The Kadoka press and Kadoka reporter. [volume] (Kadoka, S.D.) 1910-1923, 1917-07-20
Paying Wars
Many Bills

subject of discussion this week at
the University of South Dakota
when the class in public finance
to'k up governmental loans.
Germany has emitted five is
sues of war bonds agereeatine
more than $l0,000,00O,0O0 The
German loans have been issued
not only to paw the war bills but
to pay the interest on the war
loans, The German people have
been told that. war indemnities
and conquered territory will take
care of the German war debts.
The German plan means that, at
five per cent, the interest charge
on the German war debt, after
the war, would support a million
German families of six individu-
ais each at the rate of $500 for
each family. The German plan,
pursued to its logical conclusion,
means bankruptcy. Germany
has imposed no new direct taxes.
France has been slow about inn
posing more taxes and France
has issued loan after loan. Only
now after nearly three years of
war finanCierin9, is France be
coming reconciled to income
taxes, from which the nation had
been immune for years.
Sharply COntraSted to the
German method of war finance is
that of England, which has stead.
lily increased its taxes, and while
meeting the extraordinary de-
mandS OF war with the most ava
liable extraordinary means, loans
the amount raised by taxation has
risen steadily, until for the fiscal
year that closed last march Great
Britain raised three Sevenths of
revenue by taxes and four seven
tbs by loans. England has incur
red war debts of $23,0O0,000,000
and is lending money to her allies
and to her dominions at the rate
of S7,500,000 every twenty four
hours.
The United States is following
in EnRland's wake, in imposing
new and larger taxes. England,
as soon as war began, doubled her
income tax at single stride. Am
erica is also doing wisely in sell
ing the Liberty Loan to the indi
vidual American instead of to the
banks, as there cannot be
much arrangement of price lev
els nor as grave danger of infat-
ed credits, with this method of
floating the loan.
Opponents of bond issues argue
that taxes place the burden on
those who can pay the bills now,
instead of taxing the soldiers on
their return from the trenches to
pay interest to the bond holders
who bought the bonds instead of
taking part in the war Tax
alton means that incomes are
conscripted whereas bond sales
mean that the same persons pay
for the war,but paw for it as an in (
vestment. This argument, by the
tax faddist, is hollow, for many
wealthy men are going to thetren-
Ches, and some returned soldiers
will pay no take. To undertake
to raise the entire amount by cur
rent taxes would tie up produC-
ton and industry and would fail
of its mark, for confscation of the
principle that yields the social in
come would be required to pay so
vast a bill.
Bonds, on the other land, can
not solve the problem alone.
Germany is committed 20 the
bond issue plan, which means
wild speculation resulting from
deraneed prices, and a terrible
series of economic crises when
the reaction comes, as come it /
must when peace is restored.
Bonds to meet the immediate
emergency and to tide over until
taxes can be gradually increased
will prove the best method, the
class concluded. In other words,
in shifting from low to high Amer