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JANUARY 4,
THE MUSIC TRADE REVIEW
1919
War Revenue Bill Will Be Enacted Into Law Shortly
Revised Bill Will in All Probability Be Ready for President Wilson's
Signature Before the Present Month Is Over—No Change Expected in
Section Providing For a Five Per Cent. Tax on Musical Instruments
WASHINGTON, D. C, January 2.—There appears
to be every likelihood that the month of Jan-
uary and perhaps the next fortnight will see
the final enactment of the new War Revenue
Act and that business men will be called upon
to pay taxes this spring under the new schedules
instead of under a holdover arrangement that
would have compelled Internal Revenue col-
lectors to accept taxes under the old 1917 Act.
To be sure, during the weeks that will intervene
before the new revenue measure can be returned
from abroad bearing the signature of our absent
President, any business man can, if he see fit,
demand the privilege of paying current taxes
on the old basis, but the Interal Revenue of-
ficials do not intend to let him thus save money
permanently at Uncle Sam's expense.
They
will come at him later for the difference in
amount between his obligations under the pres-
ent tax law and his increased liability under the
new law.
When the peace commissions from the Senate
and House of Representatives started this week
to arbitrate their differences with respect to the
taxation program Chairman Kitchin, of the
House Ways and Means Committee, predicted
that not much more than a week should be
needed to arrive at a compromise. That music
trade interests will be fairly well looked after
in the conference room is assured from the
make-up of the conferring bodies. The con-
ferees appointed by the Senate are Senators
Simmons, Hoke Smith, Williams, Penrose and
Lodge. For the House there are acting in these
negotiations Representatives Kitchin, Henry T.
Rainey, of Illinois, Dixon, Fordney and Moore.
Changes in Bill Made in Senate
The fully revised copies of the Revenue Act
as finally approved in the Senate which have just
become available show that the bill underwent
far greater change on the floor of the Senate
than was anticipated, it being the expectation
that the Senate would adopt without question
the recommendations of its Finance Committee.
In so far as the paragraphs of Section 900 re-
lating to musical instruments are concerned the
recommendations of the Finance Committee for
a reduction of the tax levy from 10 to 5 per
cent., etc., were allowed to stand and there was
no restoration, as had been feared in some quar-
ters, of the obnoxious floor tax, but there were,
here and there, eleventh-hour revisions of the
schedules that may affect music tradesmen in-
directly if not directly.
For example, the restoration of the so-called
luxury taxes upon various classes of sporting
goods alfects a class of merchants many of
whom are accustomed to handle talking ma-
chines and records as a side line. On the other
hand, the exception made in favor of men's and
boys' suits and overcoats and women's and
misses' suits, cloaks, coats and dresses, when the
luxury taxes were unexpectedly brought back to
life on the floor of the Senate, will tend to com-
pel the everyday citizen to spend less for the
bare necessities of life and allow him more for
investment in utilities such as musical instru-
ments that make for individual morale and con-
tentment in the home.
Features of the Bill That Help Merchants
As good luck would have it, the Senate ac-
cepted, and it is expected that the House will
concur in the provisions with respect to "in-
ventories" and "net losses" which, as was ex-
plained in The Review, issue of December 21,
19l8, afford welcome relief to merchants under
certain circumstances. Likewise did there stick
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in the bill provision for a relaxation of postal
charges that will be welcome to all music trade
men who advertise either directly by mail or
through the medium of newspapers and period-
icals.
If this proposal is accepted by the
House of Representatives, letter postage will
drop from 3 to 2 cents and we shall go back to
the 1-cent postal card. For the carriage of
newspapers, magazines, etc., within a radius of
150 miles of the place of publication the old
second-class rate of 1 cent per pound would
be put back. For periodical circulation beyond
the 150-mile deadline the rate would be \ l /t
cents per pound instead of 1 cent per pound, as
was the case before the war, but this would be
a modification of the steadily increasing rate
now provided for and would put an end to the
plan of charging a higher rate on the advertising
matter than on reading matter.
Trade Has Much to Be Thankful For
From the disclosures made in the Senate dur-
ing the final consideration of the Revenue Act
it is apparent that music trade merchants have
more to be thankful for than they have realized
in that the levy on instruments, rolls and rec-
ords is a manufacturers' tax rather than a retail
sales tax collected by the merchants from the
ultimate consumer.
Senator Simmons stated
that proof had been offered to his committee
that in stores where the retail sales taxes will
be in force much time will be lost by salesmen
and extra bookkeepers will have to be employed
to keep the separate accounts for each article
sold, the amount received and the tax collected.
Music tradesmen who in their business make
use of motor trucks or trailers may feel a cer-
tain satisfaction that in the final hours of the
consideration in the Senate of the Revenue Act
there was struck out the tax of 5 per cent, upon
such commercial vehicles, even as the proposed
tax on gasoline had disappeared at an earlier
stage. But there was left in the bill the 5 per
cent, tax on automobiles and motor cycles so
that the music trade is, on this score, in no sense
at a disadvantage in meeting the selling points
of articles that are, from the standpoint of pop-
ular appeal, somewhat on the same plane as mu-
sical instruments.
GREAT INCREASE IN OUR TRADE WITH SOUTH AMERICA
American Manufacturers and Exporters Have Increased Their Commerce With South American
Countries 160 Per Cent. Since the Beginning of the War—Future Opportunities
United States manufacturers and exporters
have increased their trade in Brazil and other
South American countries by more than 160 per
cent, since the beginning of the war, according
to J. W. Sanger, Trade Commissioner of the
United States Government Bureau of Foreign
and Domestic Commerce, who recently returned
from a survey of the business opportunities
south of the Equator.
"Imagine ten large stores in one big city, and
one of these stores doing more business than
all the other nine combined," said Mr. Sanger,
"and that will give you some idea of the posi-
tion we are in to-day. It is an amazing record.
We are now selling South American countries
more than half of everything they import. Our
total export trade is now counted in billions of
dollars."
The Commissioner-said that "with the signing
of a peace treaty, a practical certainty within six
months or a year, it is not a day too soon to
begin making definite plans to meet the keen
competition in foreign trade that must come al-
most immediately." The hundreds of millions
of dollars invested in new factories and ships,
he said, mean that America must find fresh out-
lets for her enterprise and industry.
Need Representation
"We need more and better direct representa-
tion of our manufacturers in the important trade
centers of Brazil and other South American
countries," he continued. "This may come about
through taking the fullest advantage of the new
Webb Export Trade Act or in other practical
ways.
"We also need a fast and regular freight serv-
ice to every important port of Latin America.
Without it we will be as crippled as a depart-
ment store that depends upon casual messenger
boys to make its deliveries. Then again we
must be prepared to meet the actual needs of
these countries regarding the extension of
credits.
"The biggest single incentive to foreign trade
is foreign investments.
Unfortunately our
holdings in South America are practically neg-
ligible. In a short time our immense surplus
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capital will seek investment.
Brazil in par-
ticular needs this capital and will pay us hand-
somely for it.
"flow many people in the United States know
that Brazil alone is larger than all the United
States? Yet, except for its thinly settled coast
line it is practically untouched. It is one of the
richest countries in the world and is destined to
develop along similar lines to our own country
in the last hundred years. It has every natural
resource that we had, and, in addition, others
that nature did not give us. Our talking ma-
chines, typewriters, sewing machines, safety
razors and a great number of other American
products are standard with Brazilians to-day.
It is up to us to make just as well known the
thousands of other products that we make and
that they need just as much."
Advertising Imperative
To accomplish this, Mr. Sanger said, it was
necessary for American manufacturers to ad-
vertise their goods "down there." In South
America, he said, advertising methods are crude
and much as they were in the United States
thirty or more years ago.
"We have scarcely even begun to use this
power, this promoter of sales and goodwill in
South America," continued Mr. Sanger. "I have
unmistakable evidence 1 that the people of that
country respond amazingly even to the crude
forms of advertising offered them.
"The biggest thing that could happen to ad-
vertising down there would be for broad-gauged
American advertising men to take more inter-
est in it. These countries await the stimulus
of American advertising genius properly ad-
justed to meet their needs. But let the Ameri-
can advertising men put this in their note books:
Spanish is the language of all South America ex-
cept Brazil, where Portuguese is spoken. Bra-
zilians are offended if you write or speak to
them in Spanish."
Arthur Reams, Southern traveling representa-
tive for the Behning Piano Co., was a visitor
in town last week. He will return to his home
in Atlanta shortly after New Year's Day.
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