Evening star., 1918-12-01
HOW WILL II. S. fAY ITS
STAGGERING WAR DEBT
No One Doubts Its Ability to Pay, But
Task Is Stupendous and May Require 9 !.
Many Years to Give Clean Slate. =


ferent dates ranging from five to Afty
years.
The Ordinary" expenses Of the ntx.
ernment prior to the war were aee9e
$1,000. 100000 annually. It IL Q -
bet that never again win this .1e4s
ment in peace times. Tho federal glvs
ernment is reaching out into m1s1y
fields of endeavor and the demand 16R
it to enter still other fields conQe1
from the people. The expenditures for
the Army and Navy for the next few
years at least ujll be comparatively
heavy when pre-war expenditures arc
heavy they will be. Therefore it may
be put down that the governments
expenses will average around $2.0OQ,-
100000 a year. Add to this another
billion and half for reducing the
principal and paying the interest on
and it will be necessary to find a total
of $3.500.000.000 a year through the
taxing power. It has been estimated
that the present war tax law VIII
raise about four billions of dollars
and that the proposed law, now pend
ing in Congress, will raise s6,0oo.o0V,.
900. This when war prohts are sup.
ject to taxation. But there will be no
more war profits to take before long.
Prohibition Cuts a Figure.
Prohibition looms up as another
factor to decrease the sources OF rev.
enue. When three-fourths OF the
states have ratified the prohibition
amendment, and the Congress has
enacted laws to carry out prohibition.
then the federal government will
have lost a source of revenue which,
under the pending war revenue bill.
is expected to bring in considerably
taxes must be levied, or increased, to
make up for the loss of the liquor
tax.
1t is true that some of the mem
bers of Congress, who are opposed
to prohibition not only because thAy
but also because they wish the goE-
ernment to- sssarinue to obtain reve-
nue. from lf0Iuf. are hoping against
hope that there will be a reversal OF
public opinion when the armies now
abroad have come home. and that in
Congress will not enact
the laws necessary to make the pro-
posed amendment to the Constitution
even though the states may
ratify the amendment within the next
year. The prohibition amendment does
not become effective until one year
after the amendment is ratified.
1t does not appear that the United
States government will be able to get
along without at least $4,000. .000.0
or perhaps $4,000 100000 revenue, q
year for many years to come, perhaps
for thirty or forty. and possibly this
revenue must be considerably more.
In other words, the per capita con-
tribution tq the revenues Of the gov
efnment In this country must 30 $3.50
to $400 annually. Undoubtedly the
ccuntyyss popuintion will increase
greatly and the wealth OF the cotiutry
4hotld expand enormously in the next
quarter OF a century. That being. ths
case, 1t may be possible to shave down
the tax rates. because there will b
more persons and industries to bear
the burdens.
How Is It to Be ,Raisedf
How is this money to be raised?
Income taxes on individuals, and
must furnish a large
share OF the needed revenue. In
heritance. taxes, excise taxes Of va
rious kinds and the tariffs on .im-
ported articles must make up the
residue. Secretary McAdoo has adj
next year instead Of lowered,
so far as individuals are concerned
This has not met the approval OF
members of the Senate finance com.
mittee., But If Congress does not in
crease the income taxes, nevertheless
it will find it difficult to decrease
them greatly in the coming years
and still raise enough revenue. In
comes Of unmarried persons in ex-
cess of 81, 900 and of married persons
in excess of $1,000 year are taxed
under the existing law. 1t has been
further reduced, but it Is doubtful
such a course will be followed. Ex-
cess profits taxes are here> to stay.
some Of the senators say. But they
must be handled with care. or in.
centive to do business will be killed.
Business Must Be Protected. !,
Business must be handled with care.
If taxes are made too high. there wHl
he less business. The goverhment, a.
well as the country, will be the loser:
Direct taxes on many articles and
in addition to the income
tax. must be continued il the revenue
is to be derived. It will be the OBJ
ject Of Congress to make these taxes
just as little irksome as possible
The tariff as revenue source VIII
be made use of to the greatest pos
sible extent IL the republicans haye
their way. But they must be careful
not to build the tariff wall too high,
or it will reduce revenues ana at the
same time make prices to AmeItcap
sky high. In the last anaiysis
the tariff will produce a compare
lively small portion of the revenue
which must be raised. no matter Who
writes the tariff law. The hfgh-YAfer
mark in customs in the past was $780,
600, 900 in one year. -,
It is within the power of the rev.
ernment. If it desires and obtaane TIE
payment Of the principal of the public
debt indefinitely. continuing TO pay
the interest and when the obltgettons
mature issuing new securities. But II
this course is pursued scores az. even
hundreds Of years hence Americans
will still be paying of the war debt
of. today. There is strong sentiment
In Congress against such a policy
Debt at Civil Wars End. -
When the civil war ended the puttie
debt of the United States ,Was In
round numbers $4,000 900 600. This
population in those days was eb6pe
81 100000 and the wealth of the e09ff-
try wis not to be compared With the
wealth today. The country Wae. 411e
to handle this debt eficiently 364 6AA
reduced It to q billion dollars IN AAx-
rison's time. Issue Of Panama eaAns
bonds and other securities had IgfSed
the debt above the billion .oolIef
mark when war with Germany Wne
declared. ..--s
The size Of the present tasls AeNe
ever, even after. considering the- tfe-,
mendous growth Of the country ef4Se
civil war days, Is stagKerine. 1hp-