The Montgomery Advertiser
- President's Plan for Tax Reduction Startles Leaders
- Alabama Forges to Front in Pool and Acreage Cut
- Long Island Physician Complains at Treatment
The Montgomery Advertiser of November 7, 1926, led with an AP report that President Coolidge's sudden call to refund ten or twelve per cent of the year's income taxes had puzzled Washington. Treasury officials quietly preferred a credit against next year's taxes, while Democrats called the plan a subterfuge to put off a general tax cut until 1928 and hand Republicans an issue. Another front-page report quoted Edward A. O'Neal, chairman of the Alabama cotton committee, saying that twenty-five counties were already organized, with fifteen more forming, in a drive to keep 4,000,000 bales off the market and win pledges to cut acreage by 25 per cent next spring. An AP dispatch from Rome told of a Long Island doctor attacked by fascists for failing to remove his hat to their flag. He planned to protest to the State Department.
Translation
PRESIDENT'S PLAN FOR TAX REDUCTION STARTLES LEADERS
WASHINGTON, Nov. 6. - (AP) - The sudden declaration of President Coolidge for a refund of ten or twelve per cent of this year's income taxes caused a scratching of heads today both at the treasury and at the capitol. Surprised treasury officials discreetly suggested that the president's proposal be accomplished through a credit on income taxes to be paid next year rather than through a straight-out refund at this time. Equally surprised democrats, suspecting that Mr. Coolidge was trying to take the political play away from them, called the president's action a subterfuge to avoid a general tax reduction until 1928, to give the republican party an issue.
ALABAMA FORGES TO FRONT IN POOL AND ACREAGE CUT
With twenty-five counties already organized and at work, and organizations being formed in fifteen other counties, Edward A. O'Neal, chairman of the Alabama cotton committee, announced Saturday Alabama is taking a leading part in the movement for cotton relief by retiring 4,000,000 bales of the present crop from the market and getting pledges of acreage reduction of 25 per cen [?] next spring.
LONG ISLAND PHYSICIAN COMPLAINS AT TREATMENT
ROME, Nov. 6. - (AP) - Dr. C. L. Rau, a physician of Lawrence, L. I., was attacked by a group of fascists on Wednesday evening for neglecting to take off his hat to a passing fascist flag, it was learned today. The doctor told the Associated Press he intended to make an official protest to the state department.
Context
Coolidge's December proposal was a one-time cut that Congress turned down
The AP dispatch reports Coolidge's sudden call for a refund of ten or twelve per cent of the year's income taxes. It also reports the Treasury's preference for a credit against the next year's payments, and the Democratic charge that he was putting off a general reduction until 1928. When Coolidge laid the idea formally before Congress in his annual message of December 7, 1926, it was close to the Treasury's version. He said the fiscal year would end with a surplus estimated at $383,000,000 and asked for "a simple measure making reductions in the payments which accrue on the 15th of March and June, 1927." He said he would welcome a permanent cut if it were feasible. But he argued that the government first needed more experience under the current revenue act and a view of economic conditions in late 1927, and he urged both parties on the House Ways and Means Committee to agree on a bill for temporary relief rather than engage in partisan controversy. Congress did not adopt the plan. In August 1927 Coolidge told reporters that he had suggested to the last Congress that taxes could be reduced somewhat, and that "Congress concluded that they would not do so." The motive the Democrats allege in the paper is a partisan charge. What the record does confirm is that Coolidge himself declined to seek a permanent reduction in that session.
The Revenue Act of 1926 had already cut taxes that year
The refund debate came only months after a major tax cut. The Revenue Act of 1926, which Coolidge signed on February 26, 1926, reduced inheritance and personal income taxes, cancelled many excise taxes and eliminated the gift tax. It applied to incomes for 1925 and later years. So the "income taxes" that the president proposed to refund in part were being paid under the new law. That explains why Coolidge's December message said the government had had "but a few months' experience under the present revenue act" and wanted to see the returns before deciding on any further permanent cut. The paper does not mention this recent law, but it helps explain the Treasury's caution and the White House's preference for temporary relief.
A record crop and sharply lower prices behind the cotton pool
The Alabama campaign described in the paper was a response to a glut. In its issue of November 8, 1926, Time reported that the government had just forecast a crop of 17,454,000 bales, above the previous record of 16,134,000 bales set in 1914. Time said prices averaged slightly under 12½ cents a pound, a little more than half the 23-cent average of the previous year. The magazine added that discouraged tenant farmers across the South were abandoning unpicked cotton for paying jobs in towns and cities. In that setting the paper presents O'Neal's plan to take 4,000,000 bales off the market and cut next year's planting as cotton relief: an effort to stop the surplus from pushing prices lower still.
How the 4,000,000-bale plan was financed, and how big a cut Washington wanted
The 4,000,000-bale figure in the Alabama report matched a national plan. Time reported that, to carry out the president's relief plans, federal officials had begun forming nine cotton finance corporations to serve twelve Southern states. Those corporations were to have a total capital of $16,000,000, against which the government would lend $160,000,000 for storing cotton. In his December 7 message Coolidge said that sufficient funds had been pledged to finance the storage and carrying of 4,000,000 bales. He left it to owners whether to put cotton into the plan, and he said no remedy would be adequate without a reduction of about one-third in acreage for the coming year. The 25 per cent acreage pledges O'Neal announced in Alabama were therefore smaller than the cut the president would call necessary a month later.
Edward A. O'Neal and the Alabama Farmers Bureau
The paper names the chairman of the Alabama cotton committee as Edward A. O'Neal. The Encyclopedia of Alabama records that Edward O'Neal III, grandson of Governor Edward A. O'Neal, became the second president of the Alabama Farmers Bureau in 1923. Under his leadership the bureau grew so successful that he was named president of the American Farm Bureau Federation in 1931. The farm leader of 1926 was very likely this O'Neal, and the initial printed in the paper matches his grandfather's name, though the page alone does not settle the point. O'Neal's later career ties back to the acreage pledges in this article. In the New Deal he helped craft the Agricultural Adjustment Act, which paid farmers to plant fewer crops such as corn and cotton in order to keep prices high. The law turned the kind of voluntary acreage cut sought in 1926 into a federal programme with payments attached.
Original
PRESIDENT'S PLAN FOR TAX REDUCTION STARTLES LEADERS
WAHINGTON, Nov. 6. - (AP) - The sudden declaration of President Coolidge for a refund of ten or twelve per cent of this year's income taxes caused a scratching of heads today both at the treasury and at the capitol. Surprised treasury officials discreetly suggested that the president's proposal be accomplished through a credit on income taxes to be paid next year rather than through a straight-out refund at this time. Equally surprised democrats, suspecting that Mr. Coolidge was trying to take the political play away from them, called the president's action a subterfuge to avoid a general tax reduction until 1928, to give the republican party an issue.
ALABAMA FORGES TO FRONT IN POOL AND ACREAGE CUT
With twenty-five counties already organized and at work, and organizations being formed in fifteen other counties, Edward A. O'Neal, chairman of the Alabama cotton committee, announced Saturday Alabama is taking a leading part in the movement for cotton relief by retiring 4, 000, 000 bales of the present crop from the market and getting pledges of acreage reduction of 25 per cen [?] next spring.
LONG ISLAND PHYSICIAN COMPLAINS AT TREATMENT
ROME, Nov. 6. - (AP) - Dr. C. L. Rau, a physician of Lawrence, L. I., was attacked by a group of fascists on Wednesday evening for neglecting to take off his hat to a passing fascist flag, it was learned today. The doctor told the Associated Press ne intended to make an official protest to the state department.
Source: Holding institution