The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1921-09-24

months of January and February the
railroads did not earn their operating
expenses. The Eastern lines immed1-
ately began to reduce their forces.
The Santa Fe, however, hoped thati
this action would not be necessarily
and continued with the full force upl
to the month of June when the conf
pany found it necessary to lay off a.
large number of employees in order toi
protect the property and its invest
ment. Any business man understands
that when his monthly receipts will
not pay operating expenses it is time
to call halt somewhere in his ex-
pendltures. 1t is the cost of doing
business in the payment of wages or
the purchase of material and supplies
that prevents a reduction in the price
of the article which you have to sell.
This is true in the handling of trans
portation the same as in mercantile
lines. 1t was necessary for the rail-
roads to stop buying large supplies as
they did not have the money to pay
the bills and on this account many or
/ the industries of the country were
crippled and necessarily had to re-
duce their forces. Business having
revived to some extent many of the
men laid off have been taken back.
1t seems TO me the financial con-
dition of the country has had more to
do with the slowing up of business
than any OF the other reasons which
have been given by men of affairs In
the first place, the cost of the war was
out of all reason but it had to be won.
The government has loaned to foreign
countries up to this year about ten
billions of dollars. The bankers of the
country have floated loans to foreign
countries amounting to five billion dol
lars. That money was needed for de-
velopment here, but it seems neces-
sary to help the countries in Europe
which were so deeply in debt and had
no money to go ahead and rebuild
their economic condition. The trouble
with us today is that We are short of
capital to be invested along industrial
lines; interest rates have been too high
and industry had not expanded.
Too Many Tax Exempt Bonds.
Money is now getting cheaper for
| commercial lines and for short time
! loans but not for permanent invest
ment. Capital is very shy and has
| been scared away by foolish taxation.
We have issued too many tax exempt
! bonds and a large amount of capital
has been absorbed in such investments
! for safety, overlooking the fact that
the value of industry and its earning
power would more than offset the pos
sible taxation. 1t is claimed that the
! government has issued tax exempt Sc
curities amounting to twenty-four bill
! lions of dollars and that we have state,
county and city bonds exempt from
! taxation, amounting to nearly ten bill
lions.
There is no doubt but what we
should have the internal improve
ments which come from the issue of
municipal, county and state bonds,
/ but the labor is only employed a few
months in their construction. If this
capital is put into industry, such as
transportation and manufacturing,
which employs labor continuously,
| then you have a development that is
permanent and business cannot be ex-
banded in any better way, but when
! the investor along industrial lines con-
siders that the earnings must be shown
as income and will be taxed as excess
profits he will hesitate to make the
| investment for the reason that he
knows that some of the earnings
should be put back into the property
if it is to be a success and expand with
securing additional business. The
value of a property or industry is
determined by it's earning capacity and
not by the amount of money invested.
1T is very important that every bust
I,Ress man should anticipate the de-
mands of the future and then should
control his expenditure of money ac-
cOrdingly along any line of business.
feel sure that we are going to solve
the many problems we have to meet
and that proper economic condition
will De developed for all lines of
trade