These are only a few of the many letters that we desire to call to your attention to emphasize the fact that the organized exchanges are of great value to the Government and to the producers and consumers; whereas, the class of brokers not controlled by rules or regulations of an exchange and under no restrictions in their relation to the public would be more susceptible to personal gain, and could be of practically no help to the Government. Therefore, to discriminate in favor of such brokers to the extent of from $50 to $250 per annum puts a penalty where it does not belong, and this could not have been the intention of the framers of the law, except through a lack of information relative to the business of the grain exchanges conducted, as they are now, in strict cooperation with the United States Food Administration. A recent member of a board of investigators, appointed by the Bureau of Markets to examine into our affairs, reported, in substance, as follows: "That the board of trade is an efficient market organization, operated at low marginal cost under democratic form of self-government by the board of directors in the public interest." Shall the members of such organizations be penalized in favor of competitors who are under no exchange control? J. RALPH PICKELL, Secretary, 417 Postal Telegraph Building, Chicago, Ill. Mr. J. RALPH PICKELL, ST. LOUIS, Mo., September 18, 1918. Congress Hall Hotel, Washington, D. C.: In behalf of the members of the St. Louis Merchants' Exchange I would appreciate your making a vigorous protest against that feature of the revenue measure which contemplates an arbitrary tax on brokers doing business on grain exchanges. It savors of class legislation, and is manifestly discriminatory and unjust. Most of the brokers are performing a patriotic work in materially aiding in the distribution of the cereal crops of the country; others represent only flour and feed mills and can only conduct their business to advantage on exchanges. JOHN O. BALLARD. J. RALPH PICKELL, Congress Hall, Washington, D. C.: DULUTH, MINN., September 18, 1918. Members of the Duluth Board of Trade wish to file a protest against brokerage tax, feeling same to be unjust and uncalled for. We appreciate your kindness in presenting protest in our behalf. DULUTH BOARD OF TRADE, By M. L. JENKS. J. RALPH PICKELL, OMAHA, NEBR., September 18, 1918. Congress Hall Hotel, Washington, D. C.: You are hereby authorized to represent the Omaha Grain Exchange and file protest on our behalf against brokers' tax provided for in revenue bill. F. P. MANCHESTER, Secretary. J. RALPH PICKELL, BUFFALO, N. Y., September 18, 1918. Secretary, Congress Hall Hotel, Washington, D. C.: Thanks for your telegram. The interests of all grain exchanges are identical as regards brokers' tax, and this is your authority to enter protest for corn exchange along the same lines as Chicago Board of Trade protest. D. M. IRWIN, President Corn Exchange of Buffalo. J. RALPH PICKELL, KANSAS CITY, Mo., September 19, 1918. Secretary Council of Grain Exchanges, Congress Hotel, Washington, D. C. Please file following protest with Senate Finance Committee: On page 139, new revenue bill, there is a provision requiring all brokers to pay an annual tax of $100. This includes every person whose business it is to negotiate purchases or sales of produce, but where these brokers are members of an exchange there is an additional penalty of $50 to $150, depending on the value of the exchange memberships. This is a serious discrimination against members of an exchange, due probably to lack of information regarding difference in standing between produce brokers who are members of legitimate exchanges and those who have no connection with any business organization. Members of all exchanges are, in conducting their business, subject to careful scrutiny by officers and directors and there are very strict rules covering all such transactions designed to protect both buyer and seller in making trades through any broker who is a member of such exchange, and there are very heavy penalties imposed for violations of any of these rules. Our rules governing exchange transactions insure proper treatment of all parties interested, which would not be possible except for our organization. We desire to impress upon you the fact that, aside from the protection offered people buying and selling in our exchange, the complete organization of the grain business insures the handling of the crops on the most efficient and economical basis, all of which has been fully recognized by the Government through the United States Food Administration, and it does not seem just that members of an organization should be penalized while other dealers acting entirely independently without the supervision of an efficient body should be favored by a much lower tax. O. A. SEVERANCE, President Kansas City Board of Trade. TO PROVIDE REVENUE FOR WAR PURPOSES. SATURDAY, SEPTEMBER 7, 1918. UNITED STATES SENATE, The committee met, pursuant to adjournment, at 10 o'clock a. m,, in the committee room, Senate Office Building, Senator F. M. Simmons presiding. Present: Senators Simmons (chairman), Smith, Thomas, Jones, Gerry, Nugent, Lodge, McCumber, Smoot, Townsend, and Dillingham. The committee resumed the consideration of the bill (H. R. 12863) "to provide revenue, and for other purposes." The CHAIRMAN. Gentlemen, we will proceed now. Mr. Marsh, we will hear you first this morning. Before you begin I want to make this statement: Yesterday a question was asked here as to the construction placed by the committee on the House bill. I stated then that the persons appearing to discuss the bill would have to make their own construction. I want to say now that the committee is considering this bill extrajurisdictionally, so to speak; that is, we are discussing it extrajuridictionally while the House is considering it. Under those circumstances the members of the committee sitting as a committee feel a delicacy in expressing any opinion about the bill or its meaning, because we do not wish to do anything that might have the appearance of attempting to influence the action of the House while it is considering the bill. I want to make that statement, not especially for your benefit, Mr. Marsh, but as a general statement. You may proceed now. STATEMENT OF MR. BENJAMIN C. MARSH, EXECUTIVE SECRETARY, FARMERS' NATIONAL COMMITTEE ON WAR FINANCE. Mr. MARSH. Mr. Chairman and gentlemen, I am the executive secretary of and appear on behalf of the Farmers' National Committee on War Finance. I may state, by way of introduction, that this committee was organized some time ago by representatives of large farming organizations, State granges, farmers' unions, the Gleaners, the American National Live-Stock Association, and the American Society of Equity. It was organized about a year and a half ago, and reorganized some months ago, to meet the present situation. The CHAIRMAN. You are representing the Farmers' National Committee on War Finance? Mr. MARSH. Yes, sir. The CHAIRMAN. Are you the only gentleman who wishes to speak? Mr. MARSH. There will be other men here later, I hope. The date of the hearing has been changed a little and I am not sure whether the other gentlemen will be here or not. The CHAIRMAN. As Senator Lodge suggests, we can not hear the statements of several representatives of the same industry; it would take too long. Do you expect others to appear later? Mr. MARSH. There will be probably only one other. The CHAIRMAN. Then we can give you 20 minutes. Will that be sufficient for your purpose? . Mr. MARSH. Of course, I can tell better whether it will be sufficient after I have seen the result of my remarks on the committee. If that is what you assign, I will take it with pleasure. The CHAIRMAN. Well, take 25 minutes, and we will hear one other representative. Mr. MARSH. I thank you very much. We will try to make arrangements with the clerk for the appearance of the other gentleman later. May I call your attention to the copies of the Farmers' Open Forum which have been distributed here and which contain an article entitled "Credit monopoly and the revenue bill," by Gov. Arthur Capper, who is chairman of the Farmers' National Committee on War Finance. Now, the farmers of the country stand foursquare back of President Wilson's statements: "Every power and resource we possess, whether of men, of money, or of materials," is to be devoted to winning the war. "It is our duty, I most respectfully urge, to protect our people, so far as we may, against the very serious hardships and evils which would be likely to arise out of the inflation which would be produced by vast loans." "We shall naturally turn, therefore, to war profits and incomes and luxuries for the additional taxes." Now, of course, the farmers of the country do not feel under the same restraint in criticizing the pending revenue bill introduced by the Ways and Means Committee as the chairman has indicated that this committee does at this time. The farmers are keenly disappointed in that revenue bill. It should raise at least four billion. dollars more than it does raise. I quote from a resolution of the American Federation of Labor, although I am not speaking officially for them in any way, but it is striking that the farmers and labor forces of the country are a unit in holding that the major part-many of them think all-the costs of the war should be raised by current taxation. The resolution of the American Federation of Labor, which was passed at its annual meeting in St. Paul, reads as follows: Resolved, That the American Federation of Labor urges Congress to levy taxes on war profits, swollen incomes, and on land values, to an extent that during the period of the war will provide by taxation at least 50 per cent of the expenditures of the Government in any one year. The CHAIRMAN. Pardon me: when you say the expenditures of the Government do you mean 50 per cent of the amount this Government expends, or 50 per cent of the amount it spends and in addition thereto 50 per cent of the amount it loans to the allies? Mr. MARSH. I can not speak officially for them on that point. I think they mean 50 per cent of the whole cost of the war. |