The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1935-04-16
NYE PROGRAM
UNDER FIRE OF
CEN. JOHNSON
War Profit Plan Menace to
Civilian, Asserts For
mer NRA Boss.
BY HUGH S. JOHNSON

WASHINGTON, April 16.-There
is g lot C. muddy thinking on the
difference between the McSwair.
plan for snatching all profits FROM
war and the Nye plan to abolish
practically all profits IN war
Newspaper comment and even some
men IN Congress clearly have not
grasped this difference.
Both plans claim to prevent war
profits and check war initiation. The
Nye plan let's war prices rise as
they Will, but takes all profits in
excess Of 6 per cent on capital and
half Of all below per cent. 1t is
true that it makes a gesture toward
price fixing. but only TO condemn it.
The McSwain plan prevents all
rise in price, taxes 100 per cent of
all waT profits in excess of peace
profits, and boosts all income taxes
to the point of diminishing returns
Errors in Thought, He Says
The Nye plan is based on some
perfectly plain errors of fact and
thinking.
1t wrongly says that high taxes
prevent initiation. Now, tax is an
element of cost. cost is an element
OF price. High taxes make high
prices. High prices are initiation.
@. E. d.
The Nye. plan is based on a state
ment that borrowing by our govern
ment without high taxes gave us a
far greater initiation than the allies
because they taxed to the bone.
That basic statement is 100 per cent
wrong. Our war initiation was 2l7
per cent; 80 per cent of it occurred
before we did any war borrowing.
only 30 per cent of it occurred
after We began the biggest borrow
ing in our history.
The allies initiation was 369 per
cent, or 70 per cent greater than
ours. We repressed initiation by
price control which the Nye plan
says is no good, but which actually
reduced initiation here wherever it
was used.
Sees Fatal Faults
There are fatal faults in the Nye
plan. 1t let's prices go as they Will,
hoping to recoup increased cost to
the government by tax. But our peo-
pie will have to pay constantly soar
ing prices. They will recoup moth
ing. The income Of all classes is TO
be taxed to the bone.
That will destroy real wages and
punish the civilian population as it
has never been punished in any
war. Civilian morale in war is as
important as a military morale.
1t was admitted by the prepayment
of the Nye plan that its limitation
Of personal income to $4,000 a year,
heavily taxed, will destroy employ
ment in domestic and personal serv-
ice. His comment of this was, in
effect, That's just too bad" There
were $4,000 breadwinners en-
gagged in that work in 1890. They
are largely people who know no
other way of earning a living.
Worst of all, industry can't be
modified on some fraction or all of
per cent earnings on capital. No
trustee of stockholders money could
run any business at that rate, much
less take on the added rise of max
ing new, vast, and unusual war pro-
duction. 1t would certainly paralyze
our defense at the very moment of
attack.
There Is here an abuse of slogans.
The McSwain slogan is Take the
profits out of war" Masquerading
under that slogan. the Nye plan at
tempts to destroy the profit system
in war.
Copyright, 1885. by United Feature S. d.
cate, Inc. All rights reserved. Reprod.c-
ton in whole or in part forbidden