Evening star. [volume] (Washington, D.C.) 1854-1972, 1940-09-18
More Borrowing,
Rather Than Taxes,
Planned for Defense
Businessmen, New Deal
Economists and Labor
Group Hold Conference
By AL TOOMBS.

4 sac, 900, 900 900 borrowing program
thus stimulating business so Gov
eminent tax receipts would be
tripled within five years-was before
a group of the countrys leading
bankers and industrialists today.
Outlines of the plan were ad-
Vanced last night during a round
table conference at the Mayfower
Hotel. attended by the businessmen,
New Deal economists and represent
atives of labor
, The Government economists
agreed generally with the estimate
that $4,000 100000 would be need
I'd for defense expenditures during
the next five years. They held the
view that this money should be
raised by borrowing rather than by
taxation.
Many of the businessmen held
the program should be financed by
taxation on their earnings. They
said they did not believe it right to
leave this heavy debt for future
generations to pay.
Administration Fears Slump.
The Government group, however
held that imposition of heavy taxes
at this time would retard business
recovery and hold down the eX-
pected increase In national IN
come. Their theory was that the
money should be borrowed and
spent bv the Government, the IN
creased tax Weld going a long way
toward balancing the budget.
To back this contention, figures
we're introduced which predicted
that the national income by l943
would increase TO over 100 billion
dollars. This income would yield
the Government some II billion
dollars in taxes, it was stated.
This wear. it is estimated, the
national income will be around IS
billion dollars. with the Government
getting five billion in taxes. BY
Increasing the national income over
100 billion year, the tax yield can
be tripled under present rates.
Experts estimated that the ma
tional income next year would be
80 billion: III 1912 it would be 90
billion and in 1943 would be 100
billion or more. BY l945, the tax
Weld would be great enough to sup
port a -billion-d dollar Government
budget.
Conference One Of Series.
The round-table conference was
- hoj,1o Snrp6
M w. Harrison. editor and pub
Usher of the Savings Bank Journal.
To it were invited representative
of large banking houses. New Deal
ers of all shades Of opinion and
representatives of the large labor
organlza lions.
No attempt was made to reach
conclusions, but all points Of view
on subjects set forth on carefully
prepared agenda were invited. The
general subject for discussion at
last nights meeting was Exploring
the Financing Of, National Defense
and It's Consequences" ~ ~ :
Among the New Dealers who par
ticipated were Leon Henderson of
the National Defense Commission.
Jerome Frank, chairman of the Sc
curities and Exchange Commission,
Lauchlin Currie. assistant to the
President; BENJAMIN v. Cohep Of
the National Power Policy Commits
sion and Assistant Secretary OF
Commerce Richard Gilbert.
Representative of business includ-
ed Philip A. Benson. president OF
the Dime Savings Bank of Brook
lyn: B. J. ButtenWieser of Kuhn.
Loeb & Co: Emmett F. COnnely,
president Investment Bankers As
ISOLATION: T. jefferson Coolidge.
chairman United Fruit Co. and
Robert L. Garner. vice president of
the Guaranty Trust Co.
Points of View Reconciied.
The points of view were widely
divergent on most questions, but be-
fore the nine-hour session was over,
the lions and the lambs were lying
down together. The method of
financing the defense program was
the first question to develop the OPP
posite views of government and
business.
Some unanimity of opinion de-
Veloped when taX-exempt securities
were mentioned. Almost every one
agreed that this source of Govern
ment income should be tapped. Sim
ilarly, there was a general opinion
that income taxes on middle in
come groups-from $4,000 to s25 900
q year-could be stepped up.
The Government economists OPP
posed imposition of additional taxes
on consumers at this time. They
further insisted that it would not
be possible to effect any great econ
omies in Government expenditures
, for purposes other than national
,, defense-a view with which some of
the businessmen agreed.
All agreed that there would be
no difficulty in borrowing money to
, finance the arms programs through
, baby bonds and long-term bonds.
. It was predicted that the defense
, expenditures will bring great pros
perity. cutting unemployment by
! probably five million. increasing
! living stapdar6s-and nriceS