REVENUE TO DEFRAY WAR EXPENSES. FRIDAY, MAY 11, 1917. UNITED STATES SENATE, The committee met, pursuant to adjournment, at 10 o'clock a. m., in the committee room, Capitol, Senator Furnifold McL. Simmons presiding. Present: Senators Simmons (chairman), Williams, Thomas, James, Jones, Gerry, Lodge, McCumber, Smoot, Gallinger, and Townsend. The committee proceeded to consider the bill (H. R. 4280) to provide revenue to defray war expenses, and for other purposes. The CHAIRMAN. Gentlemen, according to the program that we have arranged for these hearings, we will expect the representatives of the industries to arrange among themselves who is to present the argument. We will not have time to hear more than one representative. Mr. Cravath, we will hear you now. We will give y... 30 minutes to present the case. TITLE I. WAR INCOME TAX. Sec. 1. NEW WAR TAX. STATEMENT OF MR. PAUL D. CRAVATH, OF NEW YORK CITY, REPRESENTING CERTAIN STOCKHOLDERS OF THE BETHLEHEM STEEL CORPORATION. The CHAIRMAN. Have you prepared a brief which you desire to present to the committee? Mr. CRAVATH. I have drafted a brief, and will have it here tomorrow, if that will be all right. The CHAIRMAN. That will be time enough. You may proceed. Mr. CRAVATH. Gentlemen, I appear on behalf of Mr. Schwab and other stockholders of the Bethlehem Steel Corporation to discuss the provision of the law which levies an income tax upon stock dividends, and that is the only feature to which I will address myself. The committee will remember that the provision subjecting stock dividends, so called, to the income tax first appears in the act of September 8, 1916. Prior to that time no income-tax law in this country-and no income-tax law in England-had ever subjected a so-called stock dividend to an income tax. My clients have not asked me to oppose any scheme of fairly distributed taxation, no matter how great the tax may be, and there is no disposition on 103242-17-1 1 |