566 IOWA DEPARTMENT OF AGRICULTURE 



and administration of the department his invested capital was kept down 

 to a very low point, therefore his per cent of earnings would show up 

 very large on his capital invested. 



To illustrate: The farmer who bought a quarter section of land at 

 $50 per acre would only have one-fourth as much invested capital in the 

 land, according to the ruling of the department, as the man who ten or 

 fifteen years later bought his farm of 160 acres at $200 per acre. 



The law as it was applied in 1918 not only worked a very great hard- 

 ship on a large number of farmers, but placed those who had bought 

 their land when it was comparatively cheap at a very serious disad- 

 vantage in competing with the more fortunate neighbor who had pur- 

 chased his land later at $150 to $200 per acre, because the farmer 

 who could show a large capital investment on account of having pur- 

 chased his land in later years was entirely exempt from the excess tax, 

 while the other was taxed beyond reason. 



During the spring and summer of 1918 it became very apparent that 

 something must be done to remove the discrimination that seemed to be 

 unavoidable under the interpretation of the 1917 law, and to tax all farm- 

 ers alike on their net incomes regardless of the time they purchased 

 their land, so the first time I was in Washington I took the matter 

 up with our Iowa senators and others, including the chairman of the 

 senate finance committee, and all agreed that the easiest and simplest 

 way to correct the whole matter was to exempt individuals and partner- 

 ships from the operation of the excess profits tax law in the war revenue 

 bill, which was then being framed, so this was accordingly done, but 

 was again restored to the bill after it was introduced in the senate, and 

 then came on the fight to have it stricken out, which was finally accom- 

 plished and the bill was passed by both houses and signed by the pres- 

 ident as amended, and the farmer is now exempted from making an 

 excess profits tax report, or paying excess taxes on his income. This 

 very greatly simplifies the income tax law, and makes it much more 

 equitable to the farmers in general than the 1917 law. 



STOCK YARDS AND PACKER LEGISLATION. 



Legislation for federal supervision and control of the stock yards 

 and meat packing industry has been on the calendar at Washington for 

 the past fifteen months. Federal investigations and threatened pros- 

 ecutions of the big packers were rife during the summer and fall until 

 finally to cap the climax the federal department of justice in December 

 published in the daily press the substance of an agreement or contract 

 entered into by the five big packers and the government in which the 

 packers agreed to dispose of all of their side-line business and confine 

 their efforts strictly to the meat packing business and other lines di- 

 rectly connected with it. This move on the part of the packers at once 

 removed the necessity for the enactment into law of some sections of the 

 Kenyon-Kendricks bill which had been before the agricultural committee 

 of the senate and on which voluminous hearings and testimony had been 

 submitted to this committee. So as a result of this move on the part of 

 the government and the packers a new bill has been framed and is 



