Arizona State Miner

Washington Sidelights
Congress
and Tax
Exempt Securities

WASHINGTON. - Futility of any further effort in behalf of a constitutional amendment prohibiting the issuance of tax-exempt securities is conceded by the administration, it is reported.

President Coolidge and Secretary of the Treasury Mellon, while continuing to advocate such an amendment, have become convinced that there is no immediate prospect of action and will center their efforts on obtaining reductions in the higher surtaxes to a level which will offer no incentive to investments in tax-exempt securities.

Secretary Mellon virtually admitted the abandonment of any serious effort to obtain the adoption of a constitutional amendment in his recent speech at a bankers' convention at Jackson, Miss. His opinion as to the impossibility of obtaining results through the constitutional amendment method during the present administration coincides with that of congressional leaders who have canvassed the situation in the light of the personnel of the new congress.

A resolution proposing a constitutional amendment prohibiting the future issuance of tax-exempt securities by states and municipalities will be reintroduced in the house in next winter's session of congress. The ways and means committee may go through the form of reporting the resolution favorably, as it has done in several sessions heretofore.

It is unlikely, however, that it will be pressed to a vote in either house.

Several factors have contributed to what is conceded to be a steady loss of support in congress for the constitutional amendment in the face of continued agitation for it by the treasury.

Southern Democrats, for the most part, have stood firm against the amendment in line with their general position against encroachment of the federal government upon state rights.

A good many Republicans, principally in Pennsylvania and other parts of the East, are opposed to it, believing it desirable to encourage municipal improvements through tax exemption of bonds.

Furthermore, with one reduction from the maximum wartime surtaxes accomplished in the revenue act of 1921, another cut made in the revenue act of 1924, and prospects excellent for a further slashing of rates in the revenue bill to be enacted next winter, need of the constitutional amendment is conceded to be less pressing.