New Britain herald., 1918-08-10
Henry Clews , Weekly Letter
Especial to the Herald)

New Ork, Aug. lO.-GOOd news comes from the front. The war tide is rising rapidly in our favor every day and is as rapidly falling against the enemy. The morale of the ene- 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 flat failures, accom- pl1shlng nothing but grasping sections of territory which she cannot hold and will be 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 Vlc- tory.
 There Is no need for special anxiety 2 aho1lt the monetary outlook. All that is necessary is to understand the sit 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 ments for farmers to hold their graln Business requirements are unusually heavy; and the interior banks are well loaned up. It is se1f-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 or money: one-third from taxes, ana two-thirds in bonds or other obllga- tions Such huge demands Will, or course impose additional burdens upon the bank and the money market
 Our banks are in sound position; o,,r banking resources are quite equal to the enormous strain, and behind all we have the Federal reserve syste"' which has almost accomplished mlr- acles in marshalling and utilizing the country's credit facilities. Money and credit, like other comm odltles' will probably rule high for some tlme to come; but the process or equailza- tion operates constantly and tends to eoualize matters. There is also com pensation in the fact that nearly all of the money required to be raised by the Government will be spent Tn the Tinted States, stimulating war indus tries beyond the\most sanguine ex-- pectations.
 Taxation for the coming year IS 8 nroblem of particular importance The country is calmly facing the nec- essity of a big increase in taxes when are expected to be double those ol last wear. The country has also real ized that one-third of the cost, or SS,- OOO,OO0.000, must be met by dlfect taxes, and that 8 large portion or thls sum must be raised out of incomes. Last year the personal income tax collected was about S173,OO0,Ooo, ana the corporation tax $172,0O0,Ooo. There is no doubt that Congress Will pass 8 more equitable and better tax bill than the present one if backed pE sound public opinion. The theory or nlacing the heaviest burdens upon those best able to bear them. IS un- ouestionably wise and pracucal anu heavy sacrifices have already been l made by those in this class AL the | same time there is a disposition to l
 C1 leaving others, quite able to bear a share, al- l most or entirely free. To impair bus ! ;ness wipe out savings or prohts, 1 and dry LID sources of new capital ana revenue is of course unsound from either the economic or Legislative standpoint: and it is equally unsound, if not unfair also. that the tax IS not more widely and equitably distributed
 According to Washington state nents. one-third Of this $173o0o'Ooo income tax was paid by investors ana dealers in securities, concerning | which there is no complaint. Labor' however, paid only .0S6 per cent It ! is freely conceded that the tax on la l bor should be light as posslhle; put considering the section Of lahor "hlci is securing war wages thls "ll11u'o share seems hardly justified. War 1 wages can at least pay a moderate 1 tax, if war profits can pay an excess cive one, Again, 90 per cent, of the l total tax came from incomes oI $Zo'- 1 900 and less than per cent. from 1n- comes of 5000, over 42O,O ,Ooo mai viduals reporting incomes of the lat ter volume. Only ten paid taxes on 1 incomes of $5,0OO,ooO and over; the 1 total gathered from this class amounting to $13,ooO,ooo. Perhaps l the most striking feature of the re- turns is that of the farmers who are already an especially favored class hut naid only 1 per cent. of the tax. 1