Republican farmer., 1919-05-23

ciaI and industrial undertakings of the world back to their old scope and swing again, and putting a solid structure of credit under them. All our legislation should be friendly to such plans and purposes.
 And credit and enterprise alike will be quickened by timely and helpful legislation with regard to taxation. I hope that the Congress will find it possible to undertake an early recon siderat ton of Federal taxes. in order to make our system of taxation more simple and easy of administration and the taxes themselves as little burden some as they can be made and yet suf- flee to support the government and meet all its obligations. The figures to which those obligations have arisen are very great indeed, but they are not so great as to make 1t difficult for the nation to meet them, and meet them, perha ps, in a single generation, by taxes which will neither crush nor discourage. These are not so great as they seem, not so great as the inn mense sums we have paid to borrow, added to the immense sums we have had to raise by taxation would seem to indicate; for very large propor- ton of these sums were raised in or der that they might be loaned to the government with which we were asso- ciated with in the war.
 The main thing we shall have to care is that our taxation shall rest as lightly as possible on the pro- ductive resources of the country. that it's rates shall be stable and that il shall be constant in it's revenue pow CT. We have found the main sources from which it must be drawn. I take it for granted that it's mainstays will henceforth be the income tax, the excess profits tax and the estate tax. All these can be so adjusted to yield constant and adequate revenues and yet not constitute a too grievous bur- den on the tax payers.
 "A revision of the income tax has already been provided for by the act of 1918. but I think you will find that the further changes can be made to advantage both in the rates of the tax and in the method of it's collection. The excess profits tax need not Ions be maintained at the rates which were necessary while the enormous ex- penses of the war had to be borne; but it should be made the basis of a permanent system which will reach undue profits without discourag ging the enterprise and activity of our bus mess men. The tax on tnheritances ought, no doubt, to be reconsidered in it's relation to the fiscal systems of the several states, but it certainly ought to remain permanent part of the fiscal system of the federal gov ernment also.
 Many of the minor taxes provided for in the revenue legislation of 1917 and 1918, though no doubt made necessary by the pressing necessities of the war time, can find some tustifi- cation under the easier circumstances of peace and can now happily be got rid of. Among these. I hope you will agree. are the excises upon various manufacturers and the tax upon re- tail sales. They are unequal in the incidence on different authorities and on different individuals. Their coIlec- ton is difficult and expensive. Those which are levied upon articles sold at retail are largely evaded by the readjustmept of retail prices.
 On the other hand. I should as- sume that 1t is exped!ent to maintain considerable range of indirect taxes. and the fact that alcoholic Ii- quors will presumably no longer af- ford a source of revenue by taxation makes it the more necessary that the
 field should be carefully restudfed in order that equivalent sources of rev. enue may be found which 1t will be legitimate, and not burdensome to draw upon. But you have at hand in the Treasury Department many experts who can advise you upon the matters much better than I can. I can only suggest the lines of a per manent and workab ble system and the placing of the taxes where they will least hamper the people.
 There is fortunately, no occasion for undertaking in the immediate fu- ture any general revision of our sys- tenn of import duties. No serious dan ger of foreign cornpe tition now threatens American industries. Our country has emerged from the war less disturbed and less weakened than any of the European countries which are our competitors in manufacture. Their industrial establishments have been subjected to greater strain than ours, their labor force to a more se- rfous Reorganization, and this is clearly not the time to seek an or ganized advantage. The work Of mere reconstruction will, I am afraid. tax the capacity and the resources of their people for years to come. So far from there being any danger or need of accentuated foreign competi- ton. it is likely that the conditions of the next few years will greatly fla cilitate the marketing of American manufacturers abroad. LeVFt of all should we depart from the policy aGopted in the triff act of 1913 Of per hitting the free entry into the United States of raw materials needed to supplement and enrich our own abun- dant supplies.
 Nevertheless, there are parts of our tariff system which need prompt attention. The experiences of the war have made it plain that in some cases too great reliance on foreign supply is dangerous and that in de- termining certain parts of our tariff policy domestic considerations must be borne in mind which are political as well as economic. Among the in- dustries to which special considera-
 ton should be given is that of the manufacture of dye stuffs and related chemicals. Our complete depend ence upon German supplies before A. T