New Britain herald., 1918-08-11
Henry Clens Weekly Letter
Especial to the Herald)

comes from the front. The war tlde is rising rapidly in our favor every day and is as rapidly falling against the enemy. The morale of the enc
 my is now lower than at any time of the war. while with the Allies the contrary is conspicuously true. Ap- parently the British and French have launched a new offensive with special success Germany has made three stupendous drives on the West, all of
 which have been fiat failures. accom-
 plishing nothing but grasping sections of territory which she cannot hold
 and will he of no permanent advan- tage. American troops have already
 made a splendid exhibition of fight
 ing qualities; and Germany will soon
 realize what to expect when our mil lions of ardent and fearless young sol dierS reach the front in large force.
 The German high command had hoped to obtain a decision before their arrival, but failed, and today victory for the Allies is not so very far distant. Our Government is wisely making full preparations for an army
 of immense size, five millions or more. This is the kind of argument which Germany best understands and which is sure to hasten Allied V1c- tory.
 There Is no need for special anxiety about the monetary outlook. All that !! is necessary is to understand the slt- uation and then make necessary ad- iustments. The nation has one great purpose in view; winning the war, and every energy must be turned in that direction. The truth is. there is a tremendous pressure for credit up on the banks. High prices for com
 modities. labor. etc, fully tax their re- sources, and the expansion of credit has been very considerable. Crops are moving faster than usual: and with fixed prices there are no induce i ments for farmers to hold their grain. Business requirements are unusually heavy; and the interior banks are well loaned up. It is self-eVident, therefore that there must be some curtailment of credit, especially in view of the approaching preparations for the next Liberty Loan. During the new fiscal year the Government will require immense quantities o1 money: one-third from taxes, ana two-thirds in bonds or other oblga- tions. Such huge demands Will, or course impose additional burdens upon the bank and the money market.
 
 our banking resources are quite equal to the enormous strain and behlnd all we have the Federal reserve system, which has almost accomplished mir acles in marshalling and utilizing the co,ntry's credit facilities. Money and credit like other commodities, will probab blv rule high for some tune to come: but the process or equauza- ton operates constantly and tends to eoualize matters. There is also com
 pensation in the fact that nearly all
 of the money required to be ralsed oy the Government will be spent in the United States, stimulating war indus tries beyond the most sangulne eX-- pectations.
 Taxation for the coming year Is a
 problem of particular importance The country is calmly facing the nec- essity of a big increase in taxes Whlch are expected to he double those ol last year. The country has also real ized that one-third of the cost or $8,- nO0.o0O.0OO, must be met by direct taxes, and that a large portion of this sum must be raised out Of incomes Last year the personal income tax collected was about S173, 100000, and the corporation tax SIP, 900, 900. There is no doubt that Congress will mass a more equitable and better tax bill than the present one, if backed by sound public opinion. The theory or ,1ecing the heaviest burdens upon those best able to bear them, is uh- duestionably wise and practical ana heavy sacrifices have already been made by those in this class. At the same time there is a disposition to undulv load some classes, leaving others. quite able to bear a share, al- 1 most or entirely free. To impair bus mess, wipS out savings or prohtS' 1 and dry up sources of new capital ana | revenue is of course unsound rom either the economic or leglslat>Ve ! standpoint: and it. is equally unsouho' l if not unfair also. that the tax is not l more widely and equitably dls'rlo'teu'
 According to Washington state ! n7ents, one-third of this $173,00o,o0 ] income tax was paid by investors and l dealers in securities, concerning which there is no complaint. Labor l however. paid only .0S6 per cent It ] is freely conceded that the tax on la 1 ho,, should be light as possible, put 1 Considering the section of labor Whch 1 is securing war wages, this nnnute l share seems hardly Just1ned. war wages can at least pay moderate tax. if war profits can pay an excess sive one Again. 90 per cent or the l total tax came from incomes or MO- oOn and less than per cent. rom lh- ] comes of s5,0OO. over 42O,ooo lndl- l viduafs reporting incomes ot the lat ter volume. Only ten paid taxes on incomes of $5,O00,0Oo and over; the l total gathered from this class amounting to S13.000,ooo, Perhaps l the most striking feature of the re- turns is that of the farmers, who are already an especially favored class