The New York herald. [volume] (New York, N.Y.) 1920-1924, 1920-10-19
DOMINION TO DROP
TAXES ON PROFITS
Success of Sales and Luxury
Leyies Makes Old Method
Unnecessary.
Special Correspondence to THE HERALD.

Special Correspondence to THE HERALD
OTTAWA, Oct. 4.-One result OF the
phenomenal success of the Governments
new sales and luxury taxation is that
the much debated business profits tax.
curtailed by the last budget probably
will be altogether abandoned. Official
announcement of such, a step must, of
course. await next sessions budget ad-
dress, but from a semi-offlcial and per-
fectly reliable source 1t Is learned tina,
the Cabinet has practically made up its
mind that the tax must go.
The profits tax will go to it's grave
unwept. unhonored and unsung. Born
at a time when 1t was fashionable to de-
less phrase "conscription of wealth" was
being hurled about with the utmost
abandon. no form of, taxation inaugu-
rated during or since the war has been
more thoroughly unpopular. A failure
and keen disappointment as producer
of revenue and a hobbleskirt upon In
dustry. its greatest defect was that in
stead of being paid by the alleged
profiteerS it was passed on to the con-
sumner, resolving itself into a levy upon
those least able to bear 1t and in adj
dltion tending to maintain high prices.
lHe loSlc OF tnlS WAS Sililpie. III u
word. 1t was that the manufacturer
merely added the tax to his price to
the wholesaler the wholesaler passing It
on to the retailer and the retailer Ia
turn passing It on to the public The
Government was not long in discovering
this Sir Thomas White, ex-Flnance
Minister, who was lukewarm toward
such taxation from the first. was strong
ly in favor of it's abolition last year. but
Sir Henry Drayton. fearful lest his new
taxes might not turn out as well as
hoped for and realizing that revenue
was VITAL did not have the courage to
wipe out tax which, no matter how
badly he thought OF 1t. was bringing
several millions Of hard cash into the
Treasury Then again there were po-
lltical considerations A number of
Western Liberal Unlonists were strong
Cor getting after the proflteers," and
the Government, with no downward
tariff revision to appease them, was glad
TO be able to throw them the sop of q
business profits tax partially continued.
Next budget, however, 1t will be diff
ferent. For one thing there will be
ample revenue-enough to pay all ordi-
nary and capital expenditure and to
reduce bit of the national debt be-
sides-and, in addition, there will be
sufficient OF a downward revision of the
tariff to enable the Finance Minister
to say to the House: IF we are go
ing to deprive the manufacturer of some
OF his protection, at least let us not con-
tinue to burden him with this business
profits tax"
Tariff Inquiry Furnishes Surprise.
Meanwhile there Is the utmost salts
faction in Government circles at the
trend of the hearings before the Min
t.,%A~ t,J ,,fff hn-
lieved that the Agrarian party would
make formidable showing before the
inquiry particularly in the West. In
stead. however, they have contented
themselves with q more or less academic |
treatise on the evils of protection while
supporters of the tariff have come for |
ward in almost every centre visited with
strong and detailed representations in
favor of duties being retained. Con- !
spicuous, too, has been the failure Of
labor to join with the farmers, their
supposed political allies in opposition
TO the tariff At no place thus far has
labor asked for tariff reductions, while,
on the other hand, the Trades and
Labor Congress recently held at Wind
sor went strongly on record in opposi-
tion to free trade.
The result, naturally, is to strengthen
Premier Meighen's determination to
maintain a moderate but adequate tar
iff: adequate not only for the raising OF
revenue. but for the protection of Ca
madam industries as well.
Meanwhile there is little comfort to be
found in the trade figures for August
Just made public. Their main feature
is disclosure that the balance of trade
Is running steadily and heavily against
the Dominion. the Imports increasing
and exports declining. Imports for the
month totalled sl2i, 900, as against
ss1 .Ooo. 900 in August OF last year, while
exports were $112,G0O0Oo. as compared
with SIG. 10000 In 1919. Imports from
the United Kingdom totalled $2l,0O'OcO.
compared with 100000 for August OF
last year. while from the United States
they were nearly Sc. 600 900. as compared
with So, 900, 900 In August, 1913. exports
20 Great Britain were s36,000,000, COM
pared with $52.o0o,ooo In the Same 1919
period, n disturbing decline. TO the
United States they were s46.ooWo. an
increase of about 100000, and chiefly
accounted for by the growth OF exports
In pulp and paper.
Taken all in all. the August figures
are the least encouraging that have |
bean issued for some time. and while. |
of course. a great exportable surplus OF |
wheat will save the situation II Is I'M
pleasant for the Government and imam
cial interests to contemplate what Iilisht1
have happened had Providence been |
less kind and the wheat crop failure.
Premier on Western Tour.
On Saturday Premier Meighen leaves
for a political tour of the West. He Is |
going TO tackle the Agrarian party In !
its stronghold and. incidentally, to fol-
low Mackenzie King. Liberal leader,
who has been delivering a series OF po-
iltical addresses In the prairie prov
inces and on the Pacific coast. The
Premier will open his campaign In Win
nipeg on October 10 and plans to de-
liver no fewer than forty speeches.
In the meantime by-elections are be-
ing held In East Elgin. Ontario, and
Yale-Cariboo, British Columbia, and the
keenest interest is being evinced In the
result. In East Elgin the Government Is
being opposed by both Farmer and a
Liberal. while In Yale-Cariboo the con-
test is enlivened by the participation OF
a great war veterans candidate In adj
dltion for the Farmers and the Cow
eminent. Should the Government add to
ita two recent conspicuous triumphs in
81 John. and Colchester victories In East
T,lrin arid Yale IL will be accepted as
evidence that It Is firmly internched in
the national confidence and that the
Agrarian-Labor movement Is rapidly on