73D CONGRESS 2d Session SENATE { REPORT No. 1081 TO EXEMPT ARTICLES OF MACHINERY BELTING FROM THE TAX ON FLOOR STOCKS IMPOSED BY THE AGRICULTURAL ADJUSTMENT ACT MAY 10 (calendar day, MAY 22), 1934.-Ordered to be printed Mr. SMITH, from the Committee on Agriculture and Forestry, submitted the following REPORT [To accompany S. 3419] The Committee on Agriculture and Forestry, to whom the bill (S. 3419) to exempt articles of machinery belting from the tax on floor stocks imposed by the Agricultural Adjustment Act, was referred, having considered the same, recommend that the bill do pass. It appears from the report of the Department of Agriculture that this particular industry is in a very unusual position in connection with this tax. In order to make the situation clear, the report of the Department of Agriculture is quoted as follows: It appears that this bill was drafted in order to give relief to certain individuals who hold stocks of belting that have lost much of their value because of obsolescence, and that are being liquidated very slowly. From the standpoint of revenues this particular item is insignificant. It is stated that the market for this belting has nearly disappeared and that no belting of similar type is being manufactured except on special orders that cannot be filled from the stocks on hand. In the few cases where sales can be made, the prices obtained amount to from 10 to 50 percent of the original cost of manufacture. It is further stated that about half the belting consists of remnants and that some of the belting has deteriorated from age. One manufacturer has stated that his floor stocks taxes on this belting would amount to approximately $2,400, whereas he was able to dispose of only about $700 worth of the belting from August 1, 1933 to March 1, 1934. From statements of manufacturers it would appear that the cotton floor-stocks tax does constitute an excessive burden on this type of belting and that there would be no disturbance of the competitive situation within the trade if such stocks were exempt from the floor-stocks tax. If your committee finds the conditions as stated, this Department would have no objection to the passage of S. 3419. The Treasury Department in its report does not offer objections to the passage of the bill, but suggests an amendment. The paragraph of the letter which pertains to the amendment is as follows: If your committee feels that the bill should be acted upon favorably, I would suggest that a provision be added prohibiting the refund, credit, or abatement with respect to any article that has been disposed of by the taxpayer. This restriction would be eminently fair, since the tax entered into the determination of the sale price, and the restriction would eliminate the cases in which determination of the taxpayer's rights would be most difficult. The report of the Treasury Department was received after the committee had voted to report the bill favorably, therefore, the committee did not have the opportunity to consider the suggestion of the Treasury Department. However, it is the intention of the chairman to offer the amendment suggested by the Department on the floor of the Senate. 73D CONGRESS 2d Session SENATE { REPORT No. 1082 TO AMEND THE AGRICULTURAL ADJUSTMENT ACT, AND FOR OTHER PURPOSES MAY 10 (calendar day, MAY 22), 1934.-Ordered to be printed Mr. SMITH, from the Committee on Agriculture and Forestry, submitted the following REPORT [To accompany S. 3584] The Committee on Agriculture and Forestry, to whom was referred the bill (S. 3584) to amend the Agricultural Adjustment Act, and for other purposes, having considered the same, do hereby recommend that the bill be passed without amendment. The Director of the Budget in a letter dated May 5, 1934, to the Secretary of Agriculture has stated this bill would not be in conflict with the financial program of the President. The Secretary of the Treasury in a letter to the Department of Agriculture has stated that his Department would lend its approval and support to this bill. The statement of the Department of Agriculture dated May 7, 1934, is quoted below as a part of this report: While on its face the proposed legislation involves the appropriation of $100,000,000, this appropriation will not alter the Budget or materially affect the Treasury accounts since the amount involved is at present an outstanding obligation, having been borrowed either by the Secretary of Agriculture from commercial banks on the faith of the credit of the United States or by the pool manager from Reconstruction Finance Corporation through Commodity Credit Corporation so that if the Treasury should advance the fund appropriated to the Secretary of Agriculture, the advance would be used to pay off the Federal obligation to the banks and the obligations carried by the Reconstruction Finance Corporation. The necessity of this legislation is that the Secretary has borrowed under authority of the Agricultural Adjustment Act from commercial banks, $60,000,000 with which to acquire and carry cotton which he was authorized to acquire by the act referred to and the pool manager has borrowed against this cotton, $38,000,000 which has been distributed among the producers in connection with the 4 cents loan. The obligations evidencing the money borrowed all mature on July 31, 1934. Congress will not then be in session; it will be necessary for these obligations to be renewed or paid. If there is no such authority conferred upon the Secretary as is sought by the proposed legislation, it is possible for the Secre tary to be seriously embarassed and at the necessity of having to pay a higher interest rate or of having to force the cotton on the market. If authority is given to refinance in accordance with the provisions of the proposed legislation, the Secretary will be in a position to deal with the banks in a more independent manner and to obtain from the banks more advantageous terms. Under the law, as it now stands, the Secretary is required to pledge the cotton by depositing warehouse receipts with a trustee to secure funds borrowed; the proposed legislation relieves him from this unnecessary expense and inconvenience. I think it unnecessary to stipulate that a Department of the United States Government shall give specific security, pledge cotton, mortgage buildings, etc., to secure money borrowed under authority of an act of Congress and upon the faith of the credit of the Government. The arrangement suggested does not alter the outstanding indebtedness of the United States. If the privilege to be conferred by the amendments is exercised, the obligations of the Federal Government evidenced by notes of the Secretary of Agriculture will remain obligations of the Federal Government but will be evidenced by obligations of the Secretary of the Treasury, and in either event the Government will be fully reimbursed for this item from the proceeds to be derived from the sale of the cotton. It is rather important that this matter have preferred attention in order that the trade generally may be assured that the cotton involved is not to be forced upon the market at the maturity of the obligations to secure which the cotton is now pledged. O 73D CONGRESS 2d Session } SENATE { REPORT No. 1083 LAND FOR THE NAVAL AIR STATION, NORFOLK, VA. MAY 10 (calendar day, MAY 22), 1934.-Ordered to be printed Mr. BYRD, from the Committee on Naval Affairs, submitted the following REPORT [To accompany H.R. 6847] The Committee on Naval Affairs, to whom was referred the bill (H.R. 6847) to provide for the acquisition of additional lands for the naval air station at Hampton Roads Naval Operating Base, Norfolk, Va., having had the same under consideration, report favorably thereon and recommend that the bill do pass. The purpose of this bill is to authorize the Secretary of the Navy to acquire additional tracts of land adjacent to the naval operating base for the naval air station at Hampton Roads, Va. The station at Hampton Roads is the main naval air station on the Atlantic coast of the continental United States. When the fleet or any portion of it is in the Atlantic, this station is used extensively by the aircraft from the ships for their training and operation. About 120 planes is the absolute limit of the capacity of the present field at Hampton Roads. However, as an indication of the needs for additional space at this station, during the time the United States Fleet is on the Atlantic coast 235 aircraft from the fleet will be based at Hampton Roads. At the present time this air station and operating base for aircraft has only 120 acres of land. With such a small area for aircraft operation, considerable congestion exists, and this condition will be greatly intensified when any part of the fleet is on the Atlantic coast. The additional land provided for in this bill will insure the area necessary for efficient and safe operation of aircraft at this station. The following letter from the Secretary of the Navy, addressed to the Chairman of the Committee on Naval Affairs of the House of 8. Repts., 73-2, vol. 240 |