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Show nlbii I ha Votes Are Taken on Two of La Follette's j, Amendments After a j"4- Sharp Clash on the Floor, Borah of Idaho Declaring He Would , Take All Above $10,-000 $10,-000 Income. KING OF UTAH JOINS MINORITY r I Final Vote on War Prof-y Prof-y its Section of Revenue r Bill Will Be Taken To- day; Provision of Fi- nance Committee for One-third Increase Ex- j pected to Stand. V j WASHINGTON, Sept. 3. The senate spent today's holiday in the sharpest clashes of its fight over war profits taxa- i tion and again decisively defeated pro- 1 vosals of the high tax advocates. Senator La Follette's maximum amendment amend-ment for war profits taxes, proposing a I flat increase of 70 per cent over existing ' rates, was rejected by a vote of 55 to 20. Another by the Wisconsin senator for a j 65 per cent increase was defeated, 53 . to 17. The final vole on the war profits section sec-tion is to be taken Wednesday, but the bill's provision as now written, for an j - increase of about one-third, or $1,060,000,-I $1,060,000,-I 000, is expected to stand. Tomorrow an- other amendment by Senator La Follette Tor 60 per cent gross levy will come up, "j together with a complete substitute pro- posed by Senator Hollis for the finance committee's compromise provision. 4 . King Switches. f But three recruits were gained in to- f-. tlay's voting by the high tax advocates, in- addition to the seventeen who voted 4. Saturday for Senator Johnson's maximum proposal of an 80 per cent tax. Senators I -j. King, McKellar and Trammell voted for I ' both of the La Follette proposals. v1 . , A few additions are expected on other . :sendlng amendments for various flat taxes down to 4S per cent, but Senator Borah said today after the vote oa Senator Sena-tor La Follette's maximum amendment that the bill probably would go to the president bearing its present total tax levy of $2,500,000,000. uBlood Profits." Many phases of the war situation was i discussed during the seven-hour debate. ; Senator La Follette delivered another vigorous speech for higher rates on what lL he termed "blood prorits." His remarks ' caused Senator Simmons, chairman ol' the '- finance com in it tee, to suggest that the i- Wisconsin senator was attempting to "hoodwink" the senate und provoked two hot clashes in which both senators were ! declared out of order by Hie presiding V officers. Senator T,a Follette contended that the committee's new plan would not increase t the tax burden of great corporations, but J would exempt their large surpluses. This was vehemently denied by Senator Sim- mons. La Follette Renews Attack. j Renewing his attack on the war profits I section. Senator Follette declared the method devised by the committee for as- certaining the capital of corporations Is 'f unworkable. The placing of authority on t lie secretary of the treasury to aseer-y aseer-y tain the capital of corporations in contested, con-tested, cases, he insisted, would be tantamount tanta-mount to accepting the statements of the corporations unchallenged, because it i, would be a physical Impossibility for that ' department to make investigations in the t ime this bill would be effective. I'nder the substitute proposition it . would bo possible, .he declared, for cor-f cor-f ' novations, by inflation of values for trade- i -iarks. good will and other means, to re- V J yduce tin? amount of their profits so as to ' lower the taxes they would be called f ' upon to pay. jio also said . that the . (Oontinuod on Page Four.) HIGH TAX PROPOSAL DEFEATED IPi SENATE (Continued from Page One.) United States Steel corporation, instead of being compelled to pay under the original bill, $76,726,000 on its war profits, as has been asserted, would pay, according to the committe's financial expert, only $r,9,-904,009 $r,9,-904,009 under both the original bill and the substitute provision. Arouses Simmons. The senator aroused Chairman Simmons Sim-mons by declaring it was proposed to take the "lives of our boys, the heads of our families and all the people have got," but leave these money-making corporations corpora-tions their profits, taking only 72 per cent and "leaving them 28 per cent of their blood profits to add to the normal peace profits and their capital Unimpaired." Senator Simmons denied that the bill would exempt corporations' surplus from taxation and intimated that Senator La Follette was attempting to "hoodwink the senate." Senator Simmons later disputed Senator La Follette's statement that the bill as recently amended would not take more taxes from the United States Steel corporation cor-poration tuan it would, have as originally reported. Johnson Interrupts. Senator Jottinson interrupted to 'ask Chairman Simmons if the sieel corporation corpora-tion would be compelled to pay only a tax on war profits of about $59,000,000 instead of $76,000,000, as he had declared previously. The North Carolina senator admitted-that was substantially correct. "The statement then is unchallenged that under the committee's amendment the steel corporation would pay $59,000,000 in taxes and that under the original bill the computation of $76,000,000 as stated here Is erroneous and the corporation would pay a like tax," said. - Senator Johnson. "I wanted to be sure of the fact that $76,000,000 was an error." Senator La Follette said he believed the California senator had the wrong idea, adding he believed the larger sum was correct, but that under the revised section the corporation would only pay $59,000,000, thus saving about $17,000,000. He also charged that the amended bill would reduce re-duce the taxes of corporations and began the reading of estimates to show the amounts various corporations would pay under the provisions of the original bill and as amended. Chairman Simmons asserted as-serted the Bethlehem Steel company would pay $25,045,090 under the original bill, Senator La Follette said, while the committee's financial expert estimated it at S21,R35,994, but the amended bill would only levy $19,729,060. Temptation to Corporations. "I maintain the form of amendment is a temptation to all corporations to swell their capitalization," the Wisconsin senator sena-tor continued. "It invites over-capitalization. I want to constantly remind the senators that the government is powerless power-less to tell what is the basis of capitalization, capi-talization, for there is no time in which to make an investigation." Now Is the time for the United states to show how this war Is to be financed, Senator La Follette declared, if the country coun-try is to escape financial ruin, adding that from now on the demand for money with which to conduct this war will increase. in-crease. Study of the financial condition of some of our allies, he said, has raised the doubt whether part of the money loaned them ever will be repaid. "We are adopting a plan of financing the war that is fraught with the greatest great-est danger to our finances and is an injustice in-justice to the people," he continued. "This tax bill is 24 per cent of the total amount tiiat has to be raised either by bond issue or taxes, if you leave out the amount loaned to our allies. If you do take that into account, it amounts to only 14 per cent. We don't know if we are going to collect from our allies or not. Across Danger Line. "We are starting out this war on a lower percentage of taxation than the civil war. that nearly resulted in the financial ruin of this government, or the percentage during the Mexican war. 1 sav t!ia t under the pressure of keeping down t he taxes on corporations ami the incomes of the rich we are being pressed back across the danger line. No government govern-ment on earth can stand the strain this war makes on finances." Kven Great Britain, with all her wealth, was compelled to change her financial system in order to meet the emergency he said. She found herself, he declared, "tot term ? to financial ruin, and even she, with her towering strength, was forced to throw herself on this government govern-ment for financial support." Don't let us make the mistake, sound and rich as we are. lie pleaded. Estimating 2u.Ono.00o families in the country. Senator La Follette said every billion dollars of war expense would mean a burden of $50 for each family head. The. twenty-billion -dollar war est i ma re tli is year, he declared, would mean an assessment of $100 on each family head ?2io in cash and an $So0 mortgage on every home. In concluding a three-hour speech, the Wisconsin senator reduced his amendment amend-ment for increase of the war profits levy j from 72 to 70 per cent. He said he had little hope of its acceptance and if de- ! feated he planned to propose others for ; ," and t0 per cent, respectively. i Senatoi immvm.dcchi.red that under, the bill as it now stands at least half the corporations of the country will be 1 taxed more tiian before, the tax alone of the steel corporation amounting to ?1S3,734,0C0 this year, while the tax to i be paid bv the Du Pont Powder company com-pany will be $10,000,000 more and that of the General Motors $1,500,000. The net increase to be paid by twenty leading corporations cor-porations of the country will amount to $1.136,000, he said. i Senator Frelinghuysen, opposing the La Follette proposal, said it was fraught with great danger to business Interests. "To impose such unfair taxes and impair im-pair industry," he said, "would practically prac-tically make certain the victory of Germany." Ger-many." Borah's Views. Senator Borah addressed the senate at length In favor of a tax of at least 60 per cent. Citing the increasing war expense estimates esti-mates of Secretary McAdoo, Senator Borah said he believed they ultimately would reach between $22,000,000,000 and $23,000,000,000, and possibly $25,000,000,000, for the first year, including loans to the allies. "This bill probably will finally provide $2,500,000,000 in taxes," he continued. "There is no record in history of such a shrinking from duty by a legislative body. Congress has met this war with courage and amplitude of means, but when we meet taxation we shrink from performance perform-ance of our manifest duty. "Is $2,500,000,000 In taxes the standard of patriotism that men of wealth are will-in- to contribute to the war? I do not believe it." Quotes President. Senator Borah read statements of President Wilson. Bouar Law and Uoyd George regarding possible inflation from Ian; e" bond issues and necessity for a reasonable rea-sonable amount of taxes. He cited Kmsland's SO per cent levy on war taxes after two years of war and asked: "Are we not betier able to meet an 80 per cent tax at tiie beginning of the war than England after two years of it? On what theory can it be said that we would hreak down business or make the war unpopular if business makes 20 per cent more out of war ihan in peace? What a pity it is that dollars and cents are not llesli and blood, that we might lay the ' conscripting hand of the government upon them and bring them to the support of the war! "After business efficiently is protected, I would take every dollar over Sio.noo of the income of every man in the United States." The Idaho senator present ed stat is tics regarding tiie awnount of profits, based upon last year's earnings, that big business busi-ness concerns would retain even if a SO per cent war protits rate was adopted. I lie said the Pmi F'ont Powder interests would have "5.f0o,noo left over. Senator Johnson called attention to the fact that Chairman Simmons made the statement that the profits of t lie steel corporation this year would be $400,000,- h 000, and that the tax proposed to be levied on that organization would amount to but $183,000,000. Senator Newlands interrupted to say that, according to Chairman Kitchin of the house ways and means committee. $23,000,000,000 are to be appropriated this year, of which seven billions are to go to the allies and seven billion dollars are to be expended in the conduct of the war. He asked what is to be done with the remaining re-maining nine billions appropriated. Kitchin's Estimate. ' Regarding the loans that have been made to the allies, Senator Borah declared de-clared that no living soul knows to whom that money was loaned, how it is being used or anything, else about It. A detailed statement showing the amount of appropriations already made this year by congress was made by Senator Sena-tor Smoot, replying to Senator Borah. A : total appropriation of $19,005,583,107 is to be made, he said, of which seven billions will go to the allies, thus leaving $12,005,- . 5S3.107. Senator Smoot' said he believed the pending bill would raise a great deal more than $2,500,000,000. considering increased earnings this year. He compared the tax laws of England, France and Canada, de-I de-I clafing that England's SO per cent war j profits tax would he equaled in this coun- try by a tax of 46 per cent, when eom-j eom-j parative conditions are considered. Can-i Can-i ada, lie said, levies no income taxes and 1 her war profits tax is only 25 per cent. |