"WE SHOULD PAY AS WE GO"
"We Should Pay As We Go" Senator Albert B. Cummins Flays Revenue Bill For Not Taking More Funds Through Taxation; Says Present System Will Bring Inflation and Create Higher Prices On Oct. 2...
...Without regard to the justice which ought to be observed in the distribution of the burdens of the government, there is nothing more fatal to the stability, growth, and prosperity of any country than the accumulation Of government interest-bearing obligations aggregating any considerable proportion of the wealth or property of the nation...
...If either labor or capital, or any class of our population, is permitted to retain its profits, somebody will have less than enough for the merest livelihood...
...but the most objectionable and contemptible slacker is the man who spends a large part of his time boasting of his patriotism and the rest of it trying to hold on to a big income far in excess of his living necessities...
...conflict...
...They must give what they have and be content with just a living in return...
...To this amount he added $1,143,854,532 for contracts and authorization and $1,219,207,750 for proposed and apparently imperative amendments to the deficiency bill—and I might say here that they were subsequently added, and more—making a total expenditure for this year of $20,051,700,734.33...
...THE STRUGGLE for a recognition of the just principles of taxation will go on with unabated vigor until Congress accepts the basis which is imperatively demanded not only by our elemental conceptions of right and wrong, not only by the unselfish, trained conclusions of patriots and economists, but by the highest interests of those who are now blindly resisting the most obvious truths of production, finance, and commerce...
...All I want is enough to support myself and those who depend upon me until tho clouds of war have passed away...
...but I am completely persuaded that this war is so terrific in its consequences and so vast in its proportions that it will require a surrender of all individual profits and the absorption by the Government of the whole surplus created by the activities of all the people...
...It Is not to be expected that employees will be satisfied with just a living if their employers are reaping huge profits...
...will prevail and sounder principles be adopted...
...I do not accept the doctrines of state socialism in times of peace, nor would 1 adopt them in any ordinary war...
...The people of this country, with here and there an exception, are intensely patriotic...
...for in the final adjustment, however complicated, the people must have a living, and the excess, so far as may be necessary, will be taken either for bonds or for taxes...
...Let us keep in mind every moment that to sustain our part in this unprecedented war, we will require substantially all the earnings of all the people in excess of a fair and reasonable living, and that is just as true whether we issue bonds and borrow money for the prosecution of the war or whether we take our revenue in the form of taxation...
...What proportion of the cost of the war should be borne by current taxation...
...The remaining question upon which I desire to be heard concerns the source from which the revenue we do raise by taxation should be taken...
...The sooner -they do comprehend the strength in men and money that will be required, the sooner they will feel that from now henceforth the war is the chief business of this country, to which every other hope, ambition, or interest must be absolutely subordinated, and tiie sooner they will be prepared to go resolutely forward in the right way and with the right spirit...
...They do not appreciate how large a part of their energies must bo given to the Herculean and unprecedented task which their Government must perform...
...This leads mo to a moment's consideration of the war in its general aspects, the immensity of the task we have assumed, and the tremendous energy we must awaken and direct in order to bring the struggle to a speedy and successful end...
...and so on each year thereafter...
...but the real object of all these war measures should he to establish a system in which each man, instead of fighting and working chiefly for himself, is fighting and working for the country of which he is a citizen...
...We have undertaken to do a thing which no other nation since history began has ever done and which no existing power save our own could do...
...take me...
...2 Senator Cummins of Iowa delivered an address in the United States Senate on the revenue till as it was reported by the conference committee...
...If this were all, even then the magnitude, the difficulty, of the undertaking would baffle the human mind in attempting to comprehend it...
...The fighting man comes first, and ho says to his country: "Here I am, sound in body, mind, and spirit...
...In doing them we must summon all the strength of all our people...
...It is useless to cite what other belligerent countries have done, for their industrial and fiuan-cial situatiton is not comparable with ours...
...but the most objectionable and contemptible slacker is the man who spends a large part of his time boasting of his patriotism and the rest of it trying to hold on to a big income far in excess of his living necessities...
...The farmer comes, and he should say: "Here I am, with my broad and fertile fields...
...I have but recently returned from a brief visit to the country, and one of its objects was to do what lit* tie I could toward making the people understand the character and scope of the undertaking upon which we have entered...
...We have undertaken to organize an army of two, three, four, or five millions of men, to equip it with all the instruments of war, and to transport it over 2,500 miles of submarine-infested sea to a foreign land...
...We have undertaken to supply Great Britain, France, Italy, Russia, and Serbia with the credit, the food, the cloth-ing, the arms and munitions of war, and materials of infinite variety which they must have from us or perish, and all these things must be carried in ever-increasing quantities over an ocean in whose depths float the most hellish instruments of death and destruction ever contrived by the ingenuity of man...
...Every man must be ready to do all he can...
...With all the emphasis 1 can command I protest against the plan as ruinous to the business interests of the country and aa the moat grievous injustice ever inflicted upon those who must stagger along for a century or more under this gigantic load of principal and interest...
...My hands will cultivate these fields, and they shall yield their highest harvests...
...take me...
...but that is all...
...It passes out about the same time asd for the same reason that led the medical fraternity to discard the practise of bleeding every patient to insure a speedy recovery...
...The man of fortune come:!, and he ought to say: "Here I am with my million...
...By "surplus'' I mean the excess above food, fuel, clothing and the maintenance of families, including education and other necessaries of life...
...Fitzgerald, chairman of the Appropriations Committee of the House, than whom there is no more competent or reliable authority upon the finances of the country, in Congress or out of it, in speaking of the urgent deficiency bill a few days ago, submitted a table showing in some detail the appro- made and pending for the present year...
...provide for two or three billions more...
...It would be a grievous wrong to ask the farmer to be content with a bare subsistence and tolerate immense dividends to the manufacturer...
...The Industrial and commercial life of the Nation is vast and complicated, and the channels through which the principle must run are hidden and tortuous, but finally the great clearing house of human affairs will strike the balance...
...Big Sums Appropriated WITHOUT further observations of a general na-ure, I come to the situation, not serious alone, but exceedingly grave, which now confronts this country...
...take me...
...The end of the struggle is beyond human vision, but even the most sanguine observers agree that the outlook indicates two or three years of increasing...
...To accomplish the purpose and do the justice I have so imperfectly described, we must resort to acts of organization and conscription for the military service, of regulation and control of commerce, of taxation, and the life...
...These are the conditions...
...to accomplish the common object...
...no matter what the sacrifice may be...
...It seems to me well nigh fatal to signalize our entrance into the war-by issuing* anywhere from $17,000,000,000 to $20,-000,000,000 of bonds in the first year of our military activity...
...We have heard much about slackers, and we have not yet reached the real definition of thhj odious creature...
...Each Man Must Serve NO ONE UNDERSTANDS better than I do that we cannot bring all this about in a direct way, and that some of it can not be brought about at all...
...a relatively small amount to be expended by the War and Navy Department during the coming fiscal year...
...The idea of growing richer or stronger must for the present be forgotten and all our energies be devoted to the saving of a national life which at this moment is in peril...
...I am only trying to portray the spirit which ought to prevail, and which in the end must prevail, if we are to win the war...
...The war cost next year will be not less than $25,-000,000,000, and may be, probably will be, more...
...They must educate their children In order to preserve society...
...The history of the civilized modern industrial world discloses no such blunder as we are now making...
...The work-ingman comes, and he ought to say: "Here I am...
...They have lost none of the courage of their ancestors, and they intend to see this war through to a complete victory, no matter what may be its cost in life and treasure...
...I have brought the subject forward in order that I might intelligently and understandingly express my dissent from the views of a majority of the Senate, and my confidence that when the next revenue bill is before Congress for consideration, wiser counsel...
...and Second...
...I will not remember the injustice of former days...
...It is everywhere admitted that under normal conditions, and except as to certain great internal improvements enduring In their character, the expenses of government should be regulated by the salutary policy of "pay as you go," and even these exceptions should be rare under the Federal power...
...There is no one at all familiar with our affairs who does not know that before the 1st of next July we will probably be called on to...
...They do not, however,, fully realize the full proportions of the duty which has so unhappily fallen upon them...
...take me...
...That is to say, it seems to be the approved plan to pay 13 or 14 per cent of the cost of the war by current taxation and to send 86 or 87 per cent down to future generations...
...Not because it is material, but because It Is important that those who hear me shall know that I am not unmindful of all the facts, it ought to be stated that the tremendous sum I have named includes the $7;000,000,000 we have loaned and propose to ioan this year to foreign nations, and Scores Real Slackers By Senator A. B. Cummina WE HAVE HEARD much about slackers and we have not yet reached the real definition of this insidious creature...
...They aggregate the stupendous sum of $18,288,043,-452.33...
...The boys who arc to do the fighting give all they have and receive but mere subsistence...
...The questions to which I intend to devote a very few minutes are: First...
...The people must have food, fuel, clothing, houses, and such things in order to enable them to work...
...I am not submitting a treatise upon political economy, and make these suggestions simply to remark that the old saying that a Government debt is a public blessing has been so thoroughly discredited by modern thought that it is no longer entertained by sensible men...
...In the barest outline these are the things which we have pledged ourselves to do...
...Whether in peace or war, contributions through taxation should be the primary and principal source of revenue, and a wise nation will resort to the money lender only when the expenditure is for a physical improvement of long duration, and then infrequently and with caution, or when some extraordinary event like war makes it impossible to tax for the whole 6um required without destroying the opportunity of the people to continue their ordinary pursuits...
...feed, clothe and shelter me and those dependent upon me...
...It is not my purpose to describe the disaster which will follow the enormous and unnecessary inflation of the public debt...
...It is more than unwise, it is inexcusable, to misunderstand or ignore them...
...We have a Constitution, traditions, and prejudices, none of which I now criticize, and a great part of which, in peaceful times, are invaluable, that compels [us to move through cumbersome, uncertain, and indirect methods...
...Again, accepting Mr...
...Profits Must Pay THE NORMAL ANNUAL PROFITS—that is to say, the annual increase in wealth, not including added value in existing property, in the United States in recent times—it may be safely estimated, has been from $13,000,000,000 to $25,000,000,000, and these profits, no matter who has them, and no matter whether they are used directly or indirectly, must pay for the war...
...We must meet it courageously, with never a shiver of fear, but we must meet it also successfully, or the greatest disaster which ever befell the human race will quickly follow...
...1 ask no more...
...Senator Cummins contended that the amount raised by taxation and the amount to be rdised by bonds could not be justified under any theory of political economy...
...Fitzgerald as my authority, I find that the first revenue bill for this year will yield $1,333,500,000, and this measure, adding tho sums that have been introduced by changes in the conference, will produce $2,700,000,000, or a total of $4,033,500,000...
...The address of the Iowa senator follows.—The Editor...
...After crediting the postal revenues, it may be assumed that the normal expenses of the Government are about $1,000,000,000, so that our war expenses will be somewhere between $19,500,000,000 and $22, 500,000,000...
...It would be unfair to take all the profit from capital and give it to labor...
...All thought of profit during the period of the war must disappear...
...Selfishness must be banished, and all of us, whether in the Army or out of it, should be prepared to bestow our time and strength, our minds and bodies, and the use of our capital, for the public good...
...We have undertaken to maintain this army with all that it requires to preserve its full fighting strength...
...From what sources should the revenue raised by taxation be drawn...
...I have not had my fair share iu the past, but in these days of danger and difficulty I give you my labor, and all I want is a decent living wage...
...but that i3 not all, nor is it even the larger part...
...deducting the $1,000,000,000 for the ordinary conduct of the Government, the result is that of war expenditures of from $19,500,000,000 to $22,500,000,000 we are proposing to pay $3,033,500,000 with taxes and to borrow the remainder upon longtime interest-bearing bonds...
...The men who arc left behind must do likewise...
...I can not fight, but I can work and my million can work, and I will work and my million shall work, and I ask for nothing but a living for myself aud family...
...As I view the subject, our loans to the allies are war expenditures, and the hope that at some time they may be repaid does not affect in the least degree the conclusion which it is my purpose to record...
...The picture is, of course, an ideal, and we can not hope for its perfect realization nor can we hope for a near approach unless these industrial classes are mutually unselfish...
...but I have no such hope, and to do it would be of no avail...
...I venure to paint the picture of American citizenship as I sec it...
...Great Britain has a greater appreciation of the problem and is trying hard to keep down Ivor debt...
...If I had any hope that the policy of this bill in that respect could be reversed, I would look upon it as my duty to gather together and again put before you the unanswerable arguments which have been presented by a long lino of distinguished statesmen and economists...
Vol. 9 • September 1917 • No. 10
