Evening star., 1924-03-15
CAN. YOUR TAXES BE CUT?
"A Series of Articles on the Cost of Governments;
/ -. Where the Money Goes, and Why. = -.
BY JOHN F. SINCLAIR,
Author Of Can Europe Hold Togetherr'

~ Inc dNEFhBe iHuIViuudi. ~ Ihc
Ereal COST of the war was metconly by
asreducffoTi III Consumption
Every person who has been
through the experiences. of the last
war should know and understand
that such deprivations and hardships
would not have been an !ota enlarged
/ If the entire money cost Of the war
had been raised by taxation and not
a cent had been raised by! borrow
So if ,tha entire cost of the last
war for the United States had been
paid out OF current taxation instead
of only 81 per cent az raised; the
immA1iate cost to the people in real
| wealh would have been no greater
and there would have been no federal
war debt of $4,000, 100000 to pay off
after the war was over.
! i want to make this point especially
clear. The government of the United
States by eraising 60 per cent of the
money necessary for war by. gov
ernmental borrowings only added to
the. future tax burdens without re-
ducing the immediate real cost.
But - ask how IS such thing
possible. If the government had
doubled his taxes. would Mr. Citizen
not have less money with which to
| buy current necessities and so less
purchasing power? Such question
i'ovsFiooks the change in the value Of
!; money which accOmpanied-andm must
always accompany-large-s gov
1.-The Individual taxpayers had to give
3Oyer. to the government fewer dollars
tfhan IL the war had been entirely
,financed by taxation. But the dollars
(which he had feft could buy less be-
cause of the higher prices accompany
ing the imitation of credit and cur
| ren4y, which in turn was caused di-
irectly by government borrowings.
4 War Shrnnk Wealth symbols. o.,
So the Iast war. from the stand
point of. all .. government finances,
| the real wealth destroyed, but be-
cause it corrupted and demoralized
the symbols of evidences Of wealth.
( the currency and credit OF the nation.
Our country was no exception.
J When the ratio Of the volume of
credit and currency increases faster
than the ratio of the volume Of goods
produced prices rise, money falls in
value and imitation sets in. That is
what happened throughout the world
IN the last war period. 1t happened
! also In the United States. Result
money, the medium of exchange
shrunk In value. 1t just withered up
so that 500 in 1913 became wo-th
, only $4S in purchasing value in 1919.
, I, ilaf.a anhation Is grand larceny by the
people and hands the loot over to to
another. class. 1t always works the
same way. The greater part of the
worlds troubles today are directly
Que to the evils of imitation We
oorlo~eo go per cent of our war
crime OF imitation.
Interest on the public debt grew
from s24 $4,000 In the fiscal year
year 1928. For every dollar spent by
the United States for interest in 1918
sf2 was needed in 1923.
our public debt charges in 1929
Were more than twice the cost of the
| whole federal government I'm 1900 II
was more than one and one-haIf times
| the total cost of the entire govern
ment as late as the fiscal year 1917.
ss.oo0.oOO n Day Interest.
Since the beginning of the fiscal
year 1920 the people of the United
States have had to pay out approxi-
mately 100000 q day for public
| debt charges This Is more by ap-
proximately s377, ,O0o.0 than the to-
tai spent on the Army and Navy to-
! gether for 1923. Yet it is really a
war cost-one of the tangible things
We got out of the war.
! On June so. 1916. our interest bear.
ing debt was s971.562. 900. On June
80. 1923 Il had reached S22, 2,007 900 900.
| The interest charges had grown dur
ing the same period from s23,0S4, 900
! to $1,055.000,000.
For every dollar spent by the fed
J eral government in the fiscal year
/ 1923 this item of interest alone took
| 25.5 cents. But this in not the whole
| story. Another S402,S5 must be
added to the public debt charges as
F, payment on principal Together (for
| interest and principally over Al cents
| out of every dol ar which the govern
| ment of the United States spent went
| for this item of debt charges. 1t is
| easily the largest single item in the
| cost of the federal government
| USpyri ght, 1924, in the United States and
| Great rita.n. by the North American
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! Tomorrows Can the Debt ChnrSes