Mr. MOORE. Do you care to say anything about fares and the possibility of raising any more taxes by increasing fares? The gentleman who preceded you suggested we should levy a tax on those in comes. Mr. GREEN. On gross savings. Mr. MOORE. No; gross incomes. Mr. BALLARD. I will tell you how the fare situation is. We have a contract with the city of Philadelphia that the rates of fare shall remain as they are until both parties want it changed. When we got into that in 1907 it looked very good, but now the nickel does not look so large, and we have a new contract with our city which is now before the public utilities commission waiting to go into effect, which provides that the fare shall be changed from time to time by the commission, so that the receipts of the system will always be 5 per cent on our stock, and not to exceed the sinking fund charges on the bonds which the city is to issue for the construction of the highspeed lines, that to be adjusted in a fair way by the commission. After that contract is approved we will have to go soon to the commission to get our fare raised. Until that contract is approved, while there has been a decision of the attorney general of our State that the public-service commission has abrogated all contracts as to fare and that the fare question is now solely in the hands of the commission, we are afraid of the public sentiment that might be aroused if we did not go to councils first, and we therefore went to councils about three weeks ago at the instance of our men who were demanding a very large increase of wages, and told councils "If you will agree to let us put our fares up, we will agree to keep our dividends down to the present level where they have been for two or three years, and will give our men $1,750,000 wages which they are asking for, and in other matters that will apply to the benefit of the service." 64059-18-No. 4 6 [THIS PRINT OF THE HEARINGS IS SUBJECT TO REVISION JUNE 12, 1918 WASHINGTON GOVERNMENT PRINTING OFFICE Ан 2 1918 f copy 2 REVENUE BILL. COMMITTEE ON WAYS AND MEANS, The committee met at 10 o'clock a. m., Hon. Claude Kitchin (chairman) presiding. There were also present Representatives Rainey, Dixon, Hull, Garner, Collier, Dickinson, Oldfield, Crisp, Helvering, O'Shaunessy, Carew, White, Moore, Green, Sloan, Longworth, Fairchild, Sterling, Martin, Hawley, and Treadway. STATEMENT OF MR. ROBERT R. REED, ATTORNEY, REPRE- The CHAIRMAN. State your name in full, so that the committee can get it, and your occupation. Mr. REED. Robert R. Reed, of Reed, McCook, and Hoy, of New York City, representing the Investment Bankers' Association of America, which is composed of the bond and investment houses of the country-the dealers in investment securities. Individually, the members of this association have special problems under the present tax laws. Collectively, they have at this time one general and very important interest, growing out of their wide relations with the public, which they serve. The one general interest of the investment banker in revenue legislation is to see the Government levy and collect the greatest possible tax with the least possible harm to the business productivity of the country, to get as much as practicable by tax, as much as need be by bonds, and to distribute the tax and the bonds as generally and equitably as possible, throughout the country. Probably no interest in the country at all times, and particularly at this time, is so completely identical with the general interest, with the interest of the Government. We emphasize this point because it is the basis and the whole basis of our appearance before this committee, of our interest, our very great interest, in the important problems which it is now considering. We are, of course, confining ourselves to the problems with which as investment dealers we are most familiar and most concerned. INCOME TAX. I take it that at this stage the committee is principally interested in two fundamental and primary questions, What is income, and what are war profits that can be subjected to war-profits tax. On the subject of what is income: For four years a relatively small tax has been levied on "incomes." The general purpose has been 255 15 |