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To the above the following reply was received: COMMITTEE ON WAYS AND MEANS, HOUSE OF REPRESENTATIVES, WASHINGTON, D. C.

DECEMBER 9, 1914. Mr. H. F. Cellarius, Cincinnati, Ohio:

MY DEAR MR. CELLARIUS-I am in receipt of your favor of the 17th instant, in reference to the emergency tax levied to meet the deficit caused by the falling off of the customs revenues. Your letter clearly states the intention of Congress. As a matter of fact, I understood that the bill as we passed it was satisfactory to the building and loan associations, and thought, of course, the construction would be the same as it was under the Spanish War Act. I do not know that it would be possible for Congress to take up a revision of this act at the short session of Congress, but I am in hopes that the matter can be adjusted satisfactorily by the Commissioner of the Internal Revenue, and will be glad to express to him the views of the committee which I understood when the bill was passed, which were in conformity with your views in reference to the matter. With kindest regards, I am,

Cordially yours,

O. W. UNDERWOOD. At a meeting of the New Jersey State League, held at Newark, N. J., December 5, 1914, the following resolutions were unanimously adopted :

WHEREAS, In our opinion it was the intent of Congress in enacting the Emergency Revenue Act to exempt from its provision entirely mutual co-operative building and loan associations; and

WHEREAS, In our opinion such building and loan associations should be free from taxation of every kind; therefore be it

Resolved, That our solicitor be requested to file with the Commissioner of Internal Revenue at Washington a brief on behalf of the building and loans associations of the State of New Jersey in support of their claim that they are not subject in any way to the provisions of the Emergency Revenue Act;

Resolved, That the Senators and Representatives from this state be requested to support the amendment to the Emergency Revenue Act declaring clearly and specifically that mutual co-operative building and loan associations are exempt from all of its provisions;

Resolved, That copies of these resolutions be forwarded to each member of Congress from this state.

Ohio BUILDING ASSOCIATION LEAGUE TAKES ACTION.

At a special meeting of the Executive Committee of the Ohio Building Association League, held at Columbus, December 10, 1914, the following resolutions were adopted:

WHEREAS, The Commissioner of Internal Revenue has by T. D. 2044 held that the exemption from tax by building and loan associations which make loans only to their shareholders, contained in Section 15 of the Emergency Revenue Act, extends only to stock and bonds, and not to all transaction; and,

WHEREAS, Under the War Revenue Act of 1898 by identical language

as that employed in the Emergency Revenue Act exempting these associations, the Attorney General held all papers or instruments executed by building and loan associations, which make loans only to their shareholders, and any such papers executed by the members to the associations within their legitimate operations, exempt from the stamp tax; and,

WHEREAS, We believe that it was the intent of Congress to relieve this class of associations from all taxation to the same extent that it had heretofore exempted them; now therefore, be it

Resolved, By the Ohio Building Association League that this matter be brought to the attention of Congress with the request that the exemption accorded building and loan associations, which make loans only to their shareholders, or which are organized and operated exclusively for the mutual benefit of their members, be made clear and specific, so that these associations may be relieved from the burdens of taxation, which it was not intended should be imposed upon them when the Emergency Revenue Act was passed.

Resolved, Further, that a copy of these resolutions be forwarded to the Senators and Representatives in Congress from this state, and their aid requested in correcting this apparent injustice.

MR. KEESLER'S LETTER.

President E. L. Keesler, of the North Carolina Building and Loan League and assistant secretary of the United States League, has addressed to Senator F. M. Simmons, chairman of the Finance Committee; Senator Lee S. Overman and Representatives Claude Kitchen and E. Y. Webb, a letter in which he informs them of the effect of the imposition of the stamp tax upon building and loan operations.

Mr. Keesler's letter follows:

"DEAR SIR—The building and loan associations of North Carolina, and of the United States are greatly surprised at there being any doubt as to their complete exemption from the stamp tax. Those of us concerned in the management of these institutions and who have had occasion in the past to explain their principles and methods to some of the members, are convinced that it was the intent of Congress to exempt all such associations, which are strictly co-operative and purely mutual, from the operations of the act in question. The failure of Commissioner Osborn to so construe the act is, therefore, a grievous disappointment to these grand institutions throughout every state, North and South, where they now exist. It will also cast a damper upon the extension work now getting well under way.

"I have no hesitancy in affirming that these associations have been and are today the greatest financial blessing ever bestowed upon the people of North Carolina, and they are not of governmental creation. They have, however, been recognized and justly aided by the federal government in always being held free from taxation.

“Today, when distress and suffering are everywhere apparent in consequence of a foreign war; when money, especially in the South, can scarcely be had at all by many from the ordinary money channels, public or private, these same building and loan associations, and they alone, have stuck to 6 per cent, and have made loans daily to white and black among their shareholders, without favor or discrimination, and these loans have been limited only by the scant supply of funds. Moreover, every penny paid upon these

loans gets an interest credit to the full extent, pro rata, of the profits earned. I do not hesitate to challenge any and all financial institutions throughout the Union for a showdown as to good already accomplished and as to prospects for almost unlimited extension.

"The tax in question will fall upon the poor and needy, upon the home seekers among our people, who need sympathy and encouragement and aid. If enforced, I am driven to say, it will be a blunder without excuse, and a burden upon that class of our people least able to stand it.

"What applies to North Carolina in this particular, applies also to all other sections of our country.

“I pray you, therefore, to consider the subject in the light above given, and do what you think just and right towards relief in the unfortunate situation. I take it that Congress will be called upon to act in the matter.

Very truly,

E. L. KEESLER, "President North Carolina Building and Loan League

and Assistant Secretary United States League.”

SENATOR SIMMONS' REPLY. Mr. E. L. Keesler, President North Carolina Building and Loan League,

Charlotte, N. C.:

MY DEAR SIR-I am in receipt of your letter of recent date with reference to the ruling of the Commissioner of Internal Revenue upon the question of the liability of building and loan associations for certain taxes imposed in the Emergency Revenue Bill. In reply, I beg to advise you that I have taken the matter up with the Commissioner and asked him to submit the question of the liability of these associations to the Attorney-General.

Senator Root, of New York, called upon me this morning about this matter, and we concluded that the best course to pursue was to ask for a construction by the Attorney-General. I am quite sure the committee intended to exempt these associations, and if there is any doubt as to the meaning of the act it grows out of the amendment which was made to this clause of the bill with reference to irrigation, the provision with reference to this subject having been added after the committee had drafted a provision with reference to building and loan associations. Very truly yours,

F. M. SIMMONS. JOINT RESOLUTION PROPOSED. Secretary H. F. Cellarius, of the U. S. League, has forwarded to Hon. O. W. Underwood the following joint resolution, to determine the construction of the Emergency Revenue Act, relating to the exemption of building associations:

JOINT RESOLUTION. A Resolution to determine the Construction of an Act to increase Internal Revenue and for other purposes, approved October 22, 1914.

Resolved, By the Senate and House of Representatives of the United States in Congress assembled: That the Act entitled "An Act to increase Internal Revenue and for other purposes," approved October 22, 1914, shall not be construed

so as to impose a tax on building and loan associations or companies that make loans only to their shareholders, or that are organized and operated exclusively for the mutual benefit of their members. Any papers and instruments made or executed by the shareholders or members of such associations in dealing with the associations within the limits of their legitimate operations, shall also be deemed to be exempt from the tax imposed by said Act.

Chairman Underwood, acknowledging the receipt of the foregoing, replied as follows: COMMITTEE ON WAYS AND Means, House of REPRESENTATVE.

WASHINGTON, D. C., December 14, 1914. Mr. H. F. Cellarius, Cincinnati, Ohio :

My Dear MR. CELLARIUS—I am in receipt today of your favor of the 11th instant, enclosing copy of Joint Resolution declaring the intention of Congress in reference to the building and loan associations in the War Revenue Law. I will be glad to call your letter and the resolution to the attention of the Ways and Means Committee at an early date. I cannot say what action they will take in reference to the matter, as I know there is a strong sentiment in the Committee not to in any way reopen the bill, as it expires by limitation of law on the first day of January, 1916. Although as far as I know the sentiment of the Committee would not be adverse to the suggestion contained in your resolution. With kindest regards, I am, Very truly yours,

0. W. UNDERWOOD. IMPORTANT TO THE BUILDING ASSOCIATIONS

OF THE UNITED STATES. The following are the members of the Ways and Means Committee of the House of Representatives at Washington, D. C.; Oscar W. Underwood, Chairman, John N. Garner, Texas. Alabama.

James W. Collier, Mississippi. Claude Kitchen, North Carolina. A. O. Stanley, Kentucky. Henry T. Rainey, Illinois. C. C. Dickinson, Missouri. Lincoln Dixon, Indiana.

Michael F. Conry, New York. Cordell Hull, Tennessee.

Joseph W. Fordney, Michigan. W. S. Hammond, Minnesota. A. P. Gardner, Massachusetts. Andrew J. Peters, Massachusetts. J. Hampton Moore, Penna. A. Mitchell Palmer, Penna. W. R. Green, Iowa. Tim T. Ansberry, Ohio.

Victor Murdock, Kansas. It is suggested that the building associations of the United States communicate AT ONCE with individual members of this committee and URGE THEIR SUPPORT to the above resolution.

Ohio Building Association League. Three hundred and twenty-seven associations are now members of the Ohio Building Association League, having assets of over $188,000,000. The 336 associations not members of the League have assets of $35,000,000.

According to the figures prepared by Mr. Chas. H. Brown, secretary, Columbus, O., the total amount of assets are as follows:

Eighty-five per cent of the assets, League members.
Fifteen per cent of the assets, non-league members.

Every association in the state of Ohio should join the Ohio Building Association League and assist in the great work accomplished by the League.

Illinois Building Association League. Mr. Mark D. Rider, president of the Illinois Building Association League, has forwarded letters to all associations in the state.

At his request all non-subscribers received a copy of the November issue of the News, containing full account of the Emergency Revenue Act.

All associations in Illinois should join the State League which has been of such great benefit to all associations.

Send applications for membership to Mr. B. G. Vasen, Quincy, I11.

Ohio Building Association League Proceedings. The proceedings of the twenty-sixth annual meeting of the Ohio Building Association League have been published in book form. It contains an interesting array of many valuable papers and discussions. All associations in the state of Ohio should be members of the League to secure these valuable proceedings, as well as U. S. League proceedings, which are only forwarded to members. Applications for membership should be sent to Mr. Charles H. Brown, 46 E. Gay St., Columbus, O.

Virginia New State League. A movement has been inaugurated to establish a new State League in Virginia. Mr. W. T. Gravely, secretary of the Union Mutual Building and Loan Association of Danville, Virginia, is. now hard at work making necessary preparations to organize.

All associations of Virginia should give their hearty co-operation to this great work.

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