The New York herald., 1920-01-14

be extended through 1920 and that some
adequate provision to settle the interna-
tional exchange rate must be applied and
that very quickly.
MIR. Kahn AssaiIs High Income Tax.
Otto H. Kahn deplored the high income
taxes on persons of large incomes in this
country. He said that because of these
high income tax rates wealthy persons
had little inclination to invest their money
in foreign securities or any other sort OF
securities unless they were tax exempt.
Mr.. Kahn said in part
"A tax which is regarded and accepted
as reasonable is likely to bring at least as
high a yield as a tax which those upon
whom it falls feel justified in regarding as
grossly and needlessly excessive An in
come tax, greatly increased, Of course,
over the rates prevailing before the war;
yet keeping within the bounds of modera-
tion, would produce little less revenue than
the existing tax-and with far less
economic disturbance and hindrance to
the country.
Governmental greed, just like private
greed. is apt to overreach itself. Many
transactions on which those concerned
would willingly pay moderate tax are
now simply being laid aside and not af-
fected at all because of the intolerabje
taxa tion to which they would be sub
jected. Others are being concluded in an
roundabout. unsa tisfactory
way, so as to avoid the full burden Of the
tax. The result in either case is loss Of
revenue to the government and an impedi
ment to business.
For a country as immensely rich and
intrinsically as little burdened, relatively,
as ours, 1t Is really not problem of great
difficulty to raise by taxation the sum
which the needs Of the occasion require.
"a small committee of well informed
men of different callings. approa ching
their task free from political, social and
sectional bias, would not find it a formid-
able undertaking to evolve a measure
which, while fully responsive to the die
tates OF equity and social justice. would
produce no less revenue than the taxation
now in force, and yet would be far less
burdensome upon the country less ham,
pering to enterprise and less productive Of
economic disturbance and dislocation."
Mr.. Cravath said:-"There seems to be
but three ways of securing the enormous
sums of money, running into billions of
dollars. hat must be raised to finance
the great excess Of our exports over our
imports, which must continue until the
rest Of the world has been restored 20
normal activity.
"One way is through the aid Of the
United States Treasury on a large scale.
which would probably mean new gov
ernment loan. The second way would be
for Congress to so amend our tax legis-
lation as to make 1t possible for large in
vestors to buy bonds. The third way is
to devise means Of reaching the small in
vestors who are not prevented by the in
come tax from investing in bonds Many
methods of reaching these investors have
been considered; none have yet been
adopted
Mr.. Houston said. in part
Hoover has cleared the air by his ring
ing challenge for Europe to go to work.
England heard it and instantly disclaimed
Sir George Paish and his idea for stag
gering loans. America heard 1t and Secre-
tary Glass has asked Congress to make
available at once, as Hoover suggested,
$50 ,0D,0 900 of the Grain Commissions
funds for European relief The reason
the challenge has been instantly needed
was because II rang true-true with the
notes of things that are eternal. Men
must live in the sweat Of their brow
Work must be undertaken. Neither credit
nor charity can take its place. Work of
both abor and capital is the basis for pro-
duction. Capital must do its work, both
in the form OF investment and of credit.
But it should be private capital secured
in broad. democratic offerings. just as the
Liberty loans were placed. Undoubtedly
securities, safe and attractive, can be Of
fered and sold to the 200Oo.000 American
investors who are now bondholders. Then.
as Henry p. Dawson pointed out some
months ago, the various industries can be
counted on to help finance their foreign
customers by purchasing their securities.
These securities can be pooled and made
the basis for debentures. issued by invest
ment trusts. and these debentures can be
sold here; in some cases. doubtless, the
guaranty of the country from which they
come should be behind them.
But the financing should be private
financing. in the main, and not public
financing. Industry should regain the
power to walk alone AT the earliest possi-
BILE moment or II will lose the power
Right here is the great danger Of Social
ism. We have been too quick to sur
render individual initiative to the govern
ment. II we continue doing 1t we will
soon find ourselves on the way to Social
ism and ultimately to Sovetism.
"It is time FOR courage in facing
facts"
Wants America To BE Thoug ghtfuI.
Mr.. vanderlip reiterated the assertions
he had made nine months ago in predict
ing that Europe is on the verge of a
catastrophe Such an event. he said, would
necessarily have an adverse effect on
America He suggested no remedy, but
declared merely that Il was time the
people of America began to take counsel
among themselves over the situation.
ut is possible" said Mr. Vanderlip.
that we may face breakdown in ex-
changes to which the present situation
may be regarded as very tame indeed.
IL the condition comes, then we are faced
with disaster. We must take action. inn
portant action. II we don't, the chaos
that is going to result In Central Europe.
and possibly further west, Is going TO be
beyond description.
You must wake up to the seriousness
or the situation. II is the most serious
situation the world ever faced. We've got
1t on hand now, and it's time to waqe up"
Mr. Vanderlip said that the fundamental
trouble with European credit at the pres
ent time is that all the countries there
are running with expenses greater than
their incomes. They are marking up the
deficit. part at least" he asserted. "by
running their printing presses. That. in
fact, Is the only occupation In Europe
that is working overtime. Now, we see
that such condition brings a new ele-
ment into the exchange situation. viz, the
depreciation OF the currency itself"
Mr.. Vanderlip declared that before the
nations of Europe could hope to obtain
much credit from America they must first
~ Ia raNf. thait b,,a