Martinsburg W Va evening journal. [volume] (Martinsburg, W. Va.) 1913-1920, 1920-04-03
OUR INCOME TAX FORBIDS
FOREIGN INVESTMENTS, SAYS
K I'm

FOREIGN INVESTMENTS, SAYS
KAHN,
stephen Lausanne, editor OF lie
Matin, Paris who Is well known In
the United States. publishes in his
paper the following interview with
Otto II. Kahn:
Among the great leaders Of
American finance, Mr.. Otto II.
Kahn, who is our guest for a few
days, Is certainly one of the most
interesting. Less of a theorizer
than Vanderlip, more of European
than Dawson. as humane as Hoov-
er, he speaks at one time the Ian.
guage OF sentiment and of business.
| asked him to tell the French
public plainly and simply, through
the Matin, the reasons why Amer
lea could not or would not come to
the financial assistance OF Europe.
q am surprised TO be called on
for the reasons" said Mr.. Kahn,
for they are apparent to the most
inexperienced eye. ! might tell YOU
that America has herself war
debt exceeding fifty million dollars;
| might tell YOU that she has like
wise to meet a serious railroad
situation whose solution demands
the immediate p9yment by the ma
ton Of an indemnify larger than
France had TO pay in 1871. | might
tell you that in America there are
no savings nor surplus, so that
treasury statement revealed in 1914
that among 11000O,000 Americans
only 100000 were security holders.
But all this is secondary, and per-
haps debatable.
"A fact that is not debatabe, but
which is significant above all others
is that Americas financial policy
renders 1t impossible for her to par
ticipate in the industrial develop
ment of Europe, or in European ma
tionai and International loans. 1t
is not a question of sentiment but
a question of arithmetic.
"What is the principal tax that
weighs down the American capital
list? The income tax which in the
United States goes as high as rs
per cent of the taxable income.
But this eXorbitant tax is some.
what lightened by laws STIMULATING
that municipal. federal and farm
loan bonds are exempt from taxes
Of all kinds, except inheritance
taxes.
The result is obvious. There
are more than ii billions of these
securities in circulation in the
United States, And the American
public is buying them more and
more. because even if they yield
only 4 or AZ per cent they actually
bring in more than the best gov
ernment bonds of Europe at 7 or s
per cent which are taxable.
AN example will enable you TO
put your finger on the difference.
Some of my friends tried recently
TO interest the biggest fnanciers in
America-those that you call bill
lionaires,-in a European industrial
enterprise guaranteeing return of
l. per cent. Mr.. Rockefellers re-
ply was identical with Mr.. Wander
bits:
" Nc. As l shall have to pay 76
per cent income tax on it. the net
gain is only 3 per cent l prefer to
buy New York City bonds. tax ex-
empt, which net me per cent"
But | objected to Mr.. Kahn,
Il remember that in the midst of
the war more than twenty million
American citizens subscribed some
fifteen billion dollars of Liberty
bonds, yet those bonds were only
partially exempt"
Exactly replied Mr.. Kahn.
But hose twenty million citizens
were not making an investment
Fhey We're doing an act of patriot
ism"
These remarks We're worth say
ing and worth repeating. 81 do not
Judge, | merely state the fact"
said M, Kahn. Nor shall we judge,