Milford chronicle., 1942-08-21

. DNteena Cnecks ana Tax Bills OF Every
Ineltiduali National And international
Problems lnssparabIe From Local welfare
: Britain has had forced saving
|! for over year." says Business
Week. Canada just broke dow
and put It in the new budget. W.
are going to have it soon. It's /;
question when and what sort. Sew
eral agencies are already working
quietly on blueprints." ~
The Government, in both its leg.
islative' and executive, branches
has so far shown remarkable abil
ity In avoiding, coming 5. to grips
with the forced savings issue. Sec
retary Morgenthaut has, said thai
he hopes that voluntary sales Of
War Bonds will prove adequate tc
absorb excess consumer income
For the most part, Congressman
have looked upon the f6fced saw
ings idea as a political ogre OF
horrible mien, which might cost
them votes next November. How
ever the bulk, Of economists seem
to be convinced that, whether for
good or i'll, some type of forced
savings will eventually have to be
adopted.
The arguments in behalf of fore
ed savings are simple enough. This
year, the national income is reach
ing an all-time high, due to the
S67 900 100000 which is being spent
for war production. The pockets
of the people, especially those in
the lower income brackets, are bet
ter lined with currency than they
ever have been. before. At the
same time, the supply of goods
available to civilians is steadily
diminishing and it will, keep on
diminishing until the war ends, un-
less an unlooked-for production
miracle occurs. The combination
iofrmore money and 'aesss goods adds
up to but one thing: imitation Even
today despite government; pyiee
Ceilings and coiItfols, an luminous
eblRck market, p Slnsilar to the .Bp
ropean black mafket{ ID growing
In this country. hUiiscrNpAlous mem
ara b66tleggfng Stirss, sugar. met
ais and other Eontrolied itenis pre-
l'cisely as liuuof used to Sbe boot,
legged 10 the .pFohibf ftfoa era and
they are demanding and receiving
extortionate prices. A ten-dollar
tire, for instance, will bring $50
and often more in the black market.
Economists of all the schools
agree' that imitation can be pre-
vented only If some means is found
to absorb and make inactive
large part of the 'public's income.
Taxes the theory continues, offer
only partial solution-Congress
obviously feels that the new tax
bill, which is unprecedented in Sc
verify, comes pretty close to the
limit On, top of that. it is generally
believed that the. people will balk
and yell for relief AZ taxes go much
higher Sales OF War Bonds have
been + excellent but they haven't
closed the so.caIed Limitation gap.39i
Therefore, the Argument goes, forc-
ed savings constitute the answer.
IN England, the forced savings
plan seems to have worked reason
ably well. UndAftits tax rates are
hiked to the hflt but part OF What
the nglishman pays will ebe rea
d. 10 him kftsF the war; In
other words, he simply builds UP a
credit with the Government, which
willebe Tebated once the guns stor
firing. tits likely that if and when
forced savings Is adopted here, ,':we'
will follow the EhEiish plan in es-
sentlalsa Y.
a There are other possible methods.
orexample, CoRgress could pass
law making IL obligatory for every
one to put ten perscent of his saw
fngs in War Bonds. Then, to fur
ther encourage savings, deductions
would be allowed for private saw
ings in making income tax returns. |
Whatever. method is finally decided
on, the main point will be to take
money out of the channels of trade
Ito keep 1t from purchasing goods.
The less the consumer buys, in
other words, the more we will have
for war purposes.
There Is still another argument
which the forced savings advocates
use persuasiyely. When the war
ends, war production will naturally
end@and there is going to be a
difficult period while we make. the
adjustment from war economy to
a peace economy. If people have
money saved, the argument runs,
this adjustment will. be eased. To
quote BusineEs Week again, it
would ract as a kind aof automatic
Insurance"
There seems to be, little active
opposition to forced savings manly
economists hope that it won't prove
necessary, but admit that before7
long 1t may prove unavoidable. In
both conservative andg .liperaE cir
,Ies, there is unanimity, Of opinion
%. the effect that initiation must be
avoided at all costs. The very cred
b and solvency of the nation is the
ssue at stake. So don't be sur
,rised II the Government tells you
me Of these days that you're going
d have to save definite per cent
lge Of your earnings.
Some, Of the best informed COM
nentators are now arguing that
here must be revolutionary
,hanges In the organization of the
government If the war effort is to
,e advanced with maximum speed
md minimum delay. They point.out
hat 4 Washington, red-tape makes Z
ealIy quick and effective action Is
in many vital matters.
in top Of that, they say, some of
he best men In the government
nust give too much Of their time to F
of detail, instead Of ques-
foha m war nolicV.