Evening star., 1923-11-11
u. S. BUSINESS PASSES
INTO CALMER WATERS
Federal Reserve System Plays Large
Part in Plotting Manufacturers
Through III Crisis.

Board.
The Federal Reserve Board saw the
stump coming along in April and
aay; ISZO. about eight months before
| It hit. The board began to prepare
| Tor the depression by developinp the
resources of the system and warning
the banks to be ready to carry the
manufacturers and dealers who were
! overloaded. so that they could read
| Just gradually and not all at once
Ihe Federal Reserve Board thus held
the situation together and gave in
dustry time to work out it's salvation
The federal reserve system reached
| 1920.
Practically ali .assses Of manufac-
turing in 1920 haA a net income after
neducting the tax. Thern was a slump
IL rubber and rubbs.- goods in 1920
that's all: but In 1921 we have just
the reverse-only three classes show
ed net income. textiles and textile
products. printing and publishing and
stone, clay and glass products
All of these figures check up CLOSELY
with the census of manufactures for
1921. All manufacturing corporations
operated at 56.8 per cent Of capacity
in 1921.
Taxes Collected by U. 8,
Now it must be remembered that
the manufacturers in both years
1920 and 1s21-paid heavy portions
Of the collections under the income
tax law. The manufacturing CORPORA
tions alone in 1920 paid 349 per cent
of all the income and profits taxes
collected byothe federal government.
In 1920 the total taxes collected from
corporations and all other sources
was s2,700,28S.329, of which the manu-
featuring corporations paid s944,s6o,-
573. In 1921 the total taxes collected
was only about one-half the total
in 1920. or s1.420. 0.962,53s; while the
manufacturing corporations (because
of their serious falling off in incomes)
paid only little over one-third Of
what they did the year before, or
S351,77e.249.
Now there is a moral behind all
this as seen by Fed eral Reserve Board
officials, by administration and busi-
ness leaders and by the thinking men
In Congress, who search out the
causes and effects and strive to legis-
late so as to safeguard the public's
interests.
1t does no good to let folks know
now what a narrow squeak this coun-
try had in 1921. unless the experience
teaches something. The lesson found
in these statistics is something like
this:
Lesson to BE Learned.
The popular conception Of a "rich
manufacturing corporation" that
should be made to disgorge is a mis-
conception, because If all of its saw
ings goes for taxes it will have moth
ing for increasing the plant and i'm
proving machinery by which to de-
crease price of product. While on the
other hand. as the counter PROPOSE
ton, if it has bit Of a surplus it
can tide over these years of depres-
sion. If the tax collector is always
standing around to grab whatever
net profit there may be the industrial
activity of the country is declared
throttled. On the other hand, If you
let manufacturing industry expand
you Increase the wealth of the coun-
try, and the central government
prontS not only by general prosperity,
but directly through increased taxes
paid on a greater income by these
corporations
A thought should be given, too, to
the human side of the question.
Groups of men will not invest largely
in manufacturing enterprise unless
they see reasonable hopes of profit
If manufacturing plants are not es-
ia blished and maintained, where will
the people work? The profitable con-
tinuation of manufacturing CORPORA
tionS is even more essential to the
many who work in the factories than
to the man who merely invests his
capital in such enterprises. For one
it means bread and butter and the
necessities of life, for the other
profitable investment. Both must CO.
operate for their common interest,
and the government must cooperate
by refraining from taxing beyond
what the net income warrants