The Birmingham age-herald., 1917-05-19

district here there seems to prevail, fl not a general. at least a considerable sentiment that the true economic prin- ciple for Congress to consider and adopt when providing extra taxes, is the rais- ing of sufficient amount of money to pay the interest on the war debt and also a substantial amount in addition with which to pay off the debt within a reasonable period.
 It may be that some knowledge of the policy adopted by England and France as well as some study of the work ot Salmon P. Chase, when he was Secre- tary of the Treasury in Lincolns admin istration, caused this principle to be adopted with a good deal of favor by leaders of the financial district Since the visit of Lord Cunliffe, there have been frequent comments upon the manner in which England provided the funds at hcme with which to meet current ex- penses of the war. There it was deemed advisable to secure much the larger part of the money needed by borrowing, and today the proportion of extra taxation to loans in England is as 20 for taxation to 30 for loans
 HOW IT IS IN FRANCE
 France, until recently at least, adopted exclusively the principle of securing needed funds by loans at home and abroad. The theory upon which both England and France based their finano- ing was that taxation should be so linn tied as not to impair. but greatly to in- CT ease, business prosperity.
 When Governor Chase was Secretary oi the Treasury in Lincoln's administration, he at first favored the policy of securing needed funds as far as possible by bor- rowing, and limiting extra taxes to ar amount sufficient to pay the interest upon the bonds, and to provide satis- factory sinking fund. Chase, however had difficulty at first in placing loans and he was constantly at odds with Con- gress. It was not until the close of his administration of the treasury depart ment that government bonds found their ready market, perhaps because the rate of interest was high. Chase, however was astonished at the results of the eX- tra taxes imposed by Congress, for in stead of impairing business these seemed to stimulate it, and a period of very great prosperity set In, followed by such in flation as produced the collapse of 1875 John Sherman always attributed this de- vslopnent of great prosperity to the is sue of legal tender notes commonly called greenbacks.
 CONGRESSMAN HILLS VIEW
 No news that came from Washington early this week caused more general conl- ment in the financial district than the statement made by E. J. Hill representa- tive from the Fourth Connecticut dis trict, and very high authority upon tariff and financial questions MT. Ell is quoted as having said that we must increase taxation and then again ln- crease it if the war lasts, but he insists that the taxes must be so levied as tc stimulate business, apparently believing as Secretary McAdoo is reported to be- lieve that imitation of business will be ot value, provided 1t does not exceed bounds
 FIFTY-FIFTY PROPOSITION
 We hear much discussion in the finan- cial district respecting the expediency oi what is called the fifty-fifty proposition to which Congress at present seems tc be committed This means that one-hal1 of the needed funds shall be secured by borrowing from the American people ano