The Brattleboro daily reformer. (Brattleboro, Vt.) 1913-1955, 1921-10-15
BY DAVID LAWRENCE.

Dy treasury.
BY DAVID LAWRENCE. II
Especial Despatch to The Reformer)
Copyright 1921. 49,. n
WASHINGTON, Oct. l5.-The first eff
fects of the unscientifc or rather dis
iointed way in which the tax problem
has been tackled in congress Is being
felt by the executive branch of the gov
eminent. 1t leaked out today that after
selling during three weeks in September
more than SlOO,00G,00O worth of indus
trial and railroad bonds held by the
treasury, the sales stopped abruptly as
| soon as the ~-ricultural bloc in the
senate forced the Republican leaders to
| agree to higher sIrtaXes amounting to
about 90 per cent?
Money that had been expected would
| flow into business and cause reopen
| ing of factories and a revival of eX-
port trade has sought other channels OF
| investment. The trouble Is that IN CON
2ress 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 upon smaller in
comes. - The argument was made that
wealth should be taxed heavily.
An Economic Question
But as government officials point out
| it is not a question of discrimination be
tween large and small incomes but
| broad policy of economics. Business en-
| terprises have been held stagnant, initia-
4 tive has been repealed. and the country 5
| reconstruction retarded by the vicious
| character of the excess profits taxes
| both Republicans and Democrats admit
| n the short SDaCp
1 of two weeks a demonstration Is being
| given of a parallel emergency-the i'm
| position of taxes so high that it will
| keep capital from being used in industry
| Officials of the administration insist that
unemployment will continue unless
| means are found to tempt persons with
money to lend it to business enterprises
| that need expansion and Developments
| Indeed it is urged that the purchasing
| power of labor will be diminished If the
| business depression is not relieved by the
easier flow of capital from invisible to
visible. Thus agriculture would suffer
along with other retail wholesale bust
| neSses When surtaXeS are high, the tax
| exempt bonds are gobbled up. City and
municipal bonds are tax free. Under
| the federal constitution, congress can't
/ touch LEGAL securities. Accordingly, bill
/ lions of dollars are tied up IN municipal
bonds that ought to- be available to pri-
vate business.
Just Seeing Real Effects 'a #
The full significance of the agreement
made by the senate leaders last week to
make the surtaxeS about 80 per cent is
beginning to dawn on the administration
| which is likely to express itself very
strongly on this point before long The
house bill made the surtaxes about 81
per cent which with the addition of eight
per cent normal tax made the total fed
/ -, too 4G
considered high but the fact is the gov
| eminent found a ready market for its
| securities when that figure was under
/ discussion. The moment the proposal
was made however to go higher-to a
| 30 per cent surtax plus an eight per cent
normal tax-the saturation point was
/ evidently reached-men with money no
longer considered the real trade bonds Of
| fered for sale by the government worth
/ buying when other taX-eXempt securities
| were available. .-.,a-
Harding VIII Speak
| The treasury department had fully OK
| pected to dispose of S2J0,O00.0OO worth
| of railroad securities. Everything went
| fine during the recess of congress but the
new tax program has knocked the bot
tom out of the governments aspirations
And the awkward part of the situation
is that the executive branch of the gov
| eminent which is trying hard TO bring
about a business revival is handicapped
b. the attitude of members of congress
who are mostly concerned with bill
that looks well in print, a measure that
seems to relieve the moderate incomes
| but 'soaks'' the people with capital. The
/ viewpoint of the former is economic. the
Halter is purely political President
/ Harding alone can reconcile the two ant
before the tax program is finally com
pleted his interpretation is expected $;
!. that a bill may be Trained not for the