The Omaha Daily Bee
The o mai i a dee
ta th mot powerful business
gttr la th went. bwause It goe
to the homes of poor and rlob.
WEATHER FORECAST.
For Nebraska Shewrrs.
Kr low ii Shew ci'h and cooler.
For weather report Mr- pHe 3
VOL. XXXIX-NO. C.
OMAHA, WEDNESDAY MOIININC, .HNE
l!f(t!i-TEX l'AOES.
SINGLE COPY TWO CENTS.
CHINAMAN TELLS
HOW GIRL DIED
Chung Sin Sayt He Saw Leon Lin;
with Body Shortly After Murder
Was Done.
DIDN'T WITNESS ACTUAL DEED
Ghastly Account of Crif. Unveiled
to Mr. Jerom .
Sr..
ELSIE VISITED ROOM
i "EON
Slayer
Declared She
Tongne and. Bled to Death.
.' The consular Dureau is lotn to lei r.
MYSTERY OF DEATH IS SOLV-J Howe go. realising that he Is one of the
Alrtlm nrnturil with Cklontoni and
Then Choked tn Death Cknni
Sin HrM aa Material Witness
I nilrr Hmr Ball.
SKW YORK. June 72. Baited and In
timidated by detectives, threatened with
prosecution, and confused with rapid fire
questions. Chung fin, one time room mate
of Leon Ling told this afternoon of Elsie
Nigel's murder.
Vhder the terrific pressure of the "third
degiee," the little Chinaman admitted that
he had seen the body tn Leon Ling s room,
that he had touched it while It was still
warm, that he had smelled drugs, and
had watched Leon Ling's preparations for
placing the body In the trunk where It was
found horribly decomposed last Friday
night.
Chung Sin. In fact. If what was learned
al the criminal courts building Is cor
net, described almost everything con
cerning the murder of Major General Franx
Steel's granddaughter, except the actual
commission of the crime. He denied com
plicity In It, and protested stoutly that he
wax Ignorant of the whereabouts of Ling,
the supposed murderer. After the Inquisi
tion he was taken before Coroner Har
burger, and held In $10,000 ball In the house
of detention to await the Inquest.
Chung's Spirit I Broken.
Chung Sin is IS years old, and a native
of Canton. was arrested yesterday
morning at West Culway, N. Y., and was
brought to Niw York today. Immediately
after his arrest and dining the trip to
this city, he was plld with questions, bul
lied. p i4iiadM and entangled In a mass
of quest Urn. It was not until late today
however that hi spirit was sufficiently
broken, or sufficient inducements were
ufi'ered. as the ccsc may be, for him to
cast asldo his air of etoUdnees, and tell
of the death of the young missionary.
Thru, sn.oklng cigarette after cigarette
to ruUt bin nerves, the Chnaman told
brokenly, but with brutal bluntness, of the
Ulrl's death. He was surrounded at the
time In the office of Assistant District At
torney Ward by detectives from police
headquarter.-., woo had put him through a
Kt llllllL.
Mr. Ward and District Attorney Jerome
wero also present, and from what can be
learned, it was Mr. Jerome himself, who
finally drew the story from Chlng Sin's
Hps. He was told that Leon Ling had been
captured and had lain the blame upon him
Chung Sin's) shoulders. This, together with
the persistent hammering at the prisoner,
brought the confession. It was made partly
in Fngllsh and partly In Chinese, for there
was an Interpreter present and was taken
down by stenographers.
No statement of the gist of hla remarks
was made public, but the more salient
facts of the confession soon became known
about the building.
Chloroformed and Then Choked.
From the man's stoy Is Is apparent that
Klsle Slgel first was drugged with chloro
form, and then choAVd to death. She was
killed apparently on the night of Juno
9, although Chung Sin appeared a little
mixed In his dates. But he says that early
In the morning of June 10 he heard a
strange noise In Leon's room adjoining his,
and looking over the transom, saw the
glr lying on the bed with a bloody towel
over her mouth. He passed through the
room, he said, to go out to wash his
hands, and as he did so felt of the body,
which was still warm.
Afteiv.ard he went down to the chop
suev re.'tnurant below, and then returned
to the rtMim. Leon. In the meantime, had
roititd the body with a blanket up to
the i hln. and had pulled a trunk to the
middle of the floor. The trunk. Leon was I
calmly emptying preparatory to placing
the body therein. The rope with whlth the
body was bound was lying on the floor at
the time, according to Chung Sin. Once
again he went down staira, said Chung Sin,
where he remained until Leon called him.
Whon he entered the door the body was
Dot visible, having been bound with the
rope and placed in the trunk.
Denies Any Participation.
At this point of the story, the Chinaman
was asked savagely It he had not assisted
In putting the body In the trunk. Chung
Sin started perceptibly, but said that he
had no hand In It.
"1 dodu't see her no more," said Chung
Hln, "and whcil 1 asked Leon how she
died, hr id she had bitten her tongue
and blead to death."
Leon told him, Chung Pin added, that
he was going to send the trunk to Jersey
City, thence to Kurope. As a matter of
fact. It lay untouched In the stuffy little
room until Sun latins, proprietor of the
restaurant below, noticed the odor about
the building and summoned the police.
L'ntll Chun Sin's complete account Is
mad public It will not be explained why
he saw the dead girl and the preparations
for th removal of the body with such ap
parent unconcern at the time. Also, de
spite repeated Interrogations, he declined
to aay Just what happened in th room
when th girl was murdered. He admitted
having heard a scuffle In the room during
th night and told of Elsie having arrived
on th previous afternoon, th day when
she disappeared from horn.
Girl went to Rooat.
"Did Leori take her there or did she go
of her own accord?" he was asked.
"oh want there alone," he replied.
"Was ah In love with Leon, or Leon In
lov with herT" was another question.
At this Chun Sin relapsed Into silence,
and than only smiled and shook his head.
II Indicated, however, that the girl had
sought out the Chinaman.
Taking up bis own case, Chung PI a ex
plained his sudden disappearance after the
murder by saying that he had been em
ployed by a well-to-do New Torker, at
Continued on Second Page )
Church Howe
Calls at the
White House
Consul at Manchester, England, ii
Seeking Place in the Diplo
matic Service.
(From a Staff Correspondent.)
WASHINGTON, June 22. (Special Tele
gram. ) Church Howe, consul at MariV-hes-ter,
England, who haa been successful In
consul service. Is desirous of rounding out
his career In diplomatic aervlce and to
this end Senators Burkett and Brown had
a conference with President Taft today.
They presented Mr. Howe's claims to Mr.
Taft. and urged that he be given a diplo
matic assignment In keeping with his
proved ability.
The consular bureau Is loth to let Mr.
very best consuls In service. His salary
at Manchester Is $6,000 per year.
J a in Halley, wife and children of Rapid
City, 8. D., are In Washington on a visit
to Mr. Halley'a father, who celebrated his
SOth birthday yesterday.
The president sent the following nomina
tions to the senate today: Samuel O. Mor
timer, to be receiver at Belle Fourohe, 8.
D.; W. J. Haskell, postmaster at Cedar
Rapids, and Oewell C. Wellman, post
master at Allngton, la. "
Guy M. Cowgill of Vllltsca, la., has been
appointed special agent of the Department
of Labor.
South Dakota rural routes ordered es
tablished September 1: A all ton, SfJInk
county, route I. serving sixty families;
Burke, Gregory county, routes 1, i and
S. families tm; Carlock, Gregory county,
route 1, famlllee 115; Dallas, Gregeory
county,, route 3, families 113; Dixon, Greg
ory county, route 1, families 89; Gregory,
Gregory county, routes 1. 8 and 4, families
371; Herrlck, GrenAry county, route 1,
families 110; Iroquois, Kingsbury county,
route 3, families 68.
Rural carriers appointed for Iowa routes:
Exlra, route S. Clark Griffin carrier, no
substitute; Humeston, route 3, William I.
Black carrier, Frankle Black substitute.
Harriman Goes
On His Travels
Health of Amerioan Railway Mag
nate, Once Reported Dead,
Said to Be Good.
VIENNA. June 22. Accompanied by the
members of his family, E. H. Harriman
left Vienna this afternoon for the Semmer
Ing ,a mountain resort about fifty miles
from the Austrian capital. The party will
stop at the Hotel Panhans, and probably
will return to Vienna In a few weeks.
Mr. Harrlman's condition was reported
at noon today as good.
Prof. Struempell. Mr. Harrlman's phy
sician, was questioned today regarding his
patient. He said the magnate's condition
was neither alarming nor dangerous.
"He la affected with a nervous ailment,
but not of a serious character, and he will
have to undergo a prescribed cure." The
profeaaor said that Mr. Harriman felt well
and was able to attend to his business
duties. Dr. Holsknecht has taken an
X-ray photograph of Mr. Harriman which
corroberates the diagnosis of Prof Struem
pell. SEMMERING, June 22. E. H. Harriman
arrived here at 7 o'clock this evening and
went to the Hotel Panhans, where a suite
had been engeged for him and his family.
Mr. Harriman appeared to be In excellent
health.
Base Ball Follows
Flag to Colon
New Park to Be Dedicated There
Prior to Opening of
Season.
WASHINGTON, June 22.-Bae ball fol
lows the flag even In our hot tropical
possessions. In the Panama canal cone two
leagues played a series of games In the
season Just closed there. At Colon the
sport has taken such a hold on the people
that It Is proposed to put up a new base
ball park prior to the opening of the next
league season. The Panama Railroad com
pany has granted the ground for the pur
pose and 'he business men of Colon are
contributing to a fund for the erection of
an enclosure and grand stand. The games
draw attendances varying from 600 to 1,200
each game.
STEAMER SINKS, CREW SAVED
Lake
Boat Gc
to th
Down, Men Take
Yawl and Ee-
eape,
ALPENA, Mich., June 32. The steamer
W. P. Thew, owned by Hugh R. Havey of
Detroit, was sunk today off Thunder Bay
Island by the steamer Livingstone. Csd-
tain E. W. Duncan and the crew of eleven
men escaped In yawls and were picked up
by the steamer Mary C Elpieke..
WHEAT SPROUTING IN SHOCK
Heavy Rain
Crop
s tn Sooth Damaaiiiw
Which lias Been
Cut.
NASHVILLE, Term.. June 22. Rain con
tllnues throughout this section and reports
are coming In from many points of wheat
sprouting In the shocks. The same condi
tions prevail In north Alabama and south
ern Kentucky,,
Given Life Sentence, Has
Brief Vision of Freedom
CHCAQO, June 23 A fleeting hope of
freedom, held out to a prisoner In Judge
Brentano's court today, was snatched from
him It a way that created a sigh of pity
to spread among the spectators, when tt
was discovered that th clerk of the court
should have read th Jury' verdict as
"guilty" Instead of "not guilty."
The prisoner was Frank O'Donnell. ac
cused of robbing a cltlxen at the point of a
revolver. Th Jury had been out but ten
minute. Th foreman of th Jury handed
th olerx two forms, on for guilty, and
th other for aoquktaL
"Not fullty," read th clerk, absent
EXPRESS SUITS IN
SUPREME COURT
Case of State to Compel Corporations
to Observe the Sibley Act Up
for Argument.
COMPANIES
ATTACK
LAW
Statement Made that Business Can
not Be Done at Profit.
CHARGE
IT
IS
INVALID
Plea Made it Takes Property Without
Due Process of Law.
STATE COMBATS THIS VIEW
Attorney General Holds that Facts
Presented Do not Shaw ITew
Rates Would Cans Loss
to Companies.
From a Staff Correspondent.)
LINCOLN, June 21. (Special.) The suits
against the express companies doing busi
ness in Nebraska to prevent them charging
rates other than those rates fixed by the
Sibley law, enacted by the legislature of
la07, were argue before the supreme court
today, Attorney General Thompson appear
ing for the state and Ralph Breckenrldge
for the express companies.
The argument was based on the report
of John J. Sullivan, referee appointed by
the court to take testimony and pass on
the legal points Involved. The state upheld
that report, while the express companies
objected to It.
The attorney for the companies argued
that the law was enacted as a result of
public sentiment which was to the effect
that corporations were public enemies. No
Investigation of rates was made by the
legislature which enacted the law, and the
legislature worked In Ignorance.
Using the Adams Express company as an
example, he set out that this company
had carried In 1907, 850.000 packages at a
rate of 3S centst per package. The company
had done business on such a small margin,
he said, as to b Insignificant compared
with the profits of farming and mercan
tile enterprises In the state.
The attorney general argued that It was
not sufficient for the express companies
to show what would be the effect of the
new rate as applied to old business, but
that the new rates must be applied to new
business and the profit or loss based on
that.
Position of Companies.
' In the conclusion of his brief Mr. Breck
enrldge said:
"Ti, .nntrnverv and dispute in inese
cases has resolved itself to the single issue,
whloh has been repeatedly asserted to be:
ti. ahntl the known terminal expense.
paid out within the state of Nebraska, be
apportioned between the Intrastate transac
tions and interstate transactions of the
companies?
"When the actual cost cannot be found
th apportionment of this expense on the
natural and reasonable basis of what It
costs to handle the transactions them
selves upon the average cannot be suc
cessfully assailed. To Insist that the ter
minal cost shall be charged against the
Intrastate and interstate revenues, without
considering the transactions themselves,
solely for the purpose of finding some way
to figure a profit on a losing local business
cannot be permitted; and It therefore ap
pears by all the comparisons which have
been made, that the Sibley act, which un
dertakes to prescribe the reasonable rates
and charges whloh the express companies
may collect and receive for the services
they render to their patrons between sta
tions within the state of Nebraska, Is an
outlaw, tested by the constitution of the
United States, for It takes he property and
services of the companies and their em
ployes without reasonable compensation.
The rates fixed by this aot are Inelastic;
it prescribes a maximum scale of charges
not only for prosperous times, but for
periods of depression, and gives no consid
eration to the shifting conditions of trade
and commerce, which the managers of all
successful business enterprises must rec
ognise. "The Sibley act denies to the companies
the equal protection of the laws by making
an arbitrary, unjust and radical cut In the
rates and charges of the express com
panies which was not extended to the
other carriers of the state and the ap
peal for a Judicial ascertainment of the
unreasonable and confiscatory character
of the rates and charges prescribed Is
under a threatened minimum penalty of
fines which may aggregate $10,000,000 or
more; or maximum fines aggregating SI,-
000.000,000!
Answer of the State.
In his argument Attorney General
Thompson held In his conclusion:
"The statute reducing express rate can
not be set aside as confiscatory on testi
mony which falls to show the effect of
th reduced rates on new business. The
defendant having failed to mak such
'"owing
it becomes unnecessary to ex-
i amln4 tne testimony offered by the state.
ral8 anouia never be set
asiae wunoui me lunest aiseiosure or all
material facts, and the statute reducing
express rates should not be set aside as
confiscatory on testimony of defendant
that It would be compelled to do Its buai-
ness at a loss under the new rates, where
the testimony is based on operations under
the old rates, and evldenoe of actual opera
tions under the new rate show a profit.
"By the use of reasonable and Just meth
ods for apportioning operating expenses,
(Continued on Second Page.)
mlndedly falling to note that he was
reading the unsigned form.
O'Donnell Jumped from bis seat, excit
edly laughing and wrun his lawyer's
hand. He started from the room with his
head In the air, and his eyes sparkling.
Then the mistake was discovered
O'Donnell was brought back. Hla
and
head
sunk on his chest as the real verdict was
oontinued:
"Guilty, and condemned to serve the
term of his natural life in prison."
Even the prosecutors and their witnesses
exhibited evidence of their regret at the
accidental cruelty with which th finding
of lU Jurors was accompanied,
nvviS?.
WMAT IS SO
T O
4eA, IJ. W
THE
From the Minneapolis Journal.
HIDE DUTY PASSES SENATE
Present Dingley Bate is Restored by
Upper House.
SEX LONG HOURS OF ORATORY
Advopntea of llonse Provision Assert
that Ileef Trnst la Sole Ilene
cinry of Present and Pro
posed Tariff.
.
WASHINGTON. Ju -22. Late today the
senate reached the voting stage on the
hide schedule, and nftor several amend
ments had been defeated, the amendment
of the finance committee, fixing a duty
of IS per cent ad valorem on hides, was
OKreed to by the vote of 46 to 30.
This is the rate of the present law, but
under the rulinKS of the Treasury depart
ment Is applicable only to hides welching
more than twenty-five pounds. The house
placed all hides on the free list, but the
committee restored the Dingley policy by
adding them to the dutiable list. The sen
ate sustained Its committee.
Party lines were much broken In the
adoption of the finance committee's
amendment. Republicans voting agnlnst
the 15 per cent duty were: Hriprgs, Kurn
ham, Burrows Burton, Clopp, Crane, Cul
lom, Dupont, Fry, La Follette, Lodge,
Nelson, Page, Root and Smith of Michigan, (
Democrats voting far thp duty were:
Bailey, Culberson, Fletcher, Foster,
Huches, McKnery, New-lands, Smith of
Maryland, Ptone and Tallaforro.
Lumber Schedule Reported,
Just before adjournment for the day at
7 o'clock Senator Aldrlrh, on behalf of the
finance committee, presented the commit
tee's new lumber schedule and also a num
ber of amendments relating to linoleum
and oil cloth. The committee provided a
rate of Sl.fiO per thousand on sawed lum
ber, which Is a 50-eent lnrren.se over the
house rate. Neither the lumber nor lino
leum schedules were acted upon.
Declaring that he had voted with Mc-
Klnley for free hides In lS'tO, Senator Bur
ton said that the subject had heen very
carefully considered on that occasion. The
"beef trust." he said, probably tans 60 to
TO per cent of the hides and the whole
tanning Industry was threatened by the
operations of these packers.
"I think," said Mr. Burton, "It requires
a great deal of Ingenuity to show that the
farmer In benefited by this duty on
hides."
After a speech hy Mr. Taylor, Mr. AM
rleh appealed to Mr. McLaurln to withdraw
his amendment to the proposed amendment
of the finance committee, the purpose of
which was to include us dutiable, small
as well as large hides. Mr. Aldrkh sug
gested that the amendment was not con
sistent with the free trade ideus of the
Mississippi senator. Mr. Mcl.aurin re
piled that If a duty was to be levied on
hides, It ought to be luvlod on allhldes
Mr. McLaurln's amendment was rejected
Continued on Second Tage.)
Are you looking
f
?
or a room:
) jH i " " ' fj ri when think inq about it in FtBwuAnv-
?&IWKf7i$ SO RAW A3AOAVIN JUNe-SOWrilMg8'WHtN-rr6IT3'HERE. -
An easy way is not to
wear out shoe leather but to
look through the list of rooms
offered for rent on the want
ad pages of The I"e. There
you will find practically a
complete directory of the de
sirable rooms, with sufficient
information to enable you to
judge which will meet your
requirements. Then, by in
specting these, you will bo
sure to find what you want.
Have you read tbe want ads. yet
todajri
ii
RARE Ai A DAY IN JUNE
I I. o n - -VVVVy
JUNE DAY-DREAM AND REALITY.
Single Bandit
Holds Up Texas
Bank for $8,100
Bland Stranger, in Trne Frontier
Style, Robs Cashier at Re
volver's Point.
FOR WORTH, Tex., June 22.-In true
frontier style a highwayman, described as
genteel In appearance, robbed the branch
bunking house of the Waggoner Bank nd
Trust company. In the most central section
of the down town district of Fort Worth,
this afternoon, escaped with $.W0 In cur
rency, and, up to a late hour tonight, was
still at large.
The robbery was the most daring at
tempted In Texas In years. Cashier Walter
F. King was alone in the bank. A well
dressed stranger walked In, approached
the window of the cashier's desk, levelled
a revolver at King, and next came the de
mand for all the money In sight.
"Make a move or a noise of any kind
and I'll kill you," said the man.
The cashier complied, ana stuffing the
roll ol bills, ",100, In denominations rang
ing from Jl to $20, Into his pocket, the
man backed out of the door under cover o'
his pistol, and as Mr. King ran to a tel
phone he saw the man walking down t!
street and mingling with the crowds with
an air of unconcern.
The police reached the scene five min
utes later, but the stranger had disap
peared. At the time of the robbery several
hundred were In the vicinity of the build
ing, and many noted the arrival at the
bank and the departure or the man, but
his manner was bland. Several declare
that he climbed Into a waiting automobile
after walking several blocks, but the police
plaoe little credence In this assertion, and
It Is believed he Is still In Fort Worth.
Tonight searching parties are out in force
and every place of possible hiding Is be
ing searched. According to Cashier King
the man was about 35 years old, tall and
slender, and apparently a man of refine
ment. The loss to the Waggoner bank la
covered by insurance. The bank, however,
has offered a reward of $1,000.
DROP UNION OR THEIR WORK
Street Railway Men at I.a Crosse Dis
charged for Staying- by
' Orarnnlsatlon.
LA CROSSE, Wis., June 22. When the
employes of the La Crosse City Railway
company reported for work this morning
they were given a choice of dropping out
of the union or giving up their positions.
To a man the conductors and motor
men stuck to the union and were ordered
off the company's property. Strike break
ers procured from Chicago were placed on
the cars and partial service was started.
Drink is Wrecking Nerves
of Americans, Says Doctor
r ETROIT, Mich., June 12. "Notwith
standing the prohibition wave that has re
cently swept over the country, there Is
every reason to believe that the alcoholic
habit among business men is steadily on an
ir.cieahe,"' declared Dr. Frank C. Richard
son of Boston today in an address before
the So-lety' of Neurology and Psychiatrics.
! Tl e meeting at which this arsertlon was
made was one of the many being held In
connection with the American- Institute of
Homeopathy, which Is in session here this
week.
Ir. Richardson's topic was "The Problem
of Ameiiiau Buslnefs Neurosis.'' He de
claied that the strenuius American bust
n.KS life was producing In many of Its fol
lowers a neurotla partaking of tne charac
ltr of neurasthenia, fsychaa t-Utnia aui
V ? i 1 t.r rf
J "IS F,V' 'K "
BUTLER TALKS TO TEACHERS
Asserts Educational Forces Must Har
monize Nations of World.
RACES SHOULD WORK TOGETHER
Alumni Gives Dinner tn Head of
Columbia I'nlrerslty, Who Any
He Never Heard of
Tainted Mouey.
Using th school terms of "common de
nominator" and "numerator" and saying
that the common denominator contains
fundamental principles and the numerator
Is made up of individual methods, Nicholas
Murray Butler, LL. D., president of Co
lumbia university, told the school teachers
of Omaha that It Is their duty to endeavor
to understand the "numerators" of other
countries.
"One knows what was done and thought
In Persia, Greece and Rome during the
middle ages." said President Butler, "but
sometime thb world will ask what did
America and Americans mean and try to do;
what record did they leave to go side by
side with Persia. Greece and Rome.
"What I term the new Internationalism
Is the necessity of learning what other
nations' enumerators are and whether the
fraction written In their numerators Is
earer perfection than ours.
"I am not sure but that In the next
-neration It will fall to educational forces
to bear the brunt for universal peace, If
I may use that expression. It used to be
said that commerce and trade bound na
tions together. Certainly, commerce and
trade sent men out for centuries. We are
now living In an era of high yiarlffs, some
times protective and sometimes prohibitive,
each nation for Itself establishing What
It believes to be the best rule for Itself.
In consequence of this, International com
merce tends all the more to become a mat
ter of discord, for nothing Is watched more
closely by other nations than the tariff.
i Why? Because It affects the pocketbook.
Object of Many Races.
"There are new duties und new responsi
bilities resting upon the oducatlonal forces
of the earth, and these are to understand
the elements In common, to understand
th 'numerators' In other countries, and to
pay less attention to that not In common.
We owe It to ourselves and the world to
keep the fact that the division of mankind
was not made Into races for argument and
discord, but It was made for mutual under
ptardlng and working together, for lifting
1 up of th civilized world. It Is our duty
to life up the world, hut first we must
I provide an economic basis on which to rest
I fie higher life and five an opportunity to
all men gain a livelihood and enjoy the
i. uiis of labor."
President Butler addressed the teachers
In a meeting at the First Congregational
church, arranged for and presided over by
Prof. W. M. Davidson, LL. D., superin
tendent of the city schools. Following his
address. Dr. Davidson called upon Victor
Rosewater, editor of The Bee, but Mr.
(Continued on Second Page.)
hysteria. The etiological factors In the
production of this neurc sis. he said, were
chiefly continuous mental activity and ex
cesi Ive ue of alcohol.
Breaking of patients addicted to the ex
cessive use of alcohol. Dr. Richardson said
that no fear need be entertained of any
physical or mental harm arising from a
change to total abstinence.
While Dr. Richardson held nicotine to be
also a producer of neurasthenia, he re
garded It as levs Injurious and enn de
structive than alcohol. He dli not advo
cate total abstinence from smoking, but
advised moderation, saying that a shnr
smoke after the evening meal was not In
consistent with hygiene and mlht serve to
sooUi aui to faslutai quiet thought.
LEADERS AGREE
0NTAX KILL
Earnings of All Corporations. Above
$5,000, Will Pay Two Per
Cent.
ALL MACHINERY IS PROVIDED
Designated Internal Revenue Officials
Will Act aa Collectors.
FENALTY FOR FALSE REPORTS
Betrayal to Business Rivals is
Guarded Against.
INSURANCE CONCERNS TO PAY
llonse and Senate Leaders Present at
Important White llonae Confer
ence Its Pnesaae Pre
dicted to President.
WASHINGTON. June 22 Details of tho
proposed measure for the taxation of net
earnings of corporations, were arranged
tonight at the most important conference
that has been held at the White House
since Mr. Taft assumed the presidency.
There were present as the president's
guests Attorney Oeneral Wlckersham and
Senator Hoot, who are charged with the
task of drafting the measure; Secretary of
State Knox, Senators Aldrtch, Burrows,
Penrose, Hale, Cullom, Flint, Smoot, Mr
Cumber and Lodge, constituting the repub
lican membership of the senate flnanco
committee; Speaker Cannon, Representa
tive Payne, chairman of the house com
mittee on ways and means, and Represen
tative John Dwlght of New York, the re
publican whip of the house.
The guests sat down to dinner In the
atate dining room at 8 o'clock. No busi
ness was discussed at the dinner, but for
two hours afterward the corporation tax
measure, which had been prepared in the
form of an amendment to the tariff bill,
was viewed from every angle.
Many changes from the form In which
It was placed were suggested, and not a
few- of these were declared to be wise. The
result was that the carefully prepared
copies given to each member of the party
by Attorney General Wlckersham were
returned to him at the end of the confer
ence. President Taft himself suggested that the
copies should not be taken by the mem
bers of the party until the amendment
had been perfected. All agreed not to
make the form of the amendment publlo
until It Is ready to be Introduced In the
senate as a finance committee amendment
to the tariff bill.
Measure Agreed I'pon.
The terms of the measure as finally
agreed upon, although not fully formu
lated, provide that all corporations having
capital stuck and organized for profit
ball pay a tax of 3 per cent on their
net earnings. Corporations coming wtthln
that designation will be compelled to make
returns to specially named agents of the
bureau of Internal revenue of the treas
ury department, giving the amount of
their gross receipts, capital stock, bonded
Indebtedness and all other gross receipts,
capital stock, bonded indebtedness and all
other visible dbts.
Separated from these returns, the cor
porations will be compelled to report the
amount of their net receipts, after de
ducting their general and ordinary run
ning expenses, Interest on bonds up to
the amount of the capital stock of the
corporations, Interest on notes and other
forms of tangible Indebtedness, and any
actual loss that may have been incurred
In business, which loss was not made up
by Insurance, salvage or other form of
return.
The amendment will define In the broad
est possible way the character of losses
which may be deducted from the net earn
ings upon which the tax Is to be Collected.
These losses will Include bad accounts of
a mercantile corporation, losses upon se
curities held by hanks, unnollectable notes
and all other forms of bad debts which
are usually charged to profit and loss
aocounts.
Exemption 1!p to $M,f)Of.
As has been stated before the I per cent
tax will apply to all corporations organised
for profit, but each corporation will be al
lowed a $5.ono exemption, which means that
the tax will not be collected except upon
earnings In exceen of $5,000.
Any corporation which makes a false re
port to an agent of the Bureau of Internal
Revenue, who has been designated to col
lect Information regarding earnings or has
made a fraudulent return upon any of
the subjects covered by the law, will be
subjected to a penalty. Th amount of
this penalty Is the only feautra of the bill
which was not decided tonight. Most of the
participants In the conference expressed
the opinion that this pealty should range
from $1,000 to $10,000, th amount to be
fixed hy a I'nlted States court upon presen
tation of all of the facta connected with
such fraudulent terms.
The tax will be collected upon the entire
amount of the preferred and common
stock of every corporation and upon the
bonds of a corporation where they exceed
the total amount of capital.
Collcrtnl.le July 1, lftlO.
It Is Intended that the bill shall become
operative Immediately on the passage of
the bill. The life of the measure was made
Indeterminate, Instead of two years or
osme other fixed limitation such as had
been suKgested originally. Th present
year's tax will be collectable July 1, 1910,
the beginning of the next fiscal year.
leaders in the senate and house have
been flooded with telegrams from corpor
ations, expressing fear that the taw would
be drawn in such form that unscrupulous
agents of the Internal revenue buerau
might use Information obtained In some
way so as to Injure the business of a
corporation, tils danger was discussed to
night, and It was decided that only espec
ially designated agents of t'.ie buieau
should be permuted to Interrogate corpor
ations concerning their business. The cor
porations are to make their returns dl
ret'tly to the bureau of the Internal reve
nue in Washington.
It was decided at the conference tonight
that all Incorporated Insurance companies,
organised fur profit, thai! he brought
within the terms of the propesed corpor
ation tax law. This will not exempt so
called mutual Insurance companies which
admittedly or which can be proved to
have been organlxed a profit taking Insti
tutions. Neither will U exempt fraternal
