The New York herald. [volume] (New York, N.Y.) 1920-1924, 1920-12-10
FRIDAY, DECEMBER 10, 1920.


Al AllS dhN ANAAA-ASAS ~
port to Congress, some Of the meas
ures recommended by the Secretary of
the Treasury to raise new revenues
oddly enough contradict his general
and strong stand against freakish and
dangerous taxes.
After showing, for example, the I'M
productivity of the present heavy war
income surtaxes, Secretary Houston
suggests heavy rates on industrial and
business profits which likewise would
certainly become unproductive. At
ter condemning excessive individual
income tax schedules that drive in
vestmept money by the billions out of
securities of railroads and industries
into tax exempt securities Of the Fed
eral, State and municipal govern
lnents, he proposes against corpora
lions taxes that would annihilate the
market chances OF their securities.
After excoriating tax methods that
XIII the incentive and impair the ca
pacity Of productive agencies to i'm
prove their plants, expand their bust
ness and insure their financial secur-
ity, he suggests so heavy tax on
undivided profits Of corporations that
they would be strongly impelled to
distribute those profits to stockhold-
ers SO as to avoid the taxes.
Right at this moment scores of in
custries are cutting or suspendlng
their dividends, are seriously crippled
for lack Of working capital and are
utterly dlscredited among lenders Of
money. because they have been dis
5ributing their large war earnings
lavishly.
IL makes no difference whether ex-
cessive dividends are recklessly paid
out to please stockholders and infiu-
ance stock market prices, or to escape
punitive taxes the effect must be the
same on the financial condition Of the
corporation, It's credit and its reserve
strength to weather economic storms.
Capital never will 20 near the indus
trial investment that Is financially
weakened by taxes any more than
capital will go near the corporation
whose soundness is endangered by
reckless dividends, bad management,
stock jobbing or anything else.
The evil results which Mr.. HoUs-
TON deplores from other unsound and
dangerous taxes which he wishes re-
pealed would be exactly as bad and
exactly as sure in an excessive taxa
ton Of industry and business which
f, would cause their financial exhaus-
ton, curtail their production and ham
string their enterprise.
In the additional sources OF revenue
which he suggests, we do not take
Secretary Houston, as some others
do. to mean that all the methods he
mentions should be adopted and all
the taxes he enumerates should be i'm
posed. We assume he named them all
merely that Congress might consider
which methods it possibly might wish
10 choose. Nothing could be more
preposterous when industry is flag
ging and corporations are showing
deficits, suspending their payrolls as
well as their dividends and putting
up the shutters, to propose to tax. out
of their treasures another $685.
100000 here, S5SO00,O00 there, $780,
100000 somewhere else and $780,
100000 In still another place. Any
body knows that the industry and
business Of the United States couldn't
produce such additional colossal Gov
eminent revenues to-day II. they were
subjected to the pressure of lemon
squeezers
In any event, whether Secretary
Houston proposes to take out Of
languishing industry and business a
couple of billions more Of taxes, or n
billion more, or half billion more, he
proposes to blow out more furnaces.
shut down more looms and spindles,
throw more wage earners into the
bread line, and beat general industry
and business into state Of lnsenss-
hiiifv