Evening Republican, Volume 21, Number 9, Rensselaer, Jasper County, 19 January 1918 — Government Financing of Past [ARTICLE]

Government Financing of Past

Present War Taxes Stlld in Comparison; Nations 'at War Must Make Sacrifices

By S. W. STRAUS

(Prominent New York and Ciucago Banker)

(Copyright, Western Newspaper Union.; To you who are hit by the new war tax legislation read the following and cease grumbling: , By Sydney Smith, an Englishman (in 1815). “The school boy whips his taxed top; the beardless youth manages his taxed horse, with a taxed bridle, on a taxed road; and the dying Englishman, pouring his medicine which has paid 7 per pent in a spoon that has paid 20 per cent, makes his will on an £8 stamp and expires in the arms of an apothecary who has paid a license of £IOO for the privilege of putting him to death. Hta whole property is then imnlediately taxed up 10 per cent. Besides the probate, large fees are demanded for burying him in 4he chancel. His virtues are handed down to posterity on taxed marble, and he will then be gathered to his fathers to be -taxed no more.” In England at that time there were taxes levied on lands, houses, horses, carriages and windows. There was also an income'tax. During the seventeenth century England was as rabid in its .policy of tariff production as it is now in favor of free trade. In ancient Athens taxes were very high. So zealous were the Athenians in the collection of revenues, that a public debtor could, ten days after a \ Judgment was obtained, be condemned and banished forever from public affairs. The children and grandchildren then became responsible. Slaves were employed to take care of private accounts, because if the government suspected that a citizen was not making , a truthful statement to the tax authorities, the slaves could be tortured, to give evidence of their master’s affairs. Athen’s'extensive taxes were largely due to the immense officialdom. Enormous numbers of public officials were dependent upon the government. There were public -physicians, artists, professors. The Athenians were very fond of holding great banquets and festivals, the expenses of which were paid out of the public purse. As religious gatherings as many as three hundred cattle would be sacrificed and distributed to the people. A public speaker would be paid for his efforts In oratory, and the people paid for listening. Today, the problem of raising money Zfor government expenditures occupies the time of some of the keenest financial brains qf the country. We are now participating in the greatest war qf history. We are fighting side by side with nations which are years ahead

of us in military preparations. We are facing an enemy whose military establishment has been so highly developed that it brought on the war. To carry on our part successfully and bring the war to a speedy conclusion, billions have been and will be spent. The aggregate total of the two Liberty logins has defied our Comprehension. Yet this amount, in proportion to our wealth and resources, does not equal the burden placed upon us in the previous wars.

In the Revolutionary war the Continental congress was forced to depend upon credit bills and requisitions drawn against the colonies. Our first interior war loan was made in 1775? It amounted to about $30,000. A year later a second loan of $5,000,000 was authorized, but only $3,787,000 was subscribed. Then paper money was issued and by the end of 1779 congress had authorized $200,000,000. An equal amount was paid by the various states. Continental bills of credit depreciated 99 per cent in value. Robert Morris came to the assistance of the government and by his great ability financed the war. He even made personal loans.

In the Civil war the financial difficulties were also great. The country was suffering from a business depres- 1 sion when hostilities began. One of the first efforts to raise capital was an issue of $150,009,000 of legal tender notes, and a bond issue of $500,000,000. The bonds bore interest at 6 per cent and were issued in popular denominations of from SSO up. As In the Revolutionary war, a financial gonitis appeared Tn th<i. person of Jay Cooke, who was extremely active in making the loan a success. He advertised extensively and employed 2,850 agents. The same year congress issued another $150,000,000 in treasury notes. In all, the aggregate amount of government loans during the Civil war was $2,600,700,000. About 6 per cent was paid on most of the loan. Certainly, we are now in an infinitely better position to finance the present war. Where the interest rate was 6 per cent on the first Civil war loan thq initial rate on the first Liberty loan was 3% per cent. Our wealth is many times greater in proportion to the population than in 1861. We can afford to, and will, push this war vigorously to a successful conclusion. Any strong nation that hopes to endure strong cannot shirk Its duty.