Grand Forks herald. [volume] (Grand Forks, N.D.) 1916-1955, 1917-09-06
Chicago Tribune.)

Professor Hammttte of the Mason
City, Iowa, high school writes to say
that he has followed the Tribune's
editorials on war revenue with a great
logic is not altogether clear. He asks
these questions:
lFirst-Just how would a taxation OF
80 per cent Of the profits of the coun-
ty produce business stagnation?
second-Since we must carry on
the var with what we produce, how
would taking away PROFITS entirely
stop production?
Ghird-Why could not the govern
ment,s II necessary, mobilize all men,
women, and children ana assign to
them a return rations and clothing?
Fourth-Couldn't Mr.. SchwaD su-
perintend q steel mill as a soldier az
emciently as he does as a private cap
titalist?
It is worth while to consider these
.fquestions seriatim because they repre-
sent an attitude that appears not only
in high schools but in congress. We
do not doubt the sincerity OF that at
titude except when It ID expressed by
such men as Senator La Toilette, but
at the same time II is fair enough to
observe that these questions are being
asked by persons who, for the most
part W had to meet q payroll on
Saturday night. That Is eminently
truesof Observation-Disclosures in congress-.
and high school teachers.
xFirst-Ascherne OF 90 per cent tax
alton would not merely produce busi-
ness SragnatiDn;e 1t would produce
business paralysis. It would be equiv
alent to signing the death warrant for
nearly every corporation earning less
than 100 per cent on its capital.
It ts common business knowledge
that the ordinary Commercial enter
prise which nets less than 10 per cent
profit 10 exposed to great risks We
are not speaking Of dividends; we are
speaking Of net income, because out of
that income allowance must be made
fer unusual repairs, business expan-
sipn and q surplus for q rainy day,
For the great majority Of corpora
EtionH Ii this country 90 per cent tax
alton scheme would leave a net prof.
1t ranging from Ito 5 per cent.
single improbable transaction could
easily change this profit into q. deicit,
ana the company could not borrow
money bscansa its credit would be
WORTHLESS. ~ COLLAPSE would be swift
There Is also the psychologicaa a q
tor. II q business ma Soresaes the
prospect OF o reduction Of profits to
the danger line he win, IL possible,
HQuldafe his assets and get out OF the
business. AT the very least he win
attempt TO reduce his liabilities by dis.
changing employees and 4 c~urtaiiing
production. No one would undertake
busirfsss venture, because II
would be more profitable and less haz-
ment bonds.
Something IKE this happens during
@ panic ANY widespread fear OF rad
tcaI interference with profits will pro-
Educe q panic; buHlne6S confidence dig
appears and money ts Withdrawn from
enterprise and circulation.
Second--The ~eoniscation OF Ill
Epr0dts would not entirely stop pro-
ductonb but ~ would involve us In
something like q famine, II nothing
worse. The FARMERS ar as PATRIOTS,
We believe. az any other cless. but
their c-yNalIxatf0rg have impressed on
us nVer and over again that rigid price,
eontFnl which eliminated the oBp0r-
tnnity mr. an prc1t sFuuId ilzevisshSy
IreAnce ~pgp6uctl0ns They would hare
no t1ceE1sfves tseT eays For ynizfrst
lSEEs9 Gzopaz WHY SHOULD tfte4 Aeeo&s
the taaxiLnrHn Of Their energies Wifh-
out recelvtMG any reward? me same
;cpnNfaeFet5p1a apply to al cgasseS OF
p~redf9etsoH. .Elflntnats the Incentive,
lald 81 wpsId probably require an
NfEza4I aazSa ~ mt &zz9tfiNg done.