The sun. [volume] (New York [N.Y.]) 1916-1920, 1918-11-15


actuated by n proper desire to pv help
full to, the Governments. which with Us
have borne the burden OF the war and
TO their peoples, but In also the policy
OF enlightened selfshness. II Is to oe
apprehended that the sudden cessation
OF the extraordinary demands upon our
industry and products consequent upon
the conclusion of the wac may result m
sudden reduction of prices and wages
and even in unemployment II We are
not prepared to continue to sell on credit
to the extent that may be necessary.
''rhese considerations lead me to be-
iieve that the Governments expenditures
during the hscal year ending June so.
1919, may he, In the neighborhood vf
$4,000, 100, 900.
House Bil Figures Too High.
ct am inclined to recommend a sub
stantial reduction in the amount sought
to be raised by tho House bill. Changes
have been made or are In contemplation
by the Senate, which taken together with
the anticipated elimination of revenue
from liquor taxes would reduce the
amount to be raised by the pending reve-
nue. bill from the $4,000, 000.0 900 or moro
provided for In the House bill and
originally suggested by me to some ST.
500 000.0 900.
Further changes may think with
safety be made in the bill with view
TO reducing the amount Of taxation to
SO, 100. 1000, which may he paid In
instruments during the calendar year
1919. The excess proits tax rates APP
plicable to the calendar year 1913 should
not be greater than those provided for
in the existing law Of October, 1917,
and should be payable only in those
casee where the excess profits tax would
Yield q larger return than the proposed
war profits tax. The 80 per cent war
PROFITS tar applicable 10 the calendar
year 1918 should be retained. Contracts
have been made during past months in
the. expectation of n heavy war profits
tax. Every one Is agreed that war
profits should be taxed. They must be
taxed now.
"It 10 time TO look ahead to the future
of, American business and industry. Our
tax measures should be 80 devised as to
| encourage and stimulate rather than to
| burden and repress them. I therefore
recommend the Immediate amendment Of
| the pending bill 70 as to provide that
with the collection OF the taxes levied
| upon war and excess profits for the
calendar year 1918 and payable in. the
year 1919 the war and excess pronts
taxes shall come to an end EXCEPT In
20 far as may be necessary to subject
to these taxes profits which though
arising from contracts entered into dur
Ing the war period would under existing
regulations technically be profits Of 1919
and not profits OF 1918.
II can think OF nothing which would
do more to encourage industry and en-
terprise than this mea sure, carrying with
| 1t, as II would, the assurance that with
I the cessation of war there will come
| cessation OF taxes on so-called war
| profits and war excess profits
| "It seems wise to provide with the
elimination for the calendar year 1915
of the war and excess profits taxes for q
! sufficient revenue from corporation and
individual income taxes applicable to the
calendar year 1919 to make the total
revenue payable during the calendar
year 1920 not less than $4,000. 000, 600.
1T Ia impossible at this time to make
a forecast of the aggregate amount
which the war debt will have reached
by the time war contracts have been
liquidated and the reduction OF oui
military forces to a peace basis has been
completed.
what will be the Governments neces.
stiles when the period Of Reimbursement
II past and the country has fully
reached a peace basis cannot now bs
foretold, but having regard to the in
terest on the then public debt in excess
OF the interest to be received from
obligations OF foreign governments the
necessity of providing from taxes fol
the gradual retirement OF the war debt
ard the certain permanent increase n
tina expenditures OF the Government
over prewar expenditures the figure OF
$4,000. zoe. 900 suggested seems a very
H.. l.A -
ward OF the pending revenue bill I can
not too strongly urge upon you the ne
cessity so far as the war aud excess
profits tax is concerned Of Movdint
necessary safeguards In the form Of
adequate provisions for amortization
conservative valuation Of inventories ant
the ascertainment of the minimum In
come which shall be exempted from tn,
tax on lines which will insure the tax
payer from injustice and avoidable In
Jury,
Nor can I overemphasize the impor
tance of determining now the basis O.
taxation which will apply to the calen
dar year 1919 as well as to the calendar
year 1918. Business and industry ant
individual Initiative and enterprise are
entitled to know In advance the basis O
taxation upon which all the activities o
the nation must be conducted. Pros
perity cannot be maintained IL business
p kept In uncertainty as TO taxation.
Retroactive Taxation Unjust.
at IL always unfortunate TO be com
PEELED TO enact q tax bill at the end o.
the calendar year with retroactive effec
instead OF In advances Of the calendar
year which would permit contracts ant
business arrangements generally to b'
entered into with. certainty as TO thu