New-York tribune., 1920-07-04
.HE message of Otto H.
Kahn's book "Our Economic
and Other Problems" (Doran)

and Other Problems" (Doran)
may be summed up in the
phrase: A square deal for business.
The author believes that the American
people have not fully appreciated the
great services of their financial and
industrial magnates. He feels that the
functions and purposes of "big busi-
ress" have been misrepresented by mall
evolent agitators, who delight in stir
ring up class hatred. He is convinced
that business is suffering as a result
Of certain measures of unwise and
punitive legislation, which have been
enacted in a spirit of haste and vim
cictiveness.
Faulty Taxation
One Of Mr. Kahn's most interesting
chapters is entitled "Two Years of
Faulty Taxation. and the Results" He
attacks the present income and excess
profits taxes as stranglng in their ef-
feet upon business initiative. Capital,
IN his opinion, is. going on strike
against the excessive demands of the
government, and is taking refuge in
tax-eNempt securities, such as munici-
pal and Federal bonds. Consequently
the industrial life of the nation is
starved for lack of funds Mr.. Kahn
also takes exception to the imposition
of very high inheritance taxes. He
maintains that mans right to dispose
of his property freely upon his death
is valuable incentive to thrift
The author suggests, as an ideal
means Of raising revenue, a small tav
on the sale of every commodity He
gives an alluring picture of the advan-
tages of such a levy:
"A trifiing sales tax on the hure
volume of commodities changing hands
annually would yield so vast a revenue
that it would enable the excess profits
tax and practically all other abnormal
business taxes Except, perhaps, the cor
porate income taxi to be eliminated
surtaxes on individual incomes to be
greatly reduced, and Federal taxation
of incomes up to, say, $4,000 to be
abolished altogether.
The result would be great reduc-
ton in the cumulative percentages with
which prices are now loaded to meet
taxation-that is to say, there would
be bound to ensuc a lowering of prices
all around. Competition would see to
that. If, contrary to all expectation and
precedent, it should not do so, other
agencies will.
Another advantage of the sales tax
is the great simplicity of its working
and the detiniteness of it's application,
especially as compared to the vexatious.
uneven and unfair working of the excess
profit tax.
"Furthermore to collect such q tax
requires little expense, no complicated
bookkeeping, no intricate schedules, no
lawyers and accountants services, and
no army of government employees. II
can be increased or decreased in shcrt
order and without any resulting eco
nomic disturbance, according to the
financial needs of the government"
The Menace of Paternalism
Mr.. Kahn is very firm in combating
what he calls "the menace of paternal-
ism" He condemns government opera
ton of the railroads, pointing out that
this scheme has failed, from the stand
point of efficiency, wherever it had been
tried, except in Germany. He is op-
posed to the idea of Federal guaran-
tv Of minimum, ret,1rpS to +ba 20 o;luyox
owners, on the ground that such an ar
Iangement would ultima tely lead to gov
ernment operation in fact, if not in name
He is in favor of policy of firm but
liberal supervision of the railroads,
which should assure the utmost free
dom of private initiative in questions Of
policy and management.
Business and Publicity
The author believes that wealthy men
have been subjected to unjust criticism
in the past because they have pursued a
mistaken policy of aloofness from the
public. He contends that the operations
Of business and finance should be car
ricd on, as far as possible, in the pub
lie eye, so as to give the least color to
malicious gossip. He is a strong advo-
cate of campaign of vigorous publicity
on the part of business men to combat
the subversive teachings of agitators
and unsound theorists. At the same
time, he warns his colleagues that 1--WE
must be particularly careful not to Gre
ate the impression that patriotism is
used Enthusiastically as cloak for snug
self-interest and the protection Of priv
ilege."
In his chapter "The Task Ahead" MI.
Kahn discusses IN detail the problem
OF capital and labor. He says:
THE primary cause of poverty is