The Washington herald., 1919-02-21
TAXES MENACE
TO BOND SALES
Holland Says Financing OF
War Bills Is Puzzle to
Experts.

Prom France comes informstio
that Mr Lamont and Mr.. Strauss
who were sent to Paris ~ the Sec
retary Of the Treasury for the pur-
pose OF paying careful heed to pres
ent and presumed future financial
conditions. have discovered that the
situat ton is full Of difficulties, possibly
perils. The German indemnity ana
the manner in which il is TO he as
sessed and in what way Germany can
begin payments which presumably
viii last for many years, are not the
most important OF the questions
which these two experts, men OF large
financial experience, are called upon
to examine. They probably VIII not
have any share IN the deliberations
which will be necessary in order TO
settle the question OF the amount OF
this indemnity or Of the proportionate
share which each nation is 10 receive.
Their work will be confined to the
manner in which these indennit!es
are to be paid and the distribution of
them. They also may be called upon
to give opinion about the way the
tons TO the United States may be so
handled as TO secure fairly reasonable
methods of liquidation and payment
OF interest
They undoubtedly will be made IA
milisr with the extraordinary. in many
respects even unprecedented work Of
financing for the benefit OF the gov
eFnment before the end Of the present
fiscal year, approximately 81, ,00. 900, 900.
That financing will play some part in
their deliberations.
The government will receive from
tax payers at least s6,00oOoo,oo0. pay
msnts to begin on March Is. These
are to be tentative payments because
IL viii he practically impossible for
tax payers. especially corporations, to
make a full and accurate return on
March u uDon which the tax levy
can be based. Therefore, they are 20
bc permitted to pay n sum which they
will regard as approximately their
just dues to the government. What
the first dues are will be determined
later on. II it should be found that
in the initial payment they over
paid then they will receive Tebate
but on the other hand, II their pre-
limin1rv payments are less than the
tax levy called for thev must make
IN" whole amount good.
4 PusIinw QuestIon.
This collection OF 5000. .to0, ,Oo0. sp-
proNimatcly. Of taxes would Of Itself
raise no very perpleNinS questions
were IT not for rho fact that at the
time this tax - under collection the
rropIc OF the United StatHz viii be
szkcA- to subscTihe for probably S.
init -
100. .t0O-of the fifth lssue OF war
honds. How then are the PROPOSE
tions to be reconciled is q question
which is frequently asked not only
in tho financial district but else
whore II the taxpayers isnd the
number of them il Is presumed will
nc Increased by 1000 o0o under the
ncw law return to the Treasury
s: foGsnoa.Oll will ther b~ in good post
ton TO subscribe at the same time
for at Iea-t 5000 OOn 900 OF so-called
victory bonds. Undoubtedly these
two proportions which are to he
workcs out In 'Fe spring will have
= most important influence for
time upon tho money market. The
90 eminent has the trst cell. 1t
can. as has beer pointed cut here.
collect $50. GO from the people
IN the FORM OF '@NeS.
But with regard 10 the bonds: il can
do no more than appeal to the people.
and in order to make the a-pesl ef-
fective the Secretary OF the Treasury
must now hope that authority win be
given to him TO fix the rate OF in
terest. the Iire OF the loan. the man
ner in which payments are to be made.
This is a problem such as never be-
fore was put up to the Secretary of
the Trea suTy. II SuTpasseS anything
that Secretary McAdoo did Salmon
p. Chase. when Secretary OF the
Treasury in Lncoln's administration,
was called upon for constructive finan-
riaI and banking measures. But
these were, after all. not such diff
cult problems to be solved as is the
one which Secretary Glass is now
allied upon to solve. Possibly the
only earlier precedent which can at
AL compare with this was the one
which was established by Albert CAL
latin when Secretary of the Treasury
i'm JHfferson's administration. II was
his duty 10 perfect ways and means
whereby Congress could be prevailed
Upon TO make the necessary appro-
pr!ation OF fl5.0c0.000 30 that with this
money the French tItle to the Louis
lana territory could PASS TO the Unit
- States. This Gallatin accomplish
cd. but not easily.
4 Minor Question.
There remains some vagueness Of
view. in fact there is a great deal
Of doubt. about the ability Of the
government to persuade individuals
or corporations to subscribe for the
greater part OF the fifth loan. Ex-
cellent organizations have been per-
fected in many parts of the country
which will furnish statesmen who
win undertake to persuade the peo-
pie to participate in this loan. In
some parts Of the country especially
IN the Northwest the outlook seems
TO be encouraging, because the
faTNsrs have a great deal of money
.nd have learned bp experience how
satisfactory an investment Of their
money in government bonds can be.
But in some other parts of the coun-
try the situation seems to be vague.
II apprehensions are realized by a
demonstration of the inability or
unvillingness OF the public as a
whole to subscribe for the fifth loan
then the government must turn TO
The banks. The banks and trust
companies will be able undoubtedly
70 float the loan.
Yet this cannot be doe by them to a
great extent without interfering some
what with ordinary banking business