ECONOMIC REFORMS WITH WAR'S END
Untermyer, Samuel
Economic Reforms With War's End New York Lawyer Outlines Program of Advance; Says Cost of Government Must Come From Incomes and Inheritance. By SAMUEL UNTERMYER The following statement by...
...THE necessities of the war have involved the temporary surrender of an undue proportion of incomes and profits...
...The law will see to it that the interes' of the employer is directed just as much to securing sanitary working conditions and promoting the health of the workers as though he were conserving his mechanical appliances...
...IT WILL be said, as it...
...We have eliminated those sordid issues and have lifted the struggle into the transcendental realms of idealism and world-service...
...The self-restraint that we practice now will add to the lustre of our victory...
...We may as well realize that the old order has gone, never to return...
...I refer to the disposition in some directions to stirsup hate and prejudice against our loyal citizens of German birth and ancestry whose brothers and sons are fighting side by side with ours...
...tlie utilization for the whole people of oui vast water powers and other undeveloped natural resources...
...The hyphen will be no more...
...It required over twenty-five years of r.gitation to get an enforceable law on the statute books and even then the tax was trifling...
...the preservation of our forests...
...We had been placing all the bar-dens of government on the shoulders of the workers...
...Never again will this country take counsel of its doubts or fears when once satisfied that its cause is jvjst...
...He is more often stirred by pity, but he has a stern duty to perform in which neither hate nor pity must play a part...
...punished and suppressed and ruinous competition will be prohibited...
...By this, I do not* mean that we shall enter upon what is generally understood as a Socialist State nor that the legitimate rights of property will be destroyed...
...It is only from the point of view of the effect of the retention of such taxation upon enterprise in normal times that the rates provided by the pending bill would be unwise and oppressive...
...Many of this latter group, although loyal to the United States are through unjust and unfounded suspicion or prejudice of which they are the victims, prevented from or seriously handicapped in earning their livelihood and are in consequence reduced to greatest financial straits...
...In the light of our bewildering experiences no one can predict the heights of accomplishment we shall reach in the next twelve months, and we are fully justified in casting all doubts behind us...
...In one short year our people have learned that money docs not make the man or add one jot to his title in the respect of his fellowmen...
...No other method of taxation has been suggested that would involve less real hardship...
...We have nothing to gain and much to lose in self-esteem by giving way to impulses of which we may hereafter be ashamed...
...2We will have been converted from a nation • of prodigal spendthrifts that has been squandering the most bountiful gifts ever bestowed by nature upon man, into a fairly thrifty provident people...
...Unter-myer has put forth in public addresses and articles, pleas for federal regulation, reform in criminal laws and many kindred subjects...
...every child will be truly the ward of the State which will see to it that it ia properWHEN to the expenditures for these purposes there are added the untold hundreds of millions of annual revenue that will be required to care for the men who have been injured and the families of those who have died in our cause and the further sums that will be needed to carry out the long deferred program of Social reform that will be justly demanded, it is easy to see that the Government will urgently need every dollar that can be raised from a substantial tax on incomes and from inherited wealth, in addition to the revenues from customs duties...
...The upright Judge who seaOUR system of Federal taxation prior to the war was the most crude, unscientific and blindly unjust of that of any nation on earth...
...It is not brave or fine to strike at men who are harmless, unarmed and defenseless...
...6Child labor will be contraband throughout • the land...
...By SAMUEL UNTERMYER The following statement by SenaUn- Un-termyer, the well known New Yerk lawyer is taken from one of Hs recent addresses...
...Whilst they were collecting their chief revenues from that source without interfering with their successfully competing with us in the markets of the world, our statesmen were still loudly denouncing the proposal as Socialistic...
...Justice to be administered through a "Nation of Nations" that will maintain the peace of the world...
...At last the people know their strength and it is idle to believe that they will not use it to wipe out the injustices of the existing order...
...Large incomes and inheritances will have to be heavily and permanently curtailed by taxation unless we are to have continuous warfare between capital and labor...
...What a debt...
...From a reputed nation of money-getters* we will have evolved into the spiritual crusaders of the world and thus this war of all war: will have justified itself...
...These are some of the many uses to which the taxes from untaxed wealth that should have been taxed migbt have been and will be put as one of the results of what we have learned from this war...
...The people who from motives of patriotism, or because they know existing conditions to be temporary, are willing to forego the rewards of their risks and labors would not go on with such sacrifices indefinitely under normal conditions with an alternative open , to them...
...The necessities of the war have taught us that the burdens of taxation can without difficulty be placed upon those who can best bear them...
...But the cause is too big and too holy to make room for hate...
...Home and liberty will have new meanings for them...
...Until men are born and remain equal in character, intelkct, endurance, industry . nd resourcefulness and in all the other attributes that make for deserving success, until they can contribute useful service in equal proportions, the contemplation of a Socialist State must remain an iridescent dream...
...The rich who are necessarily the main beneficiaries of Governmental protection, since they Ttave more to be safeguarded, escaped, whilst the protective tariffs furnished the revenues...
...It will bring about almost without a struggle and by a peaceful revolution the changes that could not have been wrought without civil war...
...For the present these are twofold...
...5The public domain, the public utilities and • the natural resources of the country, amoBg which I include our deposits of coal, iron and copper and our forests, all fields and water powers will revert to the people...
...Editor's Note...
...Their spirits will have been uplifted and their hearts chastened by their sufferings and by the memories of the dead comrades they left behind...
...Norrian Bridge of Washington as Chairman...
...and second, rendering of aid and assistance both financial and social to the vastly greater number of law-abiding industrious and^ discreet subjects of Germany and Austria-Hungary in the United States...
...Sacrifices of Soldiers...
...In a few generations the ravages of this war will thus have been made good to us a hundred-fold...
...3The National purposes will be purified and • spiritualized and men of all classes and nationalities will be united as never before into one indissoluble bond of true Americans...
...To that end he must provide, or at least join in providing, reserves as part of his operating expenses, for insurance against illness and unemployment and old age pensions, to which the State, the *m-pHyee &nd t' employer shall be required to contribute...
...Almost as if by magic we are well on the way to perfecting the most stupen duous war machine of which the world has ever dreamed, overcoming obstacles that men of the widest vision regarded as insurmountable, as though they had not existed...
...As they will by their sacrifices have made the rest of the world a fit place in which to live so will they see to it that their own beloved country, for which they and their comrades have fought and bled, shall become the guide and leader in the onward march for Social Justice...
...He foresees great economic changes...
...When to the expenditure for these purposes there are added the untold huoureds of million* of annual revenue that will be required to care for the men who have been injured and the families of those who have died in our cause and the further sums that will be needed to carry out the lcng-deferred program cf Social reform that will be jus'Jv oemanded, it is easy to see that the Govcrnmeut will urgently need every dollar that can be raised from a substantial tax on incomes and from inherited wealth, in addition to the revenues fi«>m customs duties...
...the coi.siruction of great i.a-tional highways by land and water...
...We had been placing all the burdens of govern-ment^ on the shoulders of the workers...
...IT IS necessary for trie encouragement of thrift and enterprise that men shall be able to reap the reward, but it jr not necessary that their children and their children's children shall be permitted to live lives of idleness and become paraSites upon the community because of the thrift of their ancestors...
...Whilst they were collecting their chief revenues from that source without interfering with their successfully competing with us in the markets of the world, our statesmen were still loudly denouncing the proposal as Socialistic...
...In Ids opinion the United States will witness a social revolution that will inaugurate reforms...
...That will be the sole test and men will prosper or fail in their life's work, in the estimation of their neighbors and of the country, in the proportion in whkh they meet the test of public usefulness...
...1 Old Order is Gone...
...4The cn^t of Government will be raised • largely from taxes on incomes and inheritances...
...There will be compulsory arbitration, binding alike on the employer and the employed^ to the end that the men and women who create the wealth in a given industry shall be paid in wages their just share, no more and no less, of the wealth that they create, after proper allowance for the risks and value of* capital and initiative...
...The rewards must be commensurate with the risks, effort and accomplishments unless we are content to abandon our place in the wnrld...
...has long been argued, that even if this ambitious program were in the interest of the people, the Government is not adapted and can never be equipped to carry it into successful execution...
...To that end competitors who choose so to do will be permitted to agree on prices subject to Government regulation and approval as to their reasonableness...
...Our system of Federal taxation prior to the wa- was the most crude, unscientific and blindly unjust of that of any Nation on earth...
...1The scourge ^nd curse of war will be for-• ever banished from this fair earth and there will be ushered in the era of International OUR soldiers and sailors will come home with this newfound knowledge of their power, as eager to right conditions at home as they were to venture their lives to assure the freedom of the old world...
...And so we will have earned the proud position that we shall maintain of being the recognized leader of the moral forces of the earth...
...That, it seerns to me, is the temper in which we should deal with this subject...
...Hate is always unreasoning and intemperate...
...No matter whence we or oUr ancestors have come we shall be known hereafter only as Americans, for we have together been baptized in American blood in a common cause...
...Within the past few' weeks the State Department announced the appointment of a Commission of distinguished Americans with Dr...
...It will usher in the era of Social Justice and will put us forward as one hundred years of j>eace could not have accomplished...
...First, the recording and control of assistance given to the families of interned aliens by the legations of Sweden and Switzerland...
...We are not bullies...
...in the irrigation and reclamation of hundreds of millions of waste lands...
...Recently, Mr...
...But if their effect would be to relax effort and initiative and drive capital into hiding, they would be unjustified from the economic point' of view, since they would fail of the purpose for which they were intended and that would doubtless be their effect...
...But even then we will have to provide our share of the cost of armament for "The League of Nations" that will in some form constitute an International Police to keep the peace of the world...
...He Is protecting society as we are safe-guarding civilization...
...To be truly great the Nation must be just, generous and merciful...
...the acquisition by purchase or condemnation of the lande that were shortsightedly given to the railroads and of the coal, iron and copper mines and the oil fields, that are the heritage of the people and should never have been permitted to go from them...
...The world will owe that priceless gift to America and to it alone for until we were forced into this war the contest was mainly for commercial and territorial supremacy...
...It is incongruous and unthinkable that a people engaged as we are in this great cause of humanity should visit the sins of the War Lords of the Central Empires upon the heads of their victims who happen to be under our hospitable roof where they were invited and welcomed, merely because of the accident of their birth in a country which they have forsaken for ours and with which we were at peace when they came to us...
...To us nothing is longer impossible with the united will of the Naticn behind us...
...He, like this Nation, is a High Priest in the sacred temple of Justice...
...1 f\ The vast land grants still held by the railroads will be opened up to settlement...
...Whilst money win not cease to buy comforts and luxuries, it will never again be possible for any single person to amass it in fabulous and unusable amounts and it will be still less possible to transmit it so as to perpetuate an indefinite aristocracy of wealth...
...Whilst these burdens will therefore be substantially lightened when our stupendous war requirements are ended, we need not expect and I sincerely hope that we shall never live to see anything like a eturn to the old basis of taxation...
...Not by far the least valuable lesson of the many lessons- of the - 'ar is the confidence to dare and do that has been instilled in us by the marvels that have been done...
...It required over twenty-five years of agitation to get an enforcable law on the statute books and even then the tax was trifling...
...Their spirits will have been uplifted and their hearts chastened by their sufferings and by the memories of the dead comrades they left behind...
...There must always be allowed full play and ample inducements for private enterprise and initiative within legitimate bounds...
...That will be our glorious contribution to posterity...
...These considerations suggest what to my mind is the greatest service that this war will do for America...
...We have truly a grim business to execute and we propose to keep at it until we finish it in a way that will render it impossible of repetition...
...they will be administered for their benefit and will not be longer exploited for the profit of any individual or aggregation of individu...
...No More Parasite...
...We were a half century behind other countries in enacting an income tax law...
...The old order, he believes, has passed...
...Tha*t is what many of us believed but believe no longer...
...9So far as possible unemployment will also • be guarded against by Government undertakings in times of industrial and agricultural depression, in which the surplus unemployed labor will be employed...
...Let us hope and pray that world-disarmament will be the blessed outcome of the brutal war...
...If wc achieve a complete victory that is likely to be our main contribution to humanity...
...THE next great lesson has been to revolutionize our standards of men and values...
...MAY I net suggest to you that you convey to your audiences just one word of caution and reminder at this time, when in our anxiety for the dear ones_ who are bearing the brunt of this bloody straggle, passion runs high and there is danger lest in our frenzy of pain and longing we say and do things that are unworthy of the sacred cause in which we are embarked...
...The rich who are necessarily the main beneficiaries of Governmental protection, since they have more to be safeguarded, escaped, whilst the protective tariffs furnished the revenues...
...ly nourished, clothed and educated and equipped with a means of livelihood...
...7The law will not permit of labor being long» • er regarded as a mere salable commodity subject only to the economic laws of supply and demand...
...Revolutionize Our Sta- .ards...
...If they would accomplish the result of permanently raising the required income, they would be justified in view of the better purposes to which the money could be put...
...The incredible accomplishments of the past eighteen months must "have satisfied the most sceptical of the unlimited organizing efficiency of our people...
...Monopolies and combinations will be 11...
...8The reserves that are made by conserva-• tive business by way of depreciation for wear and tear on buildings, plant, machinery and> tools as part of the cost of doing business before calculating profits, will be made to apply to and include the human machine as well...
...Wealth Must Bear Share...
...In my judgment the time is near at hand when the bulk of every great fortune wil revert to the State upon the death of the man who amassed it...
...Again we shall need money to pay generous pensions to the men who were disabled and to the dependents of those who were killed and in order to spread our commerce o\ct the world in our government-owned bottoms, and to answer the demands for social reform that are knocking at our door...
...I say this not by way of criticism or complaint, for the money must be raised and the least oppressive way of securing it is by the means that has been provided...
...Our soldiers and sailors will come home with this new-found knowledge of their power, as eager to right conditions at home as they were to venture their lives to assure the freedom of the old world...
...Can Ca,rry it Through...
...The purpose of the Commission is stated by Secretary Lansing as follows: "The duties of this commission while few and relatively simple are of a delicate nature and require the greatest care in their accomplishment...
...ThiB speech was made before the signing of the armistice...
...We were a half century behind other countries in enacting an income tax law...
...Patriotism and the national credit are being strained to the uttermost to provide the larger proportion of our needs through bond issues...
...As they will by their sacrifices have made the rest of the world a fit place in which to live so will they see to it that their own beloved country for which they and their comrades have fought and bled, shall become the guide and leader in thev onward march for Social Justice...
...They should have been so placed and the money should have been employed for the benefit of those by whom the wealth was created and in buildinfr for the future...
...May I not briefly sketch for you the rough outlines of my mental picture of this peaceful social revolution...
...If men of independent means were asked in gucS a crisis to contribute every dollar of their «• tire incomes and business profits and to liv* upon their capital for the duration of the war the sacrifice would be negligible as compared with those that are being mad> by the millions of our eoontrymen who are contributing their Eves and the happiness ot those more dear to them than life, aS weil as their earning power, to the Great Advenuiri' upon which we are embarked...
...Home and liberty will havr: new meanings for them...
...tences the criminal to death or penal servitude, is not moved by hate or revenge...
...He has been special advisor to the United States Government on interpretation and enforcement of income tax and war emergehcy' tax laws and assisted Provost Marshal Gereral Crowdcr in the administration of the Selective Service Law...
...The aristocracy of the future will be an aristocracy based en Service...
...IBELIEVE in a tariff for protection but the existence of that source of revenue constitutes no reason for exempting wealth from its just burden...
...And all this we shall owe largely to the inspired leadership of one master-mind...
...I appeal also, though not in the same way, for the law-aWdicg German citizans who have made their homes with us Our great President has repeatedly reminded us that we are warring, not upon the German people but upon their autocratic rulers who forced them into this war, and that we ought not add to the burdens of these people...
Vol. 10 • November 1918 • No. 11
