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Chapel Hill
The news in this publica
tion is released for the press on
receipt.
THE UNIVERSITY OF NORTH CAROLINA
NEWS LETTER
Published weekly by the
University of North Carolina
for its Bureau of Extension.
JULY 31, 1918
CHAPEL HILL, N. C.
VOL. IV, NO. 36
Editurial Board i F. C. Branson, J. G. deK. Hamilton, JL,. K. Wilson, K. H. Thornton. G, M. McKie.
Entered as second-olass matter November 14,1914, at the Postoffioe at Chapel Hill, N,1C„ under the act of August 24,
24,1912,
WAR, DEBT, AND TAXATION
SERPENT WHISPERS
pears in the international balance of
Durinp- ,nm- roronf n ■ ti'ade, which was around 4 billion dol-
i/uting loui recent war stamp drive i inrc in onn fa-nm. .b.m-n • r
in the country regions of Chapel Hill dosed
township we ran across the usual pro-
German lie.
“You are throwing your money dead
away. The government will never be
able to redeem your stamps. This
country is headed straight into bank
ruptcy.” So runs the lie put into tir-
culation among our farmers. It was
•a mischievous lie meant to scotch the
war stamp campaign in our country
side. The ready answer of the farm
ers in our township was the purchase
of $40,000 worth of war stamps.
And by the way, this is a fair sam
ple of the serpent whispering that
landed a Russellite leader and a half
dozen of his followers into a federal,
prii^n under a twenty year sentence | productriTas'
j, _ other day. The
We shipp£d abroad one and a half
billion dollars worth of foodstuffs, food
animals, work stock, and seeds during
the last 1-2 months; and four and a
half billion dollars worth of partly or
wholly manufactured articles and
crude materials for manufacture, in
cluding nearly a billion dollars worth
of cotton and tobacco. Our export
trade has more than trebled since this
war began.
This sudden increase of four billion
dollars in foreign exports means a rel
ative scarcity at home and naturally
a rise in the price of everything the
domestic consumer buys. Thus the
farm value of our crops and animal
increased from ten to
course, these loans must be repaid to
America and the interest kept up ygar
by year; which lessens our yearly
burden of federal taxation—cuts it al
most exactly half in two in fact.
Our problem of national finance is
at last reducible to terms of federal
taxation. Somebody must pay these
taxes. Who pays the piper? is an im
mensely important question.
federal treasury in 1918 around a third
of a billion dollars.
They can pay less than that or noth
ing at all by sensible self-denial.
WHO PAYS THE PIPER?
So far, the burden of direct federal
taxation is falling mainly on the rich.
Fewer than a half million of our 100
million people in. the United States
paid federal income taxes in 1917, be
cause fewer than a half million peo
ple had net taxable incomes of more
than $3,000. Even when the exemp
tion was lowered to $1,000 for single
persons and $2,000 for married coup
les, more than 95 million people in
this country paid no direct war taxes
in 1918 on individual incomes.
In our own county here, only nine
THE WAR TAXES EVERYBODY
receive $2,000 a year.
And very little of it was paid by the
larmers, because very few of them en
joy a net taxable income of more than
$2,000 a year. The average labor in
come of farmers in the United States
in 1910 was only $724. If it were
«So far, we have spoken of war taxes Sys'^of m-o^Dm-it^®%l,f
directly paid, and these taxes for the esc^ape federal
excess profits. The people X lly
such profits are only 5 in every 100 oaiance or 50 million dollars of
inhabitants, and dirfct taxes of this yelr" was Taid" for
sort amount to $86 of every $100 of Paicl tor stamps by our
the total paid last V oth^ it"
words, while the average man has a Z V! Z “ • hundred
chance to pay $14 of direct war taxes, aOmi.ssin^
the rich are paying $86-^Ji^y Sly utilities;
f wiuy may, document stamps, insurance policies.
iririoiirnrmm^aSnS®/fS^R The re-j twenty billion dollars since 1914. The j of our sixteen thouknd* people have
ligious piopaganda of the Russellites, | volume and the value of our manu-! paid any direct war taxes, and one
, factored products have increased in the; among this number paid more than
dangerous to the nation than a division same remarkable way. Farms and [ the other eight combined. He is a
01 tile txerman army. | factories are getting more money for I manufacturer, mind you, not a farm-
Our new law covers unpatriotic talk ■ their products than ever before in the
of this kind. There is work for a history of this country,
seciet agent to do in this county and i The war is so far giving our farm
in most other counties of this and and factory owners a chance at great-
every other state. ^ er wealth than they ever saw before,
It is nerveless citizenship that will while increased wages and the higher
allow treason to run riot in a com- prices of food and feed, cotton, wool
munity. We need courageous private and tobacco are giving wage-earners
citizens as badly as we need secret and farm-workers of every sort a
-service agents.
OUR MONEY IS SAFE
Nobody knows how many millions of
lives and billions of treasure it will
cost us to make this old world a safe
and decent place to live in; but it is
pitiful ignorance or craven cowardice
to think of our job in terms of bank-
.ruptcy.
The wealth of the United States is
now 300 billion dollars. It is more
than that of Great Britain, France,
Bu s ia, and Italy combined. It is three
times that of Germany before the war
began and six times that of Gennany
today.
The vaults of the federal treasury
now hold a full third of all the gold
coin and bullion of the entire world.
The resources, the good faith, and
the taxing power of the United States
are behind every dollar of our cur
rency, our liberty bonds, and our war
stamps.
.Banks sometimes fail, but never the
United States. Its resources are great
enough to pay the interest on our war
bonds and stamps, and to redeem our
loans at maturity, no matter what the
war costs. There can be no doubt
about that.
share of .this abounding wealth.
OUR BACKS AND BURDENS
THE PEOPLE ARE PARTNERS
Our national expense bill during the
first year of the world war ,was 8 bil
lion dollars. Almost exactly half of
it was raised by war taxes and the
rest by government loans in the form
of war stamps and liberty bonds;
which means that half of the burden
falls on this generation and half of it
On future generations that will reap
the benefits of this struggle fordiber-
ty and humanity.
The owners of war bonds, mainly in
fifty and hundred dollar amounts, have
now come to number 20 million people,
and the purchasers of war stamps will
be around 35 million t^eople. Here arc
,55 million owners of federal securities.
Our government bond owners are no
longer the rich alone; they are the
masses; they are every other person
you .meet, counting both sexes and all
ages. Most of these people never own-
'.flri a government bond or any other in
terest bearing security before in ail
their lives.
A full half of all our people are now
partners of the United States in tea-
■ eral finance, with an ownership con
cern in our government; and the in
terest they are drawing is already
some $110,000,000 a year.
It is the most significant single fact
in the history of the United States
during the last hundred years, it
means unity, stability, and safety to.'
the nation during all the years to come.
This is v/hat the well nigh universal
• ownership of state securities by the
French people has meant for France,
and this is what it means for the
United States of America.
FARM AND FACTORY PROFITS
During our first year of war around
4 billions were spent on our own ex
pense account, and the other 4
were loaned to our allies.
Almost
«ver, dollar of h" 1“ huge
Next year our government must
have 20 billion dollars for war pur
poses. This sum includes 6 billions of
loans to our allies. Are we able to
bear this burden ?
In anawer may say that our farms
alone will produce 22 billion dollars
worth of wealth this, year, while the
total of new wealth produced by our
mines and quarries, farms and factor
ies has now reached the stupendous
total of 75 billion dollars a year. The
net profits available for war purposes
are 25 billions or more.
How can a people with wealth pro
ducing powers of this sort be bank
rupted ? Such a thing does not seem
hnmanly possible.
It is never likely to be done, and
nobody knows it better than the ten
million people of German stock in
America.
.For instance, the first state to go
over the top in war stamp purchases
was Nebraska, and nearly exactly half
of her population is foreign in birth
or immediate parentage. In some coun
ties of that state nothing but the Ger
man language is ever heard. The fatt
that Nebraska took 20 million dollars
worth of war stamps in five months
and 5 million to boot is pretty good
proof that deep down in their souls
the German-American§ do not expect
Gei-many to win, now that America is
getting into the fight with all her
might and main.
Another good proof that our money
is safe lies in the fact that the most
liberal buyers of liberty bonds and
war stamps are everywhere the Jews,
as Bill Arp used to say.
But indirectly everybody of course
pays war taxes, because everybody h Who Pav« 1 Past
a consumm- and pays war taxes in the ^
greatly increased price of almost The simple fact is that the averae-e
everything he buys. Thus, the in- man here in North Carolina finds it
crease in the cost of living is around hard to pay any direct war taxes to
100 per cent during the last four speak of unless he indulges in luxu-
years, which means that the cost of Hes—especially in liquor, tobacco pic-
living has just about doubled during ture shows, theaters, and other Com-
this period—in many details of living mercial amusements. And such taxes
it is trebled or more. The result is as these he can escape entirely by self-
to reduce the purchasing value of the denial. Other indirect taxes he can
consumer’s dollar a full half—in many reduce to a minimum by raising poul-
in^ances, two-thirds or more. try, cultivating war gardens, living on
But on the other hand, twenty mil- as little as possible, and cuttino- out
Only one American farmer in every, hon people or a fifth of our total popu- servant hire and waste of every sort
400 paid any federal income taxes in i lation produce commodities for sale at He can hardly escape war taxes to
1917, but federal war taxes caught i these high prices. They are the farm- tie sure, if he uses the mails and’the
one out of every five brokers, one out I ers, manufacturers, miners, and fores- public utilities, but the war taxes aris-
of every four insurance agents, and i ters—the producers of crude wealth ing from these two sources are barely
nearly two out of every three techni- and wealth finished for final consump-' more than six dollars in the hundred
cal engineers. ; tion. The owners among this number of our federal war tax total.
T'U H" L Ik# * D .3 i are reaping the laigest profits in these We have said that tbp ■fpvmp-,' ic p-n
The Rich Man s Burden : davs of =vv-biv1i ,o-,-ppc. ^ pat tog taimer is on
er. Indeed, only three of them were I
farmers, and none of them were wage
or salary earners. '
j days of sky-high prices, but tenants I the safe side of the dead-line We sav
The rich are paying war taxes; no .... • J
Not one of them is rich, but every
one of them is keenly aware that he
has more money now than he has ever
had before. And we may say in pass
ing, that all of them invested heavily
in war savings stamps in the township
Ld L people on ear^h have ever had | taxes in 1918 were paid by the owners
any keener
Jews.
money-sense than the
OUR NATIONAL DEBT
Twenty-two billions of war bonds
have been authorized by Congress to
date. So far the bonds actually issued
represent a national debt of 12 billion
dollars; which is only ;^our per cent
of the wealth of the United States, as
against 38 per cent in Germany and
76 per cent in Austria.
Of course these bonds must be re
deemed some time or other, and the
interest on them must be paid year
by year. It must be done by federal
taxation, direct and indirect. If we
can finance this war to the end bn the
half-and-half plan of the first year—
half in popular loans to the govern
ment and half in federal war taxes—
we are likely to escape an era of infla
tion and cheap money with all their
multiform disasters.
The most significant thing in the
war situation today is the fact that
Germany and Austria have already run
into this whirlwind of financial dis
aster, and they cannot escape the full
penalties of it when this war is over.
The National net income of Germany
in her most prosperous pre-war year
would not begin to pay the interest on
her present war debt alone; whig.h
means inescapable national bankrapt-
cy.
-spent in this country.
During our first two years of war
the loans to our allies will reach, the
total of 10 billion dollars. Of
of big business. i back into Orange county alone
The government is now taking over! soon be around $15,000 a year;
for war purposes from one to three- which is nearly half the annual total
fifths of all business profits over and of our county taxes.
above a moderate rate of interest on
the capital invested;^ which accounts. vkiaij T'AYK'^ TW pabuttita
for the flurry in business circle^ pro-: " rtn lnAC.j lii
duced by the recent report of the Feb-' The war taxes we pay on mail are
eral Trade Commission on the profits collected and turned into the federal
of big business in this country last treasury by tHe postoffice authorities,
year. j But 97 out of every hundred dollars of
The Poor Man’s Burden | war taxes paid in Nofth Caro-
! lina during the year that ended June
Aside from increased postage rates, 30, were collected by the Internal
and freight, express, telegraph, and Revenue authorities,
teleph'bne taxes which amounted to; The total so collected was nearly 70
less tlian $215,000,000 all told in 1918, | million dollars, which is nearly three
almost every dollar of our direct taxes | and a half times all the state, county,
was levied on wealth and luxury. | and municipal taxes we pay in this
The fact is, the average man is pay- ’ state,
ing no direct war .taxes these days ex-! ^ It is a huge sum. Who paid it?
cept for stamps on his mail and ex-: Twenty millions of it was paid on
press matter, on telegraph and tele-1 individual and corporation incomes,
phone bills, on notes, mortgages and ' and on excess profits in business enter-,
similar other business papers, on rail-: prises. Mainly it was paid by the rich
road tickets, and freight bills. And people of the state, and they are- very
even then he is paying very little of: few in number. The taxes they paid
federal war tax—only six out of; on excess profits will be added, of
every hundred dollars of the total paid - course, to the market price of the
this year. goods they sell to the public. The
He pays a larger share, of course, | users of tobacco the world over will
if he willfully indulges in luxuries like: at last pay most of this war tax on
intoxicating liquors, tobacco, soft! excess profits.
drinks, Pullman cars, automobiles, pic-! Very little of the income tax total
tare shows, theatres and other com- ^ was paid by our wage earners, because,
mercial amusements, jewelry, sporting ' very few of them, if single, earn $3.50
goods, patent medicines, perfumery,
cosmetics, chewing gum and the like.
If he will indulge in these luxuries,
he must now pay war taxes for the
privilege. For indulgences of this
a day and are busy every work day of
the year; and just as few of them, if
married, earn $7.00 a day and lose no
time in the run of the year.
And as for our salaried people, bare-
sort, our luxury lovers paid into the! ly 3 per cent of us in North Carolina
NOT YET BANKRUPT
v.c. .... eainers are also handling' so in particular, because within the
doubt about that! And it is greatly „ e money than they ever saw be-; last six months we have helped five of
to their honor that they are not whin- ,3’^® -J i it gives our most prosperous farmers fill out
ing about it. ! h®«^ a capital chance to save and laj I their federal income tax Xets Thev
The only people we’ve heard groVl-! It^i^toe^nmn vRo^nroHifro^ ' '^ere all willing and anxious to pay
ing about being taxed to death by the rnodities for sale nnd has federal taxes due under the law;
government are people who are not Un m but when we figured .out the legal ex-
paying any federal taxes on incomes iLse'dlys by toe htrik o7^t7r ^ ^ reductions, excepUofs, and
or excess profits. And mind y«u, the Indirectly a full half f ^ ”®*^
people who have so far escaped such daily expenditures goes to pay ouH ® as much as $2,000.
taxes are 9o in evciy 100 people you. ^ill, or to line thefiockets of pro-
meet m the ran of the day. j steers big and little. The administra-
Accordmg to the old saying, it’s the tion, by the way, is now going after
hit dog that yelps, but when it comes these profiteers, hammer and tongs
to taxes it is the dog that isn’t hit; The point we are making is that the
that does the most yelping. It is the farmers who have , a maximum of drive‘the othn'i-irH
wicked that flee when no man pur- things to sell and a minimum of things i
sueth, is the way the Book has it. i to buy when comparer with people in j ■
On the other hand, the war taxes of other businesses have the poorest pos-'
thirty of our richest men in America sible chance to join in the financing of
ranged from $4,500 to $105,000 a day, this war unless they take liberty bonds
according to the Financial World. Two- and war stamps largely and contribute
thirds of the net taxable incomes of to the Red Cross and the army Y. M.
these 30 rich people goes to the gov- C. A. generously,
emment for war purposes. James B.i Both directly and indirectly the
Duke’s war taxes, for instance, were money expense of war rests lightly
nearly 5 million dollars and John D, on the farmer’s shoulders. And he is
Rockefeller’s nearly 40 millions. a wise farmer if he gets ready to drav
There are six men in North Caro- federal interest while other people pa\
lina whose war taxes will be more than niost of our war taxes.
$1,000 a day. The stamp taxes of one it s wise for the rest of us t'
tobacco concern in North Carolina are save down to the last penny and invest
now more than $100,000 a day on just liberty bonds and war stamps. It’s
one of its products. The American ffood exercise to take in federal inter-
Steel Corporation is paying $700,00t . with our left hands while we pay
a day. . taxes, direct and indirect, with
Almost exactly a fourth of the war right hands,
taxes in 1918 were paid by the Wall The federal interest _ money coming
Street and Pittsburg revenue districts, back into North Carolina, on account
Almost exactly half of the 3 billion of liberty bonds and savings stamps
672 million dollars of war taxes in "'dl soon amount to 6 million dollars
1918, arose from taxes on excess pro- a year; which is nearly as much as our
fits alone. A full half of our war state government costs from year to
No, the war has not hurt our pocket
books and bank accounts yet, or not
enough to speak of. We are still a
long^ way from bankruptcy. W’e have
yet to see any real discomfort and
pinching hardship in any household
anywhere, due to war conditions.
The American people have around 30
billions on deposit in the state and na
tional banjcs of the country. This
stupendous total is enough to pay our
war bill this year with ten billions to
spare. It is enough to pay our na
tional debt two and a half times and
over.
And our bank deposit's are safe. The
resources of America are so enormous
that the government will never need
to do more than to call on us for the
loan qf these savings. Our bank ac
count savings alone more than equal
at the present moment the new liberty
bonds the government will float tins
year. The bank account savings of the
people of the United States, in banks
of all sorts in 1915, were nearly 8 bil
lion dollars; this year they are around
15 billion dollars.
And they steadily increase in North
Carolina in spite of the 116 million dol
lars we have invested in liberty bonds
and war stamps. The increase has
been 14 million dollars in four years.
And mind you, the people that have
bank account savings and own liberty
bonds and war stamps are debt-own
ers, not debt-owers, they are drawing
interest, not paying interest. They
are not bond-slave, but interest-free;
and now there are 55 million such peo
ple in these United States.
A Way to Be Bond Free
How can bonded debt mean national
slavery in America, if the people
themselves own the bonds, as they now
have a chance to do in the purchase
of bonds and stamps in small denomi
nations ?
Liberty bonds are properly named,
the talk of traitors to the contrary not
withstanding. They were meant to
make the people bond-free, not bond-
slaves. They are bond-free if they
themselves own these bonds; they are
bond-slaves if they allow the rich to
own them, while they reserve to them- •
selves the privilege of paying- interest
on them. The man who pays both in
terest and taxes nowadays is in a sor
ry plight. On the other hand, that man
is wise who draws federal interest
money with one hand while paying-
war taxes of all sorts, direct and in
direct, with the other hand.