Mr. Watkins, a supporter of th.
then got the floor and said: "We now have the China Trade Act upon the statute books, We Propose to amend Hishmen. The other proposed amendments are of small matter. The situation this bill seeks to remedy A man owns stock in x corporation; he makes, we will say, $5,000 in dividends, on which the income tax is collected at the source, that is, the dividend taxed 124 per cent, The man who earns that gets the balance of $4,375, which he reports in his income-tax returns, but claims exemption because the tax was paid at the source. Now what ix the situation with the man who owns the same amount of stock in a China Trade Act Corporation? His dividend is taxed 12h per cent; he then reports his dividend to the Treasury, and on the remainder he pays the normal tax, In other words it is repetitive taxation. That is, two American; the same amount. of money; one tax is asked inthe domestic corporation and double taxation is asked in the China Trade Act corpor tion. Hix domicile makes no difference, whether itis in the United States or Chini "The second amendment is thi Grent Britain gives her people some encouragement to go to China and develop trade there in order that her commerce might. be developed tand jobs at home made more plentiful. "We want the United States to do the same for Americans who over there, We now say to the Chinese "You turn over your $50,000 to us and we will see that you ure not taxed on the dividend earned by the corporation,' Why don't we do that for the American? Under this amendment we will do the same thing for the American, We propose to say to Americans that any earns ings they make in China trade will be exempt, providing they live in China. The purpose of the bill is to broaden the class of China Trade Act stockholders now exempt, from individual income tax so ay to me clude anybody providing they reside in China.'
British Agencies for U. 8. Goods Mr. Watkins, again taking the oer, explained that one of the bene fits from the passage of the bill would be the strengthening of American business at the expense of other nationalities. More than 300 American concerns are represented in China by British companies, Mr. Watkins said, reviewing a great deal of the testimony that was given hai, when she was before the committee. These firms were doing business through British agencies because of the tax that is now imposed on American firms, Mr. Wat-Kins asserted, and there was every reason to believe that a Bri would sell British goods ference to American goods when-possible, so that American trade was suffering under a grave disadvantage.
After more incidental discussion which several other representa. tives expressed the same general sentiments and extolled the benefits that would come to American business asa result of the bill's passage it was: put to a vote and passed.
The Dill ix now in the hands of the Senate.
Text read from the printed page and cleaned; old type leaves the occasional error.