The potters herald. [volume] (East Liverpool, Ohio) 1899-1982, 1943-01-14
INITIATION: Its Chief
Causes and Remedies
BY PROFESSOR IRVING FISHER,
Yale University

Yale University
This is the third of a series of
three articles written by Professor
Irving Fisher, economist of Yale
University, who has made a life
long study of Imitation and Defa-
ton and has written Il dozen books
on the various problems of money.
We come now to the most important
method for controlling imitation.
might say it is the one essential
method without which even the 1904
plan could not be successfully EN-
ployed. This fundamental method is
one much emphasized by the President
and Secretary Morgcnthau.
1t consists simply in less spending
and more saving. Carried to its limits
this would mean that the people of the
United States would spend only on
absolute necessities and that all the
remainder of their income would go i'm
taxes or be invested in the war effort
whether through the government or
privately.
TO obtain this result an effective
system of priorities and rationing will
become increasingly important. More
over ratiOning would serve, of course,
to make the wartime distribution of
goods more equitable.
No financial program more effective
than this for winning the war is pos
sible. If such disposition of the ma
tiOnal income is insufficient to prevent
initiation, then imitation cannot be pre-
vented at all.
This program, if fully carried out,
would entirely eliminate, for the dura-
ton, all nOn-eSSentialS whatsoever. The
totals of these run into many billions,
perhaps fifty billions, which would
then be made available for the war
effort instead of for our personal
pleasures.
OF the two good ways in which the
income of the people of the United
States can 90 to the United States
Government, namely, through taxes or
through loans out of savings, the
Treasury Is Over-StresSing taxes We
should rely chiefly on loans
\ loan program can 20 far beyond
any tax program in gathering funds
into the Treasury. This ought to ne
obvious For almost all the national in
come beyond bare necessities could be
put into the war effort through loans
and investments, but ii could not pos
Sibly be gathered into the Treasury in
taxes. Any attempt at such tax gath
ering would destroy the income to be
gathered. In short, few people will
to he contiScated by Uncle Sam, rs
they will If it can be lent instead.
We must, | believe, untaX saving, or
else run the risk, by taxing them, of
egg ; for savings mean future income.
The Treasury has proposed II spend
ings tax in addition to the present in
come taxes. | approve of this and in
fact | believe 1t is based largely ON
my book constructive Income Taxa,
;ion," recently published. | would
however, 90 much further. More i'm
portant than the taxing of spendings
is the untaXings of savings. would
take off all corporate income taxes and
put the equivalent, or near equivalent
on personal incomes, SO far as they
are spent and not saved. This would
raise more revenue than now and dis
tribute the burden more cquitably. At
present when II erich" corporation
pays IN income tax of 1870, every one
of its stockholders, however poor, is
indirectly taxed that same 1879
though hc ought in justice to pay little
or nothing.
TO summarize. the utmost we can
contribute To the war effort economic.
ally would result from the following
program:
Force down all individual spend
ingS,as nearly as practicable, to the
bareSt necessities.
This can be done in any or
all of the following ways:
ia) by taxing all spcndingS beyond
the rock bottom minimum of
necessities and making This
spending tax Stceply progreS
Sive, thus virtually prohibiting
all luxurious spending.
CD by judicious, but comprchen
sve, ratloning.
(c) by priorities.
(d) by otherwise prohibiting foi
the duration the production OF
certain specific non-essentiaE
W here they are definitely
known to be deleterious.