The Birmingham age-herald., 1917-04-08
WALL STREET VIEW IS ID MAKE FUTURE HELP PAY FOR WAR Too Heavy Current Income Tax Will Help to Paralyze
 Industrial Effort ARGUE PUBLIC DEBT
 IS A GOOD THING Bonds SfiOuld Be in Small DenOmi- nations so That Every Citizen
 Could Subscribe for Any
 Amount


 New York, April 7-(special) )-Conserv- ative Wall street leaders, including such men as E. H. Gary, chairman of the United States Steel corporation; Frank A. vanderlip, president of the National City bank; James N. Wallace, executive head of the Central Trust company, were unanimous this week in praise of Presi- dent Wilson's message to Congress, such expressions as "Glorious;" Magnificent" Exactly right" were used extravagantly throughout the financial district by bank -ers with well formed habits of economy in speech. Nevertheless, there was one phrase of the address which did not meet with unqualified approval-that part which proposed to raise as much money as pos sible by current taxation. President Will sons idea was that by such methods dan gerous industrial and financial expansion could be avoided Wall street, while will ing to pay it's share, and even more, was of the opinion that part of the burden should be handed to posterity.
 There is such a thing as brains going on & strike" one international banker remarked, and the men who do things, who can think and see ahead, will simply sit with their hands in their laps if the income tax is increased past a point where there will no longer be any incentive to industry and saving
 People outside of New York are likely to comment contemptuously: "Wan street, as usual is taking the selfish viewpoint" If is true that heavy taxation of war w ri eb ha Of wa babies" speculative Wall street has been expecting. That however, is not the viewpoint of the banker just quoted He was not talking from a selfish viewpoint. Practically ever since the war began he has been meeting, out of his own pocket, voluntarily, all of the running expense of a large hospital ship for wounded Brit ish soldiers. Besides, he has been gladly paying out of his own private fortune more to help French trench-fighters whose eyesight have been injured than would be collected from a good many rich men by increasing the income tax.
 Tn raising money in any country for any war two common faults should be avoided" he continued. Industry should not be paralyzed by too heavy tax on incomes or manufacturing profits;" next, taxes of all kinds should not be made so heavy that the people will clamor for a compromise peace.
 Our income tax should be increased to help meet the cost of the war. But great deal of money should also be raised by indirect taxes. such as a stamp tax on checks receipts, etc. Then, too, long term bonds should be sold. A mistake would be made in not passing a large part of the cost of this war along to coming generations in the form of inter- est charges on long-term bonds.
 Tt was Disraeli or Gladstone I don't remember which, who believed that for the good of any country, if bonded debt diG not exist it should be invented Why the bonded debt of these whole United States today. the richest country in the world, is less than the bonded debt for New York city alone. Think of it!
 What we need in vhis country. is a fair-sized government debt in long-term bonds split up into small denominations. s10, s25, $50 and $1O0. That would do ~more to arouse patriotism, thrift, good citizenship than anything I know. In France when baby is born it's parents buy in it's name a $10 or $25 govern ment bond. That is the kind of stuff that in the end brings about good, sane democratic government"
 Those views voice the sentiments oS Wall street, as expressed this week, re- garding President Wilson's recommenda- tion for financing the war. Whether the Presidents plan is the result of his own thinning is not known: however only few weeks ago Prof. O. M. w. SpraguS of Harvard. made the radical proposal that after an initial bond issue to pro- vide for immediate needs, as long as the war lasts, funds should be raised by heavy current taxation. War loans, he argued, cause imitation and a rapid rise in prices, which bears heavy on the ex- penditures of the government. as we'll as on the poor. Taxation. he declared en- forces economy; moreover he argued, rich mems incomes should be conscripted by the government in war times, just as all belligerent countries conscrpt mems services
 There are both sides of the controversy. Beyond question, long-term bonds will be issued by the government: but both direct and indirect taxation, if the war continues any length of time, are also likely to be heavier than anything of the kind ever before experienced in this country. Naturally a tax on excessive profits of industrial companies is not to the liking of speculative Wall street.
 But the men in Wall street who have the reputation of seeing farther than the average individual still cling to the opinion that, despite any government tax on excessive profits, many large earn ings are ahead for our industrial com panies and railroads, and that these earnings will be reflected in stock mar ket values. Regarding the earning power and credit of the railroads for the sake of getting at the facts the balance sheets of an even dozen companies for the past decade were examined this week. Since 1s06 Atchison has increased her profit and loss surplus. that is, the excess of assets over liabilities from $19,9S5, 4S3 to $26,6 30S; Burlington, from s14334.9N to $100,06S.276; Great Northern, from $27.603,- 65S to $52, 1SS,779; Louiville, from S.130.- O46 to S5O,172,752; Northern Pacific, from $l9,sS6974 to ss0.S7S.737; Norfolk and Vest ern, from $3S0O,S53 to $16.9 752: Pennsyi- vania, from $24.725. ASA to $33,514 207; South yern Pacific. from $16,7 ,023 to $117,219, ,z74; :; Union Pacific, from s42796,o26 to $l59, ,5s4,- s62.
 And in addition to building up the sur plus from current earnings, since 1907, when the rules for accounting were changed, Louisville has deducted from current earnings for improvements $3.- 192,000; Norfolk and Western, $26.972. GOO; Burlington, $35 900; Great Northern, $63, ,775, GOO: Atchison, $64,634 900; Pennsylva- mia, $99, ,6S1, ,OO0 Those deductions were made before the surplus for each year over and above dividends was carried to the profit and loss surplus. These figures hardly indicate a downtrodden industry. R. l.. 5.
 A Wise One
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