Evening star., 1941-01-08
Curb on Non-Defense
Industries Urged
Advocates Heavy Toxes
Now to ForestulI
Overexpunsion
To the Editor OF The Star:

Ihere is no question Dut tnat tnere
will be tax measure started early in
the present session. The need is i'm
| perative. The need is for a tax measure
which will raise the necessary revenue
to finance a large portion of the defense
| program without hindering the program
itself. In fact the need is for one which
will actually aid the program and aid
in keeping our economic system in such
condition that we will be able to solve
| the problems which will exist when the
defense program is finished.
Such a tax is not an unobtainable
| ideal. 1t is something which can become
an actuality and something which must
| do exactly those things outlined above
| if our economic system is to continue
| in its present form. 1t is becoming in
| creaSingly obvious that it will not be
possible to weather a war initiation boom
and a postwar depression and still
| have our economic system remain intact.
We must remember from the start
| that in the defense industries there
| is going to be a need for expanding
| certain plant facilities so as to eliminate
the bottlenecks which are bound to
exist. But we also must recognize that
the greatest threat to the whole defense
| program is the unnecessary and I'M
controlled expansion of the non-defenSe
| industries. One cannot stress that point
too much because it is very apt to prove
the most troublesome one with which
Congress and the defense administration
will have to deal, and one which is apt
to be overlooked until it is too late to
do anything about it. There are going
| to be very strong forces working on
| both Congress and the defense admin
| istration TO allow that very thing to
| take place. We are going to hear a
! lot about the need for small industry
| to grow, about the need for reserves to
| tide business and industry over the post
war depression, and for the need for
large profits and expansion so as to
! put business and industry in a healthy
condition to enable it to withstand the
| defense needs.
| If Congress listens to these pleas it
surely will find itself in the midst of a
real war boom with non-defenSe in
| dustries competing with the defense
industries for materials and men to the
| point that the defense program will be
| very seriously impaired. There is no
! question but that during the World War
! much of the trouble with which the
defense industries had to contend was
| this competition of the nom defense
! industries, and we must prevent this
very thing if We are to escape a war
! initiation. We are hearing a lot about
| monetary controls to prevent imitation
and probably will hear much more about
| it in the future, especially if we allow
! the non-defense industries to expand.
But we must remember that by far the
most important cause of such initiation
is the unnecessary expansion of the nom
| defense industries and that unless this
is prevented any monetary control will
not amount to very much and that if it
is prevented the need for such monetary
control will be very slight if any at all.
When the defense program is over
the real job is going to be to find a
profitable use for the factories that are
being built to produce the defense ma
terials and finding employment for
those engaged in defense production.
! If we allow the non-defense industries
| to expand it is only going to make more
factories and more people to find en-
| ployment for when the defense program
| is over and only add to the cost of the
| defense program both in the form Of
| higher prices which the Government
will have to pay and in the lower stand
ard of living to the public in general
because of the high prices of an in
| f1ation boom.
The most effective method of pre-
venting the expansion of the non-de-
fenSe industries would be to impose a
stiff tax upon the savings which are now
idle and which are seeking investment
and stiff tax upon the corporation
| profits and individual incomes from
which these funds will come during the
defense program. If the Government
takes the money in taxes it just won't
be available for investment.
Essentially, we cannot postpone pay
ing for war preparation. 1t is actually
question of supplying goods and serv-
ices which must be supplied through
the labor of human beings. II we borrow
the money to pay for these goods and
services it is merely question of giving
those who buy the bonds an opportunity
of saving the profits made out of the
war preparation. The whole story is that
if there is money available for borrow
ing there is money available for taxation
and in the long run our problems will
be greatly simplifed if we raise the
money for war preparation through tax
alton.
If those who have money available
for loans or new investments could see
their own best interest they would under
stand that in the long run their best
interest could be served by having that
money taken by taxation instead of hav-
ing it borrowed, or instead of having it
invested in plant expansion of the non-
defense industries. They would realize
that they are the ones who own the
factories which will stand idle once the
defense program is over and should
realize that small profits now would
be much better than large ones if those
small profits could be made to continue
after the defense program is over.
Those who have a sincere desire to
see our present economic system con-
| time should pet behind Sllch a tax nro-