64TH CONGRESS, 2d Session. } SENATE. (REPT. 1039, Part 2. ADDITIONAL TAXATION STILL FURTHER TO MAKE GOOD THE LOSS OF REVENUE UNDER TARIFF ACT OF OCTOBER 3, 1913. FEBRUARY 20 (calendar day, February 21), 1917.-Ordered to be printed. Mr. PENROSE, from the Committee on Finance, submitted the following VIEWS OF THE MINORITY. [To accompany H. R. 20573.] The undersigned minority members of the Committee on Finance were not consulted by the majority members of the committee in the preparation and consideration of this bill and were only given opportunity at a perfunctory session of the committee to record their disapproval of it. Hearings, so-called, were held, to which the minority members of the committee were not invited officially; and persons whose interests the bill affects vitally were not called to testify. These "hearings" are valueless to the committee and to the country. The minority members protest against those methods as well as against the bill itself. That additional revenue is necessary can not be gainsaid; that it would be necessary, notwithstanding three previous attempts of the Democratic Party to bolster the Underwood tariff law by direct taxation, was foretold by Republicans only last summer. The wild, reckless extravagance of the Democratic Party was then brought to the attention of the country, and the inadequacy of relief measures pointed out. Military and naval preparedness is not alone responsible for this present emergency. Appropriations, exceeding the actual necessary domestic needs and demands of the Government, if economically administered, are largely responsible for it. There has been no fiscal situation, not created by the short-sighted policies of the Democratic Party, that could not have been met adequately by the imposition of duties upon the flood of foreign-made goods imported into this country since the enactment of the Underwood tariff law. But the Democratic Party, in the light of recent experience and in the face of an empty Treasury, persists in ignoring the indirect, historic, and easy method of collecting revenue at the customhouses and continues to saddle direct taxes upon an already burdened people. That these additional tremendous taxes are largely responsible for the high cost of living we have no doubt. The average American citizen finds it more and more difficult daily to make ends meet; hardships and deprivations are his lot, as he is confronted with the ever decreasing purchasing value of his hard-earned dollar. For the cause he has only to be told that the Government is draining the people's pockets for useless objects, such as the fruitless Mexican expedition costing nearly $200,000,000; the building of a railroad in frigid Alaska to cost $35,000,000; the construction of a fertilizer plant to cost $20,000,000; an armor plant at $11,000,000; for the purchase of ships at exorbitant prices, $50,000,000; for many thousands of new offices at a yearly cost of over $40,000,000; and for manifold activities and agencies, many of them experimental and of doubtful value, running the cost of government far in excess of practical business and necessary demands. All this load the consumer is bearing; it is a tax on consumption in the long run, and never before has the American consumer so sorely felt the sting of direct taxation. All over the country he is asking the question to-day: "When will prices stop going up?" The only answer vouchsafed by the Democratic Party is more taxation. The responsibility for present conditions rests upon the Democratic Party. The minority members of the Finance Committee have repeatedly called attention to the unscientific methods of the majority party in their mismanagement of the country's finances. Trusting doggedly to their tariff policy, refusing blindly to admit the failure of the Underwood law to produce revenue in the face of unprecedented imports, the majority through pride of opinion continues to draw upon the substance of our own people rather than recede from its erroneous position and resort to the Republican method of raising revenue indirectly upon imports. Estimates of receipts and expenditures and statements of the present and prospective condition of the Treasury, as given in the report of the majority are confusing and misleading. This, however, is to be expected when the daily Treasury statement continues to show a net balance in the general fund, when in fact there is a deficit. of approximately $50,000,000. There is no balance in the general fund; what purports to be a balance consists of liabilities. There are no reliable estimates. We know in a general way only that the Treasury is in dire straits. Since the Book of Estimates was submitted in December supplemental estimates keep coming in. Congress must guess at the Treasury's true condition to-day and next year. No figures upon which it is asked to formulate revenue legislation intelligently are even fairly within many millions of remaining authoritative reasonably long. The estimates of the amounts to be raised by the additional taxation in this bill are guesswork. They are arbitrary. No basis is given for the estimated revenue from the profits tax because there is none to give. The pending bill not only disregards the opportunity for raising revenue from imports which aggregated $2,391,716,335 in value during the last calendar year, but it takes no account of the future industrial preparedness of the United States against the invasion of Europeanmade goods which is bound to come after the war. In this, as in its predecessors, this bill fails to safeguard the industries of the United States. Of this bill we will say as we have said of other like revenue bills which have ignored sound economic principles and the "American system" of protection, that it will be inadequate to meet the demands upon the Treasury by reason of wasteful appropriations; and not until the Democratic Party makes a serious attempt instead of pretense at economy and recognizes its utter inability adequately to finance the Government without adopting the natural and economically sound method of raising revenue by protective tariff duties will that party be able to escape the just condemnation of an overtaxed but long suffering people. We believe the estimates of revenue under existing law will be less by $100,000,000; that the disbursements this fiscal year and for 1918 will exceed the estimates; that the deficits both years will aggregate in excess of $500,000,000; that this bill together with existing direct taxation laws will be fastened upon the people permanently unless relief be had by restoration of import duties that will yield $200,000,000 more revenue annually and at the same time conserve our productive energies, both of capital and labor. BOIES PENROSE. PORTER J. MCCUMBER. JACOB H. GALLINGER. |