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April 9, 1941
Chairman Eccles
Baile Bespres

Tour suggestion that the iaooaae from tax-execrpt
Government securities bo included in incorie subject to a
special defense tax on corporations baa not been Included
in this memorandum,. Although the legality of the proposal
la generally acknowledged, it would arouse m o b controversy
and raise very little revenue* The only important group of
corporations affected would be the banks. Life insurance
companies are allowed special deductions which would continue
to give them imunity, and holdings of partially tax-exempt
securities by non-financial corporations are negligible.