Some of us prepared an amendment when the Revenue Act of 1921 was pending at Washington, and Dr. Adams was, I think, of material assistance in getting that amendment before the proper committees, but the Senate, and Congress generally, for reasons of its own, took no interest. I suppose because nobody loves a fat man, nobody loves a holding company.

CHAIRMAN WHITNEY: Gentlemen, it is now twenty-five minutes of five. Mr. Moffett, what time does your automobile tour start?

Mr. C. T. MoFFETT: It starts at a quarter of five. We will have the cars on the Third Avenue side.

Thereupon an adjournment was taken to 8:00 P. M.

(Adjournment)

SEVENTH SESSION

WEDNESDAY EVENING, SEPTEMBER 20, 1922

MR. FRANK ROBERSON, of Mississippi, presiding.

CHAIRMAN ROBERSON: The conference will please come to order. I ask all those who are in the room to take seats as quietly as possible. Mr. Lord, when he asked me a day or two ago if I would preside tonight, said to me that I might introduce myself; that as long as he was on the program himself tonight, he thought it would be all right for the chair to make himself known. I thought that it was rather peculiar to introduce yourself to a strange audience, but on reflection, and since I have been reading the papers here for the last two or three days, I have come to the conclusion that the real reason why I am forced to introduce myself to the conference is that it may be somewhat difficult-possibly dangerous -to get a man to introduce a democrat to an audience in Minnesota, but since one of the duties of the chair is to introduce the speakers on the particular program, I have a chance of getting even with my good friend, Mr. Lord, who, of course, is from Minnesota. One of the cardinal principles of a Mississippi democrat is to never say anything good about a republican or anything bad about a democrat. He may expect to be introduced in accordance with this good old democratic custom.

You know, if I may be permitted to digress just a moment, we do not take our politics in some of these Southern states as seriously as you might think. There is a good deal of zest in the game. You may have noticed in the public press in the last few weeks that they have been having a few primaries down in South Carolina, Mississippi, and Texas, and you people who live in a state where they have two parties don't know anything about politics at all. You know that the only way we were able to beat Vardeman down there at all was finally to get out a great scare-head circular about something good he had to say in a newspaper he ran about two or three republicans. They just would not stand for that at all, even his own crowd. But, my friends, on reflection, since the first speaker of the evening is from Minnesota, and a man who has the ability and reputation which he does have, I am enabled on this particular occasion to lay aside the ordinary custom of mine, to which I just referred, and really introduce him or try to intro

duce him in a way in which he should be presented to an audience of this state. Digressing is about the only thing I shall have to do with this program tonight. I want to have my say before anybody interrupts me; you cannot call me down. In making reference to Minnesota, it comes to my mind that in one of the military parks, located at Vicksburg, Mississippi-we call it the National Military Park of Vicksburg and it is supposed to be one of the most attractive parks in the United States-the finest monument happens to have been erected and put there by the State of Minnesota, in the memory of the valor of the soldiers during that battle. It is a wonderful thing, and I do not mention this as a mere matter of phrase-making, but if you happen to be in that part of the country at any time it would be well worth your while to go through the Vicksburg Military Park. It is a wonderful natural park, besides containing the very expensive and fine monuments erected by some of the Northern states on that battle ground.

But, coming to the serious part of these exercises tonight, I want to say to the people of Minnesota-those who may be here-that the National Tax Association has recognized for many years the ability of the president of this association and the present chairman of your Minnesota commission. Those of us from the other states have had the idea that Minnesota was somewhat in the forefront in remedying tax troubles and tax problems, and although you seem still to have problems here, I must say that, as compared with a great many states, you have made very great progress. A great deal of that progress I am sure must be due to the ability and energy of Mr. Lord, of your commission, and so, without any further remarks, I take pleasure in presenting Mr. Samuel Lord, the chairman of the Minnesota tax commission, who will now deliver to you his annual address.

(Applause, and all rise)

MR. SAMUEL LORD of Minnesota: Mr. Chairman, ladies and gentlemen, and gentlemen of the conference: I wish I might say ladies and gentlemen of the conference," but I think we have no lady delegates here. It would be very ungrateful of me indeed not to express my appreciation of this heartening demonstration. It will always remain one of my most pleasant memories. I might say to the chairman, that the reason why I did not introduce him was because I knew so many good things about him that I feared it would take up too much of the time of this conference for me to undertake to give all of them. The General is one of our members who needs no introduction.

16

THE BRETTON WOODS RESOLUTIONS

ANNUAL ADDRESS OF SAMUEL LORD

President, National Tax Association

Three important resolutions were adopted by the National Tax Conference at Bretton Woods in 1921. All three of them deal with undesirable federal laws and practices and point out evils that can be corrected only by congressional action; nevertheless all of them have a bearing on state taxation and I feel it my duty to acquaint you with what has happened to them and to give you some idea of their present status and future prospects.

The first of these resolutions calls upon Congress to submit for the ratification by the states an amendment to the Constitution of the United States, prohibiting the exemption from income taxation of the salaries of public officials, and of the interest on future issues of federal, state, or municipal obligations.

The second resolution read as follows:

"Whereas, at the first conference of the National Tax Association, held in 1907, it was resolved that it was the sense of that conference that inheritance taxes should be reserved wholly for the use of the several states, which resolution has been reaffirmed at subsequent conferences;

'And Whereas, inheritance taxes have not heretofore been imposed by the federal government, except as emergency measures in times of war;

"And Whereas, the federal estate tax now in force imposes an unduly heavy burden of expense upon the estates of deceased persons, in addition to the tax itself, out of proportion to the revenue received by the government, seriously interferes with the administration of such estates and delays final settlements;

66

Be it Resolved, That the estate tax should be recognized by Congress as a war measure only and should be repealed at the earliest possible moment."

The third resolution presented the views of the conference upon the troublesome problem of bank taxation, and reads as follows:

"Be it Resolved, That in the opinion of this conference, Section 5219 of the United States Revised Statutes should be so amended as to permit the states to tax national banks or the shares thereof or the income therefrom, according to such systems as they may consider desirable, provided that such taxation shall not be at a greater rate nor impose a heavier burden than is assessed or imposed upon capital invested in general banking business and the income derived there from."

In line with the first resolution, several Joint Resolutions have been introduced in Congress and exhaustive hearings have been held by the Ways and Means Committee of the House, and, as a net result, House Joint Resolution No. 314, known as the "Green resolution," was reported by that committee to the House on May 3 last, with a recommendation that it be adopted.

This resolution reads as follows:

"Resolved by the Senate and House of Representatives of the United States of America in Congress assembled (twothirds of each House concurring therein), That the following article is proposed as an amendment to the Constitution of the United States, which shall be valid to all intents and purposes as part of the Constitution when ratified by the legislatures of three-fourths of the several States:

"'ARTICLE -.

"Section 1. The United States shall have power to lay and collect taxes on income derived from securities issued, after the ratification of this article, by or under the authority of any State, but without discrimination against income derived from such securities and in favor of income derived from securities issued, after the ratification of this article, by or under the authority of the United States or any other State. "Sec. 2. Each State shall have power to lay and collect taxes on income derived by its residents from securities issued, after the ratification of this article, by or under the authority of the United States; but without discrimination against income derived from such securities and in favor of income derived from securities issued, after the ratification of this article, by or under the authority of such State.'"

The committee in its report very strongly condemns the present system of exemptions for the following cogent reasons:

"1. A large portion of property escapes taxation, thereby causing great loss of revenue.

"2. It violates the ability principle of taxation and unfairly discriminates between taxpayers.

"3. It impedes private financing.

"4. It discourages investment in new enterprises.

"5. It encourages extravagances in governmental agencies. "6. It grants a private subsidy to certain interests.

"7. By withdrawing money from private enterprises it increases the rate of interest required for all enterprises not carried on by the government and thereby adds to the cost of living.

"8. It creates social unrest; and that the only practical