The sun. [volume] (New York [N.Y.]) 1916-1920, 1918-07-31
THE BUSINESS DILEMMA.
Lessons From the Past TO Guide Fed
eral Tax LAYERS.

To THE EDITOR OF THE sUN-Sir: /
have read with much care your leading
editorial article entitled The Worst
Kind Of Vicious Tax Legislation and
I heartily approve Of the fair way in
which you handle the entire proposition,
but the following additional suggestions
have occurred to me that may be OF
some interest.
The laws which were framed by the
last Congress for the major part ex-
empted, or apparently attempted to ex-
empt, the farmer and the laborer. The
farmer was entirely exempted from the
action of the Food Administration bill.
We are not discussing the propriety OF
such exemption, but since then we have
heard Of many speeches In the halls OF
Congress In rank condemnation OF the
profiteer. and the pronteer 10 always al
luded to as the business man that has
taken large pronts.
Taking tho illustration in your edito-
rial article, the company capitalized at
$1,000 600 doing a business of $40, 000,-
600 year, would probably much prefer,
II the matter were left to It, to make
" amount SaSh W
a reasonable amount should say a
normal profit Of from IL per cent to
20 per cent.-which should represent a
pre-war normal profit Through abso-
lutely unforeseen circumstances beyond
Its control this company has been do
ing business In a market where II was
obliged to anticipate its wants for sup
plies by probably six months. and by
such anticipation made an abnormal
pront almost. II would seem. by acci-
dent, and Congress proposes to take the
major portion of that away from II.
That Is the proposition, as we under
stand II.
But the next page in the chapter ap-
pears to me to be the answer to the
question as to what will happen, prob
ably very shortly. The conservative
managers OF the business In question
realize that they havo to buy six months
supplies ahead. covering 100000 or
more OF all their materials: otherwise
they may as well shut UP shop and not
undertake to run their business, for this
is the only way supplies can be Sc
cured under present conditions. They
buy supplies which amount TO $1,000
900 or S2.50o,000 on the present mar
ket. When the break does come It prob
ably will be az sharp as the advance.
and we may expect a decline Of so
per cent in six months, thus wiping out
last years business Of the concern.
This Is not only possible, but is reason
ably sure to happen.
When the war stops. II the war stops
as suddenly as It began. just that sud
denly the decline in these materials
will begin and the inexorable law OF
supply and demand will force this de-
cline and the money made in very many
instances, in fact in almost all INSTANCES.
by these unusual advances will be taken
to cover a large portion OF similar losses.
But the farmer from California. who
is getting $40 ton for cherries that
cost probably $50; the farmer Of the
middle West. who is getting 100 per
cent or more profit on his sugar beet
and other products. Is not placed in such
n position. He does not have to carry
stocks in anticipation, that Is. stocks OF
merchandise He IL not loaded with
high priced goods to enable him to con-
t.nue doing business, but he has OBJ
tanned the great advantage realized on
the unusual advance, and yet is not al
luded to to any extent as a profiteer.
That title Is kept for the business man,
a man who will be in a most dangerous
position as soon as peace is declared.
Mr.. Schwab told US on Saturday that
he expected to get out 100000 tons
Of shipping in one year This morning $
papers tell US THAI at the end of the
war there will be a shortage of l0.00o,-
900 tons of shipping. In other words,
America will supply the entire world OF
shipping In one year. neighbor. with
in a stones throw, a house established
be fore 1867. with a limited capital, made
$3.50, 900 in 1854 and lost more than
$3.50, 900 from unavoidable depreciation
in 1866
Our experience with business men is
that they have already come forward
loyalty to the support OF the Govern
ment without complaint that they have
paid their full share or more of the
taxes and that they should not be brand
ed as prohteers as various agitators
have endeavored to brand them In many
instances nor should they be unfairly
taxed in the manner now suggested in
Congress. GEORGE W. b. ROBERTS.
PHILADELPHIA, Pa, July 80.
COSTUMES WANTED.