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About Morning Oregonian. (Portland, Or.) 1861-1937 | View Entire Issue (Oct. 14, 1920)
THE MORNING OREGONIAX, THURSDAY, OCTOBER 14, 1920 5 PERIL TO INDUSTRY SEEK IN TAX LAW Existing System Described as Discouraging to Capital. REMEDY IS SUGGESTED Taxation Should Be So Arranged That Burden Will Be Equal ized, Says Mr. Kahn. This Is the continuation of the first of a. rie of artH-les on "Faulty Taxation," ' prepared by Otto H. Kahn, noted financier ( una nenu or Kutin, ioeo 6c co. l lie so lution of the problem of taxation has a very larj?e bearing on the nation's pros perity. Mr. Kahn makes it plain that many evils now exist and suggests ways and means to effect reforms. BY OTTO H. KAHX. (Article I. Continued.) The ideal tax is one that rests where it is laia. That is to a con siderable degree attainable in the case of reasonable and moderate taxes, but only in that case. In proportion as a tax is grossly excessive or palpably unsound, in that proportion is it lia ble and likely to be avoided or passed on. Economists tell us that an income tax cannot be shifted. That is true only in part, and moreover, the evils prowing out of our present unprece dented and unparalleled scale of su pertaxation far exceed the virtue of what measure of "non-shiftabillty" inheres to the income tax. It is still less true of our excess profits tax, the incidence of which is largely loaded on to costs and is frequently several times removed from the first corporation which has to pay such a tax. Increased cost of manufacture and distribution means increased cost to the farmer, increased cost of the ne cessities of life, increased wages, and. In short, increased cost of living all around. The social and moral arguments for an unsparing war profits tax are to my mind unanswerable. To permit Individuals and corporations to en rich themselves out of the dreadful calamity of war is repugnant to every right-thinking man's sense of right and justice, and gravely detrimental to the war morale of the people. Unfortunately, however, our war profits tax was in large measure dis associated from war profits in too many cases. Heavy Hand Laid on Ilunlnexn. And as for the excess profits tax, eo-called. it is altogether a different thing, in spirit and effect. That measure establishes as "normal earn ings" an arbitrary, and, in case of many industrial activities, inadequate percentage of return on invested cap ital, and by a complex, confusing and generally ill-devised system, taxes at a high rate all earnings above that percentage. It lays a heavy and clumsy hand on successful business activity. It is grossly inequitable in its effects, and, to a large extent, the greater or lesser degree of its burdensomeness is de termined by purely fortuitous cir cumstances. It puts a fine on energy, enterprise and efficiency. It leaves untouched the man of wealth, who neither works nor takes the risks and responsibilities of business, but mere ly collects his coupons. It is bound to operate unfairly, freakishly and un-, evenly, and greatly enhance the cost of things. Let me point out. incidentally that 'the spectacular earnings of certain corporations and individuals afford no just criterion of the earnings of business on the whole. As against a number of concerns and individuals who have made ex ceedingly great profits during and since the war, there are numerous others whose earnings have shrunk, and in some cases very greatly shrunk, during and since the war. Rennlts of Investigation Quoted. It may be interesting to quote the results of an investigation made re cently in England (where conditions appear to be similar to those pre vailing here) as to how the increased cost of certain articles in the last two years, compared with the two years preceding the war, had been divided. The investigator found, taking such Increase as 100 per cent, that labor received 57 per cent thereof, the state through taxation, 40 per cent, and capital 3 per cent. This is not the place to argue the question whether in the pre-war era industrially invested capital received too large a part of the national in come. In some respects I believe it did. But since 1914 the wages of labor have been vastly increased. The farm er also rightly receives a greater re turn than formerly. There has taken place, in fact, a considerable readjustment in the dis tribution of the national income. To a large extent this is also true of the distribution of capital. The capital value of farms and the capital value of manual labor have greatly in creased, while the capital value of all fixed interest-bearing investments has been very largely diminished. Cash Required for Taxes. One of the most unsettling conse quences of our tax system is the ex cessive and til-regulated cash drain wiiich it creates, away from its nor mal channels into the coffers of the government. You cannot pay your taxes by turning over book assets or bills receivable or materials or in ventories; you must pay them in cash But while the outgo in taxes payable to the government is all cash, the in come of most businesses is cash only to a limited extent. Consequently many a business man. however free from objectionable tendencies of the profiteer, must seek to increase his margin or protlt in order to increase his margin of available cash, because otherwise, through the exactions of clumsy taxation, the cash resources Indispensably essential to the conduct of every business would be infringed upon to a perilous degree, if not to the point of extinction. This consider ation is accentuated by the fact that merely to do the same volume of business as before the war. a great deal more capital Is required now adays. owing to the largely increased cost of labor and materials. The excess profit tax has tended furthermore to increase actual cost of production, inasmuch as costs natur ally are deducted before taxable prof its are arrived at, and. therefore, un der the operation of the excess profit tax there is not the same inducement as under normal circumstances to keep cost down as much as possible, but, in fact, rather the reverse. It is a fact well known to those familfar with business practices that there hag been gross wastefulness in certain lines of expenditures since the excess profit tax went into effect and as a direct consequence of it. Public Held Burdened. Objection to the excess profit tax in peace time rests, in my mind, not on the ground of denying the theoretical equity of such a tax, but on the ground that. In actual practice. It does not and cannot accomplish the social purpose aimed at, and that it tends to hurt trade, discourage Enter prise and burden the public, and that it presents immense difficulties of ad ministration. Our excess profit tax certainly has not stopped but rather has intensified what Is commonly termed "profiteering." The faultiness. the Intolerable com plexity of the technical provisions of that tax, its uneven application and its baneful ef f ects in various direc tions have become so widely recog nized that we may, I hope, look for ward with reasonable assurance to its repeal or thorough modification in the not very distant future. But to remove the excess profit tax on corporations without at the same time reducing the extreme rates of individual surtaxes would mean that corporations would receive a vast ad vantage over individuals engaged in business, inasmuch as corporate earn ings are, of course, not subject ' to supertaxes. As near as possible, tax ation should be so arranged that cor porations and individual business are taxed to equal effect. Moreover, the repeal or modifica tion of the excess profit tax will not and cannot effect the relief which the situation calls for unless accom panied by a well-judged revision of the existing scale of taxation of in dividual incomes, as I shall endeavor to show in' the following articles in this series. (These articles will appear several times weekly until the series Is com pleted.) PAlR WEDDED 50 YEARS Mr. and Mrs. C. II. Ralston Cele brate Golden Anniversary. LEBA.VOX, Or.. Oct. 13. (Special.) Mr. and Mrs. C. H. Ralston of this city celebrated their golden wedding anniversary yesterday at the home in this city with a family reunion at which five ol the persons who at tended their marriage 50 years ago were present. These were Mrs. A. M. Lee of Junction City, Mrs. W. A. Mc Clain of Albany, J. M. Ralston of Al bany, John Griggs and Miss Fannie Griggs of this city. Letters of con gratulation were received and read from Senator Chamberlain and Judge M. C. George of Portland. They were married on October 12, 1870. on the A. B. Griggs donation claim, five miles north of Lebanon. With the exception of 12 years spent in Portland when Mr. Ralston was employed in the custom-house, they have lived continuously in Leb anon since their marriage. They are the parents of four chil dren. One, Frankie, died when 10 years old. The other three all reside in Lebanon. They are Mrs. H. Y. Kirkpatrick, wife of the (present post master of Lebanon; Mrs. S. H. Land strom and C. H. Ralston Jr. CITY LOSES HOTEL MEET Oregon Association' to Convene at The Dalles Early in December. THE DALLES, Or., Oct. 13. (Spe cial.) Due to the efforts of Pat Foley, proprietor of The Dalles and Bank hotels, this city will be the meeting place of the Oregon State Hotel Men's association during the first week in December. The convention will bring from 150 to 200 visiting hotel men to this city. It was originally planned for Port land, and was changed to The Dalles at the instance of Foley, who is sec ond vice-president of the organ ization. Entertainment for the guests will be arranged by Foley and the local chamber of commerce. $50 LOAN ACCEPTED BY 9 University Ex-Service Men Take Advantage of State Offer. UNIVERSITY OF OREGON. Eugene. Oct. 13. (Special.) Nine university men have taken advantage of the $50 state loan to ex-service men. accord ing to Carlton Spencer, registrar, who has charge of the applications. No loan can be for more than $50 and the date of maturity is January 1, 1921. There will be no extension of. this loan. Heretofore extensions have been granted in most cases, but now that the ex-service men have had time to adjust 'themselves and become more settled the extension will not be given. Hood River to Honor Veteran. HOOD RIVER, Or., Oct. 1. (Spe cial.) E. W. Vanhorn, commander of the American Legion post, received message today from William Mc- Murray, general passenger agent of the O.-W. R. & N. company, that the body of Earl M. Robertson, who died while serving in France with the 65th regiment, coast artillery corps, would arrive here Friday evening. A formal military funeral will be con ducted by the legion post Sunday at Riverside community church, the pas tor. Rev. w. H. noddy, officiating Interment will follow at the family cemetery in Pine Grove. Mr. Robert son, son of Robert Robertson, was a memDer or the lzth company, Ore gon coast artillery. 3153 in Sale in Schools. SALEM. Or., Oct. 13. (Special.) The enrollment of Salem public schools is 3153, or a gain of 17 per cent over last year, according to an nouncement, made today by George W. Hug. superintendent. There are 1635 students in the six lower grades. GRE AT SLAUGHTE R of M EN'S NECKWEAR To close out the balance of the Neckwear which has been on sale this week. I shall further reduce the price' of the $3.50 and' $4 ties to the nominal price of $ 55 3 for $4.50 Thousands of magnificent ties below pre war prices. Those of you who have paid me $1.85 for these ties this week can have the differ ence refunded on presentation of the sales slips BUY AS MANY AS YOU WANT Supply Your Christmas Needs Now! BEN SELLING LEADING CLOTHIER RATE HEARING 0W NOV. 5 Interstate Commerce Commission . to Hear Intermountain Case. SEATTLE, Wash., Oct. 13. (Spe cial.) Argument of the intermoun tain rate case before the interstate commerce commission at Washington, D. C, has been set for November 4 and 5, according to word received by the transportation bureau of the chamber of commerce today. The entire commission will bear the argument, which will be based on the tentative report of W. A. Disque, examiner, made public about four weeks ago. Recommendations continued in the report were in ac cordance with contentions of Seattle and other Pacific coast cities and if adopted by the commission will sig nalize complete victory for the coast section. Wasco to Rally Election Eve. THE DALLES, Or., Oct. 13. (Spe cial.) A republican rally, with Rep resentative Sinnott as the principal speaker, will be staged here at Elks' temple November 1, it was announced by the republican committee today. With the election on November 2, the rally is planned to add the final stim ulus which will put Wasco county over with what is hoped will be the biggest republican plurality ever recorded. wag he 1-d at the regular meeting In Carlton on October 9. A. J. French was elected master. Mrs. A. J. French lecturer and Mrs. W. W. Glandon of Yamhill secretary. J. J. Johnson, master of. Evening Star grange of Portland, addressed the meeting on grange doctrine and also discussed some of the measures to be voted on November 2. The Pomona, grange la on record as favoring the Roosevelt bird refuge measure and op Easing the 4 per cent interest bill and 4and tax bilL FOUR PERSONS INDICTED True Bills Charge Utterance of Bad Paper at Eugene. EUGENE, Or.. Oct. 13 (Special.) The Lane county grand jury yester day returned, indictments against four persons who had been arrested on charge of passing bad checks, and spent some time examining witnesses in the case of W. R. Elliott, charged with the murder of Vivien Dunten. Those indicted are: Edwin Sink. J alias Potter, uttering a forged in- LiuitiEni aim M-t. J-j. iaic, ojici man Douglas and Gilbert Janes, obtaining money under false pretenses. George Garcia, a Mexican, accused of a statutory crime, was released from jail as the grand jury reported not a true bill. Stanfield Confers on Irrigation. SALEM. Or7, Oct. 13. (Special.) Ralph Stanfield was here today con ferring with the members of the state irrigation securities commission with relation to the state guarantee of interest bonds in the sum of $930,000 voted for the development of the Teal Irrigation district. No ac tion was taken by the board with re gard to Mr. Stanfield's request. Dayton Gives Relief Clothing-. DAYTON. Or., Oct. 13. (Special.) The volunteer committee of Dayton and vicinity has forwarded to the state committee on the near east re- SIX SAVED BY REPRIEVES Only Two of Eight Sentenced to Hank in Chicago Today. CHICAGO, Oct. 13. Only two out of the eight men originally sentenced to be hanged in Cook county tomor row morning will die on the gallows at the appointed hour am the result of two eleventh-hour reprieves granted by Governor Lowden today. The others have been saved by re prieves, commutations and wr'ts of supersedeas. The latest reprieves granted were to Arthur Haensel, convicted of wife murder, and Nicholas Viana, sen tenced for the murder of a salocn keeper. The two who will face the executioner are John Henry Reese, negro, convicted of wife murder, and Frank Campione, found guilty of kill ing a saloon keeper. Olcott Adresses Rotarians. SALEM, Or., Oct. 13. (Special.) Governor Olcott, in an address before the Salem Rotarians here today, re viewed the establishment of the Ore gon state government and referred briefly to the various governors of the commonwealth in their several different types and capacities. Sev eral popular songs, introduced by the Rev. H. N. Aldrich of the Leslie Meth odist church, were sung by the fra ternity members. Sacrifice Sale of Boys' Eoiicker Suits TO MEET the insistent demand for lower, living costs, I place on sale 200 BOYS' "KNICKER" SUITS at the following sacrifice prices Boys' $18, $20 and $22.50 Suits, 3- A OC some with two pairs "knickers" P XTZ.OtJ Boys' $25, . $27.50 and $30 Suits tf - Q O C splendidly tailored garments vpXy.O-) BOYS' $12.50 CORDUROY SUITS $9.85 These all are wonderful bargains. You will do well to come early BEN SELLING LEADING CLOTHIER Morrison Street at Fourth Sunday School Convention On. MEDFORD, Or., Oct. 13. (Special.) -The annual county Sunday school of this week. A large attendance of teachers and pupils from all parts of the county is anticipated. Norman Johnson, new state secretary, will give the main addresses both days. Postal Receipts Increase. ASTORIA. Or.. Oct. 13. (Special.) Postmaster Wise reports that the receipts at the Astoria postoffice dur ing the quarter just ended were $3000 greater than for the corresponding period last year. Postal savings de posits showed a pain of $Knon. Yamhill Grange Elects. CARLTON, Or., iirl?LCJ1 669 a,n,a'l eiectYon oT7ffS of' 11 ZZL. tne lamnm County Pomona gran; BVhMW THE COLD Bllilll f THE CURE lltnelilliliS 1 H 1 zli$- time of year it's so 1: III IIP is m n m Vmf' 1 easy to contract a cold, 3 w8Smfe 8 II $Mh but it's no easy matter iisfitlp w m wlt'Vt to cure it unless attended to t0MHJMJI$ at once- i rjlgf?3a H Ifpfc ft.'i) Consult your physician and OSWHfllf . if he suggests or prescribes ' Wffltf&Zf$: m: i a remedy, have his orders PlmiSEOjsl I fillGd ie st"6 of "De" VS ' We Never Close VSSSi il Exclusive Agency for .t1!!ipJ fi- Huyler's Candies 4feM I H- Prescription Dguqgist jtl PHONE MAIN 7211 lief 400 pounds of clothing collected convention of Jackson county will be In this neighborhood. neld in Mertford Thursday and Friday PLAYING TO CAPACITY CROWDS SENSATIONAL. PICTURE OF J J H THE DANGERS, THRILLS I l AND EXCITEMENT F 1 .KvionoF I NOW PLAYING "A DOUBLE i DYED DECEIVER in III T-rfrmrmrTmimmi ing ; y B Y TODAY pffip jk , "SOMETHING TO Next Saturday Douglas McLean And DorU Mat "THEY WERE YOURS, MY SON!" She believed him to be her boy i-the boy who had run away years ago. Her pathetic joy filled the imposter with guilty shame. Could he go through with the decep tion? Every decent in stinct within him said "no! NEWS and COMEDY ONLY A QUARTER "SOMETHING TO THINK ABOUT A romance staged by Cecil DeMille that with its glamour and beauty will make you, too, think with Gloria Swanson Theodore Roberts Elliott Dexter Monte Blue J . .- til , DIRECTION I CI 2 m B hi. MfiarTl"Mt'frrrT Mlrf.Y rTMnirTifTr If,' i Old Folks' Coughs will be relieved promptly by Piso'a. Stops throat tickle; relieves irritation. The remedy tested by more than fifty years of use is 'PS s s