Mr. HENDRICKS. I propose an amendment to come in after the word “dividends” in line 3135 of section 9 of this bill, on page 136: That section 122 be amended b adding thereto the following proviso : Provided, but whenever any such railro, canal, turnpike, canal navigation or slack water company is indebtedas herein set forth, and shall oweaccrued interestor matured coupons upon its indebtedness, the tax of 5 perrent. on the amount of all such interestor coupons shall be payable to the Govern mentwheneversaid interest or couppns shall be ordered by any such company to be paid to the person to whomthe same slittl be due and owing, or when ever the payment thereof, as aforesaid, by any such company with or Without previousorder, shall have beencommenced. I will explain in a word or 2 what this amendment is. The section of‘ the old law which it proposes to amend is section 122. That provides“ That anyrailroad.eannl. turn iko, canal navigation.orslnc k watercoiniiiinyinde ted for any money for which bonds or other evidence of indebtedness have, been issued, payablein oneor more cars after which interest is stipulatedto e paid or coupons representing the interest, or any such company lhatmay have declared any dividend in scrip or moneydue or payable to its stockholders.as part of the earnings. profits. income, or gains of such company, and all profitscfsueh company, carried to the account of any fund, or used for construction, shall besubjectto and pay a duty of 5iier cent. on the amonntorall such interest mr coupons, dividends or profits, wheneverthe same shall be payable: and said companies are hereby authorized to deductand twcirtchshte, ld from all payments, on account of any in or couponsand dividends due and ayuble as aforesaid the duty of 5%.; and the paymsnt of the amount of said dut so deducted from the interest or coupons, or divi ends and certlfled by the president or treasurer of said company shall discharge said company from that amount of the dividend, or interest or coupon. on the bonds or other evidences of the ir indebtedness so held by any person or party whatever.oxccpt where said companies mayhave contracted otherWise.” This construction has been given to that provision: that as soon as the coupons became due the company shall pay 5%. on them whether the company is in a condition to paytecan one or not. in other words, it is so construe as to make the payment of the tax to be upon the indebtedness of the company. This was intended to be an income tax, that the 5%. should be paid by the company, instead of the party to wh0rn the interest is payable. The proposition I now make is, that it shall be in act‘an income tax; that it shall be a tax upon the Iinterest paid to the bond holder, instead of being a tax against the company upon its indebtedness. Congress did not intend to tax the indebtedness of a corporation but intended to tax the income of the end holders against the company, and provided that the tax should be pai directly by the cempany to the Government instead of collecting the tax from the bond holder after the conpoInt or interest had been paid. seems to me this is right. There is one compau in the State of Indiana that has not been able to pay its coupons, but it has been required to pay the tax upon the coupons when it was not able to meet them. My proposition is that when a company pays the coupons, and not before, it shall pay the 5%. tax upon them into the ‘reasury.