Evening journal., 1920-01-05


war. II Il be contended that these re-
turns are only temporary, the answer
must be given that no one knows how
temporary they are, and that the only
way to meet a condition Is to face Il
squarely, preparing at the same time
10 meet in the same way any other
condition that may subsequently arise.
Even II the rate fixed were equivalent
20 the yield on capital in other lines,
then II profits above that fixed. rate
were removed or limited, il would seem
that there ought 20 be corresponding
limit 10 losses in order to make rail-
road investment still as attractive as
other investment. The Cummins bin
as FIRST presented in the Senate, pro-
vided, in substance that any road earn
/ ing more than the fair return" should
retain only one-third Of the excess and
/ pay the other two-thirds TO a general
railway contingent fund.
10 Is a question whether this would
not deduct too large a percentage OF
the excess; 10 is a question, moreover,
whether the government could take
away more than half Of the profits
earned by roads above the fair return
without deadening private initiative
and good management. II half the
profits earned by the railroads above
the fair return are taken back, This
provision could only be balanced by
turning the profits over 30 roads with
deficits below the fair return. BY not
giving such roads more than half OF
this deficit, the deadcning OF their lncen-
tive toward economy or better service
lan In
road circles, however, seems TO favor
a regional tariff high enough TO yield
a fair return 10 railroad capital in
vested in a region as a whole, leaving
the strong roads the rewards Of the
good location, good financing and good
operating management that make them
strong. and leaving the weak roads to
suffer the penalties Of the location or
poor management that makes them |
weak.
The Government Deficit.
One of the big things which cannot |
escape having an influence on business |
this year is the demand that will be |
made upon the peoples purse by the
United States treasury Representative !
James w. Good, chairman Of the apprO- |
priatlOns committee of the House, has |
estimated that the expenditures Of the |
government for the fiscal year from |
July 4, 1920, TO June 30. i99i-wholly |
apart from any assistance 10 the rail
roads-wlll total Sj,250000,000. In each
of the four years from 1918 on, rev
enues Including postal approximated
just slightly over Sl,0OO0OO,0OO Rep
resentative Good estimates that there
will be a deficit in the general fund OF
the treasury on June 30 1920 OF S3,-
i56O00,0OO and points to the possibility
OF a treasury deficit on June 30, 1921,
Of S2,S70000.000.
Such a deficit can be overcome in
only three ways: taxes will have to be
raised, the government will have to
borrow extensively, or a policy Of
eoonOmy-an elimination OF wasteful
eXpenditure-will have TO be adopted.
Which shall IL be2 II Congress does
not retrench, the funds will have to
be provided Borrowing would not be
easy. A great volume OF war bonds is
still unabsOrbed. War issues are now
on per cent. basis. With the war
over II is felt that the policy Of the
government should be TO decrease the
national debt rather than to increase II.
But what about taxation2 Can we
look ahead TO taking nearly s90OO,0OO,-
BOO in taxes from industry In the next
fiscal year-twice as much as taxes in
The height OF the war period? This is ;
4 question entitled to the immediate |
and serious consideration, not alone of
in Congress, but Of every
business man throughout the cOun-
Try who can make his voice heard. I'm
less appropriations are contracted, we | I
may face a burden OF taxation in the
next fiscal year even more crushing ]
han was that OF the war period.