The Washington herald., 1917-05-21
HOLLAND LETTER
The Biggest Daily
Financial News Feature
of the Counhy's Best Newspapers.


SO tnat men who are fortunate enough To
gain yearly incomes of large amounts will
oe compelled to pay 50 per cent of ii to
the tax gatherer than that of John d.
hock1elier His name has occurred
propaoiy because he is presumed to be
in possession OF the largest yearly income
OF any American, perhaps OF any citizen
OF the world, five millions of which he
mas now subscribed to the 5000, ,0OO, 600
To illustrate the immediate effect of
the income tax upon verv 10 roc jncou,es
II has been said that II Mr. Rookie
ieher possesses an income of $5,OOO,O0
men men ne VIII be taxed $2,50o.0oo Should
nls income De, as many believe 1t to be,
approximately 1000, 600, then he will nav
TO the government, II the proposition be-
comes law, $5,OOOO0O.
accompanying this illustration has
Deen the remark that payment of these
millions' will divert from the customary
investment or reinyestment Tnetboos
adopted by Mr.. Rockefeller SO large
sum OF money as possibly to curtaH his
glits 10 educational or philanthropic in
sutuuons and also his investments in
great business UNDERTAKINGS and in rail-
roads However, 1t has been said that
there VIII surely be in time satisfactory
reaoJustment since substantially all of
into various business undertakings rep
resenting the needs of the government
Tor supplies, ammunition ships and other
commodities which are necessary II we
are successfully to carry on the war, or
our part In II. Men of very large in
comes spend each year upon personal
ana domestic affairs and recreation, a
comparatively trivial part of their in
comes. All the rest of It goes directly
nH l..
portion as Is turned over to philanthropy
or to the universities and Institutes of
research and the like
Late In April the trustees of the
Carnegie endowment fund voluntarily
relinquished $4,000, presumably out of
incomei with intent that the money be
used in facilitating reconstruction work,
particularly OF homes. in France,
Belgium, Serbia and Russia This con-
trlouuon Is now supplemented by an
other which may or may not have been
taken from income, of 500 O0O This is
the gift OF an individual, or perhaps a
FAMILY. to England with intent that the
money be used to relieve distress of the
women of Great Britain who have had
brought home to them what the sacrifices
OF the war entail Therefore, within
three weeks $4,000 has been contribut-
ed. probably taken from incomes,
endowment its income is not liable to
any tax. These funds will directly or
Indirectly be diffused in such manner as
TO stimulate business activity both in the
United States and in Great Britain.
Not the Only Subscription.
Indirectly, at least, Mr.. Rockefeller's
subscription of S, 10000 is not his exclu-
sive contribution to the war fund. For
various Industries with which he is as
ISOLATED have already subscribed to that
fund, one subscription being for sl,0OO.0
and these subscriptions represent the
proportionate part of the stock OF the
corporations which Mr.. Rockefeller pos
sesses.
The opinion prevails in the financial
district that Mr.. Rockefeller shares in
the view recently set forth by Ogden
Armour, of Chicago, and by others that,
after readJustment OF new taxation to
our business life has been accomplished.
our Industrial and agricultural and COM
mercial activities will be speeded up to
a point possibly beyond the comprehen-
sion OF the American people. There is to
be inevitable imitation, but it is the COM
mon understanding that it will be wisely
controlled by the banks and by the Fed
eral reserve board at Washington over
which this board has control For It is
pointed out here that the very exigencies
OF the war will compel the expenditure,
probably, OF as much as $4,000 O0O, 900.
and that means business imitation.
For instance. the ship builders OF the
United States are to receive S1,0o0, 900 900
II present plans are carried out for the
construction OF naval vessels and a larg-
er sum than this is probably to be ex-
pended in the construction Of other ships.
The allies will presumably expend not
all but the greater part Of the money
which will be raised by the government
and received from the people in buying
not only food but also munitions of war.
They will also spend stupendous amounts
for commodities needed for reconstruc-
ton.
The Iron and Steel Industry.
1t almost seems as II the iron and steel
industry of the United States is already
at the highest point of its capacity of
production, yet there must be and will
therefore be increased production and
also the construction OF new plants
These undertakings will involve vast ex-
penditure in the form Of wages too great
now to be reasonably estimated. Every
one looks to the published reports of the
United States Steel Corporation so that
1t may be learned how far and how
rapidly the steel industry is progressing
in the United States for this CORPORA
uon acIlNlIleS IurnlSh an index OF gen.
eral business activity. A day or two
ago an estimate was made that the cor
poration is now earning possibly as much
as $500 10000 a year. But It is not earn.
ings which now so greatly concern the
management of the corporation as It is
the ability greatly to increase production
so that It may be possible to meet the
demands of the government and of in
dustry. 1t is a little unfortunate per
haps that in view of the appeal made by
the Department Of Justice to the Supreme
Court for the dissolution Of this corpora
tion 1t is not deemed practicable greatly
to increase the productive capacity Of
the steel and iron industry in the Biz
mingham district. Had the government
accepted the finding of the lower court
that this corporation was not organized
OF Is not operated in violation of the
Federal statutes, there is no doubt that
large capital would have already been
invested in the Birmingham plants. with
free hand in dealing with the oppor-
tunity in the Birmingham district m.
productive capacity of the district wouId
now be so greatly increased as essential
ly to aid in meeting the stupendous de.
mand for iron and steel products which
will come not only from the government
but also from other industries.
HOLLAND.