New-York tribune., 1918-06-16

unwillingness TO look the fsets In xhe
face.
How raising Of funds to pay for all
but permanent improvements results In
imitation might well be illustrated by
the analogy Of corporate finance farnil-
lar to most people. II g arailway cor
poration or q manufacturing concern
were to issue its bonds or notes to pay
for wages or fuel It would at once be
recognized as doing reckless thing.
the common rule with all honestly
managed corporations being that money
raised By sale of bonds, notes or added
capital can only be spent for permanent
betterments, or for those forms Of ex-
penditures which increase the earning
capacity Of the corporation.
The Good and Evil
Effects Of Initiation
While the effects Of imitation are
manifestly bad, II would be unfair not
to admit that imitation has some good
effects. In 90 far as 1t increases the
prices Of commodities generally, It re-
suits in compulsory economies Except
where wages or money incomes increase
in like proportion). and In this sense
operates as a sort Of tax on consunp-
ton. Hence, If II be true, as We have
contended, that economy is necessary
in war time, It might be urged that a
heavy consumption tax was a most
desirable method Of bringing about en-
forced economies. lust answer To
that suggestion seems 70 be that such a
form Of consumption tax falls with
] great severity upon the citizens In gen.
eral. because It adds to the cost OF the
necessities Of life; upon the wage
Garner It falls heavily-unless and un-
til he Is able to get his wages advanced
in proportion to the amount Of the in
f1ation-and upon those dependent on
moderate fixed incomes or fixed salaries
1t Is an unduly heavy burden. It affects.
Of course, all corporations or individuals
engaged In manufacturing and other
industrial enterprises. but II may In
many cases be passed on to the con-
sumer In the shape Of increased prices.
With those corporations who, By reason
! Of contract or law. are required to
accept fixed compensation, 1t is very
burdensome.
Perhaps the most serious Indictment
against the results OF imitation IA tho
fact that it dislocates all the delicate
| q hnk
pensation. payment for services, prices
or commodities, etc, and, although
brought about by the operations Of the
government itself. It's effect Is to raise
prices against the government, thereby
increasing the necessity for still fur
ther taxation or borrowing. In other
words, II establishes what NAV be
termed vicious cycle, In that II first
raises prices, and by So doing creates
the necessity Of raising more money.
and 30 still further raises prices again.
Our conclusion must therefore be:
First-That the government needs
rigid economy Of all Its citizens to win
the war; that 1t requires II not cnlv
because 1t needs money to command
and pay for goods and service, but be-
cause every self denial will release
some goods or some service which the
government can use TO good advantage.
Second-lt is clear that TAXATION ia
not only tae best way for citizens to
support their government, but taxes
intelligently applied will do much to
produce the very savings of which we
have been speaking.
Lastly-Taxaton and the resultant
savings are the only ways 70 mitigate
the perils and pitfalls of imitation.