'tati"S named pay ineome tax on each dollar of Total internal revenue of 4 States named (48.6 per aggregate wealth of three hundred and eighty-nine one-thousandths, or eent ------~------249, 378, 199. 00 Jess than two-tlfths, of 1 mlH. . NPw York pays 206 per eent of internal revenue. Ordinary intPrnal revP.nne: Illinois pays 12.73 per cent ot internal revenue. New York _____. ------$60,298,983.56 pp_nnsylvania pays 8.74 per C1'Dt of lntE'rnal revenue. Pennsylvania------21,715, 069.99 ObJo pays 6.58 per cent of internal revenue For the year 1!Jtt. Manufao Real estate Square Farm im. titiles State. Wealth. Income taL turingrna Li've stock. ~ncludes im chinery. plements. provements). land area. Maine ....•...... •.•.•.••..• ~ •.••.••••••••• ~ •••••••• : •••••••••••••••... $1,069,594,027 } l$69, !l41, 215 $15, 6~. 09ll $32, 745, 172 1485, RM, 919 29,895 N' ew Hampshire •••••.•••.••••..•...•••••••.•••.•••.••..••..••••••.•••.. 64!},320,469 S1,064.,107.29 ' 38,561,6lt 6,020,570 16,015,159 33!i, 212,237 9,031 Vermont ...... •.... 527,261, 7i5 l 19,089. 082 10.694,725 "30, 65t, 0911 255,994, 27R 9,124 North Dakota.. ••.••••...•...• •.••..•.•••.•••.••.•.••••.••.••••••••.••.•. 5,244.543 49,87S,002 125, 614,381 1,261,3 .140 70, lltl Eouth Dakota ••..••••..••.•..•••.•••••...•••••.•••••••.••••••••••••••... i:~~~; ~~::: } ~4, 741.21 { 6,043,576 38,100,632 145,815,4!» G:l!l, 661, 792 76,~ lowa ...... •...... : ...... 7,MS,4M.211 'i94,981i.41 58,520,370 102,mn,4M 491,613,546 . 5.111, 230,343 55.5.~ Nebraska • •••••••••••.•.•••••••••••••••••.••••.•••.•••••••.•••••••••••.. 3,794,9M,781 492,912.00 35,084,497 48.111,51\0 205, For the vear 1909. Bout·ces-Contlnued. State. Wage I Wages. Value Capital. State. Source. earners. I products. Minnesota ..•••••••••••.....••••.. Treasurer's report. 70,230 $37' 907' 000 $272,896, 000 $216,876,000 Missouri. ....••.••..••••.• .••.... Auditor's report. ::::::::::::::::::::::::: 79,955 37,632,000 97,101,000 202,260,000 Montana ...•..••.••••.•.•••••..... First report ol the tax commissioner, p. 11. New Hampshir~ ...•..•...... 18, 658 36,200,000 164, 581,000 139, 990,000 Nevada ...... ••.•...... •.. Treasurer's report. Vermont ...... •...... 33,788 17,272,000 68,310,000 73,470,000 New Hampshire ..•.•••••••...... Do. North Dakota ...... •.•.•••. 2, 789 1, 787,000 19,137,000 11,585,000 .Do. South Dakota ..••..•...•..... 3,602 2,297,000 17,870,000 13,018,000 ~:: ~~;r:: ::~::::::::::::::::: Compttoller·s report, p. 14. lowa ...... •.•••.•...•. 61,635 32,542,000 259, 238,000 171,219,000 North Carolina ..••••.••.•.••••.•. Treasurers report. Nebraska.....••..•...••..•... 24,336 13,948,000 199, 019,000 99,901,000 North Dakota ..•••••.•....•.•... Do. Oklahoma ...... •.•.••.••••.' 13 143 1,240,000 53,6&2,000 38,873,000 Oklahoma ...... •..•••••••••..•. Do. Colorado ....•....•..•••.•••... 28;067 19,912,000 130,044, 000 162,668,000 Do. 2,867 2,081,000 6,249,000 6,195,000 Do. ~~=t::::::::::::::::::: 76,165 33,386,000 223,949,000 221, 816, 000 Do. Connecticut .•....••...••.•.•. 210,792 110, ll9, 000 490,272,000 517' 546, 000 South~i~~~~~:::::~:::::::~~::: Dakota•••••••••••• __ ••.... Do. Rhode Island.•••.•••••.•.••.. ll3,538 55, 234, 000 280, 344, 000 290, 901, 000 Comptroller's report. Alabama ...•..••••••••.••..•• 72,148 27,284,000 145,962,000 173,180,000 i~~~~:::::::::::::::::::::::~ Treasurer's report. Arkansas ...••.•...•.•••••.... 44,982 19,ll3,000 74,916,000 70,174,000 Do:- 50, 384 18,768,000 80,555,000 '72, 393, 000 Do. ~=J~8:::::::::::::::: 584,559 301,174,000 1, 490, 529, ()()() 1, 279,687,000 ~~~~~~::::::::::::::::::::::::· .Do. Wasbin~on~ ...... State tax commissioner's report. Treasurer's report. In1~eritan..ce-taa: re-ven.ue by Btatces. ;r:~~::::::::::::::::::: : Do. state. Year. Revenue. TREASURER OF "!l'Hl!: 'STATE OF ILLINOI'S~ Spritzottelrl, July 14, 11!16. Hon. LAWirENCE Y. St:rERMAN, 'Wa8hi1'gton, -n. ·a. A.l'izona •• ···~··~·· .. ····· -·-·--····~····· - ··•u·--···-· 1914-15 $12,1.32.-45 Arkansas_ ••• ···-······· •••••••••••.•••.••• ·~· •••••• ···-·.. 19la-14 44,361.49 DEAR SENATOR: 'In reply to your .letter of .the 11th instant, -would caillornia..•••••••••••••••••••••• -·· ••••• -·-· _ •••••••• -·-... 1913-14 ' 1,'796, 478.57 -say that] wired you yeste:rtday as "fo-llows: Colorado·-······----········-···························" 1912-14 1 232, 531. 51 "Inheritance-tax .receipts in the State .treasurer's office for ithe year Connecticut •••••••••••••• ·--••. -~ •••~ ••••••••••••••• -·..... 1914-15 807,293..zr 1914 were- $1,600.000, and for the year "1915 were $1.995,.000:'' 13,463.96 This dep~nt has gotten to be quite a revenue producer, and it will -6,066.40 make a big -dl1ference to the clti:rens <>f Illinois i.f it should .be cut .olf. Ei~~~:::::~:::::::.:::::::::::::::::::::~:::::::::::::, :J:t{;: .30,634.00 When you are ' here in August I bope to see you. Idaho •.•••.• ·-...... ·- ·~·. u •••. _..... ••• 1913-14 9,994.90 With my best regards, I am, D.lino-is. • • • • • •-~-• .-• •• :. • • • ...... _ • ro • •• 0 • •. • • .- • • r• • • • • •~• • • 0 .. 1913-l{ .2, 092, 960. 20 Yours, very truly, ANDREW RUSSEL• Indiana .••••••.•••..••.••..•••.•••.••..••••• ___ ...... 1914-1.5 233, '5a9. 83 ILLINOIS lNBllRIT.A.NCE ACT. lowa .•.. -·····-··-···-·· .•••• ·-·-··-· ··-·-··· ·-········-··- 1912-14 .3 218,-565. 70 Kansas .•••••••••••••••••• ·-••••.••••• ·-•••.••••••• ·-...... • • .• --. -· (S) Less than $500 estate, all exempt. Exceeds $100,000, dtrect heirs, $2 "Per $100. Kentucky.········································~······ 1914-.15 270,429.89 Louisiana. • • . • • . • • . • • . . • • . • • • . . • . . . • . • • • • • • • . . • • • • . • • • • • • . . 19l3 97,290.72 One .hundred l:.bousand :dolla-rs ·or less, -d~ct lleinl, $1 -per $100. Maine...... 1914 283,869.36 'Twenty tho11Salld dollars or less in above cases exempt. 256,814.84 COLLATERAL HEIRS • • .2, 308, 460. 46 . ~~~6u.s::::::::::::::::::::·::::::: ·:::::::::::::::::::: ~~t~ .Exceeds $2,0'00 and exceeds .$201.000, received by each p.erson, -$4 Michigan..-· •.••••••••••••••••••••••••• ·-••• -.--•• ·-··.·-.. 1913-14 6111,710:02 per .$100. Minnesota_.·-~- •••••••••• - - ~- •••.• -~· ••••••••••••••• ~ •• -·... 1913-14 650,756.85 ·Two thousand -aollars and is '$20,000 o0r less recetved by e:a.ch person, Missouri..•. ·-········-··················--····-····· .••• : 1914 !11,160.91 $2 _J)er ,$.100. M..ontana ...... -·····-··--······-··-··-·-· 1913 ~~273-94 ALL OTHER CASES. Nebraska.-.-······················--······-···-········· Nevada.•• _ .•.. - .. ····-·········¥·-···--·····-·······-·· 1915 4,415.10 Ten thousand dollars or less at 1:he rate of $3 per $100. 114,014.61 -over <$1.0,000 and not exceeding $20,000, 1lt the rate of $4 p.er $100. ~:: ~~~~::::::::::::::::::~::::::::::::::::::::::::: l~ti~ ' "1,090,298. 78 Over $20.000 and not exceeding '$50,000 :at the rate of $5 per "$100. New York ..•...•..•••.•••.•.•• ·-···········-·····-········ 1914-15 . 8_, 263,893.67 pver ·$50,00.0 and not exceeding =$100,000, -at :the Tate of $-6 per .$100. North carolina.• -. .••.••••••••••.•.. ··-··...... "1913-14 .19,899.19 Over $100,000 at the -rate of $10 -per $100. • North Dakota ...... •...•..••...•.••...... •••.•.•.• -•.•••••. 1914-15 7~680.57 Oruo ...... (•) Mr. SHERMAN. I also ask permission to insert editorials Oldaboma 5 •••• , ...... - ••••••••••••• - ·. • .• • 1912-14 14,822.14 from the St. Louis ·Globe-Democrat of "Several issues and -an Oregon ...... •. _.•.•..••••.•••••••••••••••.•...•••••••••.•..• 1913--14 85,0SL61 the 2,516,-790.43 article from -Ghicago Tr.ibnne headed " ·Two yeru·s of British ~=l{y~~::.: :::::::::::::::::::::::::::.:::::::::::::::: l~it~i 33,431.65 . snubs, United States unruffled," written by Arthur Sears Hen- South Dakota •••.•.•••.•••••..•.••••..••••.•.•••. : .••_ .••.. 1913-14 25,412.04 ning. . Tennessee ..•••••••.•.•.•.•....••••.••.••• ; ••••.••.••••.••.. 1913-14 210,-831.10 The PRESIDING OFFICER. Without objection, it is so or Texas.····································-··············· 1913-14 43,105:75 Utah •••••••••••••••••••••• -·...... • • • • • • • • • • • • • • • • • • • • • 1913-14 487,228.55 dered. Vermont ...... ••..•...... •.•.•••.•••..•..•••...••..••.. 1913-14 · 93,280.30 The matter :referred to is as follows : Vb-ginia ••.••••••••••••••••••••••••••••••••••••••••••••••••• 1914-15 '42,497.89 141,319.57 '[From the St. Louis Globe-Democrat.] 281,600• .20 ANOTHER INA.DlJQUA.TE REMEDY. ;~0!?~:::::::::::·:::::::::::::::::::::: -::::::::::::~ ~~iEH · 570,170.73 The Senate Jl'inance ·Committee. bent on -:p.olitical preparedness, has Wyoming ...••.•••...• ~ •••••••.••••••••..•.••••••••.•••••.•.•...... • (3) adopted a provision for the alleped purpose of ·Rreven.ting discrimina tions against American trade ' .after the war.' 1t -authorizes the 4.2 States...... • ••. •• . 24,381,047.53 President and the Secretary o'f the Treasury to retaliate against any 2 Territories. • . • • . • • • • • • • • • . • • . •• . • . • . • • • . • • • • • • • • • • • • • • • • . • • • • • • • • • . 30, 634. 00 country which forbid!! the importation of American articles by for· bidding imports from those countries. The provision is not broad Total...... • . • • . • • • . 24,412, 181. 53 enough 'to prevent -any discrimination short of absolute ·prohibition of American imports. !l.'he last Congress delibemtely discarded the maxi 1 One-half of receipts for two years. mum and minimum provisions of the Payne tariti, which gave the . 2 Fiscal year ending Jan. 12, 1916. President the power to meet any discriminations against American a Revenue paid to counties. goods. lt was to gather data for ·guidance of the Pr-esident in the fJnterest not included ($23,352.28 interest). discharge of this duty that the tariff board was created. The Demo fi Common-school fund, p. 11. cratic House of the Sixty-second ·Congress showed its oppo-sition to this principle by refusing to continue appropriations for the support of the Source-s. board. As soon as the Democrats got control of the Wblte House and both Ho-uses of Congress they threw the whole system overboard, not· withstanding the fact that most countries of the world_had tariffs and State. Source. that they could use th-em to our disadvantage. There are alri!Rdy eomplete -prohibitions against- certain imports now in force., being nr·ovtded by tbe British orders in council. _Their Arizona .•..••••••••••••••••••••.. Treasurer's report. -pretense of mUltary Decessity is a humbug. They are designed primarily Arkansas ••••• ••••••••••...•••••. Do. to foster Br1tish industries. The proposed remedy is inadequate, for California •••••••••••••••••••••.•. State comptroller's report. . after Congress adjourns the orders 1n council may be "ID.Odltied so as Colorado ...... •..•.....•.•.. Treasurer's report, p. 11. to levy a huge import duty. The President will be powel'less to retaliate Connecticut .••••.••••.••••••..... Do. under the ;provision as adopted Delaware ...••...•..••..••.•..... Do. But this is not the chief danger to American industries. That lies Comptroller general's report, p. 22. tn a flood of European products fo11owing the war. No safeguard ~~~~~:::::::: _:::::::::::::::::: Treasurer's report. against this is provided by the -pending measure, except as to dyestuffs Auditor's report, p. 31. and as to gaods that are t.o be sold here at less than the current market ~~iS~~~~::::::::::::::::::::::: Do. price at home, -with the criminal intent of establishing an American Indiana ...... •.....••.• :. Treasurer's report. monopoly. For practical purposes this will aJrord no protection at all. Iowa ...... •...... Report or the executive council, p. &3. :Auditor of public accounts. f~~=~::: · ::::::::::::::::::::: Treasurer's report. [From the St. Louis Globe-Democrat.] Maine..•.....•..•..••••...••••.•. Do. CA~SES OF PRESENT PROSPmRlTY. M.w-yland ...... ••...... •... Comptroller of the treasury. The nemocra.tlc Party wo11ld like very much to make it appear that Massachusetts ...•.•.•.•.•...... Treasurer's report. the ·wnson administration is responsible for present business conditions. Michigan ...... •••••••...•••••. Do. · ~be reports <>f the Federal Government totally disp-rove such a c-laim. 13104 CONGRESSIONAIJ RECOR.D-SENA1'E. A 24, The enormous crops of last y('ar addNl approximately $500,000,000 tition of other countries? .Arc we to continue to bold fnst to a . 13106" CONGRESSIONAL RECORD-SENATE. AuGUST .....9 "±,·' 191G. ThE'n a clipping from llepresentntivc Srsso~. in which be talk~ January 4 : Secretal'y Lansing followed with another note of protest about the rampant tendenry of his o"n party. • He is from to Great Britain instancing the selzurP. of n:n11s from the United States Mississippi. to tile Scandinavian countries on the steamships Stockhohn> Un·ited States, l'redet·ick VIII. and llc!ig Olav. · The matter referred to is as follows: January 1!): Great Britain promulgated an order known as an exten Principle bus gone to the four winds of the earth! and we nrc writing sion of the " trading with the enemy act," by which persons, " thongh oursel>es down in the history of the country as }eing the most out not resident or carrying on business in enemy territory by reason ~f rageously and most criminally ex:tra'\"agant eongress that ever sat on their enemy nationality or associations," are excluded from doing busl the American eontinent. · DC'~~ with England, which means with all of the countries affected by the present British " blockade." This act was aimed at Germans and firms _ 1\fr. SHERMAN. Another from l\1r. l\1essenger a few dnys of German capitalization in ·the United States. ago, who is a newspaper man tra\eling with Gov. Hughes on MUST PROVE INNOCENCE, his tour over the country. It relates to the InmbE'r aud shingle .March 30: Ambassador Page informed the State Department that an · industry of Washington. I wish to insert that. · amendment to the orders in council had been promulgated for the pur The PRESIDING OFFICER. Without objecti ::m it is so pose of carrying out " au absolute blockade" of neutral ports, based apparently upon the theory of "continuous voyage." Au unofficial re ordered: port of the text of the order stated that " that provision of tl\e declara The matter referred to is as follows: tion of London shall not bP deemed to limit or to have limited in any flOW TllE TARili'F llURTS. way the rlght of His l\1ajesty, in accordance with the law of nations, to capture goods on thn law that they are contraband or to have affected Washington is essentially a protectionist State and has snll'ered actual the liability of conditional contraband to the carriage of the goods to loss by the Democratic tariff, whicb has not been olfset, as in some otbet· their destination redirect or entail transshipment or subsequent trans Commonwealths, by temporary war prosperity. The State has shared port IJy land." The order concludes with the statement "that it shaH very little in the industrial prospe1·1ty engendered in this countl·y by the lie upon the owners of goods to prove that their destination was inno war. · . It has, however, seen millions of dollars' worth of Bt·itish Columbifl. cent." shingles and lumber, cut fl"om raw material which was 20 per cent PATIE~TLY WAITING. cheaper than theirs and manufactured by coolie and.llindu cheap labor, '- I What the United Stutes most desires is an answer to the communica pass the very mills of its lumbermen to compete ln American markets tion sent by Secretary Lan!llng on October 21 last demanding that the uuder the reduced tariff, It has seen New Zealand butter, Argentine British Government change its methods of dealing with. American com beef, and eggs from China sold in Seattle markets lower than home merc-e. It is anticipated that when the British Government finally raised products. being admitted free of duty. 'fhe lumber tmde is in makes up its min1t to reply tts answe.r wlll merely attempt to justify the straits, and the workingmen charge it to the Demoe-ratlc tarllf. action of the commanders of warships whi<'h have been seizing American Mr. Hughes, in his speech here, said to his audience that ho didn't vessels and cargoes ever since the outbreak of tho war. have to talk tariff, as every man in the crowd knew the subject thol' oughly from practical everyday business ex:pedence. The audience Mr. SHERMAN. I wish also to call attention to the fact assented. that this gentleman named Keegan, who delivered himself of Progressives are in the main protectionists in Washiugton, aml many an interview in St. Louis three weeks ago, does not appear to a Iumbet·man who is a Democt·at from principle looks ruefully at the be quite as unjustified as the public thought, because I ha-\e practical opemtions of the tariff of his party. now to offer practically the same kind of iLter\lew from Presi· Mr. SHERMAN. I wish also to insert an article from the dent \Vilson that Keegan, attached to the Laboi· Bureau, gave Washington Post : out :rt St. Louis three weeks ago, nne which I put in the WAR TO DlllVE PEOPLE OF ll[\IT.\I:-i' BACK TO TUE LAND; . ENGU~D MUST FEED HERSELF Is THE NIDw SLOGAN-I~CREASED Cnor ARE..l.S Oli' CoNGRESSIONAL RECORD a week Or two ago. GRAIN ALREADY R~PORTED-SITORTAGE OF L.l.BOR MET BY "'O:UEN, 1\Ir. Keegan said that be would welcome the day when the DESPITE 0PPOSITIO.--PLANS UNDER WAY TO REPOPULATE COUNTRY· Govemment would take the railroads, and he said that they SIDES WITH SOLOIEUS AND. S.HLORS WHE:i MEX UETt::£::\' F£:0)1 TliE FRO~T. would never go back to private owners because the Government {Correspondence of the Associ a ted Press.] would continue, and we would have Government ownership of LONDOX, July 20. railways. He welcomed the strike because it would hasten the One of the effects of the war will be seen in a great revival of agri day of Government ownership. That same threat is in the ad cultural life in England and the United Kiugdom. The outbreak of dress made by President Wilson to the railway managers on the the conflict caught the British Isles dependent on foreign commerce for four-fifths of their food supply, barring meat, of which between GO question whether the strike shall be declared or whether they and 70 per cent is produced at home. will settle it. He threatened them in substance with the GoY· The motto of a few years ago, "Back to the land," tbus has given ernment ownership of railways if they did not yield the control way to the slogan, "England must feed herself." Lord Selbornc, the leader of the crusade, declares that the attainment of this objl.'ct is of their property. So I ask that this among the others be in· the country's sacred duty, and he emphasizes the point that the farmer corporated in the Co~GRESSIONAL RECORD. can do as much fot· the country as the sold.ier in the trenches. The matter referred to is as follows : Plans for the gt·cat reform include a number- of important mca~urcs that are to he put into effect at the earliest possible moment. They YIELD Ol.l FACE U.!' England exempts the amount paid for life insurance up to one certain, and advantageous mode of prov1d:lng for their families by in~ sixth of a man's income. suring their lives." (Debates on the first income-duty bill ln the Com Germany is contributing heavily by a governmental aid to compul mons, 1798.) sory life insurance. Charles ~umner ~ "The businesR of life Insurance, as tt seems to How can peaceful America defend penalizing its thrifty, provident me, is peculiar. It differs from others In being not strictly, If I may insurers, when the same kind of thrift is being encouraged by all the say so, a money-making business. I know that p.-r~ons get up insur rest of the world? ance companies in order to advance their own interests. but the pri What possible defense can there be in properly exemptlng those car mary object of the insurance office is to protect other pE.'ople, particu rying 8.000,000 polieiPS in assessment companies and yet imposing a larly the poor; it is to bPJp the poor. I say, theretot•e, It ls not pri tax upon the ove1· 40.000.000 polldes carriPd In companies, 90 per cent marily, as compared with many other busint>s PS, a money-making of which are doing business entirely on the mutual plan, and Jn all of business. On that account, as it t::eems to me. it has a title to certain which cases the tax falls entirely upon the policyholders? consideration. Now, what is proposed? .A tax on premiums. What The defense can not be made by anyone familiar with the subject are the prt>miums? The premiums are thPmsl;!lves a tax. The pre that this tax falls upon anyone else than the policyholder and increases miums constit-.ste the tax which the person insured pays for his the cost of his life insurance or dimin.ishes Its amount. insurance. We beg respectfully to resubmit a paper presE.'ntt>d to the President "This is contrary to all sound policy. nere you are proposing to of the United States and many Members of both Houses wben a pre tax those who have taxed themRelves that the Nation might nut have vious finance bill was before Congress, which resulted in the exemption to support thE'm. You are pulling down the pillars of the temple. of some proposed taxaticn of life insurance policyholders. You are undermining the structure." (Congressional Globe, 37th We submit the memorandum unchanged. because all the facts pre Conf!., 2d ~ess., pt. 3, p .2335 E.'t. seq.) sented therein are of even greater force to-day. particularly in view Ralph W. Breckenridge : " The most unmoral. unE.'conomic. unjust of the fact that with most of Europe .driven to discover every new pos and oppressive form of taxation is the tax lt>vled upon gross premlums.'1 sible source of revenue they are not penalizing life insurance, as is pro (Argument before the national convention of insurance commissioners, posed in peaceful Amerira. 1!>07. ) Shall the 125,000 active and aggressive life-insurance salesmen in " This is a tax on a ta.x, and can not be justified on any principle of all sections of the country, coming into dally contact with their morals or economics.'' . · 28,000,000 policyholders, be obliged to explain that the future increased "lt was nevE.'r intended that the sf'veral States should annually filch cost of their msurance is due to such unusual action on the part of from the policyholde1·s of America $25,000.000, which, in the aggregate, the present Congress? the companies are compelled to pay under one form of exaction or Very truly, yours, ---.- ----, President. another." . " Some States, overlooking the fact that this Nation is a Union of TAXING OF LIFE INSURA.~CE U~CONOMIC IN PRINCil'LE. States and not a pack of wolves, have enacted laws under which that (Eviden.ced by:------.) species of tax known as retaliatory is exacted.'' " It is just as dishonest to stE.'a1 under protection of a l€gislative en I. NATURE OF BUSINESS. actment as without it. It is just as dishonest for a State to lay unholy Life insurance in its essence is not a money-making enterprise, but a hands on trust funds as for an individual to do it.'' method of distributing a loss by combining large numbers of people. " It is a monstrous injustitce for a State government to maintain It promotes thrift and reduces poverty and a consequent burden of itself by legislative raids upon trust funds. and the climax of cowardice dependents upon the State. to commit extortion in the name of the police power.'' (Committee on insurance Jaw of the American Bar Association.) II. EXEMPTIO~ OF KINDRED INSTITUTIONS. "The State should insist upon the faithful conservation of life Mutual savings banks are properly exempted. Page 26, lines 17-18. insurance funds and their appliea.tion to their intended use. It should Domestic building and loan associations are properly exempted. be as reluctant itself to divert them from their Intended use as to per Line 25. · mit individua.ls to employ them for political purposes or in extravagance Fraternal life insurance companies are properly exempted. Lines of management.'' 19-24. "A 11 life insurance companies pay, in t·ound numbers, in all the· Stat~s RPgula:r life inf'urance companies, with whom 25,000,000 Americans $10,000,000 annually under these premium inrome-tax laws. If thiB carry nE.'arly 35,000,000 policies ·for $18,000,000,000-an average of $550 sum were not paid into the State treasury, it would be used under the each and paying annuall.v but $20 each-are included. law and the policy contracts to reduce the premmms the policyholders Large numbers of these companies-transacting !)O per cent of the are obligated to pay or employed to purcha. e paid-up additions to the life in~urance business of the country-and especially the largest of policlE.'s. In the one case it would diminish the cost of insumnce, in them, are absolutely mutual companies having none but the policy the other lt would increase the amount insured. In both cases It would holders who can possibly pay this tax. Other companies are specifically be used for the benefit of dPpendent people of the State." (National required to conrluct the life in~uranf'P hrancb of thE'ir hu!':inf'~s on the convE.'ntion of insurance commis ion~>rs, 1007.} mutual plan, dish·ibuting all profits to policyholders. In all companies, o1 Elizur Wright. " Life insurance deservE's the fostering care of wise course, the ultimate tax falls finally and directly upon the policyholders. and liberal legislation. It should be freed from all unnecessary bp.rdens. GovernmeDt should as soon tax its asylums and hospitals as to seek a III. TAXATION OF LIJrn INSURANCE CONSldTENTLY AND UNIFORMLY gain or revenue fr·om the deposits which foresight and alfeetiou has set OPPOSED BY- apart for the protection of thousands among the most helpless of its own (A) Economists: John Stuart Mill declares that a tax on life in citizens. A tax upon life insurance is nothing more tban a tax upon surance " is a direct discouragement of prudence and forethought.'' widows and orphans." (Massachusetts Insurance Report for 1867.) (Principles of Political Ec.onomy, 5th London Edition, vol. 2, pp. " Life insurance taxes either increase the cost of insurance or dimin 407-408 and 4G3.) ish the amount of it. In 1:he one case tbey fall on the policyholders; J. R. McCulloch stated that a tax on insurance " discourages that in the other on the beneficiaries of the insured." prudence and foresight the encoura~ement of which ought to be an "The mere desire to raise revenue does not warrant imposing ut;ton object with all l)rudent governments ' life insurance a special form of preminm income tax." (National Con " Seeing the vast importancE> of insurance, it may well be doubted vention of Insurance Commi~sioners, Detroit, Aug. 24, 1908.) whether it ought to be charged with any duty. however Blight." (A TAXATION OF LIFE INSURANCE CONSISTENTLY AND UNIFORMLY OPPOSED UY Statistical Account of the British Empire. Taxation of - Insurance Companies, vol. 2, p. 511.) (C) THE EX.U>IPLE OF OTHER NATIONS. . Sir S. Morton Peto: "A tax on insurance is a tax not only upon No other Government in the world places an income tax upon life in- industry but upon prudence and fru~ality, and the American system surance companies. , seems to be far worse than that of which we have so long been com England, besides not taxing the incomes of life insurance companies, plaining in Great Britain." (Taxation, Its Levy and Expenditure, specifically exempts from income taxation what a man nays for life in· pp. 58, 73. 118, 121. 220. New York.l surance up to one-sixth of his income. (Sec. 54 of 16 and 17 Vlctoda., New York Evening Post: " It is a fundamental principle of social ch. 34.) science that the insurance contract itself ought to be free from taxa In 1906 and 1!)07 the amount of income allowed to be deducted on tion. Taxation ou~ht to be on property, on production. Insurance account of life insurance premiums amounte called upon to pay to Go>ei.'nment authorities more than $100.000,000. which is the b:lckbouc of the credit of the country, and at the same In other wonl~. the policyholders of the country can have their in time a business which has ucc·n continuous]\' fot· the pa!'t 10 vcnJ·s surance within the next 10 years cost them less uy $100,000,000 by performing its mil:; •ion or an actual los·, amounting for t11c years "190G acbiedn:; the rem$>\·al of taxation from life insurance.'' (The World to 1!)15, inclusiYI', to 1.04 p<'r C('nt. The pcreentagl' of taxe~. <·xclusivc 'l.'o-Day.) of reul Pstatc, to actual net Income, hy years, a · compiled by the National Tbe. taxation of life insumnce has increased from ~0.70 on eYcry Board of Fire Undet·writers, i: a. follows: $100 of premium income in 18GO to $1.23 in 187u, $1.42 in 1890. $2.1G rerccnta~c in 1000, atlCl $~.2G in 1011; from $2,240,148 in 1 00 to $14,323,!)09 in of taxes. 1011. Exclusive of taxes on real esta.tc, in 1011 policyholders paid 1UO!I ______------2G. Gl ~'1!.?,017,f.i!>G, or ~l.UO per $100 of premiums. 1!110------33.53 Y. l•'EDEP.AI. CO\'F.P.XMEXT f,ACh."lXO AX EXCUSE OFFERED BY ST.\TES. 1911------57.07 The Government hns not even the excuse of " cost of supervision " 1012------52.51 of life insurance companies as reason for taxation. 1'axation by States 101~------~------57.!)0 was admittedly originated for the purpose of paying "cost of super 1914------Loss. vision." Gwin~ to the wonderful American growth of life insurance, 1015------50.33 already it has I.Jecome such a som·ce of State revenue as to become an 'I t·usting that yon will · sec that we ~et a square deal in the matter, American dLc;gracc in the Yil:)w of foreign statesmen. and with assurances of om· high rcg:ud, believe us to be, An English stn.tesman bas :aid that any British cabinet proposing Yours, respectfully, such a tax on life insurance as is charged in America would not bold II. N. KJ::LSEY, Mauaqcr. office ::!4 hout·s. 1\lr. CURTIS. l\Ir. President, I make the point of no quorum. YI. l'JlESE.'\T BILL IXCOXSISTE~T WITH ITS Pt:RPOSE. (a) It imposes a direct tax upon 25,000,000 persons, the yast ma The PRESIDING .OFFICEU (Mr. SMITH of South Carolina jority of whom hayc in~:omes of less than $4,000 and arc under the in the chair). The Secretary will call tbe roll. exprc~s terms of the bill supposed to be exempt. The Secretary called the roll, ·and the following Senators an While no other civilized country in the world taxes the income of 2;;,ooo,ooo policyholders, who are taxed j12,000,000 by 48 States, they swered to their names : were recently taxed in addition by the Jrcderal Government. Now the Chamberlain Lane Phelan Smith, S.C. present bill adds to this tax I.Jy taxing the nearly $UO,OOO,OOO in return Chilton Lea, Tenn. Pomerene Smoot premiums or refunds, annuity payments, cash surrender values, ma Culbcnon McLf>.an Ransdell Thomas tured endowments, and in payments made to such lidng policyholders Curtis Martin, Va. o:'hafroth Underwood as bring their incom(;s to over $4,000. England and Holland not only Galllnger Martin'!', N.J. Sheppard Vardaman do not tax the income of life insurance companies, but go further and Ilartling Oliver Sherman Wadsworth expressly exempt certain portions of individual .incomes if paid for life Hitchcock Overman Simmons Warren insurance. America not only makes no exemption but taxes on cer Kenron Owen • mith, Ariz. Weeks tain policies and persons life insurance funds repeatedly, as follows: Kern Penrose Smith, Ga. Williams First. If the income is over $4,000, that part paid for life insurance is taxed instead of exempted. The PRESIDING OFFICER. Thirty-six Senators ha-ve an · Second. The income of the life insurance company is tn.xed. swered to their names. There is not a quorum present. TJ1e Third. In almost every State in thf.' Union the premium is taxed. Secretary will call the naines of absentees. VII. SIIOULD AliiERICAN LIFE INSURANCE COl\IPA:-JIES Bll PENALIZED? The Secretary call€.d the names of the absent Senators, and Although life insurance did not originate in this country, Americans have voluntarily, not only without compulsion of Government, but Mr. KELso~, 1\ir. PITTMAN, Mr. SHIELDS, Mr. STo~E, and Mr. against discouragement of Government, adopted this as theh· favorite THOMPSO~ answered to their names when called. method of providing against poverty and want for themselves and their Mr. BECKHAM and Mr. O'GoR:MAN enter.ed the Cllamber and chilclren. In 1860 there were less than 50,000 policies in force. In 1880 there were less than 600,000. There are now nearly 35,000,000 answered to their names. · policies, held by probably 25,000,000 persons. What Germany compels The PRESIDING OFFICER. Forty-three Senators have an· by law, what England has just adopted as governmental policy, Ameri swered to· their names. There is not a quorum present. What cans have voluntarily, ln 50 years, assumed for their widows, orphans. bomt's, and old age to a greater· extent twice over than all the rest of is the pleasure of the Senate? the world put together. Is it wise, in inaugurating a new fiscal Mr. SIMMONS. I move that the Sergeant at A.rms be ·di policy, to handicap the measure by incorporating therein as subject to rected to notify absent Senators to attend the se ~sion of the taxation things exempttd by every other ch-tlized Go>ernment?. - Is it wise to create 25,000,000 taxables in a bill intending to tax less than Senate. 500,000? Is it wise to force the 100,000 active llfe insurance agents, The motioh was agreed to. as well as the officers and directors, of the various companies to explain will the increased cost of life insurance by the present fiscal policy of Ute The PRESIDING OFFICER. Tile Sergeant at Arms present administrution? Is it just to tax persons in bulk that the bill execute the order of the Senate. expressly purposes shouJd not be taxed separately? Is it just to tax Mr. l\lcCul\IBER and Mr. SAULSBuT.Y entered the Ghamber and as income what is really capital? Is it just, under an income tax, to tax money three and four fold? answered to their names. In half a century tho .Americans voluntat·ily avnillng themselves of After some little delay l\lr. FLETCHER and Mr. AsHu"TTST en thi. certain method Jf saving for self and family have· gro:wn to ex tered the Chamber and answered to their names. ceed in number all the depositors of banks of all kinds, plus all the ownet·s of real estate. plus all the owners of stock in building and loan Mr. GALLINGER. Mr. President, it is \ery tedious remain associations, plus all the owners of stock in all other corporations, plus ing here awaiting the attendance of absent Senators, and I :ill those engaged in active business for themselves. All these pet·sons move that the Senate adjourn . . combined, including duplicates, fail far short of the 25,000,000 persons interested in life insurance. The PRESIDING OFFICER The Senator from New Hamp Shall this administration handic-ap a measure which is a departure shire moyes tbat the Senate adjourn. The question is on that fr·om former .Amelican fiscal policy by imposing a tax difficult to de motion. fend in principle and still more difficult to defend as applied to this bill, and which the trustees and other representatives of companies The motion was rejected. will be, as a mattet· of self-defense, obliged to explain to their 25,000,000 l\Ir._ NEWLANDS entered the Chamber and answered to his clients as contrary to morals, sound economics, and, until the previous name. administration to all Ic'E>deral precedent? Can anyone defend the se lection of lcgai-reservf.' life insurance for such multiple taxation, when The PRESIDING OFFICER. Forty-eight Senators ha\e an savin!js banks, building and loan associations, assessment and fmternal swered to their names. A quorum is present. orgamzation~, and even mutual fit·e insurance companies are expressly exempted? APPOINTMENTS IN THE STATE DEP.utTl\IE~T (S. DOC. NO. 534). Letter from H. N. Kelsey, numnger of the· Hamburg-Bremen The PRESIDING OFFICER. The Chair lays before the Fire Insurance Co. : Senate the following me sage from the President of the United NEW YORK, August 22, 1916. States: Hon. LAwnE~CE Y. SrrEnM..u.-, l\Ir. PENROSH. I ask that tliC message and accompanying [Jnited States Senate, Washington, D. 0. papers be printed in the RECORD for the information of the Sen DE.Ut Srn: We arc advised tllat tbc Senate committee has amended the Federal t·evcnue bill, known ns the income-tax measm·e, to provide ate and the House of Representatives. for a ~ per cent income tax, with a furtbet· provision of 50 cents pc.l' The PRESIDING OFFICER. The message and accompany: thousand on the catlltal stock and surplus of companies (with a permis ing papers will be printed and printed in the REcoiU> and referred sible deduction of :;;99,000), and it further prohibits any deduction on account of increase in reserves required by law; and it also continues to the Committee on Civil Service and Retrenchment. inde1init£>1y the stamp tax upon insurance policies. While the income The message and accompanying papers are as follows: and capital-stock features apply to all corporations, Insurance com panics are the only corporations required to continue the application To the Senate: of stamps, wit.h the exception of stamps on conveyances, etc. The In response to the resolution adopted by the Senate on August stamps formcl'ly provided for from railroads, telegraphs, etc., have been discontinued. . 16, 1916, reading as follows- · Tbis revenue stamp tax on fire inslU'ance policies is equivalent to Resolved, That the Secretary of State be, and he is hereby, requested 1 PN' cent of om· net income. The othet• two measures arc an added to inform the Senate as follows: burden to this heavy tax IJcsides the tax alrea . which is incJmlPd In the amendt>d re\enrte bill. Railroad telegraph C'OID or corporation required to retain it at its source, nor shall any penalty panies and otbe:rs have l>PI'II exempted from this tax, and we feel that be impo ed or collected In such ease from the taxpayer, or sucll person this is unfair discrimination. or corporation whose duty it was to retain it, for failure to retmn or BBRGMA. , HEBRON &. STARLING. pay the same, unless such failure was fraudulent and for the purpose GEO. WHEATLEY. of evading payment." J. ALBERT LAKE. ROJJB & MOYSE. 1\Ir. HITCHCOCK submitted an amendm.ent intended to be 1\lAx LEMLER. proposed by him to the bill (H. R. 16763) to increase the revenue, A. G. RUSSELL. and for other, purposes, which was ordered to lie on the table and SUNDAY OBSERVANCE IN THE DISTRICT OF COLUMBIA.. be printed. Mr. PHELAN presented a memorial of sundry citizens of San l\lr. POMERENE submitted an amendment intended to he pro Fernando, Cal.. remonstrating against the enactment of legisla posed by him to the bill (H. R. 16763) to increase the revenue, tion for compulsory Sunday observance in the District of Co and for other purposes, which was ordered to lie on the table lumbia, which was referred to the Committee ·on the District of and be printed. Columbia. Mr. 0\VEN. 1\ir. President. I ask unanimous con~ent that, REPORTS OF COMMITl'EES. after the Senate shall have voted on the pending revenue bill, Mr. POMERENE, from the Committee on the District of it proceed to the consideration of House bill 15842, and to the Columbia, to which was referred the bill (H. R. 14824) to pre disposition of that measure. vent fraud at public auctions in the District of· Columbia, re M.r. SIMMONS. What is the measure? ported it without amendment and submitted a repo-rt (No. 819) l\lr~ OWEN. It is the corrupt-practices act. thereon. Mr. SMOOT. Nobody in the Senate can tell wben the revenue Mr. WEEKS, from the Committee on l\filitary AffHirs, to which bill is going to pass; that has not been decided. It seems to was referred the bill (H. R. 7045} for the relief of Caleb T. me that it is unwise for the Senator now to ask unanimous ccm Holland, reported adversely thereon, and the bill was postponed sent to take up the bill to which he bas referred after tbP rPvenue indefinitPly. bill shall have passed. We do not know when a resolution will 1\Ir. SHEPPARD, from the Committee on Military Affairs, to be agreed to providing for final adjournment. We are right which wa~ referred the bill ( S. 3180) to authorize the appoint in the last days of tbe session of Congress, and for that reason ment of Clarence C. Kress to the grade of eaptain, United States Mr. President, I shall object. Army Medical Corps, reported it with an amendment and sub 1\lr. OWEN.. 1\ir. President, ~n the first day of this session mitted u report (No. 818) thereon. the chairman of the Democratic confe-rence, Senator KERN, intro ouced. a bill providing for the control of corrupt practices in this · MAHONINO RIVER BRIDGE. country. The bill is similar to one which was reported during ~1r. SHEPPARD. From ·the ·Committee on Commerce. I re the last Congress, but was not acted on by tbe Senate. Tl1e · pOl·t back favorably without amendment the bill (H. R. 17501) House passed a similar measure at this session and sent it to the granting the consent of Congress to the city of Youngstown, Senate. It has been reported back to the Senate and is now on Ohio, to construct a briuge across the 1\lahonin.g River. in the the calendar. The bill is not a long bill; it is not an involved bill. State of Ohio, and I submU a report (No. 817) ·thereon. I call It ought to be capable of disposition in one or two dRys. The the attention of the Senator from Ohio [Mr. IlABDING], who is Honse of Representatives acted in a few hours in considering very much interested in the bill, to the. report. and acting on the mensure. · l\Ir. HARDING. I ask unanimous consent for the present After the revenue bill shall have been acted on by the Senate consideration of the bill. that bill must go to conference, and it certainly will take sev Mr. GALLINGER. I think we had better continue with the eral days to reconciie the dlfferences between the two Houses, consiUeration of the unfinished business, and I object. and in that time this bill can be considered, amended if neces The PRESIDING OFFICER. The Senator from New Hamp sary, and. disposed of. shire objects, and the bill will be placed on the calendar. ·There is no reason why Senators should not in the meantime l\fr. GALLINGER subsequently said: Mr. President. a mo read .this bill; should not study this blll; should not be c•,m• ment ago I objected to the con~ideration of a bill which the pletely prepared to express themselves upon it, unless it is the Senator from Texas [Mr. SHEPPARD] reported from the Com desire of Senators to prevent action just before the pPnding mittee on Commerce. I now withdraw the objection, and I election. The American people, I believe, will not approve of hope the bill will be considered. the old system of the use of money on a gigantic scale to influ Mr. HARDING. I ask unanimous consent for the present ence and contrpl the elections of this country. As one of their consideration of the bill. Representatives, keenly sensible of my duty toward them, under There being no objectio~ the bill was considered as in Com my oath as a public servant, I shan resolutely insist upon action mittee of the Whole. now. I earnestly hope I may have the sympathy and cooptora The bill was reporteil to the Senate without amendment, or tion of all Senators, whether Democratic or Republican, in ~Pt dered to a third reading, read the third time, and passed. ting immediate con-~tructive a.ction and that I may not be impeued BILLS INTRODUCED. by the old Senate game of a substantial filibuster unde.r the ore Bills were introduced, read the first time, and, by unanimous tense of debate. but that the debate shall be simple and straight· consent, the second time, and referred as follows : · forward, and amendments suggested sincere and of constructive By Mr. LEE of Maryland~ and not of obstructive purpose. · A bill (R 6932) for the relief of John P. Hanlon; to the Com This bill is easily understood. The first section simply d~fines mittee on Military Affairs. what "political committees" are, what the word ''"candidates" By Mr. REED: and the word "elections" shall be construed to mean, whut the A bill ( S. 6933) removing the disabilities of Richard W. words "political purposes," the words "disbursement," "per Hocker; and son," and u Representative" shall be construed to mean. in A bill ( S. 6934) removing the disabilities of Thomas B. Cassel; order that the text of the bill shall not be susceptible of mis to the Committee on Military Affairs. CQ."lstruction. AFFAIRS IN MEXICO. Section 2 of the bill provides for the organization of political 1\fr. SHERl\IAN. I ask that Senate joint resolution 117, au committees of citizens who desire to take part in Influencing _ thorizing the President to call for volunteers for Mexico, intro elections, and provides a method by which such committees can duced by me and now on the table calendar, be taken from the be organized. table and referred to the Committee on 1\filltary Affai!·s. Section 3 requires each of the committees to have a chairman The PRESIDING OFFICER. Without objection, it is so and a treasurer. ordered. Section 4 provides that every political committee must keep THE REVENUE. a bank account and keep a comp1ete record of receipts and dis bursements. l\fr. SHIELDS. I &ubmit an amendment intended to be pro po ed by me to the revenue bill (H. R. 16763), which I ask may Section 5 requires receipts to be preserved. be read and lie on the table. Section 6 provides for an account to the treasurer and a reeord of contributions. Mr. SIMMON~. I hope the Senator will allow the amend ment to he printed in the RECORD without reading. Section 7 requires statements by the treasurer to be filed 1\Ir. SHIELDS. I should like to have the amendment read. with the Clerk of the House of Representatives. It is very short. Section 8 requires the details of the contributions, where The amendment was Tead and ordered to lie ·on the table and they are above $100 and where they are below $100, aud the be printed, as follows: aggrel!ate of contributions and disbursements in like fashion. On page 58, line 7, insert the following-: Section 9 requires statements by others than political com u Provided, That where any tax heretofore due and payable bas been mittees of expenditures where they exceed $50. and compels a duly paid ~Y the taxpayer it shall not be re-collected from any person private person who contributes more than $50 to make a report 13112 CONGRESSIONAL RECORD-SENATE: . AUGUST 24,- as if he were a committee, and provides further that no indi- even if p.ot successful, to make a proper report of their expendi vidual citizen shall contribute to any election a sum exceeding tures under penalties for failure to do so. $5,000. · Section 12 requires that the Clerk of the House and the Sec- Section 10 puts a limitation on expenditures of $400,000 on retary of the Senate shall, on or before the 15th day of Janu national committees in the election of presidential and vice a_ry t;ext after any general or special electiqn for Representa presidential electors, and makes the chairman and treasurer bve m Congress or Senator of the United States, report to the of each national political committee responsible for preventing House and Senate, respectively, the names of these candidates the aggregate of such disbursements exceeding this amount. and .their rei>orts, and that these reports shall be printed as a It provides further that the chairman and treasm·er of the public document, in order that the people of this country may see congressional campaign committees shall be charged with the to what extent and bow far money is being u ed in the control responsibility of accounting to the treasurers of their respective of the election of the President of the United States and of 1\lem- national committees for disbursements made by them. It limits bers of this body and of the House of Representatives. · the aggregate of di3bursements for a presidential candidate to Section 13 provides that jm·isdiction over all violations of the $50,000, for a vice presidential candidate to $25,000, and pro- act is conferred upon the United States district court. vides that no political committee or any member or officer Sec~on 14 provides that personal expenses for stationery, thereof and no personal campaign committee shall make any travehng expenses, circulars, advertising, postage, and telegraph disbursements for the nomination of such candidates except and telephone service shall not be subject to the provisions of under the direction and with the consent of such candidates. ~ the bill, except that an account shall be kept of all moneys ex~ It makes the amount which a Senator may expend for a nomi- pended for circulars and postage and adv{'rtising authorized by nation or for an election $5,000, but provides for certain ex:- the section, which shall be reported in the statements required eruptions in the way of postage, circulars, etc., on condition that by the bill as an addendum thereto, but not subject to the limi those expenditures shall be reported, together with other ex- tations in amount fixed by section 10 of the bill. · penditures. It provides that the aggregate of disbursements This provision is a matter of grave doubt as to the exception; by a Member of Congress for his nomination or eleetion shall but, nevertheless, it will permit the people of the United Stutes not exceed the sum of $2,500. It provides that candidates shall, to pa.ss their judgment on whether or not the abuse will ju tify within certain times, make these reports to the Secretary of strikmg out this exception. We have proceeded very slowly in the Senate, if a candidate for the Senate, or to the Clerk of the this matter. This question has been up for years. House of Representatives, if a candidate for the House. It We have taken one poor, little, weak, inadequate step from provides that no candidate for Representative or Senator shall time after time, nnd we now have on the .statute books a law make a promise of patronage in order to secure his election or ·that is fundamentally and essentially as contemptible· as any · nomination. . It requires the statements to contain a statement law that was ever written upon the statute books of any intel that no promise has oeen made. It ref{uires the statements to ligen~ people. I say so because the present so-called corrupt be made under oath. It provides that the bill shall not be con- practices act deals only with committees handling two or more strued to annul or vitiate the laws of any State not directly in States and exercises no control whatever over committees in conflict with the blll, and provides that no disbursement may side of a State and no control whatever over individuals inside be lawfully made except for the following purposes--and this of a State, and as far as the present law is concerned, an indi- 1s a very important part of the bill, which ought to meet ·the vtdual, as a private person, could go into the different States approval of every Senator on both sides of this Chamber: and spend a million dollars or ten million dollars cort·uptJy with- First. li'or the traveling expenses and expenses of subsistence out the laws of the United States holding hlm to an account for of the candidate an 1916. . CONGRESSIONAL RECORD-SENATE. 13113 this net will :put :an end to it. I will say to the Senator that . Mr. GALLINGER. I have not seen their certificate yet. I there is some -basis for his inaccurate ob ervations. ·beeause have seen the advertisement of the Republican treasurer. when I was a call(\idate I was informed, ano I verily believe, Mr. OWEN. Mr. President, I have in my hand now a that the Lumber Trust sent $40,000 into my State to defeat my memorandum showing conditions in ()hio, and, according to the nomination, being offended because of the demand which I made report filed with th~ secretary of state under the Obio law, and voiced on this iloor that Mr. Lorimer should not retain his Mr. Herrick, who was the successful candidate for the Repub seat in thf> Senate, becau.se the Lumber Trust had bribed th~ lican nomination at the recent primaries held in that State, Illinois Iegi~lators to elect Mr. Lorimer, at a cost estimated at spent the following amounts: bet,Yeen '$100.000 and $200,000. By Herrick personally, $22,1'15. 1\tr. VARDAMAN. Mr. President-- By the Herrick Voters' League, $29,000. The PRESIDING OFFICER. Does the Senator from Okla By the Stark County Herrick Voters' League, $413-a total homa yield to the Senator from Mississippi? of $49,588. Mr. OWEN. I yield to the Senntor. AnCtion in Mr. PE!\TROSE. No one is filibustering. my State on the Saturday before the election which was held Mr. OWEN. And it will not be done without being exposed, on the following Tuesday. 1 thdroughly agree with what the I can tell the Senator. Senator .from Oklahoma says about the necessity of passing Mr. STONE. l\lr. President-- thi~ bilL The PRESIDING OFFICER. Does tne Senator from Okla Mr. O'GORMAN. Mr. President, to avoid any ambiguity as homa yield to the Senator from Missouri? to the applieation of the last statement, I should be glad to l\1r. OWEN. I yi~ld. know from the Senator from Delaware whether the $50,000 1\Ir. STONE. 1\Iy fri-end from Oklahoma said he .could not to which ·be refers was used for the election of the candidate understand why our friends on the Republican side of the .of the Republican Party. · Chamber could object to the passage of this bill. He certainly Mr. SAULSBURY. Most assuredly it was, as many Sena did not mean in that statement to have any doubt as to the rea tors now sitting in 'this body know. · son. The reason is that they expect to try to buy this election. Mr. PENROSE. Mr. PrPsiden~ there Wn.s a million dollars Mr. GALLINGER. If the Senator will perruit me, I have spent t(} eJect President WiiRon-()v-er a mil1ion. · heard it stated from several sources that the Democratic Party 1\lr. O'GORMAN. Is it not a fact that two and a halt mil is proposing to buy it-- lion dollars 'W'('.re used in 1896 to elect Mr. l\1cKinl-ey? Mr. STONE. We are ready to vote to-morrow to pass th1s 1\fr. PENROSE. That might h!lve been. · bilt . 1\.1r: O'GORMAN. The rate has· been· going down since that Mr. GALLINGER. That they have already raised a very time. · · large sum for that purpose whicJ?. they have distributed 1n part. . 1\fr. OWEN. If wh~t the Senator [1\lr. !>ENROSEl says is Mr. O,VEN. The Democrats are ready to aet now, and .I true-and I do not know whether it is true or not-I want to challenge the Senators on the other side to action. put a stop to the practice. I ·do know that no such sum was Mr. PENROSE. If the Senator will permit me, the supposi uffieially reported :as spent in t}le election of :Mr. Wilson, but tion throughout tbe country is that a.n enormous corruption it was currently reported in 1896 · that Mark Hanna ralsffi fund has been collected by the Democratic Party, and now $16.000,000 to elect McKinley and the "Big Boys n successfully they want to iock the door. threatened a panic besides and voted every poor employee the 1\lr. OWEN. I have beard that statement made with regard corporations could coerce to -eleet McKinley ; and I do not want to the Republican Party. I do not know whether it is true or these great parties rivaling each other in raising gigantic funds not, but I believe the. Senator bi~self would certainly know in a contest of money for the purpose of dishonestly and cor- if it were true that the· Republicans had gathered and dis ru]ltly infimmcinJr votes. · tributed a ~igantic fund for such purpose. Mr. GALLINGER. Mr. President-- l\1r. PENROSE. No; I have been down here attending to my The PRESIDING OFFICER. Does the Senator from Okla official duties. I do not know what is going on. homa yield to the Senator from New Hampshire? Mr. OWEN. This bill will disclose· the fact If such funds Mr. OWEN. I yield. have been coilected and w111 prevent the corrupt use. of such 1\lr. GALLINGER. Has the Senator noticed that the treasurer funds in either party if they have been collected. of the Republican National Committee is asking $1(j contribu l\1r. V ARDAl\1AN. I wish to suggest that th-e statements tions to enable him to get a fund for the coming campaign? . which ba ve IJeen made by Senators on either side of the aisle Mr. OWEN. I wish it might be confined to $10 contributions. have proven beyond any sort of question the necessity for this I \\~a uld be much more co-ntent if both parties were confined to lPgislation. After the admissions made and the suspicions ex small contributions. pressed I do not Ree how any Senator can afford to anta~onize Tt.e suggestion of the Senator that innocently assumes the the passage of this bill at tllis session. To do so would be almost Republicans will rely on small contributions will not be taken criminal inconsistency. seriously by the :people, much less by Republican ~eaders who Mr. OWEN: A.Dsolutely. know better. They will raise millions in big contributions if Mr. VARDAMAN. If that money has b~n collected, the not prevented .and every well informed man .believes it. enactment of this law will discloRe the fact. and it may be the ..1\Ir. O'GOR1\1AN. The Democratic committee in 1912 solicited means by which a few distinguished gentlemen can· be sent to $1 contributions, which was quite re.asonal)le. the penitentiary for using it, a thing that might contribute mate- 131'14 AUGUST ·24, rially toward the purification of the political atmosphere in this M1:. OWEN. I am very. gl_ad to. hear that .disclaimer. I was country about election time. certainly 1.mder . the impression that the minority were responsi 1\fr. OWEN. They will not use it if this act is passed. ble for keeping it off, but since the minority disclaims the 1\Ir. POMERENE. Mr. President-- paternity of this illegitimate child I know that no Democrat The PRESIDING OFFICER. Does the Senator from Okla- will consent to be known as its father. homa yield to the Senator from Ohio? · 1\Ir. PENROSE. And, Mr. President, if the Senator will per- Mr. OWEN. I yield to t11e Senator. mit me one brief ob~ervation-- · Mr. POMERENE. I wish to_suggest that even if sucp. a fund 1\:lr. OWEN. Certainly. has been collected, this legislation can be so framed· that it can 1\f.r. PENROSE. So far as I am concerned per onally, I will not be used. go as far as the Senator f.rom Oklahoma or any other Senator 1\lr. OWEN. It would not be used in any event until just to pass a corrupt-practices law. I would even go to the extent before the el£>ction; but if this bill is passed it can not be used of arbitrarily prohibiting the use of money in any election. com in any improper way without great jeopardy to the political pletely stopping it; and I am wilJing to stay here all the rest of thieves guilty of corruption. I do not believe that the people of the summer and until the day before election, if tile Senator the United States are going to stand any more buying of elec wants to stay here with me and a sufficient number of othm· tions in this country. Senators will remain to make a quorum, to consider this bill, Mr. President, the parliamentary way is clear. This bill is on the immigration bill, and everything ets·e on the calendar; but, the calendar. The House of Representatives has acted. A con in view of the fact that Senators want to go home ami that we ference can dispose of the matter within a day after the Senate have been here a long while, anyhow, it seems reasonable that shall consider it and, if lt requires amendment, after it ~hall . a bill like this, that requires the most careful thought, shoul LIII--825