The daily times., 1921-10-15
THE AGRICULTURAL
BLOC STOPS SALE
OF RAILWAY BONDS
DEPRESSION STILL ON
I UEPRESSION STILL ON
Money That Had Been Ex-
pected to Flow Into Business
Has Sought Other Channels
of Investment, Tax Problem
Was Tackled in Disjointed
Way by Congress.
By David Lawrence. }
Copyright, 1921, by The Daily

Copyright, 1921, by The Daily
Times)
Washington, Oct 14.-The first eff
fects of the unscientitic or rather dis
jointed way in which the problem
has been tackled in Congress is be-
ing felt by the executive branch of
the government 1t leaked out today
that after selling during three weeks
in September more than 100000
600 worth of industrial and railroad
bonds held by the Treasury, the sale
stopped abruptly as soon as the agri-
cultural bloc in the Senate forced the
Republican leaders to agree to higher
surtaxes amounting to about SO per
cent
Money that had been expected
would flow into business and cause
eopening of factories and a revival of
export trade has sought other chan
!nels of investment. The trouble is
that in Congress the feeling prevailed
that the higher surtaxes should be
imposed in order to make up for
revenue that would be lost through
the removal of other taxes falling up
on smaller incomes. The argument
was made that wealth should be taxed
heavily.
| But as government officials point out
| it is not a question of discrimination
hrrt
a broad policy of economics. Busi-
ness enterprises have been held stag
,,nant, initiative has been repelled,
and the country's reconstruction re-
excess profits taxes-bOth Republi-
cans and Democrats admit this. Now
however, in the short space of two
lweeks demonstration is being given
of a parallel emergency-the imposl-
tion of taxes SO high that it will keep
capital from being used in industry.
Officials of the Administration insist
! that unemployment will continue un-
less means are found to tempt per-
sons with money to lend it to busi-
iness enterprises that need expansion
land development. Indeed, it is urged
that the purchasing power of labor
will be diminished if the business
i depression is not relieved by the
easier flow of capital from invisible
Ito visible use. Thus agriculture
would suffer along with other retail
taxes are high, the tax-exempt bonds
ARE gobbled up. City and municipal
bonds are tax free. Under the fed
Ieral constitution, Congress. can't
> billions of dollars are tied up in mum
4 icipal bonds that ought to be avail
fable to private business.
The full significance of the agree
: tment made by the Senate leaders last
week to make the sur taxes abont
fifty per cent is beginning to dawn
4 on the Administration which is likely
Ito express itself very strongly on this
4 point before long. The. House bill
made the surtaxes about 80 percent
which with the addition of eight pei
icent normal tax made the total fed
eral tax about forty per cent. This
too is considered high but the fact
is the government found a ready mar.
, ket for its securities when that figure
was under discussion. The momen,
the proposal was made however tt
go higher-to fifty per cent sur
tax plus an eight per cent norma
tax-the saturatior roin: was evi
IDENTIFY reached-men with money NJ
longer considered the railroad bonds
offered for sale by the government
worth buying when other rax-exemp
securities were available.
, The Treasury department had full,
= Iexpected to dispose of s25O,000,OO(
worth of railroad securities. Every
! Continued on Page Six.)