Tariff Before Taxes

As the Congress reassembled after holiday recess, its more thoughtful members realized that this was to be one of the busiest, most critical sessions that ever sat. The Capitol's serious air was supercharged by an unexpected special message from the President calling for immediate, non-partisan enactment of relief legislation. All the leaders were agreed to put that first thing as far as possible first. But Congress is Congress, composed of politicians. Its opening day was not without an event which contained as much politics as economics. The big story for which the Press was on the lookout during the recess was: Everyone now being agreed that taxes must be raised, what will be the Democrats' taxation program? The Administration's program was known: a two-year return to the generally higher, broader tax levels of 1924 (TIME, Dec. 14). Floor Leader Rainey, Chairman Collier of the House Ways & Means Committee and Senator Pat Harrison, ranking minority member of the Senate Finance Committee, were three leading Democrats left in Washington last fortnight. A few days before the year's end the Press obtained from them some sketchy hints which were immediately reported as the Democratic Tax Plan. Chief features: Make the "entrenched rich" bear the load; hoist the surtaxes; repeal the section on capital gains & losses (under which many a citizen was hoping, with mostly losses to report, to cut his 1931 tax to practically nil). Quickly the Treasury (Undersecretary Mills speaking) Hayed the Democrats for planning to "soak the rich." With equal promptitude, stocky, ruddy little Speaker Garner of the House--to whom William Randolph Hearst referred last fortnight (and again last week over the radio; as the Hope of the Democratic Party--retorted: "Ogden Mills is talking through his hat! If he knows what the Demo-cratic tax program is, then I wish he'd tell me!" Also without ado, Speaker Garner summoned Floor Leader Rainey, Congressman Collier and Senator Harrison to his office and in good plain plainsman's language, for two and one-half hours, told them there was yet no Democratic tax plan and would not be before the end of the month. The Hope of the Democratic Party then made a terse announcement of his own: Whether the Republicans liked it or not, the House would deal with the Tariff before Taxation. And sure enough, the very first day Congress sat. Chairman Collier introduced, and called his committee for next day to consider, a bill providing:

1) That the President should at once set up a permanent international council to consider reciprocal tariff reductions between the U. S. and other countries.

2) A "consumer's counsel" (lobbyist) salaried at $12,000, White House-appointed. Senate-confirmed, to confer with the Tariff Commission.

3) That the Tariff Commission should submit to the Congress via the President (.instead of just to the President for action by him) its recommendations for duty changes.

The economic purpose of this bill might have been paraphrased: ''To get the U. S. out of the world tariff wars which the U. S. started." Its political purpose was equally plain: "To keep the Tariff alive as a political issue for 1932." Lower tariffs having been such a major political cry of the Democrats (though almost inaudible in 1928), some move toward lower tariffs must be made early by the new-powered Democratic House. But to attempt a general rate revision now would be not only to keep Business on tenter-hooks but to obstruct many other pressing national affairs. Shrewd was the Democrats' middle course of suggesting a plan which called for action by the President. It might live to embarrass him whether he carried it out or not.

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