8
THE 3IORXIXG OREGONIAN, THURSDAY, JTJXE
PORTLAND, OREGON.
Entered at Portland. Oregon. Fostoftlca as
Second-Class Matter.
bubacriptlon Kate Invariably In Advance.
(By Mall
Pally, Sunday Included, one year .00
Daily. Sunday Included, six month 4.25
rally. Sunday Included, three, months... 2.25
Dally. Sunday Included, one month 75
Pally, without Sunday one year 6.00
lally. without Sunday, six months 3.25
Dally, without Sunday, three months. . . 1.75
Dally, without Sunday, one month ".60
weekly, one year 1.50
Sunday, one year 2.50
Sunday and weekly, one year 3.50
(By Carrier.)
; Dally. Sunday Included, one year .... 8.00
Dally. Sunday Included, one month 75
How ' to Remit Send postoffice money
order, express order or personal check on
your local bank. Stamp's, coin or currency
are at the sender's risk. Give postofflce ad
dress In full. Including county and stata-
Fofltase Kat-n lu to 14 paxes. 1 cent: 16
to 2S panes. 2 cents; 30 to 41 pages.' 3 cents;
46 to B0 pages, 4 cents. Foreign postage
double rates.
F.Shtrro Huslnesa Office The S. C. Beck
with Special Agency New "York, rooms 48
60 Tribune. building. Chicago, rooms 510512
Tribune building.
PORTLAND. THURSDAY. JI XE 17. 1909.
A PARTIAL AND UNJUST TAX.
Doubtless Congress will levy the pro
posed 2 per cent tax on dividends of
corporations. An income tax would
fca- fairer, because It would treat all
alike. But It is assumed that any busi
ness conducted in the name of a cor
poration is "oppressing: the people,"
and should have no friends.
An individual makes money In his
business, yet is not to be taxed on his
profits. A partnership makes money in
its business and obtains large divi
dends from the earnings, yet is not to
pay the tax thereon. But a business
conducted in the name of a corpora
tion is to pay the tax. Wherein la the
fairness here? "There may be," says
the New York Times, "good fiscal reas
ons for a 2 per cent tax upon the in
come of corporations, but there is no
reason in economics or In justice why
the Income of corporations should be
taxed that does not apply with equal
force to a tax upon the Income from a.
3000-acre farm or from a great mer
cantile establishment. The tax upon
corporation income was chosen as the
peace offering because during the last
seven years the people have been
taught to hate corporations. A cor
poration tax would be popular."
The effect of this unfair taxation of
corporations will be considerable. It
will reduce the value of their stocks
and cut down dividends which, of
many small corporations are meager
already. It will cause owners of small
parcels of stocks to sell out to the
larger owners, and these last then will.
If possible, change the business to the
partnership form, In order to get rid
of the tax. But the lawmakers have
only in view the great trust corpora
tions, as those in the steel, copper and
sugar business. An income tax bear
ing equally on all would be fairer every
way.
THE COMMITTEE ON SPECULATION.
. On December 14. 1908, Governor
Hughes, of New York, appointed a
committee to investigate the general
Bubject of speculation in securities and
commodities for the purpose of recom
mending legislation to reform abuses.
The committee's report has now been
given to the public. It is an elaborate
document, containing the results of
wide research. Upon a variety of sub
jects, such as short selling, margin
trading, the manipulation of prices,
and so oh, it offers discussions of great
value. The exchanges which were in
vestigated in New York are nine in
number, two for transactions in securi
ties and seven for commodities like cot
ton, wheat and metals. These bodies
are usually grouped in the popular
mind under the ominous designation
of "Wall street," and It is commonly
supposed that a good deal of more or
less drastic legislation would be an
excellent thing- to check their Iniquities.
Governor Hughs' committee Is of a dif
ferent opinion. The gentlemen com
posing it are fairly competent to deal
with the subject and about all the new
legislation they recommended relates
to bucket-shops and to the mercantile
and metal exchanges.
Bucket-shops are places where
gambling, pure and simple, is carried
on under the thin disguise of buying
and selling stocks. No stocks are
bought and none are sold. All that Is
ever done is to bet that the price will
rise or fall and the bucket-shop keeper
makes sure of his percentage by charg
ing a commission on the illusory trans
action. The practice Is wholly evil
Bucket-shops exist not only in New
ork, but also in almost every city of
the country, even in many small towns
They: foster the spirit of risky specu
lation, depraving the morals of the
public and draining small owners of
their accumulated capital. The Louisi
ana lottery was a trifling National evil
compared with them. The Government
was able to suppress the lottery by de
nying it the use of the mails, but the
bucket-shops do not employ the mails.
They thrive through the receipt of
market reports by telegraph. The
committee recommends two measures
which would tend to cut off this source
of information and thus help extirpate
them. It advises that the telegraph
companies be relieved of the obliga
tions of common carriers in regard to
stock quotations. They can then choose
their own customers and decline the
business of the bucket-shops. Again.
K a telegraph company supplies con
tinuous quotations to a place which it
has good grounds for taking to be a
bucket-shop, it is to be held criminally
liable equally with the gambler him
lf. In addition to this, the committee
urges the adoption in New York of
t1.eJCtllent Massacnusetts provision,
which holds the bucket-shop keeper
criminally liable for any deal which he
Intends shall be settled bv the mere
payment of differences without an ac
tual transfer of property. The present
New York law requires proof that both
parties to the pretended sale purposed
that it should be a gambling transac
tion. Of course, this makes convic
tions much more difficult than they are
In Massachusetts.
For most of the other evils which it
came upon in the course of lu investi
gations, the committee seems to think
that action by the various exchanges
might be more effective than legisla
tion. Only two of the exchanges does
It find irreclaimable. Those are the
metal and mercantile, where few or no
genuine sales are made, and nothing is
done but manipulate prices, to the in
Jury of both producer and consumer.
These ought to lose their charters, the
committee thinks. As to the others
the stock, cotton and all the other ex
changes, it urges numerous reforms
upon the members themselves, and Is
hopeful enough to believe that they
will be adopted. Considering the his
tory of these bodies, one is constrained
to admire the optimistic mood of the
committee. Most of its recommenda
tions are directed to the suppression of
that species of speculation which it
classes as injurious. This does not in
clude all speculation, by any means.
Much of it is beneficial, inasmuch as
it tends to make prices stable. In
times when prices are going up, the
man who sells short in the expectation
that he can buy cheap for delivery in
a few months, and thus reap a profit,
helps to prevent an excessive rise.
When the time comes for him to make
his purchases for delivery, he naturally
buoys up the market. Thus the com
mittee reasons in defense of specula
tion and no doubt it reasons well.
Still, it is to be remembered that
speculation is the great source of in
stability in markets and is an import
ant factor in causing panics. If nobody
had sold stock short, nobody would
be frightened at high prices. If no
body had shares or wheat to deliver,
whether or no, at a given date, high
prices on that date could not make
bankrupts. ' Admitting the equalizing
effect of speculation on prices, which
is rather emphatically" evident to Gov
ernor Hughes' committee, one Is im
pelled to ask whether It Is not more
than counterbalanced by an unavoid
able disturbing effect which exagger
ates every little flurry.
THE GROWING PURPOSE.
Sellwood Republicans, at their club
meeting on Monday night, formulated
a statement about the initiative and
referendum, and abuse of it as a policy,
that should attract general attention!
The preamble, with the resolutions
the whole containing the argument
was printed by The Oregonlan yester
day. It is a carefully considered and close
ly condensed presentation. It will be
reprinted conspicuously, by The Ore
gonian, at intervals hereafter. They
who drew up this document were
"wise," mainly, on what they were
talking about.
Though The Oregonlan printed this
document yesterday, it prints it again
today. It will reprint it again and
again. In short space the document
contains the whole subject. Yet The
Oregonlan does not go so far, as to the
referendum, as ' the authors of this
statement go. The initiative proves
to be a nuisance. But the referendum
in a restricted or qualified way, be
longs to our system, and always has
been part of it. The original constitu
tion of Oregon was referred to the
people, for adoption or rejection. But
there should be no referendum, as to
laws on ordinary detail of administra
tion. Misuse of referendum in these
particulars also has been a nuisance.
Referendum should - j
fundamental propositions. If, however,
-...a i uo uone, men wipe it out al
together, too. The state can get on
with the Drlmarv luw ,, ',
be done by use of advisory assemblies.
- icjctuuu or statement One. The
statement, indeed, is no part of the
law. It is not mandatory. It is only
suggestive, and stands merely as a vol
untary proposition.
A NEW BRYAN COMEDY.
Last year the State of Nebraska
voted for Bryan for the Presidency.
Not that the State of Nebraska for a
moment really believed In Bryanism;
but it was esteemed a great matter to
have a citizen of Nebraska In the
Presidential office. The opportunity
might not occur again. So Nebraska
.rBryan- This vote carried
with it a Democratic Governor and a
Democratic majority in the Leglsla
If, WVv enouh- " was a small
".f m h CUld DeSrudse to Bryan
this little gratification as a balm to
many defeats?
It has been supposed by many that
Bryan would trim his sails for the
Presidential breeze again. And he
may But first he will, try for the
Senatorshlp in Nebraska for the term
to begin in March. 1911. The Legis
lature has fixed up the "Oregon plan"
ini ,?,m- He is to be the candidate
for the Senate In 1910, and Statement
ri C! d the rest- The will
be whether this exotic from Oregon
will flourish in Nebraska. We thlnc
tt has mighty little chance, or none
at a Tet Bryan in his endeavor to
2 eveT,thln8- has attacked the
rum demon." "the liquor fiend." in
Nebraska, which hitherto he had not
molested. He has begun a political
rTart oJT, thB "1I1UOr terS.
part of his campaign method. This
means of course, abjuration for the
present of his further designs upon the
Presidency. He couldn't expect to
carry the great states on a prohibition
n if vBUt he thlnks tha " such
?m i1!? m'ght wl.the Senator
ship in Nebraska.
.l.lleJ,f the funnv 'acts of all this is
s,el,apQlth6 "Nation enforces 0n
ptre in fett"h tern " ex
pire in 1911. He has been hitherto
a Republican of the straitest sect. Now
IV, ,Sm0"f lh 'lnsurnts"hoPing
iuUSroundead Bryan "-
RAILROAD PROSPERITY.
No more tangible evidence of the
return of prosperity can be offered
than the substantial increases in the
rrtad ",et rnine 'r the first ten
months of the current fiscal year as
compared with the earnings for a cor
responding period in the preceding sell
leJfV 0t thS more Prnt
s stems of the country, as printed in
yesterday's Oregoniandisclosed 1 ga n
to 53 per cent, -While the Pennsylvania
was the only one in the group which
showed a decrease. Of all the vast
property interests that suffered from
h;fl"a,1Clal Paralysis which sw!
? i.n,e country ln the closing days
JrJ V' "?ne felt the effect to so
great an extent as the railroads. The
Tn'irm the latest prosperity
Tr h wVer knwn imo tne ePths
of adversity came so suddenly that
in"" a chance to shorten sail
and prepare, for the blow
iWflen,eVery avaiIaIe Piece of roll
ing stock and an army of extra men
are working overtime at vastly in
creased expense over that incurred
H neLn0rm,al conditln- retrenchment
is not easily accomplished. It m,
, ,. jja.uc oeiore the rail-
Kra" Was "snused down" to meet
the hpflw wootho- .
- ruL-uunierea. Ther
"LnTT aVndUStry of Importance in
the United States today which does
not in sortie manner pay a certain
amount of tribute to the railroads and
in consequence the railroads suffer in
a degree for the financial troubles of
all other industries. The troubles
through which the roads have been
passing, however, may not prove un
mixed evils.
The figures which enow a decrease
of nearly $1,000,000 in net earnings for
the Pennsylvania when analyzed pre
sent a most encouraging aspect of the
situation. They show that while the
gross earnings of the road were 113,
000,(100 less than for the corresponding
period in the preceding season, econ
omy in operating expenses and other
directions had been practiced to such
an extent that this heavy decrease in
gross had shrunk to less than 31,000,
000 in net earnings. It is in this re
trenchment, which has been gradu
ally approaching perfection since the
panic forced it on the railroad man
agers, that much of the handsome in
crease shown ln the net earnings of
the other roads has been accom
plished. There is of course a limit to
which this retrenchment can be
carried with safety, and under the
stress of the storm more than a year
ago there may have been some im
pairment in the physical condition of
some of the roads.
Most of the economies that have
been accomplished, however, have
been brought about by the return to
normal conditions which admitted of
better service at less cost than was
possible when "over-time" for both
employes and equipment absorbed
nearly as much money as regular time
under the tonnage offering, and the
roads are again ordering cars. When
there are no longer idle cars and loco
motives, it may be accepted as a cer
tainty that good times are with us
again ln earnest.
THE EVER-READY FISTOI.
The serious wounding of two men
by a. negro porter at Shaniko again
brings the nefarious pistol-toter to the
front. What business had this negro
with a pistol? Did he need it ln his
employment as a porter? What need
have other men of the concealed wea
pons which they carry wherever they
go ? What do they carry the pistols
for, if not with tha intention of killing
somebody sooner or later?
The pretense that the weapons are
carried for defense is all humbug. In
ninety cases out of a hundred the oc
casion for using a gun arises from the
fact that it is at hand. If no gun were
ready, no defense would be needed.
Peaceable persons can go anywhere
among all sorts of characters and re
main perfectly safe while the gun
toter would be In difficulties in a quar
ter of an hour. The fact of having a
weapon causes him to seek the oppor
tunity to use it. If a man must bear
arms about him on the streets and in
the cars, let him keep them in sight,
where his neighbors can take warning
of his disposition and probable con
duct. Let the act of carrying con
cealed weapons be punished severely.
The jail is not a particle too severe
for it.
There is another point in connection
with the business of pistpl toting which
ought not to be overlooked. That is
the profuse advertisements of guns
of one sort and another in magazines
and in the streetcars. These wicked
advertisements urge everybody by print
ana picture to procure weapons. A
particular one which is recalled at this
moment assures people that "safety" is
to be secured by purchasing a certain
kind of revolver. People of sense
know that revolvers make nobody safe,
while they frequently bring danger
down upon one's head. If you are held
up on a dark street, a revolver will not
help you. The thief either takes you
at a disadvantage or not at all. If a
burglar enters your house ln the night,
the chances are that he will steal your
pistol before you can use it. The
chances are still greater that you will
shoot your wife instead of the burglar.
It is time to do a little serious think
ing on the subject of carrying weapons
and using them indiscriminately.
MUST NOT BE PERMITTED TO FALL.
Effort is to be renewed to place the
Portland Country Club and Livestock
Exposition on a permanent financial
basis. The purpose of this organiza
tion is to give a great annual livestock
show at Portland with the usual racing
events. The exposition and races last
year were successful in every way ex
cept in the vital feature of attend
ance. The promoters were dis
couraged but not beaten. They had
confidence that their enterprise was
entirely worthy of public support and
that the public, therefore, would sup
port it. They arranged to carry out
their original plans.
Whether the Country Club meet and
Livestock Exposition shall be a perma
nent institution, the Portland public
will decide. It should decide favor
ably. It is a project of very great
importance to Portland and Oregon.
It must not be allowed to fail. Every
citizen has a special duty to con
tribute his share for its success. For
success is in some measure a benefit
to him.
It is proposed to sell in Portland
for the exposition of 1909, 5000 season
tickets at $5 each, thus realizing a
fund of 325,000. An elaborate cam
paign for the sale of such tickets is
about to be inaugurated. One thou
sand five hundred of them have al
ready been sold. There remain on
hand 3500. The Oregonlan urges the
public to receive with favor the can
vassers who are to start out next week
and to subscribe freely and generously
for the tickets.
FRENCH AVERSION TO 8TEEI
The French have not taken kindly
to the listing of steel stocks on the
very respectable but not always ex
clusive Bourse. They are offering a
great many reasons for rejection of
this favorite American security, none
of which can be regarded as of very
great weight, if the Frenchman were
really desirous of dabbling in steel
common and preferred without play
ing the game through the foreign ex
changes. In the absence of any in
surmountable reason why they should
not permit the listing of steel stocks
on the Bourse, the generally accepted
opinion will be that they are suspicious
of the stock. The French are the
thriftiest people on earth, and their
annual savings reach an enormous
total. For this reason there is always
an army of financial Philistines hang
ing around, endeavoring to separate
them from their savings.
That the feat has been comparatively
easy ln the past, is shown by the
De Lesseps canal scheme, and a long
list of other enterprises which returned
nothing to the investor except a hand
somely engraved stock certificate. The
American steel stocks have for years
been carry ing an enormous amount of
water, enough in fact to drown them
if it were not for the paternal interest
of the government with its protection
pap. Perhaps, in the present some
what uncertain tariff revision, the
French may see signs of trouble ahead
for steel stocks, and are accordingly
not disposed to touch them.
With the Corevs. r'p rnrcHpo an
Schwabs dazzling the eyes of the for
eigners wn tneir lavisn display of
money, all Of Which has ioen maAa In
steel, there may come a thought that
If steel stock is such a good invest
ment, these multi-millionaires might
buy it themselves. Nnn nf thpm hna
ever been accused of philanthropy un
less xnere was a string attached, and
they are not obliged to part with any
of this steel stock unless It is no lonrop
attractive to them.
This country can use French money
to advantage for a great many pur
poses, and it mv r lust ae t-All
us that the French failed to interest
tnemselves in stocks which might get
water-logged and sink on their hands.
The citizen who suec-esterl vptitprdnv
through The Oregonlan, that the
proper way to get signatures for the
Initiative was to require the petitions
to be left at the office of th rnnntv
Clerk, to be signed by such persons as
mignt wish to sign them, said a right
thing. Let the law be so amended
and allow no clrcuIaHnn of tho
petitions, with chances of fraud, forg
ery and perjury, but let the person who
thinks it Important to have the pro
posed law enacted go up to the County
Clerk's office and sign. It Is the most
valuable suggestion yet for. adminis
tration or "the people's law of legis
lation." It can be no hardship to any
patriot who really wants a. law onniH
to go up to the County Clerk's office
ana sign lor it; no more trouble, cer
tainly, than to sro there. a ii m,,.,
to register his name as an elector.
The 1909 crop of wheat is one of the
coming events which, infer at r..-eont
is casting Its shadow before. Under
wie uemgn innuence or a fine crop
prospect, and an khHv Vm
Chicago wheat market is sliding 'back
m iuwer levels at a pace that fully
equals that with which it ran up the
grade a few weeks ago, when the fate
of the crop was trembling in, the bal
ance, and there was a pronounced
shortage of wheat all
It is possible that no small portion of
me weaicness ln the Chicago market Is
due to liberal sellinsr bv th i
terests who were such prominent fac-
iura in increasing the profits of Mr.
Patten and his ansnpintno o ,
ncrfta
ago. Later, there may be a necessity
for the buying back of some of this
wheat that is now being sold short.
Chicago rpnn .n l7no o 7 r
'-' ..... . . i . w ijiuuaea lu
eliminate the danger that attaches to
uuiomoDiies coming up behind street
cars which have stopped. The city
has petitioned the Legislature so to
amend the state motor vehicle act
that it shall provide that when pass
ing a streetcar e-nlnc in iho o
direction, which stops, the automobile
"lu" a'so stop or pass the car to the
left. This is and has
gonian's contention, and to the credit
of Portland drivers, be It said, there
13 a disposition now to be cautious on
occasions of this kind, where two
months ago recklessness was marked.
During the Rose Festival the conduct
of professional and amateur chauffeurs
was commendable.
The Yaquina launch captain who
yielded to the pleadings of his passen
gers and crossed the bar at a time
when he knew it was. dangerous to
make the attempt, hardly measures up
to the standard of "commanders" who
usually figure in such episodes. There
should be. but one master on a ship,
and he should back his own Judgment
against that of all the passengers, if
it became necesMrv in mab.A j
" - .""'.L a, BituiU
against such a foolhardy piece of work
10 ma miempt to cross a breaking bar
with a small launch. It would be the
master and not the passengers who
would be held responsible, had any
lives been lost in the Newport acci
dent. Jack Johnson, the pugilist, has de
clared himself a Bostonian. The an
nouncement is timely. John L. Sulli
van, that other ancient Bostonian, has
Joined the "has-beens'" and Tom Law
son is strangely quiet. With Mistah
Johnsing in the limelight, however, to
uphold the glory of Beanville, life is
still worth living "from Old South to
the sea."
One of the circulators of the Board
of Excise petitions who turned in
fraudulent names, has been sentenced
to imprisonment for two years ln the
penitentiary. This is the fairest fruit
yet gathered from the initiative system
The parties who prompted this effort
to get names on the petition ought not
to be neglected.
Mrs. Gould's lawyer thinks it un
conjugal in Mr. Gould to object when
she locks herself in her room for
weeks at a time with an ample supply
of liquor. That sounds reasonable.
But she ought to have leave to ex
tend the time indefinitely.
Hard to see why there should be
excitement in the Senate over the
slight to La Follette by Aldrich. The
recording angel has not filled many
books with the kind words La Follette
has scattered along Aldrich'3 way.
As an exhibit of self-help, self-confidence
and public spirit, let us com
mend Baker City, where 310,000 was
raised In no time to extend the Sump,
ter Valley Railroad into the John
Day country.
It may be all right for the Paris
Bourse to turn down United States
Steel, but we hate to think what would
happen If they did the same thing to
United States bonds.
Mrs. Howard Gould says society
women's reputations are .unsafe ln the
hands of their servants." It's a good
thing, then, that they can't get along
without servants.
"I want to see how far I can knock
him," says Jeff of Mistah Johnson.
Now we're getting back to old "pug"
days. No "beg your pardon" In the
next fight.
What? The river coming up again?
But don't worry. Prophecies of a
"flood" are the only way many people
have of learning that we have a river.
Still another has refused the Amer
ican post in Pekin. The President
has not yet, however, tried offering the
job to any of Senator Bourne's friends.
Oregon's latest crop of new lawyers
numbers 41. The Increase is a whole
lot larger than the dying off. Too
bad.
WHO WILL HAVE TO PAY THIS TAX?
Impose Burdens on Corporations
and Not on Other "Weslthr
New York Sun.
We hear from Washington that a tax
on the net earnings of corporations Is
regarded as a tax on "wealth," and
therefore desirable and acceptable and
a bond of union between conservative
and "progressive" Republicans.
Of course, anybody who knows
enough to dress himself In tha rinvito-ht
knows that there are hundreds of thou
sands or small shareholders ln corpora
tions, and that the number has been
increasing remarkably of it vobt-.
We find nothing in the Republican plat
form aoout rinlng these people.
This is a period at Washington of
muddling, waiting, arranging terms
for compromise. That is how we ac
count for what looks like a confusion
of counsels and darkening of knowl
edge. For whatever has happened to
the Republican party in the last eight
years, it Is not yet forced to go for Its
policies to Ocala or Omaha or any other
station on the Bedlam Unlimited.
If there is to be a temporary defi
ciency of revenue which no properly
constructed tariff bHl can supply, let
the emergency be met by an adequate
stamp duty on checks, deeds, notes,
proprietary articles, and so forth. Let
the occasion of the emergency tax be
recognized frankly by calling It the
Roosevelt tax. Let every revenue
stamp bear the likeness of Roosevelt,
even though he is yet alive. Let his
countenance be kept before the tax
payers and voters as long as the need
of extraordinary taxation exists. The
reminder and the warning will be of
priceless value to this country.
TAPT, NOT ALDRICH, IS PRESIDENT
But One of the Two Will Shape th.e Ad
ministration's Policies.
New York World.
Between William H. Taft and Nelson
W. Aldrich there ought to be an irre
pressible conflict. Judged by their
records the two men have little in com
mon politically except the name "Re
publican." Mr. Taft is by nature a
moderate radical. Mr. Aldrich's ten
dencies are all Tory. He Is a firm be
liever ln the supremacy of vested
rights, in government by property and
In the rule of the weak by the strong.
Mr. Aldrich represents the corpora
tion. Wall-street element In the Repub
lican party, and represents it very
ably and skilfully. Mr. Taft is sup
posed to represent the progressive ele
ment that has Ideals and altruistic pur
poses. Mr. Taft could not have been
elected as an Aldrich Republican, and
had Mr. Aldrich controled the Repub
lican organization Mr. Taft would not
have been nominated.
One of these two men is going to
shape the policies of the Republican
party during the present Administra
tion. If Aldrlchlsm triumphs ln the
revision of the tariff, it is safe to as
sume that Aldrlchlsm will be the guid
ing principle during Mr. Taft's entire
term; for If the President surrenders to
the reactionaries now. there Is no rea
son ln particular why he should frame
a declaration of independence at some
time in the 'future.
There Is no satisfactory basis of com
promise between the things Mr. Taft
stands for In the popular mind and the
things Mr. Aldrich stands for. The
President has never displayed great
technical knowledge of the tariff ques
tion; but he has always shown a keen
appreciation of the difference between
right and wrong, between good faith
and bad faith, between popular govern
ment and plutocracy. This apprecia
tion will not avail much to the public
benefit, however, unless U is presented
ln concrete form.
Aldrlchlsm cannot triumph unless Mr
Taft permits. It is he. not Aldrich, who
Is President of the United States. It
is he, not Mr. Aldrich, whom the people
of the United states have clothed with
power and whom they will Justly hold
responsible for the breaking of pledges
or the repudiation of promises. This is
no longer a conflict of schedules, but
of principles,' and Mr. Taft Is mistaken
If he thinks that as President he can
stand serenely aside, an impartial spec
tator to the conflict.
TURN TO APPROVED WAYS
Movement to Go Back Once More
o Representative Government.
Resolutions on the initiative and
referendum adopted Monday by the
Sellwood Republican Club:
whereas, Our business prosper
ity depends largely upon the
stability and permanency of our
laws and governmental condi
tions, and as the initiative and
referendum law adopted in 1902
by the people of the State of Ore
. on has proved by Its operation
to be a disturbance and a pro
moter of instability, making it
possible to change our funda
mental laws with the greatest
facility and for the slightest rea
son, thus creating distrust in the
minds of investors' and tending
to hinder growth; now, therefore
be it
Resolved, That we denounce the
initiative and referendum law as
a menace to our business pros
perity in that It affords oppor
tunity for theorists to have
enacted into law measures that
no representative L e g 1 s 1 a ture
would attempt to enact. It af
fords means by which dema
gogues and cliques can promote
measures for private gain at the
expense of the public. It has
promoted. Is promoting and will
promote measures which are
thrust upon the attention of the
unwilling voter, who has neither
time, means, inclination nor op
portunity to Inform himself prop
erly upon them and who, by re
fusing to vote, or voting blindly,
is liable to work Injury to the
state. In the three general elec
tions under this law the voters
of the state have been called
upon to decide 33 different ques
tions of greater or less merit, or
demerit, besides the regular work
of the election. In addition the
citizens of Portland have been
called upon to decide upon 55
local measures, making a total of
88 propositions submitted to the
voters of the city. And be it fur
ther Resolved. That the Initiative
and referendum law is foreign to
our system of government, trans
planted from an alien land ln
answer to the persistent demands
of agitators and theorists who
were not well imbued with the
spirit of or principles of Ameri
can Institutions, our Government
being representative ln theory
and shculd be so in principle.
Resolved, That we will unite
with all good citizens of all
parties to work for a return to
our ancient and approved form
of government, a government of
the people, for the people and by
the people, through their chosen
representatives.
President Taft Sends Message
Proposing Tax on Corporations
Statement of His Recommendation for Constitutional Amendment Permit
ting Income Tax.
WASHINGTON, June 16. The message
of President Taft to the Senate today
reeommendlnor th ni-n-,rn.. r
vision in the tariff bill for the taxation
ui ine earnings or corporations and the
adoption of a resolution looking to an
amendment of the Constitution to permit
the levying of an income tax was re
garded by Senators as of such importance
as to place in the shade all questions
pertaining strictly to the tariff sched
ules. The message was received early
In the afternoon and was referred to the
committee on finance.
Root occupied the chair when one of
the President's secretaries appeared with
the message, but it was not presented
Until Rurtnn wlir, .. BnAai.tH v. .
, " " atdiviiie, JlttU
concluded his remarks. A full Senate
was present and the document was given
the most careful attention.
Gore Beaten, Bailey to Kight.
Gore attempted to have the committee
instructed to report on the income tax
feature of the message by next Friday,
when, under general agreement, the in
come tax question Is again to be taken
up for considerarlnn Ufa mntnn .
ev?r. was voted down, and for the first
time ln many weeks the division was
aiucuy aiong party lines.
During the informal discussion of the
reference of f h mMumca d.iu
tlee that he would demand that provi
sion be made for a graduation of any in
come tax that might be provided for, and
intimated that much time would be nec
essary to get through a provision which
aia not carry that qualification.
Message From Taft.
The President's message follows:
"To the Senate and House of Repre
sentatives It is the constitutional duty
of the President, from time to time, to
present to the consideration of Congress
such measures as he shall Judge neces
sary and expedient.
"In my inaugural address, lmmmedl
ately preceding this present extraordi
nary session of 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 the
revision should be effected. I referred to
the then rapidly Increasing deficit, and
pointed out the obligation on the part
of the framers of the tariff bill to ar
range duties so as to secure an adequate
income, and suggested that If It was not
possible to do so by import duties, new
kinds of taxation must be adopted, and
among them I recommended a graduated
inheritance tax as correct in principle
and as certain and easy of collection.
"The House of Representatives has
adopted the suggestion and has provided
in the bill It passed for the collection
of such a tax. In the Senate, the action
of its finance committee and the course
of the debate Indicate that It may not
agree to this provision, and it is now pro
posed to make up the deficit by the Im
position of a general Income tax. ln form
and substance of almost exactly the same
character as that which, in the case of
Pollock v Farmers' Loan & Trust Com
pany (157 U. S. 429) was held by the
Supreme Cohrt to be a direct tax. and
therefore not within the power of the
Federal Government to impose unless
apportioned among the states according
to population.
Should Amend Constitution.
"This new proposal, which I did not
discuss in my inaugural address or my
message at the opening of the present
session, makes it appropriate for me to
submit to Congress certain additional
recommendations.
"The decision of the Supreme Court in
fhe income tax cases deprives the Na
tional Government of a power which, by
reason of previous decisions of the court,
it was generally supposed the Govern
ment had. It is undoubtedly a power the
National Government ought to have. It
might be indispensable to the Nation's
life in great crises.
"Although I have not considered a con
stitutional amendment as necessary to
the exercise of certain phases of this
power, a mature consideration has satis
fied me the.t an amendment is the only
proper course for its establishment to, its
full extent. I therefore recommend to the
Congress that "both Houses, by a two
thirds vote, shall propose an amendment
to the Constitution conferring the power
to levy an Income tax upon the National
Government without apportionment among
the states in- proportion to population.
"This course is much to be preferred
YEAR AT PACIFIC IS ENDED
Programme of Expansion Marked
Out at Commencement.
PACIFIC UNIVERSITT. Forest Grove,
Or., June 16. (Special.) The graduation
exercises of the University, concluding
with the conferring of degrees upon the
nine members of the finishing class, oc
curred this morning. Members of the
trustees, old friends, alumni and fac
ulty occupied seats on the platform. The
diplomas were presented by President
Ferrin.
During the exercises. Judge J. Q. A.
Bowlby, of Astoria, an alumnus and trus
tee, on behalf of the family and heirs of
the late Alanson A. Hinman, presented to
the University a portrait of the pioneer
educator. In accepting the picture. Pres
ident Ferrin paid a glowing tribute to
Dr. Hinman, who was connected with the
affairs of the college for 60 years and was
the last, surviving charter member of the
board of trustees. The portrait will be
hung in Brighton Chapel, along with
those of President Sidney Harper Marsh
and Grandma Tabltha Brown.
The ladies' chorus, numbering 30 voices,
rendered "Gypsy Life," by Schumann, and
piano solos were played by Miss Alice
Clement and Miss Frances Clapp.
At the corporation dinner In the Con
gregational Church this afternoon, short
speeches were made by several of the
pioneers and early students of the Insti
tution. Mrs. C. A. Coburn. who was a
student here ln 1852 to '54, and a pupil
under Tabitha Brown and E. D. Shat
tuck, gave reminiscences of the early
times, telling how she attended school In
the old losr building, the location of
which is marked by a petrified stump on
the west side of the campus. '
George H. HImes, secretary of the Pio
neer Association, represented the pioneers
of the state. G. S. Allen, secretary of
the Forest Grove Board of Trade, spoke
for the home town. Miss Martha F.
Holmes, president of the senior class, re
sponded for the graduates.
W. G. Hale, president of the Alumni
Association, stated plans had already been
formulated among the graduates and for
mer students in Portland to boost the in
stitution in the state and particularly in
the metropolis. President Ferrin an
nounced the campaign for completing the
gymnasium fund would be strenuously
prosecuted during the next two weeks,
which would be Immediately followed with
a similar movement for raising the
library endowment, the fulfillment of
which will mean the erection of a Car
negie library on the campus.
The degree of Bachelor of Arts was
conferred upon fhe following: Ernst
Bratzel. Helen Wlllena Chandler, Jona
than Urban Hilts, Martha Frederika
Holmes, Harry Pembroke Humphreys,
Reginald Heber Robinson, James Richard
Ward. Virgil Waterman, Hermon Ernst
Witham.
The programme of commencement week
was brought to a close with the com
mencement concert tonight in, Marsh Hall.
to the one proposed, of re-enacting a law
once judicially declared to be unconsti
tutional. For Congress to assume that
f Wi" reverse lt nd to enact
legislation on such assumption will not
strengthen popular confidence in the sta
riVhe ,"dlPlal instruction of the
Constitution. It is much wiser policy to
accept the Constitution and remedy the
defect in due and regular course
mA5ai? i- te clear that by th enact
L, ,i I ProPose(l aw. the Congress
will not be bringing money into the treas
ury to meet the present deficlencv. but
by putting on the statute book a law al
ready there and never repealed will sim
ply be suggesting to the executive offi
cers of the Government their possible
duty to invoke litigation.
"If the court should maintain its form
er view, no tax would be collected at all
If it should ultimately reverse itself, still
no taxes would have been collected until
after protracted delay.
t,'S St'd the ffculty and delay in
securing the approval of three-fourths of
the states will destroy all chance of
adopting the amendment. Of course no
l.0"? .8pTlk With "Inty upon this
point, but I have become convinced that
a great majority of the people of this
country are in favor of vesting the Na
tional Government with power to levy
an income tax.
Power to Tax Corporations.
'JSe?n.d' the dec,s'on in the Pollock
case left power in the National Qov
""men 'vy an excise tax which
accomplishes the same purpose as a
corporation income tax. and is free
from certain objections urged to the
proposed income tax measure.
"I therefore recommend an amend
ment to the tariff bill imposing upon all
corporations and joint stock companies
for profit, except National Banks, (other
wise taxed), saving banks and building
and loan societies, an income tax meas
ured by 2 per cent of the net Income of
euch corporations. This is an excise tax
upon the privilege of doing business as
an artificial entity and of freedom from a
general partnership liability enjoyed by
those who own the stock.
"I am informed that a 2 per cent tax
of this character would bring into the
treasury of the United States not less
than J2o.000.000.
"The decision of the Supreme Court In
the case of the Spreckels Sugar Refining
Company against McClain seems clearly
to establish the fact that such a tax as
this is an excise tax upon privilege, and
not a direct tax on property, and is with
in the Federal power without apportion
ment according to population.
Supervision of Corporations.
"The tax on net income is preferable
to one proportionate to a percentage of
the gross receipts, because it is a tax
upon success and not failure. It imposes
a burden at the source of the income
at a time when the employer is well able
to pay and when collection is easy
Another merit of this tax is the Fed
eral supervision which- must be exercised
in order to make the law effective over
the annual accounts and business trans
actions of all corporations. While the
faculty of assuming a corporate form has
been of the utmost utility in the business
world, it is also true that substantially
all of the abuses and all of the evils
which have aroused the public to the
necessity of reform will be made possible
by the use of this very faculty.
"If now by a perfectly legitimate
and effective system of taxation, we
are incidentally able to possess the
government and the stockholders and
the public of the knowledge of the real
business transactions and the gains and
profits of every corporation in tha
country, wu have made a long step
toward that supervisory control of cor
porations which may prevent a further
abuse of power.
Recommendations in Nutshell.
"I recommend then, first, the adoption
Of a Joint resolution by two-thirds of
both houses, proposing to the states an
amendment to the Constitution grant
ing to the Federal Government the
right to levy and collect an income tax,
without apportionment among the
States HcrOTrifnu' .. 1 . i . .
I . i t1. ' '''ii, ana,
4 second, the enactment as part of the
....u 1'ictt.iuie, eitner as a
substitute for or an addition to, the in
heritance tax. of an excise tax upon all
comnratinnfl m n . . v, .. - .
. - -. s, ptr cent oi
i their net income."
EARLY GRADS TELL STORIES
Willamette's Older Alumni Gather
at Salem.
SALEM. Or.. June 16 (Special.)
More than 150 guests were present to
night at a brilliant banquet given in
the First Methodist Church preceding
the reception and reunion of the gradu
ates and students of the '60s, '70s and
'80s of Willamette University. C. B.
Moores, of Portland, acted kg toast
master, and men and women prominent
ln various lines of activity throughout
the Pacific Northwest responded to
toasts, giving humorous anecdotes and
facts of the early days of the historic
old school, when the city was a tiny
village ln the woods. Following the
banquet the guests went to the home
of Mr. and Mrs. A. N. Moores. where
they were entertained until a late hour.
ONE GROWER FAILED TO DIP
Special Inspection of Lake County
Sheep Necessary, Therefore.
PENDLETON, Or., June 16. (Spe
cial.) The failure of one Lake County
woolgrower to dip his sheep in ac
cordance with instructions Issued, will
necessitate a special inspection of all
the sheep in the county. Dr. W. H.
Lytle, State Veterinarian, has Just re
turned from an official visit to that sec
tion of Oregon and as a result the
special inspection has been ordered,
for he discovered several thousand
head of sheep had been infected with
scabies.
As the remainder of the state is prac
tically free from the disease, a strong
effort will be made to stamp it out in
Lake County.
Slide Spoils Land, City Sued.
ASTORIA, June 16. (Special.) A
suit was filed in the Circuit Court thi
morning by Joseph Gisconi against tht
City of Astoria to recover damages in
the sum of $2000 for injuries alleged
to have been done his property in the
Scow Bay district by sliding ground,
aid to have been caused by a fill made
In the improvement of Irving avenue.
The complaint asserts that the-improvement
was improperly made and that
the plaintiff has been compelled to ex
pend J1250 in making repairs to his
property.
Jefferson Brings Much Gold. A
SEATTLE. June 16. The steamer Jef
ferson sailed from Juneau, Alaska, yes- .
terday with J2.8SO.000 in gold, the largest F
amount that ever came out of the north
on a single steamer.
r
N