THE PRESIDENT'S ADDRESS ON THE FINANCES
Follette, Robert M. La
The President's Address On The Finances Three Editorials by ROBERT M. LA FOLLETTE THE PRESIDENT greatly heartened and encouraged every student War insnce in his address to the two Houses of...
...Of course you do...
...Such taxes mean but very little to the rich...
...That contest in the Senate stirred the whole country...
...If that word had been spoken then we should now have some billions of money in the Treasury which have gone into the pockets of our rich profiteers instead...
...It was the subject of comment among students of war finances in England...
...To state them is argument enough...
...Lord Reading, now in Washington as the British Ambassador, at that time was asked by a representative of the press to outline for the benefit of the American people how England had dealt with the same problem...
...Definitenes*, jearly definiteness as to what its tasks are to be is absolutely necessary for the successful administration of the Treasury...
...All through the month of /vugubt tne war rtrvvirue DiiT of HUT was under consideration in the United States Senate...
...Kahn's computation would prove the equivalent of an investment yielding a return of 5.2 per cent to a person with an income of 12,000,000, or more...
...Ksmateyi" /"sywt- -arj* .hi...
...Possibly Secretary McAdoo discovered the press reports on the subject somewhat exaggerated...
...He admon- that the " light of Heity will turned upon the recorus of the Treasury with regard to profits of eveiy sort...
...This is clearly established by" the fact that (1) No recommendation came from the President or intimation from the Secretary for adequate tax rates on war profits and incomes when the tax bill of 1917 was before Congress...
...2) That in (his annual report in December Secretary McAdoo actually proposed to raise all necessary money by selling bonds and "thus escape additional revenue legislation at this session of the Congress...
...Enormous loans freely spent in tha stimulation of industry of almost ev»ry sort, produce inflation and extravagances which presently make the whole economic structure questionable and insecure and the very basis of credit is cut away...
...But—"You never can tell...
...Standing Back Of The President NOW all of you profiteering "patriots" who have bawled yourselves hoarse about "standing back of the President" get into line and support his recommendation for "additional taxes on war profits, incomes and luxuries...
...We need not be afraid to tax them, if we lay the taxes justly...
...Buy bonds...
...1. INCREASED Taxation We frankly paid the unsatisfactory of the Tressury and the urgent need of additional revenues, saying"Additional revenues must manifestly be provided for...
...No, no, Mr...
...This was accepted as tantamount to, and was in effect an endorsement of the Secretary's plans...
...You do understand business and war contract and the Hog Island type of "Loyalty...
...I have written thousands of letters and hare sent thousands of speeches into most of the states of the Union, in support of such legislation at this session, and have advocated it editorially again and again in these columns...
...Indisputable facts, every one...
...1. THE OPPOSITION OF TAX PROFITEERS The Pre warns Congress against he warns the profiteers of the risk they will in atten to defeat the leg islation to their taxes...
...It was you "patriots" the President had hi mind when he spoke of: "The profiteering that can not be got at by the restraints of conscience and the lo^e of Country...
...It is unfortunate for the country that he did not address Congpess ten months ago in support of such a tax...
...After stating that additional revenue* must be provided for by taxation the President said: "It would be a most unsound policy to raise a too large proportion of them (tht> additional revenues) by loan...
...Why, sirs, as everybody knows, these war-bonds are either wholly or partially non-taxiblo...
...Ah, but you will say that you "have bought bonds, very heavily—very...
...Possibly Mr...
...y A Belated Address AT LAST President Wilson has broken his long silence on the subject of raising a larger part of the War cost by "additional taxes" on "war profits and incomes and luxuries...
...McAdoo's report at the opening of Congress in December...
...A little band of progressive Republicans and progressive Democrats made a four-weeks fight in the Senate for the just taxation of excess incomes and war profits...
...Thereupon Congress promptly disposed of the Administration's war program and arranged in an orderly way to complete the regular business of the session and adjourn by July 1, all of which was the subject of daily newspaper comment and was well understood at the White House and the Treasury...
...Professor Henry C. Adams, in his excellent work on Public Debt, says: "An adequate policy for the management of war finances is a tax policy assisted by credits, rather than a credit policy assisted by taxation...
...They perfectly understood the significance of the struggle during the entire month of August to increase the tax on surplus incomes and war profits...
...and we can not alter or blink them...
...Talk about sacrifice and patriotism...
...Justice to all classes would require that the bulk of war cost should be paid by a current tax on the wealth of the country...
...That's the way you want the war financed...
...For example the first war-bonds sold, bearing only 3% per cent, are wholly exempt from taxation...
...the banker, computed the investment value of these bonds on the basis of income taxation as proposed in the House Revenue bill of 1917...
...He was quoted as saying: "Sound finance requires that we pay for the War as far as possible out of war time taxation...
...You don't know the meaning of the terms...
...But if we cannot pass a just revenue measure, our experience in other wars certainly admonishes us that the integrity of our financial structure demands that, at the very least, something more than a major portion of the day by day cost of the war should be met by taxation...
...3) That the President in his annual message at the opening of Congress in December did not mention taxation...
...He then stated that the end of the fiscal year would find us with a deficit of more than five billion dollars...
...Articles have appeared in economic journals urging a higher taxation of wealth and a proportionate reduction in bond sales as the only sound policy of war finance...
...The silence of the President and Secretary McAdoo at such a legislative crisis on a great war revenue bill must be accepted as indisputable evidence that both were opposed to a higher tax than the meager 31 per cent on war profits which we in the Senate were trying to increase to 80 per cent, the amount England was then taxing war profits...
...But buying the bonds of the Government out of your abundance is not sacrifice on your part...
...The Congressional elections are to come in five short months...
...It is fair to pr»sume that the President sanc-AifiTw^ Ah...
...Yours not to question why, yours not to bat an eye, yours but to walk up to the Captain's office and pay heavily on your big incomes, cough up your war profits and meet a tax on your luxuries, which will make you remember as long as you li-.'e that war means sacrifice for you, as well as for the poor, who in giving their boya give all...
...It is a high-class, gilt-edged, profitable investment for you...
...3. THE SOURCES FROM WHICH THE REVENUES SHOULD BE RAISED Fortunately at this point the President is quite specific...
...Especi-i'ly after the Government has once undertaken to sell a given amount of bonds, it would be a very great misfortune to have such a sale miscarry...
...mainly by bond sales, you will buy-the bonds,— wear bond button as a badge of "patriotism"— escape taxes in whole or in part on the bonds, collect your interest, and finally the principal to the last farthing after the war is over...
...He must have acquired quite an extensive amount of information regarding public opinion on 41 variety of subjects...
...A word from the President at that time would have enabled them to win in that contest...
...It was not overlooked by either of them...
...McAdoo discovered also that "politics is not adjourned" in quite a number of states...
...You well un derstand that^if war is financed by war-time taxation, that great wealth will have to pay the bulk of the cost of war, spot cash...
...nlcn5 .tor financing the war before they were presented to Congress...
...You know that the principal and interest on these war bonds will be paid by consumption taxes on -what the consumers eat, wear and use...
...In an address before the Merchants' Association of New York, Mr...
...And he further says: we shall naturally turn to, "war profits and incomes and luxuries for the additional taxes...
...Kahn...
...likely to demoralize credit by their very abundance can prevent inflation and keep our industrial system free from speculation and waste...
...Britain, recognizing this, is now unprece-dentedly conscripting wealth and very soon she mus^ greatly increase taxes on incomes...
...which the President admirably deals in hi* brief, trenchant address...
...It was a sore disappointment to progressive Republicans and Democrats that no word of encouragement came to them from the President or the Secretary of the Ti'easury...
...The President's Address On The Finances Three Editorials by ROBERT M. LA FOLLETTE THE PRESIDENT greatly heartened and encouraged every student War insnce in his address to the two Houses of Congress in jo ssion on May 27th...
...These are the main propositions wit1...
...Th?ro is such profiteering now and informati >'i with regard to it is available and indisput***** "And this task to which I invite your immediate consideration will be performed under favorable influences if we will lo>k to what the Country is thinking and expecting and care nothing at all for what i.-i being said and believed in the lobbies of Washington hotels, where the atmosphere seems to make it possible to believe what is believed no where else...
...I can not assure the Country of a successful administration of the Treasury in 1918, if the question of further taxation is to be left undecided until 1919...
...Tens of thousands of copies of the Record vote on all amendments offered in the Senate when the Revenue bill of 1917 was pending have been sent out into different states...
...That would be some measure of real sacrifice...
...And Congress will pass the revenue bill for increased taxation of war profits, incomes and luxuries...
...From press reports it would appear that the people are eager to have the entire expense of the war provided for by selling bonds...
...2. TOO LARGE BOND SALES UNSOUND...
...Stand back of the President," just once, when you will have to make a real sacrifice in support of the war...
...Investment in them is especially profitable to the rich man whose large income is thus rendered immune from taxation...
...And this view is still further confirmed by the fact that five months of this legislative session passed without a recommendation or suggestion in any address or message delivered to Congress by the President that additional tax legislation at this session would meet with executive favor...
...Secretary McAdoo made an extended and successful tour of the Country in conducting the last bond sale which closed on the 4th of May...
...Consumption taxes cut the family earnings of the poor to the very bone...
...this session of the Congress...
...Public opinion is forming and it may be ready to express itseif in a surprising way in the November elections...
...The history of the United States, like that of England, has shown the fallacy of attempting to leave the burden of the War for posterity to pay...
...Profiteer, when you boil it all out, the part you are playing in this tragic hour is just the plain, sordid, cold-blooded game of business...
...It will make the rates of taxation just as high as the President desires...
...Only fair, equitably distributed taxation, of the widest incidence, and drawing chiefly from the sources which would be "The present tax laws are marred, morever, by inequities which ought to be remedied...
...It was you, my dear profiteers, of whom the President was thinking when he warned Congress against the "lobby that would hurry to Washington to turn this taxation measure to its advantage...
...Be the reasons what they may, it seems to have been suddenly decided, here at the very tail end oi the fiscal year of 1918, to pass ft bill raising additional taxes on "war profits, incomes and luxuries...
...Of all the hypocrises that are practiced in this hypocritical old world, the "hypocrisy of patriotism' is the most despicable...
...Tiie result of allowing wealth to escape in 1917 with a mere slap on the wrist, was disclosed in Mr...
...The public has been enlightened quite extensively on the profits of the profiteers, and the relatively small amount of taxes they pay...
...Hence you owners of great wealth are determined that the War shall be financed by big bond sales and that the taxes on incomes and war profits shall be held down to the lowest possible rates...
...Better lata than never...
...Quit it, get into line...
...Everybody except the profiteers rejoices that the Administration has so decided...
...It was your kind of whom the Prophet said: "Wheresoever the carcass is there will t'io vultures be gathered together...
...And so, upon the entire record, Congress and the country were bound to believe that the President and the Secretary approved the present low tax rate on the billions derived from war profits and were perfectly satisfied to raise the great bulk of the money to finance the war in 1917 and 1918 by selling bonds...
...Otto H. K«ahn...
...failure of the Administration to support the higher taxation of war profits and surplus incomes in 1917, the President now says: "The people of this country are not only united in the resolute purpose to win this war, but are ready and willing to bear any burden and undergo any sacrifice that it may be necessary for them to make in order to win it...
...President Wilson's Message to Congress...
...I would in no wise disparage the value of such support to the Government...
...These bonds,—because exempt from taxation, according to Mr...
...He says: ''We shall naturally turn therefore, I sup-Dose, to war profits and incomes and lux-uries for the additional taxes...
...And again he says: "The administration that shrinks from a levy •f taxes lest the war spirit be chilled, shows either a doubtful cause or a weak-kneed cabinet...
...And then the Secretary naively stated that he "indulged the hope that additional bonds could be sold" to raise the amount of money required and "thus escape additional revenue legislationt...
...Excepting you are resolved to throw oi the "restraints of conscience" and prey upon your Government, as a cold blooded porfiteer, the Government bond is the best and safest investment you can make in these uncertain times...
...A few Senators and Representatives have continued to insist upon the justice and the necessity of such taxation...
...As the Revenue Bill actually passed these bonds were given an investment value even higher than as computed by Mr...
...That he recommends it is enough for you...
...If on the other hand the war is finance...
...Whatever may have been the reasons for the...
...And he further says: "The profiteering that can not be got at by the restraints of conscience and love of Country can be got at by taxation...
Vol. 10 • June 1918 • No. 6
