Broadcasting (July - Dec 1941)

Senate Committee Kills Radio Tax {Continued from page 7) JOHN BLAIR & COMPANY Affiliate Station WLS Chicago REX DAVIS THREE TIMES DAILY WDSU NEW ORLEANS soon will be 5000 WATTS Day and Night WEED AND COMPANY National Representatives New York • Detroit • Chicago San Francisco THE VOICE OF MISSISSIPPI Gquivocal opposition to both the radio and billboard levies on the general ground that any tax on advertising would have a deleterious effect on business and hence on tax collections, and on specific grounds that the proposals were discriminatory and punitive [Broadcasting, Aug. 25]. AFL unions in the radio field, led by AFRA and IBEW, also took a strong position of opposition. Emphasizing the stand of AFRA and IBEW, and countering the logic of John B. Haggerty, president of the International Allied Printing Trades Assn. (AFL) and a prime mover for the radio tax, Mr. Hushing in his Aug. 23 appearance declared unreservedly that the parent organization opposed such legislation despite its espousal by the member printing trades unions. His testimony was regarded as a complete disavowal of the practicality of the stand of Mr. Haggerty, who the day before in a lengthy printed statement filed with the committee had not only reiterated his support for the radio tax but also had recommended that it be doubled. Declaring that a tax that would hit the workers' pay enveopes would hurt earning power and "is the wrong way to finance the defense program", Mr. Hushing called attention to a resolution adopted by the AFL executive council opposing such "punitive or discriminatory taxation as a special levy on radio advertising broadcasts" [Broadcasting, Aug. 18]. Pointing out that four AFL unions are directly concerned in the radio picture, he said none of the organizations favoring the tax have workers employed in the radio industry. Recalls Buggy Days "This is not a new question to us by any means," Mr. Hushing commented. "In the middle 1890's there was another new industry coming into existence, and in one of the Central Labor Unions on the West Coast, which was located in the largest West Coast city, there was an organization which came in with a proposal that no member of the organization, organized labor, ride in an automobile, even to a funeral, and the motion was adopted. "This proposal here is on all fours with and is made for the same reason that that motion was passed through that central body over 45 years ago. And in the future you will probably look back on this proposal in the same manner that you do on the one which I have just mentioned. "This proposal in this bill could well have been made against electric lights, because they put the manufacturers of oil lamps out of business, or could have been made by the candlemakers with the same force when the oil lamp came into use." Another final-day witness, Cathrine Curtis, national director of Women Investors in America Inc., a non-profit educational organization with headquarters in New York and Washington, charged that the proposed radio tax was an attempt to use the Government taxing power to "plow under" commercial radio entertainment to provide more free time for war and Government propaganda. She declared also that the proposed tax runs counter to the maximum revenue principle found throughout the bill in that the lump sum rates set up in the measure permit broadcasters to obtain lower i-ates than those specified by holding their time sales down to certain levels, she pointed out that this feature was not mentioned in the House Ways & Means Committee report on the bill. "Why did the committee hold out this premium for restricting time sales on the air?" she asked. "Did the committee deliberately forego the opportunity of collecting the full rate of taxation specified in the bill in order to accomplish the plowing under of radio time and station and network facilities? We have become accustomed to plowing under pigs, plowing under corn, plowing under cotton, plowing under profits — even plowing under reputations — but will the public peacefully accept the plowing under of radio time?" To Continue Fight Following Chairman George's announcement, Mr. Haggerty declared that the printing trades unions "will continue the fight to have the Senate levy a tax on the exhorbitant profits of the radio networks and large commercial radio stations." "It is difficult to understand," said Mr. Haggerty, "how the members of the Finance Committee can justify levying taxes on millions of wage workers earning less than $1,000 yearly, those least able to pay, and exempt from excise taxes the privileged few who operate radio networks and who are yearly deriving millions in profits which represent more than 200% and 300 9f per cent yearly on their investment. "We have every reason to believe that the Treasury Department and committee experts, as well as the subcommittee appointed by Senator George will find that the radio networks after payment of rebates and discounts in addition to agency commissions have deprived 25,000 printing trades workers of their jobs and have received net profits of $40,000,000 in the period 19311940 inclusive, while the profits for the 1931-1935 period were less than $20,000,000. The printing trades are right and righteousness will prevail". LEAVING FOR THE ARMY. Louis McComas Young (right), formerly chief engineer of KMOX. St. Louis, was presented with a valuable wrist watch by Manager Merle S. Jones. Young becomes a major in the Air Corps, assigned to Wright Field, Dayton. In a supplementary statement filed with the Senate committee, IBEW pointed to the growth in newspaper and magazine circulation and in printers' union membership in the last 15 years, commenting that printing industry workers, in attempting to have Congress enact a punitive tax on radio advertising, "have selfishly disregarded these obvious facts". Answering the Aug. 22 Haggerty statement, in a letter to Chairman George, Ellsworth C. Alvord, Washington tax attorney retained by the NAB, pointed out "certain erroneous statements which require correction". Taking issue with the Haggerty argument that the present need for revenue justifies the imposition of a special tax on radio broadcasting, at double the rates proposed by the House, Mr. Alvord declared that "the revenue needs can never be great enough to excuse an unjust, discriminatory tax". Mr. Alvord declared that Mr. Haggerty's "specious argunient" that the tax is justified because broadcasters earn large profits on the investment in or value of physical property "completely neglects the need for operating capital, the certainty of early losses, the constant hazards of the business, and the necessity for plowing back with CIRCUIT DESIGN Owned and Operated By LAMAR LIFE INSURANCE COMPANY JACKSON, MISSISSIPPI GENERAL # ELECTRIC ^icy 160-17 Page 50 • September J, 1941 BROADCASTING • Broadcast Advertising