The Birmingham age-herald., 1917-08-05
WHENCE COMES THE MONEY?

New York August 4-(special)-se | a more curious dilemma than that in which they have found themselves this week. If the war stops, munitions mak- | ing stops, and all is dubious. If the war 1 is to continue for another long spell, the munitions business will likewise con- tinue. But will the government leave enough, after prices have been drastic ally cut and profits drasticaily taxed, to
 make the game worth the candle?
 Similarly, Wall street had been trying to get enthusiastic over tremendous gov ernment expeditures, arguing that here lay a definite augury of pro ,erity and profits. Great loans were De floated, great amounts of bank not~4zWere to be put out, great amounts of bank credit were to be piled up. There was to be money for all. Not only would 1t circu- late in mass, but it would circulate rap idly, and the rapidity, as well as the mass of circulation obviously has a great deal to do with making the wheels of industry spin merrily and profitably. | But see what now confronts the finan- cial community. Expenditures beyond the most extravagant dream of the most enthusiastic expansionist, have been an
 nounced from Washington. and Congress
  withal Where is it to come from?
 Largely from loans, but also from taxa
 ton. If not now, certainly next year l Crowded the war last that long), taxa tion will become increasingly burden some. President Wilson, on the outbreak I of the war; announced that loans would I have to be adequately supported by taxa ton, and that is formula in which all thinking observers of things financial 1 concur.
 Where the rub comes is in the question, what Congress will decide is adequate" taxation. MT. Kitchin this week spoke l of this being democratic war, which | must be supported by democratic taxes namely, taxes levied according to abil- | ity to pay. Just how MT. Kitchin suc- | ceeded in satisfying himself that tax principally levied on the rich is demo- cratic tax. Wall street did not pre- l cisely know But the democratic lead l CTS attitude may be taken to represent
 that of a good many people, particularly ] in the lower house of Congress-
 | Secretary McAdoo himself, early in the war, apparently arrived at basis of | '50-50' as the proper proportion of loans and taxes. This was how it figured out.
 Expenses were placed at some $6 4o0,0o0 00o which included $3,00100o,00O to be | loaied to the allies, for which they
  GOO for our own use. and the House
 framed tax bill providing for s1.s0o,o00,- coo or, roughly, half that amount.
 Since then. it has been announced that war expenditures for the first year will
 amount to $11 o00,O00 0o0,00o, without count ing the possibility-even the obvious ne- cessity--of much lar<er loans to our
 allies. About sGOe0,0No,O0o has been or presumably will be provided for, leav- irrer vAf kA 1,n ,satc sod
 much of this will be in the form of taxes and how much in the shape of loans? Certainly the amount will not be ap- portoned "50-50'' What would be the state of American industry, under tax burden of s2,50a, 100000 in the present fis-
 cal year in addition to the $1,67O G0000o
 planned by the Senate committee, it re-
 uuires no seventh son of a prophet to figure out. More than that, the business community had been told. with varying
 emphasis. that there were to be few
 profits arisng from the conduct of war business, and to that pronouncement
 most people unhesitatingly said "Amen.'
 As a matter of fact. it is coming more and more to be realized that what the
 President had in mind in placing ban
 on profits was the making impossible
 of those exhorbitant and disgraceful fi-
 nancial gains which were q reproach to
 some of our earlier wars, and which in much less aggravated form, thoughtful
 men in England are condemning at this
 moment. The responsible leaders of Con
 gress have no Illusions about the neces-
 stv of leaving to business enterprises
 living wage. with enough margin to sup
 port the taxation which it will be neces-
 sary to impose
 The question remains, therefore. what
 proportion of our first years war ex- penditure 1t will be found feasible to
 raise by taxation, and what part by