person.

The "component material of chief value" of any article means that component material which is not exceeded in value by any other single component material;

Section 900. Manufacturer who customarily sells both at wholesale and retail.

The paragraph next to the last paragraph of this section provides:

If any manufacturer, producer, or importer of any of the articles enumerated in this section customarily sells such articles both at wholesale and at retail, the tax in the case of any article sold by him at retail shall be computed on the price for which like articles are sold by him at wholesale.

It has been suggested that this paragraph works a hardship on small manufacturers who are able only to engage in retail business and that an injustice is done to a greater number of taxpayers through the operation of this provision than would be the case if every taxpayer under this section were required to pay tax on the basis of the selling price in the case of every transaction, and that, therefore, this paragraph should be repealed.

This change could be accomplished by an amendment in substantially the following form:

Strike out the next to the last paragraph of section 900 which reads as follows:

If any manufacturer, producer, or importer of any of the articles enumerated in this section customarily sells such articles both at-wholesale and at retail, the tax in the ease-of any article sold by him at retail shall be computed on the price for which like articles are sold by him at wholesale.

Section 902. Sculpture, paintings, statuary, art porcelains, and bronzes.

Articles on which tax is imposed by this section have been defined by the Treasury Department and it has been suggested that these definitions should be reviewed by Congress and incorporated, with whatever revision may be deemed necessary, in the law.

It has been suggested that these articles should be taxed only in the case of sales for consumption or use and that the exemption provided in this section for the benefit of educational institutions should be extended to all corporations organized and operated exclusively for religious, charitable, scientific, or educational purposes, provided no part of the net income of such corporations inures to the benefit of any private stockholder or individual.

It has been suggested that these changes could be accomplished by an amendment in substantially the following form:

Strike out section 902 and insert:

SEC. 902. That there shall be levied, assessed, collected, and paid upon sculpture, paintings, statuary, art porcelains, and bronzes, sold by any person other than the artist for consumption

or use, a tax equivalent to 10 per centum of the price for which so sold. This section shall not apply to the sale of any such article to an educational institution or a public art museum or a corporation organized and operated exclusively for religious, charitable, scientific, or educational purposes, no part of the net earnings of which inures to the benefit of any private stockholder or individual.

The term "sculpture" as used in this section means any produc tion, such as statues, statuettes, figures, figurines, groups, busts, haut or bas reliefs, plaques, pedestals, vases, flower bowls or holders, umbrella stands, jardinieres, brackets, fountains, sundials, book ends, paper weights, cabinet pieces or curios, and the numerous articles included within the term bric-a-brac (whether antique or modern, and whether original, replica, copy, or reproduction) which is cut or carved by hand from marble, stone, alabaster, agate, crystal, jade, lapis lazuli, or other semiprecious stone, terra cotta, ivory, bone, wood, clay, wax, metal, or any other substance, and which is of such a character that the use to which under general custom or ordinary usage it should be put (irrespective of the use to which the purchaser intends to put it), is entirely or principally an ornamental or decorative one as distinguished from a useful or utilitarian one.

The term "sculpture" does not include (a) such articles as are in the nature of material, work, or labor furnished in connection with the erection or construction of a building and which form an integral part thereof, or (b) cut glassware or engravings on metal, wood, shell, stone, or other substance, or (c) furniture, altars, candlesticks, chandeliers, railings, gates, doors, or other articles designed primarily for a useful purpose.

The term "paintings" as used in this section means any pictures, images, likenesses, scenes, designs, or sketches, wholly or in part in oil, mineral, water, or other colors on canvas or other textile, wood, paper, metal, plaster, or other material, (a) whether antique or modern, (b) whether originals, replicas, copies, or reproductions, and (c) whether or not intended for reproduction by printing or other processes.

The term "paintings" does not include (1) such as are in the nature of work or labor furnished in connection with the erection or construction of a building and which form an integral part thereof; (2) furniture, windows, tableware, toilet articles, glove, handkerchief, candy, or other fancy boxes, menu, place, greeting, and similar cards, stationery, candlesticks, signs, placards, desk fittings, and other articles of utility when the same are ornamented or decorated with oil, mineral, water, or other colors; (3) such as are produced wholly or in part by stenciling, printing, or other mechanical process; and (4) pastels or drawings. The term "drawings"

as

used in this paragraph means only pictures, images, likenesses, scenes, designs, or sketches produced by means of lines.

The term "statuary," as used in this section, means any production (whether antique or modern and whether original, replica, copy, or reproduction) cut, carved, or otherwise wrought by hand from marble, stone, alabaster, agate, crystal, jade, lapis lazuli, or other semiprecious stone, terra cotta, ivory, bone, wood, clay, wax, metal, or other substance, when such production is a representation in the round of the human or animal form (irrespective of size), whether real, mythical, fabulous, or allegorical.

The term "statuary" does not include (a) such productions as are in the nature of material, work, or labor furnished in connection with the erection or construction of a building and which form an integral part thereof, (b) dolls or toys, or (c) such productions as are designed for a primarily useful purpose.

The term "art porcelains," as used in this section, means that class of articles, such as statues, statuettes, figures, figurines, groups, busts, haut or bas reliefs, plaques, pedestals, vases, flower bowls or holders, jardinieres, brackets, fountains, sundials, cabinet pieces or curios, and the numerous articles included within the term bric-abrac, by whatever process made, when such articles are made wholly or in chief value (a) of any ceramic production of translucent ware, of hard or soft paste, whether vitrified or semivitrified, by whatever name known; or (b) of that which is commonly or commercially known as porcelain, in either case, whether or not decorated, colored, or ornamented, whether modern or antique, and whether originals, replicas, copies, or reproductions, which are of such a character that the use to which under general custom or ordinary usage they should be put (irrespective of the use to which the purchaser intends to put them) is entirely or principally an ornamental or decorative one as distinguished from a useful or utilitarian one.

The term "art porcelains" does not include (a) such articles as are in the nature of material. work, or labor furnished in connection with the erection or construction of a building and which form an integral part thereof, (b) tableware or other articles designed for a primarily useful purpose, or (c) such articles as are duplicated by the manufacturer in commercial quantity wholly or chiefly by the ordinary mechanical process of manufacture. Articles shall not be deemed to be duplicated in commercial quantity unless they are ordinarily sold by the manufacturer in quantities of not less than a dozen.

The term "bronzes," as used in this section, means that class of articles such as statues, statuettes, figures, figurines, groups, busts, haut or bas reliefs, plaques, pedestals, vases, flower bowls or holders, umbrella stands, jardinieres, brackets, fountains, sundials, book ends, paper weights, cabinet pieces or curios, and the numerous

articles included within the term bric-a-brac, by whatever process made, when such articles are made wholly or in chief value of that substance which is commonly or commercially known as bronze, whether such articles are modern or antique, and whether originals, replicas, copies, or reproductions, which are of such a character that the use to which under general custom or ordinary usage they should be put (irrespective of the use to which the purchaser intends to put them) is entirely or principally an ornamental or decorative one as distinguished from a useful or utilitarian one.

The term "bronzes" does not include (a) architectural bronzes, (b) such articles as are in the nature of material, work, or labor furnished in connection with the erection or construction of a building and which form an integral part thereof, (c) medals, memorial or commemorative tablets, or (d) such articles as are designed for a primarily useful purpose. The sale to an artist by a foundry of a casting made from the artist's model shall not be subject to the tax. Section 905. Articles made of, or ornamented, mounted or fitted with, precious metals or imitations thereof.

It has been suggested that the interpretations placed on this provision by the department should be confirmed by legislation. The department has held that Congress did not intend to tax such articles as railroad coaches or coffins, although such articles might have fixtures of precious metals. The department has also ruled that the term "precious metals" was intended to include only silver, gold, platinum or metals of greater value and that the term "imitation thereof" was intended to include only platings or alloys of these materials.

It has been suggested that this change could be accomplished by an amendment in substantially the following form:

Strike out the first paragraph of section 905 and insert:

SEC. 905. That on and after April 1, 1919, there shall be levied, assessed, collected, and paid (in lieu of the tax imposed by subdivision (e) of section 600 of the Revenue Act of 1917) upon all articles commonly or commercially known as jewelry, whether real or imitation; pearls, precious and semiprecious stones, and imitation thereof; articles (designed for personal use or adornment or for ornament or display in connection with the home) made of, or ornamented, mounted or fitted with, precious metals or imitations thereof or ivory (not including surgical instruments, articles made of imitation ivory or ornamented or overlaid with gold or silver leaf or paint, such as picture frames, books, christmas cards, glassware, china and pottery); watches; clocks, opera glasses; lorgnettes, marine glasses; field glasses; and binoculars; upon any of the above when sold by or for a dealer or his estate for consumption or use, a tax equivalent to 5 per centum of the price for which so sold.

TITLE X-SPECIAL TAXES.

Section 1000. Extension of time for filing capital stock tax return.

Many corporations have of necessity been granted extensions of time in filing income and excess-profits and war-profits tax returns and claim the same data is used in preparing capital stock tax returns, and for that reason insist that it is impossible to properly file the capital stock tax return within the prescribed time under the law. The difficulty seems to be due to the fact that the capital stock tax return requires under Exhibit C the net income reported for the Federal income tax, and until this data is available Exhibit C can not be computed. Many requests for extension of time in filing the capital stock tax return are received from foreign corporations whose principal offices are located outside of the United States.

It has been suggested that the commissioner should be authorized to grant an extension of time for filing a capital stock tax return whenever an extension of time is granted to the same corporation for filing its income and excess-profits and war-profits tax return.

It has been suggested that this change could be accomplished by an amendment in substantially the following form:

Amend section 1000 by adding a new subdivision as follows:

(e) The Commissioner may grant a reasonable extension of time for filing returns under this section whenever in his judgment good cause exists and shall keep a record of every such extension and the reason therefor. Except in the case of taxpayers who are abroad, no such extension shall be for more than six months.

Section 1001. (12) Dealers in malt liquors containing one-half per centum or more of alcohol liable to $1,000 special tax.

This paragraph of the law imposes a special tax of $1,000 on every person carrying on the business of a brewer, distiller, wholesale liquor dealer, retail liquor dealer, wholesale dealer in malt liquor, retail dealer in malt liquor, or manufacturer of stills, as defined in section 3244 as amended, and section 3247 of the Revised Statutes, in any State, Territory, or district of the United States contrary to the laws of such State, Territory, or district, or in any place therein in which carrying on such business is prohibited by local or municipal law. It has been suggested that the definitions in the Revised Statutes are not dependent upon the alcoholic content of the liquor produced or sold by persons engaged in the occupations which are defined, and that under the literal language of the Revised Statutes and of this section it is necessary, in order that a given business may be regarded as prohibited by local or municipal law, that such law prohibit the sale of any liquor whatever, even though absolutely non

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