The Omaha Daily Bee
The Omaha bee
Is tb mint power fal builnrnt
Rotter la th nt, becai It goes
to the horns of poor and rich.
WEATHER FORECAST.
For Vr-hraska-Oenerally fair.
r nr Iowh- Knlr.
Kit fnth"r report see pace i.
VOL. XXXIX-XO. 1.
OMAHA, THURSDAY MORNING, JUNE 17, 1P)!-TVKLVK PAGES.
SINGLE COPY TWO CENTS.
SPECULATION IS
NOT GAMBLING
C'.ncluiicn Reached By Hughes' Com
million to Investigate Stock
Exchange Practices.
Norris Brown
Chloroforms the
Income Tax
WILL FIGHT ON
, FOR INCOME TAX
"Progressive" Leaders in Senate Will
Continue Battle Despite Mes
sage of President.
TAFT URGES AN
JiAlWIINGS TAX
President Sends Special Messag-e to
Congress Favoring- Levy on Cor
porations. His Resoluti:n to Submit Constitu
tional Amendment EnJs That
Fight for Present.
FUTURE DEALINGS STEADY PRICES
DISAVOW ANY ANTAGONISM
WOULD AMEND CONSTITUTION
Markets Depends en Operations of
the Bulls and Bears.
SOME THINGS ARE NOT VERY NICE
Plain Gamblh v 'utures Should Be
Absolut rohibited.
TWO "EXCHAN
CONDEMNED
"Mrtnl" and "Me. 5 r" Are Not
Legitimate II 04 rlnnlly
Trading- nnd v.v '
Be Ahull
L .' "
Ni:V VOKK. June 1G.-The report of the
'oinmlttee appointed by Oovernor Hughes
to Investigate speculation in securities and
commodities and the organisations tused
In dealings therein was made public to
night. The New York stock, the Con
solidated stick, the cotton, the produce,
the coffee, the mercantile, and t he Metal
exchanges and the Curb market were thor
oughly investigated and recommendations
looking to Impioveinent of existing condi
tions were made at length by the com
mittee. The most drastic finding Is that
affecting the Mercantile and Metal ex
changes, as follows:
"Under present conditions, we are of the
opinion that the Mercantile and Metal ex
changes do actual harm to producers and
consumers, and that their charters should
be repealed."
Concerning speculation In general, the
committee declares that it may be wholly
legitimate, pure gambling, or something
partaking of the qualities of both, that in
some form It ia a necessary incident of
productive operations; that It tends to
steady prices and that for the merchant or
manufacturer the speculator performs a
service which has the effect of Insurance.
"In law," says the report, "speculation be
comes gambling when the trading which
it involves does not lead, and Is not
Intended to lead, to the actual passing
from hand to hand of the property that
Id dealt' In. The rules of all the exchanges
lot bid gambling as defined by this opinion!
hiu they make so easy as to technical de
livery of the property contracted for' that
the practical effect of much speculation,
In point of form legitimate. Is not greatly
llfferent from that of gambling."
The committee makes no presentment
igalnst short selling, ut declares the
tendency of such a selling Is to steady
prices. It is recommended that the
minimum margin should be 20 per cent
and Urong disapproval Is expressed of
branch brokerage offices which supply
llluorn(J rort to, other improper .means
.o induce speculation. -
Moat Important In the 'World.-
Taking up the New York Stock Ex
hange, the volutin, of transactions thereon
s referred to as making it probably the
Host Important financial Institution In the
world, its "enormous business affecting
he financial and credit Interests of the
country in so large a measure that its
proper regulation Is a matter of trans
cendent importance." Patrons of the Ex
change are divided by the committee Into
five groups, namely. Investors, who pay
for what they buy; manipulators of prices;
floor traders; outside operators having
cupital and experience, and "inexperienced
persons who act on Interested advice,
'tips,' advertisements in newspapers, or
circulars sent by mall, or 'take flyers," "
tn absolute Ignorance and with blind con
fidence In their luck. Almost without ex
ception they eventually lose." As to the
character of the transactions the commit
tee declares:
It is unquestionable that only a small
part of them Is of Investment character;
a substantial part may be characterised
as virtually gambling. Yet we are unable
to see how the state could distinguish by
law between proper and improper trans
actions, since the forms and mechanisms
used are Identical. Rigid alatutea direotud
UKttlnst the latter would seriously Inter
lere with the former. The experience of
Germany with similar legislation Is Illu
minating, liut tlie (Exchange, with the
plenary power oer ...embers and their
operations, cuulu , ...e correctives, as
we shall show.
i'urchastng secui.. . on margin Is as
legitimate a truusuv. .i as a purchaae of
any other property in which part payment
Is deferred. We therefore see no reason
whatsoever for recommending the radical
change suggested, that margin trading be
prohibited.
Insofar as losses are due to insufficient
margins, they would be materially reduce
if the customary percentage of margins
were Increased. In preference to recom
mending legislation, we urge upon all
brokers to discourage speculation upon
small margins and upon the Exchange to
UHe its influence, u.,d If necessary, Its
power, to prevent members from soliciting
and generally accepting business on a less
margin than 30 per cent.
Pyramiding la Condemned.
Pyramiding, that is the use of paper
profits as margin for further commitments,
should be discouraged, says the commit
tee. In this connection it is suggested
that If brokers and the banks would make
It a rule to value securities for the pur
pose of margin or collateral, not at the
current price of the moment, but at the
avtrage price of. say. the previous two or
three months (provided that such average
piico were not higher than the price of
the moment) the dangers of pyramiding
would be largely prevented. The report
buys:
We have been strongly urged to advise
the prohibition or limitation of short sales,
not only on the theory that it Is wrong
to agree to sell what one does not pos
sess, but that Much salea reduce the mar
ket price of the securities involved. We
do not think that It Is wrong to agree to
sell something that one does not now poa
mjs, but expects to obtain later. Short
Kellers end. uxor to select times when
prices seem high in order to sell, and
tunes when prices seem low In order to
buy. il.iir action in both cases serving to
less, n n.nntices and diminish declines of
pile.-. In other words, short-selling tends
i' I'lmliird steadiness In prices, which Is
iim nlnntage to the community. No other
in.-ins of restraining unwarranted mark
mi nit and down of prlcea has been sug
. rested to. us.
The commlltee here rails attention to
the New York law- of 1S12, which declared
vn!l all short sales, and to the law of
WR. repealing Hie art of mt and legalising
short sales.
Milling tho Market.
Manipulation of prices Is divided by the
committee ttiti two classes: First, that
which Is resorted to for tha purpose ol
making a market for Issues of new secur
ities, and second, that which la designed
to serve merely speculative purposes In
the endeavor to make a profit as tha re-
(Continued on Second Page.)
(From a Staff Correspondent.)
WASHINGTON. June l.-Kpecial Tele
gram.) President Taffs message, recom
mencing a tax cn the net revenues ef cor
porations, read in the senate teday. Is (he
outgrowth cf a series of conferences held
between the progressive republicans and
the conservatives, with a view cf clarity
lug a very much strained situation. Coupled
with the recommendation cf President
Taft such a tax, In his cplnion, would be
constitutional Is the direct suggestion thut
In this legislation should be a provision
for vote by the states tn a constitutional
amendment giving power to congress tc
levy a lax on incomes.
Senator Rrjwn ot Nebraska introduced
the first resolution suggesting such a con
stitutional amendment Senator Nelson ot
Minnesota later, in the present session of
congress. Introduced a resolution very sim
ilar in character, but somewhat different
In verbiage, looking to the same end, and
these two resolutions are before the fi
nance committee of the senate tonight.
When the message camn Into the senate
this morning It created Intense surprise
among those senators who had hoped for
a vote on the Income tax proposition, and
Senator Hrown seemingly was picked out
by some of the Insurgent republicans for
Intense criticism.
1 "You have chloroformed the tariff sit
uation," said Senator Cummins to Senator
Brown, as they stood together In the
marble room fronting the senate chamber.
"On the contrary," replied the senator
from Nebraska, "I have helped In a small
way to resuscitate the copse."
Senator Borah, who has been the most
pronounced Income taxlte cf the Insurgent
forces, and who argued at groat length
for the constitutionality of such a meas
ure, said even harder things to Senator
Brown than had Senator Cummins, but
Brown, knowing his position and having
been In conference, not only with the pres
ident, but with the lawyers) of the cabinet,
believes that the only way to make the
Income tax constitutional Is tc have the
states say so. and the finance committee
tonight Is laboring with that question.
In the meantime, Senator Brown Is re
ceiving congratulations cn all sides for
his farsightedness and his appreciation of
the constitutional question.
Germans Narrow
Says Von Buclow
in Bitter Address
Chancellor Scores Countrymen for
Allowing Political Opinions to
Enter Into Social Life
BERLIN. June 10. Chancellor Von Bue-
tow, In the Reichstag today, sarcastically
attacked the tactics employed by the cler
ical party aaalrst him. They had even
dared, he said, to accuse him of dis
loyalty to the emperor and Infidelity to the
Austro-German alliance, and they had
considered It necessary to sever their
social relations with him.
"Possibly It Is because I have lived so
long abroad," continued the chancellor,
"that It never occurred to me to exclude
anyone from social relations because of
differences of political opinions. I hope
to see the day when In this respect also
Germans will be as other people. Partic
ularly In England, no one ! so petty as to
carry political antagonisms Into personal
relations."
The chancellor praised the part that liber
alism had taken in the development of
German national life and spoke highly of
the great contributions that the liberal
parties, were making today toward the
national welfare.
Referring to the reports that he would
resign the chancellorship, Von Buelow
said:
"I will remain so long as the emperor
believes that my co-operation In the In
ternal policies cf thi government is use
ful to the errplre, and so long as my own
political convictions and nry own Judgment
of the political situation make me be
lieve I can be useful."
Degree tor Baron Takahlra.
CHAMPAIGN, 111., June IS. Baron
Kogora Takahlra, Japanese ambassador,
addressed 564 graduates at the thirty-eighth
annual commencement exercises of the
University of Illinois today. Degrees were
conferred by President James. The hon
orary degree of doctor of laws was con
ferred on the ambassador.
Calhoun's Lawyer Exhausts
Language of Vituperation
SAN FRANCISCO. June la- Patrick Cal
houn's explanation of the btiheiy Indict
ment against him ' rci!oa!l sub
mitted to the Juiv tenant. rn A. A.
Moore senior of the six ctomael for the
president of the United Railroads, promised
to close his cane during tbe first hour of
tomorrow's session.
Mr. Moore's argument, which has already
extended over eight hours, was pronounced
tonight by adherents of both sides a
masterly review of the case. Mr. Moore
declared there was a fatal error In the
prosecution's rase tn the testimony designed
to show tho offer of a bribe."
The mate had failed, he declared, to
show that Gallagher made an offer to
Nlchrlas prior to actual payment of the
money. He argued, regarding extracts
from the transcripts of prior trials, that
Callaghrr and Nicholas had both failed on
several occasions prior to the present trial
to testify that any such offer had been
made aad he intimated more than once
that tha prosecution had submitted a
machine-made case that showed Uie marks
af tbe tools.
"Without this potent factor, this abso
lute essential." said Moore, "this case falls
to the ground of Its own weight, 'f there
was no offer, there was no bribe.
'Nicholas, as well aa Gallagher, comes
before you an accredited perjurer and has
confessed aa well that he had been guilty
of high crlmee against tha state. He has
sworn both ways first that be had re
Declare Their Position Not Inconsist
ent With Taffs Attitude.
EARNINGS TAX IS NOT ENOUGH
They Give Oat Statement Defining
Their Views in Detail.
DEMOCRATS ARE UNDECIDED
tlnrah, Itrlstow, Clapp, Cnmmlns and
I. a Follette Hold Meeting; and De
ride to Carry On Fight On
Orlalnal Lines.
WASHINGTON, June . Five prog
ressive republican senators. Messrs. Borah,
Bilstow. Cummins, La Follette and Clapp.
cenferred tonight to determine what their
attitude Is tc be In relation to the Income
tax amendment to the tariff bill In the
face of President Taffs special message
to congress today, favoring the submission
of the question to the states for a consti
tutional amendment, and the enactment of
a law taxing the net earnings of cor
porations. They derided that the president's plan
Is not Inconsistent with their demands for
the adoption of an amendment taxing In
comes, and that both may be adopted In
harmony. They assume that the presi
dent's plan, endorsed by leading republi
cans on the finance committee, Is designed
to "chloroform," the Income tax amend
ment, but nevertheless announce that they
will continue to fight for lta adoption.
In a brief statement prepared by Messrs.
Borah and Bristow. the supporters of an
income tax amendment, say:
"The friends of the Income tax feel It a
duty to continue to put forth "very effort
to secure the adoption cf the measure
They will, therefore, urge the adoption of
the amendment. They also stand ready to
support a resolution providing for an
amendment to the constitution of the
T'nlted States. While they believe that
the supreme court will sustain the law, yet
to provide arrainst a possible contingency
that might result from an adverso decision,
they gladly favor the propositions to amend
the constitution. They do not fel satis
fied with simply a corporation tax.
Corporation Tat "Imperfect."
"A tax upon the net Income of corpora
tionse only will Imperfectly reach the de
sired result It will tax tens of thou
sands of stockholders whose total incomes
are small, and will exempt In large meas
ure tho immense personal incomes of the
country. The provision they favor treats
large incomes exactly alike, whether re
ceived by corporations or individuals and
whether arising from Interest, dividends,
Inheritances or otherwise. The plan which
they propose simply carries the president's
views to their legitimate end, and Is as
consonant with the decision of tha su
preme court as Is the tax on corporate
Incomes alone. There Is no reason for
exempting from this tax the vast Incomes
of Individuals like Carnegie, Rockefeller,
and others, a very large part of whose
fortunes do not consist of corporation
stocks.
"It Is also well known that corporations,
especially the larger ones, can in moat
instances shift the burden of the tax to
the public by Imposing upon the people
increased charges and. prices.
"As to the publicity feature, there Is no
substantial difference between tLe two
measures. In other words, there Is tbe
same necessity for securing tnfoivnattoii
and Insuring publicity in tha income tax
as In the corporation tax.
"Every possible effort will be made to
secure the passage of the Income tax
amendment." J
Expect Some More Help.
The small attendance at the conference,
it is asserted, does not, augur a lack of
sympathy with tho income tax proposition,
but is explained by the fact that the meet
ing was not called until after tha presi
dent's message was received and many
senators had engagements which they could
not break. An effort will be made to
morrow to get together again. Senator
Brown, author of the first resolution in
troduced to enable the states to pass upon
tha quejstlon of amending the constitution
so as to empower congress to levy a tax
on Incomes, was present tonight for about
ten minutes. It is declared that he is not
opposed to the adoption of the president's
jprogram and the income tax amendment
as wall.
That the supporters of a direct tax on
(Continued on Second Page.)
ceived ao effer and then that he has mt "
Mr. Moore was severe in his denunciation
of J a me I Gallagher.
"The top o' his head doe not emerge
from the pit of corruption h has digged
for himsulf," he said. "If you know a
I man who had added perfidy to perjury.
' had been turned informer and sworn his
confederates into Jail, would you return a
dog to the pound on his testimony, or
vould you deprive a man of his liberty
and honor on the same authority?"
Mr. Moore declared that hundreds of In
nocent lives were taken in the French rev
olution upon the perjured statements of
informers. He paid considerable attention
io the testimony of John H. Helms and
Nicholas Kemgold, detectives for the pros
ecution. "Helms," he said, "Is one of the soldiers
of fortune who Incidentally served at the
same time undtr two flags, and took
money from both sides. We are told he
was decorated by the Caar of Russia, I
surmise for aome magntfioent gum shoe
work in the land of spies. Consider Helms
and this other soldier, Korngold. "and sup
pose these two doughty warriors to he
challenged by a sentry who demanded
'under which king? speak or die," Helms
and Korngold, falling on their knees would
say with one voice: 'Both' "
Patrick Callhoun laughed openly at some
of the speakers metaphors.
M l Stilt:
111-' lip 3 1 wm
ill rtJi -.-Hi
"" "" " ' ' 'in . racCt u J'. M T -i r i
From the New York World.
MRS. GOULD IS BLACKENED
Her Former Servants Tell Scandalous
Stories About Her Conduct.
GETS DRUNK EVERY OTHER DAY
Evidence la That She Cursed and
Swore at Grooma Rnvra In Dis
hevelled condition Before Meni
als Knd la Not Yet.
NEW YORK. Juno 18. If .iward OoiiM
did not go on the atand today to testify
spainst his wife. Katherlne Clemrnons
Gould, whose stilt - fari 'enaratlon h Is
opposing. . Instfad thertwas a continuation
of ffrvants' g.isslp accounts hv menials of
their former mistress's eccentricities, hum
iliating details, as swr.rn to on the stand,
of Mrs. Gould's alleged ft ndness for al
coholic beverages, and hor manner at such
times when what the witnesses said was
the Influence of liquor, brought from her
lips remarks ill suited to a woman's
tongue.
And indications are that the plaintiff
must endure for another day, possibly for
two, the embarrassing ordeal of listening
to the testimony of fonder servants, aJl of
whom have been called at the Instance
cf her husband to sustain. If posxlble. his
contention that living with his wife was
Impracticable and decidedly unoIwsa't,
hence that the charge of abandonment,
the mainstay of Mrs. Gould's case, is not
borne out.
Was Often Intoxicated.
What Mrs. Gould heard today was but
a reiteration and in some respects an am
plication of yesterday's testimony, the
basis of which Is that at various and divers
times at the vast Long Island show place,
Castle Gould, she had, according to the
witnesses, been Intoxicated: had abused
menials, had given arbitrary and unreason
able commands to the sen-ants and had
used severe language In altercations with
her husband.
Coachman, gardener, maid and other ser
vants went on the stand and swore to the
demeanor cf the woman who used to give
them orders. An occasion when she would
have fallen from her carriage, but for the
protecting arm of a coachman, an attempt
cf hers to drive through a closed gate, and
a time when a footman saved her from
falling intoxicated, were among the things
testified by the I.ong Island rustic or ser
vant on the witness stand. As on yester
day, Mrs. Gould was greatly moved as Bhe
heard this evidence. i
A carpenter, Herbert Trotter, was-the
last witness of the day. He said when he
was working in the servants' quarters,
Mrs. Gould rushed In at one time, swore
at and abused the servants.
"Her voice was shaky and Incoherent,
her hair disheveled and she was very pro
fane. She was decld-idly drunk," said the
witness. t
he Swears at the Grooms.
"at another tlnv she came Into the sta
bles while I was -working there and swors
at tbe groom fti.d wa so drunk that
every one could t!l that she u drunk."
he contlnued."He tried to go up stairs to
the harness room but could not navigate
the steps," he addod emphatically.
Trotter said he was ordered to go to
Blue Gap farm, the Oould place in Vir
ginia. On several occasions during the
first ten days he was there he testified
he saw her Intoxicated and heard her
swear a great deal at the workmen.
"One night ahe came In from driving,
drunk," said the witness, "and began to
abuse me and a man named Tony.' Khe
said to me she wanted the big seven-foot
hall clock moved, and I told her I would
have to get help, and she said: 'Why, I
can move it myself.' She was staggering
drunk. She grabbed the clock and they
fell against the wall together."
Trotter testified that Mrs. Gould "was
only occasionally Intoxicated" during her
stay of ten days at the Blue Gap farm
when he was there.
Drank Kvrry Other Day.
"How many times do you think she was
Intoxicated during that ten days?" asked
Mr. Hhearn.
"Kveiy other day," was the reply.
Referring to a time when Trotter said
(Continued on Second Page.)
' Oil, YOU KIDl"
Money Needed ?
to Finish North
Platte Ditch
Senator Burkett and Director Newell
Face Lack of Funds to Com
plete Third Section.
(From a Staff Correspondent.)
WASHINGTON. t. C June lfi. If plans
formulated by Senator Burkett and Di
rector Newell of the reclamation service
can become effective, conditions on the
North Platte Irrigation project will be much
Improved, and settlers along the third sec
tion of the ditch will be relieved of much
anxiety. For . some time they have - been
anxious to have this third section of the
ditch completed, and Senator Burkett has
received a number of letters from them
asking that the ditch be finished If pos
sible. He has been working on the matter,
and he and Director Newell have been
going over the situation together with a
view of having work go forward promptly.
The principal difficulty has been because
of lack of funds, but It is possible that
this may be overcome by some arrange
ment whereby settlers can do the work
themselves. Director Newell has expressed
himself to the effect that he will push
work In every way he can. He has talked
with settlers concerning It and says he
will do all In his power to assist them
Detailed plans are being made to com
plete the third section of the ditch, and
they will be put Into execution at the
earliest possible date.
H. J. Penfold and wife ef Omaha, ac
companied by their little granddaughter,
are at the Raleigh. Tomorrow Mr. Pen
fold will be presented to the president and
on behalf of the governors of Ak-8ar-Ben
will tender to the president an Invitation
to stop over at Omaha on his trip to tbe
west, either going or returning, should Mr.
Taft decide to make this trip during the
coming summer.
The First National bank of Bristow,
Neb., has been authorized to begin busi
ness with a capital of $25,000. F. M. Wid
ner Is president, F. W. Woods vloe presi
dent and J. K. Moore, Is cashier.
Rural carriers appointed: Nebraska,
Farwell, route 2, J. J. Hofseth, carrier;
A. W. Lang, substitute. South Dakota,
Herreld, route 1, Karl J. Baessler, carrier;
Andrew Lang, substitute.
FAIRBANKS HONORED BY JAPS
Former Vle President Elaborately
Entertained By Dignitaries
Enroote to Kobe.
TOKIO, June 18. Former Vice President
Charles W. Fairbanks was elaborately en
tertained yesterday by the governor of
Kyto while an route to Kobe. The dis
tinguished traveler received rhe addresses
of the mayor of Osaka and at Kobe he
was driven to his hotel In the governor's
carriage after being - welcomed by the
mayor and councillors. At Krbe Mr. Fair
banks spoke before the assembled school
teachers and the Chrlsttan girls' school.
On the eve cf his departure for Korea,
for which country he sails tomorrow, the
former vice president returned profound
thanks to the Japanese peeple for the cour
tesy and hospitality he has received
everywhere throughout his tour of the is
lands. Ten Thousand
Will Strike at
PITTSBURG, Pa., June 1 More than
10,000 skilled workmen, members of the
Amalgamated Association of Iron, Steel
and Tin Workers, who are employed by
the American Sheet and Tin Plat com
pany, will quit work on the night of June
30, at which time the "open shop" order
ot the company becomes effective. Many
unskilled workmen will also be affected.
The decision to take this action followed
a special convention here.
The following announcement was made
by President J. P. McArdle of the
Amalgamated association:
"The convention of the representatives
BANKER RELASED ON BAIL
Charles W. Morse Given His Liberty
Pending an Appeal.
HIS BOND PLACED AT $125,000
Twenty New York Bankers and Bnsl
nesa Men Believe II I m Innoeent
Qualify On Bond Foar Mentha
Freedom At Least.
NEW YORK, June 16. Charles W. Morse,
convicted banker, was released on ball to
day pending the taking of his appeal In
the United States circuit court of appeals
next October. For nearly four months
Morse will be free. At the end of that' time
the court of appeals will either order a
new trial or afiUm the sentence of fifteen
years' Imprisonment Imposed upon the
former Ice king In November of last year.
The bail bond for $125,000 was signed lute
this afternoon by twenty wealthy friends
of Morse, who volunteered for this service
several months ago, and Morse quit the
custody of the United States marahal
shortly before 6 o'clock.
Morse's release came largely through the
activity of twenty-five of his frlenda, who
petitioned the court In May, saying that
they believed In his Innocence, and were
ready to become responsible upon a ball
bond for an indefinite sum. The signer
included Frank A. Munsey, Augustus Vah
Wyck, John D. Crlmmtns, Oaklelgh Thorne
and other prominent New York bankers
and bt'slness men.
Morse was cornricted of having misappro
priated the funds of his former chief bank,
the National Rank ot North America, In
financial operations which led to Ma being
thrown into bankruptcy early in 190S. He
was sentenced to fifteen years in the fed
eral prison tn Atlanta, Ga. Since his con
viction he has been in the Tombs. At
tempts to hate him admitted to ball have
extended over a period of seven months.
Clark on Stand
in Smuggling Case
Witness Tells of Conversations With
Dinin? Car Cooks and Pay
ment of Money.
CHICAGO, June IS. W. H. Clark, one
of the alleged conspirators In the plot to
smuggle Chinamen into the United States
from Mexico, who had already pleaded
guilty to the charge, testifying for the gov
ernment thlj afternoon, told of conversa
tions he had with dining car cooks on the
Atchison, Topeka & Santa Fe railroad and
of hattig paid them money supplied by
Ju.hu l!etli,' anotlie f .he conspirators,
who has already pleaded guilty.
STEAMER TEUTONIC AGROUND
Position an Kesy Owe and Vessel Was
Floated mt the Next lllirh
Tide.
NEW YORK, June 16. The White Star
steamer Teutonlo, which left Its pier today
for European porta, ran aground In '.he
Ambrose channel opposite Sandy Hook.
The Teutonlo was floated by the rising
tide this afternoon and proceeded on its
voyage apparently uninjured.
Steel Workers
End of Month
ot the sheet and tin mills lodges, held for
the purpose of taking action on the
declaration of the American Sheet and Tin
plate company to run Its plants nonunion,
has decided that the Amalgamated associa
tion will resist all efforts to carry out that
policy and will refuse to Work after June
30, laoo, unless a satisfactory agreement is
reached by that time."
In the Pittsburg district a majority of
the mills of the American Sheet and Tin
Plate company, a subsidiary of the United
States Steel corporation, are nonunion. The
combined plants tn which a strike order
will be effective total 12 mills In the tin
trad and 61 mills In the sheet steel trade.
Thinks Federal Government Should
Have Income Tax Authority.
BUT IT HASN'T GOT IT NOW
Executive Reported to Be Confident
of Downward Revision.
FIRST STRICTLY PABTY VOTE
On Motion to Instruct Finance torn
mlttee, Democrats All Vote In
Affirmative and ttepnbllcana
In Negative.
.A
1
WASHINGTON, June 1 Recommending
legislation leading to the placing of a t
per cent tax on the net Income ot corpora
tions and also the adoption of an amend
ment to the constitution providing for the
Imposition of an income tax without nn
apportionment umong the several stat.
President Taft today sent to congress a
message embodying his views on the sub
ject. This action followed a protracted
special meeting of the cabinet.
President Taft, Is was announced latei
In the day, Is highly gratified over the out
look. It Is said that he regards the
prospects for "tariff revision dowuward"
as bring brighter than ever.
In his message the president speaks of
the apparent inability of congress to agree
to an Inheritance tax, and aa regards an
Income tax he refers to the decision of lh
supreme court in the case of Pollock
against the Farmers' Loan and Trust com
pany, in which the court held the tax to be
unconstitutional unless apportioned accord
ing to population. "It Is," says the presi
dent, "undoubtedly a power which the gov
ernment ought to have. It might be indls-
penslble to the nation's life In great crises."
The amendment, therefore, he declares,
was tho only proper course. Suoh an
amendment to the constitution, he contends,
was preferable to the one proposed of re
viving a law Judicially declared to be un
constitutional.
Illy Revenue from Tax.
The amendment which he says should b
made to the tariff bill, provides for th
imposition on all corporations and Joint
stock companies for profit, except national
bank (otherwise taxed), savings banks and
building and loan associations of an cxcls
tax of 2 per rent on the net income of . said
corporations. This, it I estimated by
him, will bring an annual revenue of 125,
000,000. "This Is a tax on privilege and not
on property," he says, "and is within tin
federal power without apportionment ac
cording to population."
The president point out that anothet
merit to'tlie tax ou corporations is the fed
eral supervision which will give to- th
government, the stockholders and the pub
lic knowledge of the real business trans
actions and the gains and profits of every
corporation in the country. The adoption
of the amendment, he says, will make a
long step "toward that supervisory control
ot corporations which may prevent a fur
ther abuse of power."
Hccrntlon of Message.
When the message reached the senate
Mr. Hoot, who was in the chair, made the
customary reference ot the document to
the committee on finance and Mr. Heyburn
Secured the floor and began a speech on
another subject.
Senator Gore broke In and attempted to
have the committee Instructed to report
on the Income tax feature of the move
ment by next Friday when, under general
agreement, the Income tax question Is
again to be taken up for consideration. His
motion was, however. Voted down and for
the first time In many weeks the division
was strictly along party lines, all tha re
publicans voting to lay on the table, whllo
all the democrats cast their votes against
that proposition.
Senator Bailey gave notice that he would
demand that provision be made for i
graduation of any Income tax that might
be provided for and intimated that much
time would be necessary to get through a
provision, which did Dot carry that quali
fication. Teat of the Message.
The text of the president's message Is
as follows:
"To the Senate and House of Represen
tatives: It is the constitutional duty of
the president from time to time to recom
mend to the consideration of congress such
measures as he shall Judge necessary and
expedient, in my inaugural address, im
mediately preceding this present extraor
dinary session ot congress, I Invited at
tention to the necessity for a revision of
the tariff at this session and stated the
principles upon which I thought U re
vision should be effected. I referred to th
then rapidly Increasing deficit and pointed
out the obligation on th part of th tram
era ot the tariff bill to arrang th duty
so as to secure an adequate lncom and
suggested that if it was not posslbl to do
so by import duties, new kinds of taxation
must be adopted, and among them I recoia
mended a graduated Inheritance tax aa cot
reel In principle and as certain and eaaf
of collection. The house of representatives
lias adopted the suggestion and has pro
vided In the bill It has passed for th col
lection ot such a tax.
"In the senate tho action of it finance
committee and the course of th debut
Indicate that It may not agree to this pro
vision, and it Is now proposed to make up
the deficit by the Imposition of a general
Income tax In form and substance of al
most exactly the same character as that
which in the case of Pollack against
Farmers' Loan and Trust company (157 U.
S. iZ was held by the aupreine court to oe
a direct tax, and therefore not within th
power of the federal government to impose
unless apportioned among the several
states according to population. This new
proposal, which I did not discuss In my in
augural address or in my message to the
opening of the present session makes'it ap
propriate for me to submit to the congruj
certain additional recommendations.
Favors Income Tax Amendment.
"The decision of the supreme court In
the Income tax cases deprives the national
government of a power, which, by reason
of previous deciblons of tlie court, It was
generally supposed the government has.
It la undoubtedly a power th national
government ought to have. It Ls lndlpen-