HC 
 
 106.3 
 
 K12i
 
 IMMEDIATE PROBLEMS 
 
 cAn address delivered by 
 
 OTTO H. KAHN 
 DECEMBER 12, 1922 
 
 The Farmer 
 Capital and Labor 
 Taxation 
 America and the 
 European Situation 
 
 PUBLISHED BY COMMITTEE OF 
 
 AMERICAN BUSINESS MEN 
 
 354 FOURTH AVE., NEW YORK
 
 I M M E D I AT E 
 PROBLEMS 
 
 by 
 
 Otto H. Kahn 
 
 AN ADDRESS 
 
 DECEMBER 12, 1922 
 
 PUBLISHED BY COMMITTEE OF 
 
 AMERICAN BUSINESS MEN 
 354 Fourth Ave., New York
 
 * .
 
 o 
 
 HC 
 
 December 12, 1922 
 
 IMMEDIATE PROBLEMS 
 
 IT has been often said, and it is wholly true, 
 that there have been changes more funda- 
 mental in the mode of living of the world 
 in the last seventy-five years than in the pre- 
 ceding two thousand years. 
 
 From the time that the conception and the 
 fact of space and distance came to be radically 
 modified by the railroad, the telegraph and the 
 steamship, and that the industrial processes 
 and conditions became revolutionized by the 
 advent of the machine, things have rushed upon 
 humankind which have made life fuller and 
 quicker and infinitely more complex. 
 
 To the vast and unprecedented change from 
 ^ age-long habits and practices thus brought about 
 p with almost unthinkable rapidity, the world has 
 not yet adjusted itself fully. Least of all, in the 
 system and methods of government. 
 
 In the midst of these vast changes, of immense 
 material progress, of unparalleled advances in 
 the field of science, the system and methods of 
 government have undergone relatively very little 
 modification from what they were in the pre- 
 machine period. 
 
 I 3 ] 
 
 215 7 
 
 t
 
 To the extent that there have been modifica- 
 tions, the question more and more obtrudes itself 
 whether, especially of late years, that way has 
 been followed which is best calculated to lead 
 to the greatest attainable degree of happiness 
 and well-being for all the people and to the 
 furtherance of those things which are in truth 
 most worth while. 
 
 The problems, political, social and economic, 
 of the past are not akin to the problems of the 
 day. The time when there was reason to fear, 
 and to guard against, the preponderance or abuse 
 of kingly power has gone, probably never to 
 return. It seems a fair question whether the 
 pendulum has not swung rather too far in the 
 direction of laming the effectiveness of govern- 
 ment by too great a measure of parliamentary 
 or direct popular functioning. Certainly, the 
 world's need today is less to curb leaders than to 
 create and encourage leaders and accord them 
 
 scope for action. 
 
 •$ <©■ <§> 
 
 Are the prevailing methods of government, 
 everywhere, methods which would be incompati- 
 ble with the successful conduct of a business 
 concern, nevertheless reasonably adapted to, or 
 unavoidable in, dealing with public problems 
 which now-a-days are, and for a long time to 
 come are likely to remain, mainly economic 
 and social? 
 
 Does the existing system put a premium on 
 glib talk and political cunning as against plain, 
 prompt and efficient action? Does it tend to give 
 
 I 4 1
 
 undue influence and effect to vociferously dog- 
 matic and virulently aggressive minorities? Has 
 it so enmeshed us in a web of rules, minute 
 details, red tape, log-rolling and interferences 
 that inevitably in the affairs of government the 
 "native hue of resolution is sicklied o'er" ? 
 
 More particularly, in this country with its 
 huge size, its heterogeneous population, and the 
 strongly diverging economic interests of different 
 sections, do and can the methods of centralized 
 and all-pervasive law-making and administrating 
 from Washington, such as they have developed 
 more and more in recent years and as they were 
 neither intended nor countenanced by the 
 makers of that most admirable and inspired and 
 most justly revered of all political instruments, 
 the American Constitution — do and can these 
 methods yield results propitious, serviceable 
 and satisfactory to the American people? 
 
 Does the outcome of the recent elections in our 
 own country and in England, and especially the 
 popularly acclaimed advent of the Fascisti rule 
 in Italy, betoken an intense dissatisfaction and 
 disillusionment among the people with the 
 functionings of government and an intuitive 
 conclusion that measures are called for, making 
 for greater effectiveness, simplicity and sincerity 
 of government? 
 
 <§> ^> ® 
 
 I merely register these questions. I shall not 
 attempt today to answer them. To do so would 
 be to go much beyond the theme upon which you 
 have asked me to speak. 
 
 ( 5 )
 
 I shall not seek to fathom fundamental 
 causes and currents nor indulge in speculations 
 thereon, but shall confine myself to discussing 
 concrete and immediate problems confronting 
 us, namely: 
 
 1. The condition of the farmer; 
 
 2. Capital and Labor; 
 
 3. Taxation ; 
 
 4. The European situation and 
 
 our relation thereto. 
 
 [ 6 1
 
 I 
 
 THE PROBLEM OF THE FARMER 
 
 Adversity has come upon the farmer. He is 
 gravely discontented and under a sense of griev- 
 ance toward the existing order of things. 
 
 His is a toilsome calling, involving inevitable 
 hardships and deprivations, and usually a poorly 
 requited one, indeed one of the least adequately 
 remunerated among those which make up the 
 sum total of the nation's activities. 
 
 The farming business is the largest in the 
 country. The basic and vital necessity of the 
 farming industry needs no emphasis. The 
 immense social value of the farming class to the 
 State is beyond argument. 
 
 The farming stock provides a continuous and 
 essential supply of human raw material toward 
 the preservation of the vigor and distinctive 
 characteristics of the American race. 
 
 <§> <§> <§> 
 
 The farmer finds himself in an intolerable 
 situation. 
 
 Pre-war Income, 
 Post-war Outgo 
 
 With wages continuing on a high level, and 
 in some cases wholly undeflated from the peak 
 
 1 7 1
 
 reached during war conditions, with the supply 
 of labor greatly restricted through the operations 
 of the Immigration Act, with taxes increased, 
 with the cost of everything he buys much above 
 the level of pre-war days, the farmer faces the 
 fact that the dollar price of that which he pro- 
 duces and sells is no higher than it was before 
 the war and that the dollars which he receives in 
 return for his toil have a greatly diminished 
 purchasing power as compared to what it was 
 formerly. 
 
 It is harmful and menacing to the common- 
 wealth that so numerous and so valuable a por- 
 tion of the population should feel discontented 
 and resentful and be without prosperity. It 
 must be recognized that the situation lends itself 
 peculiarly to the incitements and wiles of the 
 demagogue and to the plausible figments of the 
 economic visionary or humbug. 
 
 The Danger of 
 False Remedies 
 
 Unless reasonable and well-considered mea- 
 sures of alleviation are promptly enacted and 
 such policies put into operation as are effective 
 and economically sound, the danger looms ahead 
 that a large portion of the farming vote may suc- 
 cumb to the specious persuasiveness and the false 
 promises of those offering relief through unsound 
 money and similar, often disproved but ever 
 resurging, shams, delusions and heresies. 
 
 Indeed, that danger is upon us. Once more, 
 as in the days of populism, the raucous voices 
 
 1 8 1
 
 of the fomenters of class and sectional ani- 
 mosity, of the promoters of economic, social and 
 political quackeries, and of the vendors of 
 tickets to Utopia, pervade the land and are 
 finding all too many listeners. 
 
 The farmer's just grievances call for imme- 
 diate, intelligent consideration and effective 
 redress. 
 
 If there is one calling which has a higher claim 
 than another upon the helpful consideration of 
 the State, it is that of the farmer. 
 
 The farmer's problem is part of our problem. 
 The farmer's welfare is an essential part of our 
 welfare. 
 
 There can be no lasting prosperity in trade and 
 industry, unless the farmer is reasonably pros- 
 perous. There can be no stable and propitious 
 conditions in the field of politics as long as the 
 farmer harbors the resentful feeling that he is 
 not accorded a square deal. 
 
 The remedy can and must be found. More 
 adequate financial facilities for the farmer, a 
 better and more economical system of distribu- 
 tion, co-operative buying and marketing, satis- 
 factory arrangements in the matter of storage 
 and grading, a national policy which will tend to 
 broaden the market for our products of the soil, 
 and other economically well-grounded measures 
 of a helpful character, though divergent from 
 conventional practices, can and should be 
 realized. 
 
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 But that realization will be greatly retarded, 
 if not at least partially prevented, if the problem 
 is not tackled with a common effort of good-will 
 and mutual understanding. 
 
 For business to rail at the "Farm Bloc" and to 
 obstruct soundly conceived measures of legisla- 
 tion desired by spokesmen for the farming in- 
 terests, and, on the other hand, for the farming 
 communities to follow the lead of men who 
 would angrily strike at business and ignore, or 
 run counter to, economic law and experience, is 
 not the way to attain useful results. 
 
 Solution Through Consultation 
 and Reciprocal Collaboration 
 
 The way is to sit down together and by calm 
 and well-meaning comparison of views diagnose 
 the case, determine the causation of the trouble 
 and act in unison in finding and applying anti- 
 dotes for the present and preventative measures 
 for the future. 
 
 Both the problem of the farmer and that of 
 labor involve a careful and authoritative investi- 
 gation of the question whether and to what 
 extent waste has crept into the processes of dis- 
 tribution, whether and to what extent unneces- 
 sary tolls are levied and the channels leading 
 from the producer to the consumer are clogged 
 by parasitic and obnoxious growths which 
 ought to be removed. 
 
 Statistics over many years have demonstrated 
 strikingly that agricultural prosperity and 
 
 [ 10 ]
 
 business prosperity, and agricultural depression 
 and business depression, run on parallel lines 
 and are largely interdependent. 
 
 Unfortunately, that truth has not been 
 sufficiently recognized as yet by either party. 
 On the contrary, they have usually been at 
 loggerheads and pulling in divergent directions, 
 when, as a matter of fact, they are natural allies 
 and both have much to gain from sympathetic 
 understanding and co-operation. 
 
 I 11 1
 
 II 
 
 THE PROBLEM OF CAPITAL 
 AND LABOR 
 
 If there is one country which ought to be free 
 from class animosity and conflict, it is the 
 United States. 
 
 There is no class demarcation in this country. 
 The workman of today is the employer of 
 tomorrow. Most of our rich men and all of our 
 richest men started at the bottom of the ladder. 
 
 The great majority of the presidents of our 
 railroads and of our leading industrial concerns 
 rose from the ranks. 
 
 Yet, the gulf between employer and employee 
 remains far from bridged, and conflicts are far 
 too frequent. 
 
 ^> <§> •§> 
 
 It would be idle to look for a universal remedy 
 to cure this state of things. Much can be done 
 by the pressure of public opinion directed equally 
 upon the "hardboiled" employer and the tru- 
 culently class-selfish labor leader. 
 
 The average American workingman is of no 
 different human stuff than the rest of us. His are 
 the same joys and sorrows, and the same funda- 
 mental morality. He is responsive to the same 
 appeal. 
 
 [ 12 1
 
 He is subject, however, to a ceaseless and 
 highly organized propaganda calculated at best 
 to confirm and strengthen him in the feeling of 
 class consciousness, but all too often aiming by 
 insidious misrepresentation and plausible falla- 
 cies to poison his mind and lead him astray. 
 
 The way to meet this pernicious propaganda 
 is for employers, individually and collectively, to 
 take the pains of counteracting it, both in word 
 and deed. 
 
 That means not only patient and persistent 
 work in explaining and elucidating, and in 
 attacking social and economic heresies with the 
 weapon of logic and of tested truth, it means 
 likewise the exemplification in fact of fair and 
 liberal dealing. 
 
 Capital Should be Guided 
 by the Golden Rule 
 
 It means recognizing the human qualities of 
 the worker; it means respecting his dignity; it 
 means paying due heed to his legitimate require- 
 ments and making fair allowance even for his 
 traditional and natural prejudices; it means 
 stimulating his interest, giving him incentive, 
 granting him his due say as to the conditions 
 under which he works; it means fairly meeting 
 the problems of sickness, unemployment and 
 old age. It means, in one word, putting the 
 human equation and the element of the golden 
 rule into the relationship between employer and 
 employee. 
 
 [ 13 ]
 
 It also means recognition of the fact that it is 
 in the best interest of the employer, even from 
 the merely selfish point of view, not to pay the 
 lowest wages to which labor can be squeezed 
 down, but rather the highest wages compatible 
 with the successful conduct of his business and 
 with keeping his product at reasonable cost. 
 
 <§> <§> <§> 
 
 Labor is entitled as a matter of course, to 
 receive its fair share in the fruits of industry, not 
 merely by way of an adequate return in wages, 
 but of an adequate return also in the comforts, 
 interests and recreations of life, in those less 
 tangible things which make for contentment, 
 peace of mind and happiness. 
 
 On the other hand, the workingman must 
 realize that high wages can only be maintained 
 if a high rate of production is maintained. The 
 restriction of production to a uniformly low 
 level per man, with a view to creating positions 
 for more men, is a sinister and harmful fallacy, 
 most of all in its effect on labor. 
 
 Even the official organ of the Bolshevist 
 regime in Russia announced recently that 
 "increased production is not only the imperative 
 duty but the imperative interest of the prole- 
 tariat." 
 
 Restrictive Rules 
 Hurt Everybody 
 
 By the same token, the restriction, under 
 labor union rules, of the number of apprentices 
 
 I 14 1
 
 in given trades, and all similar measures of inter- 
 ference with the natural course of things, defeat 
 their own objects and are detrimental both to 
 labor and to the community at large. 
 
 It is a truism to say that the more is produced 
 in a community, the more there is to divide all 
 round. Show me a country of low production, 
 and you have a country of low wages. Inevitably 
 so. No labor union or other power can change 
 that economic fiat. 
 
 Nor can they change the fact that there is a 
 point beyond which wages cannot rise without 
 throwing production out of gear and disturbing 
 the whole economic equilibrium. 
 
 Unduly inflated wages must necessarily create 
 unduly inflated prices. The result is diminished 
 consumption which, after awhile, becomes 
 reflected in a reduction of output, accompanied 
 by a reduction of employment. 
 
 Moreover, exorbitantly boosted wages do not 
 do the worker much good when offset by a more 
 or less proportionately high level of the cost of 
 the things he buys. And they do a great deal of 
 harm to a very large part of the rest of the 
 community. 
 
 The Welfare of the Whole 
 People 
 
 The welfare of the so-called middle classes, 
 the men and women of moderate incomes or 
 salaries, the small shopkeeper, the average pro- 
 fessional man, the farmer, etc., is no less im- 
 
 [ 15 ]
 
 portant to the State than the welfare of the 
 
 wage-earner. 
 
 If, through undue exactions, through unfair 
 use of his collective power, through inadequate 
 output, the workman brings about a condition 
 in which the maladjustment of returns and the 
 pressure of high prices become intolerable to the 
 many millions who are not wage earners, he will 
 create a widespread animosity against himself 
 which is bound in the end to be of great harm to 
 his legitimate aspirations. Precisely the same, 
 of course, holds true in respect of the employer 
 and capitalist. 
 
 <§> <§> <§> 
 
 In the last analysis, these matters come down 
 to the temperate, sensible and foresighted use, 
 or the misuse, of power temporarily residing, to a 
 greater or lesser degree, with one party or the 
 other, with organized labor or with the em- 
 ployer, according to the greater or lesser demand 
 for workers. 
 
 The Public Disinclined 
 
 to Tolerate Avoidable Conflicts 
 
 Both sides will do well to take heed of the 
 patent fact that the community at large is less 
 than ever inclined to tolerate quarrels, at its 
 discomfort, expense and peril, arising from the 
 misuse or the unintelligent use of power by one 
 party or the other or by both. 
 
 If necessary, means will be found to curb, cur- 
 tail and circumscribe the exercise of that power, 
 
 [ 16 ]
 
 regrettable though it would be if in one more 
 great field, legislative or bureau regulation and 
 governmental interference were to be substi- 
 tuted for the action of natural forces. 
 
 But it is plainly manifest that the community 
 will not again stand idly by and subject itself 
 to the losses, penalties and risks of great strikes 
 such as the recent railroad or coal strikes. 
 
 17 ]
 
 Ill 
 
 THE PROBLEM OF NATIONAL 
 TAXATION 
 
 It would be difficult to conceive of a system 
 of taxation less scientific and balanced, more 
 crude and disserviceable than the one that has 
 been in effect in this country since 1917. 
 
 While business and accumulated capital are 
 naturally the principal single sources of revenue, 
 there is a point beyond which these sources can- 
 not be used wisely, safely or effectively. 
 
 To supplement them, numerous other means 
 of providing revenue are available. The framers 
 of our tax legislation have resorted to them only 
 unwillingly and inadequately, although they 
 are being greatly and successfully used in all 
 other countries. 
 
 Taxes of that nature, while largely productive 
 in the aggregate, are so trifling in their units as 
 to be barely perceptible in effect, and they have 
 the great advantage of collecting themselves al- 
 most automatically, whereas the expense, labor 
 and complexities, both to the Government and 
 the taxpayer, which the collection of the income 
 taxes involves under the provisions of the exist- 
 ing law, are of staggering magnitude. 
 
 I 18 ]
 
 Progressive Income Taxation Right, 
 but Existing Method Unreasonable 
 
 I favor, and have always favored, the principle 
 of a progressive income tax, but, like every 
 other principle, however sound, it must be ap- 
 plied within the rule of reason and with that 
 discrimination which takes account of practical 
 considerations and consequences. 
 
 We have applied that principle with vindictive 
 unreason. We have turned a rightful theory into 
 a measure of economic violence, with ill effects 
 that, however indirect in some of their mani- 
 festations, are all-pervasive upon the nation. 
 
 <§> <§> <§> 
 
 Much the largest part of the nation's liquid 
 capital is owned by those of small and moderate 
 means, either in the shape of direct investments 
 or through deposits in savings banks or with life 
 insurance and kindred institutions. But the 
 funds so held are not, generally speaking, and 
 ought not to be, available for starting and 
 financing new and untried enterprises. 
 
 The man of small means ought not, and as a 
 general rule will not, and savings banks and life 
 insurance concerns do not, and indeed under the 
 law must not, place funds otherwise than in 
 seasoned investments. 
 
 Reserve of Capital 
 Needed for New Enterprise 
 
 The capital which can afford to take, has an 
 incentive to take, ought to take and heretofore 
 
 [ 19 ]
 
 has taken, the risk of starting and financing new 
 enterprise and doing the pioneer work of the 
 country, is that relatively small percentage of 
 the nation's total capital which is represented by 
 the available funds of corporations and of well- 
 to-do individuals. 
 
 That is a most valuable function for the 
 nation, and that function has been woefully 
 crippled by the existing surtaxes, both because 
 they have prevented the accumulation of capital 
 and because they have largely impaired the 
 incentive to venturing and risk-taking. 
 
 Effects of Present System 
 of Supertaxes 
 
 A register of the characteristics of our present 
 schedule and system of supertaxes would include 
 these items: 
 
 1. It bears the imprint of class and 
 sectional discrimination. 
 
 2. It is unscientific, inequitable, vexa- 
 tious, and uncertain in its operation, and 
 getting steadily less effective in producing 
 revenue. 
 
 3. It encourages and facilitates govern- 
 mental extravagance and at the same time 
 diminishes the incentive to the careful 
 husbanding of private resources, thus dis- 
 couraging saving and self-denial and pro- 
 moting private extravagance. 
 
 [ 20 1
 
 4. By appropriating and draining into 
 the coffers of the government a preponder- 
 ant share of the liquid capital which ought 
 to be available for business and investment, 
 it hampers enterprise, deflects the natural 
 and fructifying flow of capital and prevents 
 that degree of accumulation of funds which 
 is needed for the normal conduct and due 
 expansion of the nation's business and for 
 the country's development. 
 
 5. It causes economic dislocation and 
 maladjustment, diminishes the country's 
 purchasing and consuming power, tends to 
 curtail production, and makes for higher 
 costs. 
 
 6. In that it penalizes the working 
 capitalist, the man engaged in active busi- 
 ness and in productive enterprise, as 
 against the idle capitalist, who simply puts 
 his funds into tax-exempt securities, it pre- 
 vents many business transactions alto- 
 gether, and causes others to be done in a 
 roundabout and artificial manner. 
 
 7. By curtailing excessively that incen- 
 tive to effort and venturing, which relates 
 to the expectation of material reward, it 
 strikes at the very basis of the system of 
 individual enterprise and initiative, upon 
 which our social, economic and political 
 system rests. 
 
 I 21 ]
 
 Prosperity a Matter of 
 Delicate Interrelationships 
 
 The country's prosperity is a matter of mani- 
 fold, complex and delicate interrelationships, 
 and he who would lead the people to believe that 
 they can be benefitted — or, indeed, that they can 
 avoid being greatly harmed — by oppressive taxa- 
 tion of capital, deceives himself or attempts to 
 deceive others. 
 
 Prior to the war, the annual expenditure of 
 the Federal Government was approximately one 
 billion dollars. It is now about three and a 
 quarter billion dollars, and even with strict 
 governmental economy can probably not be 
 reduced materially below that sum for a number 
 of years to come. 
 
 That is a vast increase, yet the burden is not 
 really a heavy one in proportion to the nation's 
 wealth and resources, and could be borne with 
 relative ease if it were wisely adjusted. As a 
 matter of fact, it is grossly maladjusted. 
 
 The whole theory, never, prior to the war, 
 tried in practice or countenanced by public 
 opinion, of levying huge toll on the usufruct 
 of capital and the material reward of energy, 
 ability and enterprise, is not workable. 
 
 Taxes Inevitably 
 Percolate Downward 
 
 The conception of piling enormous taxes on 
 the top in the expectation that they will not 
 percolate downward, is fallacious. 
 
 [ 22 1
 
 For many years prior to the war, America's 
 material development proceeded by leaps and 
 bounds, and its people prospered under a scheme 
 of taxation which sat so lightly on everybody 
 that the subject of taxation was one of but slight 
 general concern. 
 
 If it has now become one of our major prob- 
 lems, a matter of universal complaint, unceas- 
 ing discussion and grievous burdensomeness, the 
 reason is to be found far less in the increased 
 revenue requirements arising from the war than 
 in the stubborn adherence since 1917 to a faulty 
 system and ill-judged methods of taxation. 
 
 How the Present 
 Income Tax is Paid 
 
 According to the latest published official com- 
 pilation of "Statistics of Income," the yield from 
 personal returns for the year 1920 was in round 
 figures, $1,075,000,000. The total number of 
 persons in this country "employed in gainful 
 occupations" is stated to be over 41,000,000. 
 The total number of persons filing income tax 
 returns was 7,259,944. That is either too many 
 or too few. 
 
 Individuals to the number of 5,241,266 having 
 annual incomes from $1,000 to $3,000 paid alto- 
 gether $82,367,553 in income taxes, being at 
 the average rate of less than 1 per cent of their 
 incomes. 
 
 Individuals to the number of 1,337,116 having 
 annual incomes from $3,000 to $5,000 paid alto- 
 
 l 23 ]
 
 gether $83,496,116 in income taxes, being at the 
 average rate of 1.66 per cent of their incomes. 
 
 In other words, 6,578,382 income tax payers 
 (i. e., over 90 per cent of the total number of tax 
 paying individuals) contributed about 15J^ 
 per cent to the total governmental revenue from 
 income taxation, while the remaining 843^ per 
 cent was contributed by 681,562 income tax 
 payers (i. e., barely 10 per cent of the total 
 number of tax paying individuals). 
 
 How the Returns from 
 Surtaxes are Decreasing 
 
 By reason of their very extremes, the high 
 surtax rates have defeated their own purpose, or, 
 rather, that of their advocates. The country is 
 afflicted with the troublous consequences flow- 
 ing from the operations of the existing tax- 
 schedule, without even gaining the advantage of 
 the revenue which was supposed to result from it. 
 The higher brackets of the surtax schedule have 
 ceased more and more to be productive. To a 
 considerable degree they have abolished them- 
 selves, but in the wrong way. 
 
 The official figures show that the aggregate 
 income subject to the higher surtaxes has been 
 reduced to less than one-half of what it was 
 in the first year of their existence, and the aggre- 
 gate of taxable incomes exceeding $300,000 has 
 been reduced to less than one-quarter of what 
 was the aggregate declared income in that 
 category in 1916. 
 
 That does not mean that large individual 
 
 I 24 1
 
 incomes have diminished. It merely means that 
 the governmental revenue derived from the 
 extreme surtax rates on large incomes has 
 diminished. 
 
 Quite apart from the plain way of avoidance, 
 through investment in tax-exempt securities, 
 these rates challenge the ingenuity of those 
 subjected to them, as every extreme statute does, 
 to find permissible means of escape from their 
 rigor. 
 
 Governmental greed, just like private greed, 
 is apt to overreach itself. Many transactions on 
 which those concerned would willingly pay a 
 moderate tax are now simply being laid aside and 
 not effected at all because of the intolerable 
 taxation to which they would be subjected. 
 Others are being concluded in an artificial, 
 round-about, unsatisfactory way so as to avoid 
 the full burden of the tax. The result in either 
 case is a loss of revenue to the Government and 
 an impediment to business. 
 
 I have personally no doubt that surtaxes im- 
 posed at a reasonable rate would produce a 
 larger revenue than do the excessive rates now 
 in existence. As the rate of surtaxes is lowered, 
 the aggregate amount of income subjecting itself 
 to taxation will be largely increased. A decrease 
 in rates will bring an increase in volume. 
 
 A Few Pertinent 
 Questions 
 
 I should like to address the following few ques- 
 tions to those who, untaught by the test of the 
 
 ( 25 ]
 
 past four years, still cling to the ill-conceived 
 and nationally detrimental system of taxation 
 which was inaugurated in the stress, and to meet 
 the exigencies, of war and is no more fitted to be 
 perpetuated in peace than is any other war 
 measure: 
 
 Has any one, any calling, or any section of 
 the country been benefitted by a system which 
 was meant by its promoters to place the prin- 
 cipal burden of taxation directly upon a small 
 minority of the people? 
 
 Has not, on the contrary, that burden, trans- 
 lated into higher costs, diminished supply of 
 capital, reduced enterprise, curtailed purchasing 
 and consuming power, freakish maladjustments 
 and other impediments, fallen heavily upon the 
 bulk of the people, especially upon the agri- 
 cultural population, much more heavily indeed 
 than would have been the case under a system 
 less based upon class discrimination and political 
 opportunism, and more upon courageous applica- 
 tion of practical knowledge and economic 
 soundness? 
 
 Is it not a fact that the problem of raising 
 in times of peace so large a sum as three and a 
 half billion dollars by taxation, is an entirely new 
 one to us and that we have no precedent to guide 
 us in its solution? If so, is it reasonable to think 
 that we have found the best solution right off, at 
 the first attempt, in the revenue measure enacted 
 in the midst of war, and is it reasonable to ad- 
 here in peace times, as we have done, generallv 
 
 f 26 ]
 
 speaking, to the economic conceptions under- 
 lying that measure? 
 
 Ought we not, rather, while retaining the 
 principle of progressive income taxation, to do 
 some prudent, carefully circumscribed and 
 responsibly sponsored experimenting in order to 
 ascertain through the test of actual experience 
 what is the best and most advantageous and least 
 burdensome way all round to raise the revenue 
 necessary for the conduct of the Government? 
 
 Plea not for Benefit of Wealth, 
 but for Advantages of All 
 
 I realize that not much sympathy will be 
 wasted by the rank and file upon the plaint of 
 those in possession of large incomes, on the score 
 of excessive taxation. 
 
 If the argument for a reduction of those rates is 
 to succeed, it must be based not upon the plea 
 of consideration for the rich, but upon proof 
 that the existing schedule results in harm to the 
 country as a whole. 
 
 That proof has been given repeatedly. As 
 far as I know, it has never been contested by 
 serious arguments. A Democratic President and 
 a Republican President, three Democratic and 
 one Republican Secretaries of the Treasury have 
 advocated an adequate reduction of our sur- 
 taxes and have given reasons for that recommen- 
 dation. 
 
 I 27 1
 
 Yet the evil of extreme surtaxes and the 
 countrywide damage flowing from it remain 
 uncorrected, for the slight modification effected 
 last year is no correction. 
 
 How Existing Laws 
 Came Into Being 
 
 It is interesting to note in this connection, that 
 the high surtax rates embodied in our revenue 
 measures since 1917 do not represent the advice 
 and judgment of the responsible leaders of either 
 of the great political parties, nor the vote of the 
 House of Representatives as enacted in the bills 
 sent by the House to the Senate, nor even the 
 judgment of the Senate Committee specially 
 charged with the function of studying and recom- 
 mending measures of revenue-raising. 
 
 In 1917 the recommendations of the Com- 
 mittee in charge were set aside by the assault 
 of a group of Senators on the floor of the Senate 
 who stampeded their colleagues into voting for 
 much higher surtaxes than had resulted from the 
 deliberations in the calmer and more responsible 
 discussions of the Committee room. 
 
 In 1921 the House of Representatives voted 
 to reduce the highest surtaxes to thirty-two 
 per cent and the Senate Committee adopted 
 the same rate, only to reverse itself at the bidding 
 of a group of Senators who successfully insisted 
 upon far higher rates of surtaxes than had been 
 fixed by the vote of the House and by the original 
 vote of the Senate Committee. 
 
 I 28 ]
 
 It is true that the proposed reduction of the 
 maximum surtax rate to thirty-two per cent 
 would have affected only those in receipt of 
 annual incomes orprofits exceeding$70,000. From 
 that point of view, the proposal, whatever its 
 economic and fiscal justification, was maladroit 
 and inexpedient practically, and, in my personal 
 opinion, lacking in due consideration for the 
 smaller income tax-payer. Coinciding, moreover, 
 as it did, with the abolishment of the excess 
 profits tax, it lent itself easily to attack. 
 
 Spread between Normal and 
 Surtaxes in America Higher 
 than in Europe 
 
 From the point of view of the strictly intrinsic 
 justification for the proposed reduction, it may 
 be pointed out that the spread between the rate 
 applicable to the income class at which our 
 "normal" tax of eight per cent starts, i. e., $4000, 
 and the rates applicable to those in the high 
 surtax classes, is far greater under the American 
 tax schedule than it is in any country of Europe. 
 The exemptions granted under the American 
 Income Tax enactment in favor of those of small 
 means, are much more liberal than those prevail- 
 ing in any European country. 
 
 Nevertheless, it is questionable whether public 
 opinion and political considerations would and 
 should countenance a really adequate reduction 
 of the surtax rates unless there was a simultane- 
 ous reduction in the "normal" rate. 
 
 [ 29 ]
 
 Normal Tax Rate Should be Reduced 
 Simultaneously with Surtaxes 
 
 I would suggest, therefore, (irrespective of 
 what might be done in case of the adoption of the 
 "sales tax," to which I shall refer later on), that 
 the "normal" tax-rate be reduced by one- 
 quarter and that all surtaxes be reduced by 
 one-third for the next fiscal year and by another 
 one-sixth for the year after that. 
 
 While such a reduction would have a strongly 
 beneficial effect in quickening business, facilitat- 
 ing the flow of capital and diminishing costs, it 
 would be found, I believe, that the total revenue 
 resulting from the lowered rates as compared to 
 those now in force need be affected to a relatively 
 unimportant extent only, and as far as the tax 
 yield from large incomes and profits is concerned, 
 I feel certain that the government would receive 
 more, rather than less. 
 
 The latter expectation is borne out by the high 
 authority of the Secretary of the Treasury in his 
 latest report on the national finances, an ad- 
 mirably wise, sound and candid utterance. The 
 only point concerning which I venture to express 
 qualified dissent from the tax policy recom- 
 mended by the Secretary is, that his advocacy 
 of a reduction in the upper brackets of the surtax 
 rates is not coupled with a proposal for the 
 simultaneous relief of the income tax payer of 
 lesser means. 
 
 [ 30 ]
 
 Alternative Taxes Available 
 if Afore Revenue Needed 
 
 To the extent that a falling off in the aggre- 
 gate revenue from income and surtaxes is to be 
 made good in consequence of the general reduc- 
 tion which I suggest, there is a choice available 
 among several very simple and productive 
 taxes (such as have long existed in most countries 
 of Europe) , for instance, a very small stamp tax 
 on checks and on bills of exchange, which would 
 involve no burden at all on the people at large 
 and no hardship on anybody. 
 
 #> <§> <§• 
 
 Suggestion of Sales Tax Should 
 Receive Unbiased Consideration 
 
 In this connection and from the broader view- 
 point of fiscal policy, I would once more bespeak 
 unbiased consideration of the sales tax. It seems 
 to me that the objections to that form of taxa- 
 tion are largely based upon preconceived notions 
 or dogmatic assumptions. Whether its advocates 
 or its opponents are in the right can only be 
 determined by actual test. I think such a test 
 ought to be made, simultaneously with an 
 adequate reduction of the surtax-schedule and 
 the normal tax-rate, and a fair trial given to the 
 principle of a sales tax on however modest a scale. 
 
 Such votes as have been taken on the subject 
 among business men throughout the country, 
 demonstrate that the majority of the business 
 community endorses the principle of a sales tax. 
 
 1 31 ]
 
 It has been advocated by leading men in both 
 political parties and by leading newspapers of 
 divergent political affiliations. 
 
 The sales tax is so simple of application and 
 collection, so exceedingly small in its individual 
 incidence, and so easily recalled if no longer 
 wanted, that a trial upon intelligently conceived 
 and carefully worked out lines may safely be 
 undertaken without the risk of noticeable hard- 
 ships upon any one. 
 
 The labor, trouble and time spent by the 
 6,578,382 small income tax payers in filing 
 their returns and paying their taxes, and the 
 expense caused to the government in collecting 
 and checking them, are out of all proportion 
 to the revenue produced. 
 
 If a sales tax were adopted, the yield produced 
 by it would make it easily possible for the govern- 
 ment to exempt entirely from income taxation 
 all those having incomes of $5,000 or less, in 
 addition to diminishing the normal tax and to 
 reducing the war schedule of surtaxes to reason- 
 able rates, appropriate to peace time conditions. 
 And there would still be left, assuming a sales 
 tax of one per cent, a large surplus yield to be 
 applied to relief from burdensome taxation or to 
 other desirable purposes. 
 
 No Complex Machinery 
 Would be Required 
 
 Such practical objections as have been 
 brought forward by fair critics of the sales tax, 
 can be met without difficulty by suitable 
 
 [ 32 ]
 
 provisions of the enactment. No complex and 
 cumbersome machinery is required to bring the 
 sales tax into operation. Should it not prove sat- 
 isfactory to public opinion, after having been in 
 effect for an adequate length of time to test its 
 workings, it can easily and simply be abolished. 
 
 I feel assured that if and when the 
 people can once be made acquainted through ac- 
 tual experience with the simplicity, productivity 
 and "painlessness" of the sales tax, it will be 
 recognized by public opinion for what I believe it 
 to be — an ideal means of raising revenue — and 
 will become a permanent feature of our fiscal 
 system. 
 
 Conservative estimates indicate that a one 
 per cent tax, even if confined to sales of com- 
 modities only and exempting initial sales of 
 farm crops and live stocks and also exempting 
 annual turnovers up to $6,000, would produce 
 annually at least $1,250,000,000. 
 
 According to careful calculations, the addition 
 of a tax of one per cent upon every stage of 
 manufacture from the original producer of the 
 raw material to the ultimate consumer of the 
 finished article, will average an addition to 
 final costs of not more than three per cent. 
 That is less, I feel sure, than the addition to final 
 costs which the public now pays through the 
 existing practice of shifting taxes by "loading" 
 prices in a more or less haphazard way, and 
 through the indirect effect of the withdrawal of 
 capital from productive enterprise, owing to 
 excessive surtaxes. 
 
 I 38 1
 
 Sales Tax Would Rather Diminish 
 than Increase Burden on the Masses 
 
 The incidence and amount of the sales tax can 
 be so plainly checked and traced as to prevent 
 its being used for unfairly pyramiding or "load- 
 ing" prices. Personally, I am convinced that 
 instead of adding to the burden on the masses of 
 the people, as its opponents claim, the effect of 
 the operation of the sales tax would tend to 
 diminish that burden. 
 
 The tax problem of the United States Govern- 
 ment is not difficult, the remedy for its existing 
 defects and their consequences is easy. The 
 adjustment which is called for, can and should be 
 effected without impairing the fortunate and 
 desirable circumstance that in our country, in 
 respect of taxation by and for the Central 
 Government, those of small or moderate means 
 are taxed far less, both directly and indirectly, 
 than they are in any other of the leading 
 countries. 
 
 The alternative is not to burden unduly either 
 business or the masses of the people. The idea 
 is not, and ought not to be, to relieve the former 
 at the expense of the latter. 
 
 The end that should and can be attained by 
 proceeding wisely and in recognition of the facts 
 which practical experience has demonstrated 
 unmistakably, is to benefit both business and the 
 masses of the people. 
 
 1 34 ]
 
 There can be no Full Prosperity 
 Until Taxation is Adjusted Wisely 
 
 I am convinced that unless and until the glaring 
 errors of our existing taxation policy are remedied, 
 America will fall short of attaining that degree of 
 prosperity and accomplishing that measure of 
 general well-being, which are open to a nation in 
 whose domain abounding natural resources are 
 coupled with racial qualities that in the past 
 have found conspicuous expression in zest for 
 work, daring enterprise and broad-gauged 
 achievement. 
 
 And I am further convinced that tax revision 
 contains a good deal less political dynamite than 
 many of those in public life appear to think. I 
 believe the people do not care by what method 
 relief is obtained from an unpropitious situation 
 provided the relief is effective and the results are 
 beneficial to them. 
 
 [ 35
 
 IV 
 
 THE EUROPEAN SITUATION 
 
 The blight of those ill-omened instruments, 
 the peace treaties of 1919, lies upon all Europe. 
 
 Undertaking blithely to create a new world by 
 their fiat, the framers of the treaties carved up 
 with sweeping and iconoclastic arbitrariness the 
 map of Europe, Africa and Asia, brushing aside 
 actualities, unmindful of demonstrated qualities 
 or disabilities of races and disregarding economic 
 realities and results. 
 
 Endeavoring to reconcile justice and wisdom 
 with expediency and all too often with considera- 
 tions of domestic policy, they sowed the seeds of 
 dissension and ill-feeling toward each other 
 among their respective nations, and of confusion, 
 discord and strife throughout Europe. 
 
 In the name of a hazy and illusory doctrine, 
 termed self-determination, dispensations were 
 made which instead of bringing assuagement of 
 racial animosities, have resulted in the creation of 
 narrow, rampant nationalisms and of multiplied 
 customs-barriers and other impediments thrown 
 in the path of trade-intercourse and normal 
 relationship between the peoples. 
 
 Simultaneously with these dispensations and 
 in defiance of the self-same doctrine, large bodies 
 
 [ 36 ]
 
 of people were torn from their racial affiliations 
 and thrust under unnatural sovereignties. 
 
 Failure of the 
 Peace Treaties 
 
 So little were the peace treaties consonant with 
 the realities that from the day of their promulga- 
 tion to this day they have been continuous ob- 
 jects of heated controversy, of readjustment, of 
 interpretations, of conferences, of haggling and 
 whittling down, and of ever-recurring crises. 
 None of them has proved fulfillable. 
 
 In the case of one of them, the treaty with 
 Austria, the selfsame nations which imposed the 
 conditions of peace have found themselves com- 
 pelled to undertake the task of intervening to 
 counteract the effects inevitably produced by 
 these very conditions. 
 
 In the case of another, the treaty with Turkey, 
 its provisions have been nullified by the sword, 
 and, according to often published and uncon- 
 tradicted reports, the means to sharpen that 
 sword were furnished to a considerable extent 
 by some of the Allied Powers. 
 
 The treaty makers thought fit to inject into 
 the matter-of-fact business of making peace — a 
 business which demanded promptitude and final- 
 ity — the complexities, delays and uncertainties 
 of a world-embracing ethical experiment that 
 called for calm and detached and separate con- 
 sideration and treatment, i. e., the League of 
 Nations. 
 
 1 37 ] 
 
 - ;!- 

 
 The idea and aim of organized co-operation 
 among the nations in order to maintain and 
 strengthen international law and justice, foster 
 understanding, fair dealing and good relations 
 among the peoples, and aid to preserve peace has 
 ever met with the ardent approbation of right- 
 thinking people everywhere. 
 
 The treaty makers have mishandled that fine 
 and universally acclaimed conception by seeking 
 to utilize it for unrelated purposes. 
 
 Fundamental Defects of 
 the League of Nations 
 
 The League ought to have been entirely 
 separate and distinct from the war-settlement, 
 instead of being made an instrument to execute 
 and guarantee the terms of ill-conceived peace 
 treaties. 
 
 It ought to have been a matter of growth, of 
 evolution, of elastic adaptability, instead of the 
 rigid, cumbersome, complex, all-embracing thing 
 which emerged from the fateful secret conclave in 
 Paris in the summer of 1919. 
 
 Owing to its congenital defects and the disin- 
 genuousness and bargaining which marked its 
 very creation, the League has proved itself im- 
 potent to deal with the most pressing and vital 
 problems for which the world craves a remedy, 
 and to aid effectively in bringing about that 
 spirit and fact of peace and settlement and 
 fairness and reconciliation among nations, for 
 the promotion and attainment of which, in the 
 
 [ 38 1
 
 view of the sincere and singleminded adherents 
 of the League idea, it was destined. 
 
 •^ ^> <§> 
 
 The contention frequently put forward that 
 responsibility for the existing unsettlement, dis- 
 peace and quarreling in Europe is largely attrib- 
 utable to America's absence from the League of 
 Nations seems to me to be little more than an 
 attempt to unload the blame for the conse- 
 quences which were bound to spring, and did 
 spring, from the fatal faultiness of the peace 
 treaties. 
 
 How could America's participation in the 
 League of Nations have changed the fateful 
 course of events, in view of the fact that it is the 
 dispensations embodied in the peace treaties and 
 particularly the provisions relating to repara- 
 tions, which were mainly causative of those 
 events, and of the further fact that the League, of 
 course, has no power whatever to modify those 
 dispensations and provisions? 
 
 The "Fourteen Points" 
 were Disregarded 
 
 The program proclaimed by President Wil- 
 son, speaking for the "Allied and Associated" 
 powers, as the basis on which peace should rest, 
 including the wise, enlightened and far-sighted 
 Fourteen Points, has been disregarded or cir- 
 cumvented. 
 
 Whether or not the American and Allied 
 armies ought to have gone on to Berlin, whether 
 
 [ 39 ]
 
 peace terms ought to have been dictated from 
 that capital, whether they ought to have been 
 different than those actually stipulated, the fact 
 is that Germany laid down her arms upon the as- 
 surance of definite conditions of peace stated by 
 President Wilson and formally accepted and con- 
 firmed — with minor reservations — by our Allies. 
 
 The peace treaties are not in conformity with 
 those terms. 
 
 If it be possible to speak of a pledged word 
 being more sacred and compelling in one case 
 than in another, it may be said that no obliga- 
 tion is more solemn and binding than that 
 undertaken toward a beaten and disarmed foe. 
 It has been so considered throughout history, 
 far back even in the days when the code of ethics 
 was primitive. 
 
 The treaty makers not only departed from the 
 plain meaning of the conditions granted to the 
 enemy, they also nullified, in effect, the promise 
 given to their own peoples, which fired so many 
 hearts and inspired so many to willing sacrifice 
 and heroic endurance, the promise that the 
 dreadful night of the war would bring the dawn 
 of a nobler day, both within each nation and 
 among all nations. Alas, for the shattering of 
 that high hope! 
 
 The spirit and actions of the victors as 
 exemplified in 1919, and the proceedings since 
 then of some of them have gone far to handi- 
 cap the influence and the efforts of those in 
 the defeated countries who are sincerely attached 
 to liberalism and democracy, and to facilitate 
 
 I 40 1
 
 the propaganda of extremists, both on the right 
 and on the left. 
 
 I dislike to interject any reference personal 
 to myself, but, lest such consideration as you 
 may be inclined to think my arguments to be 
 deserving of, may be affected by misunderstand- 
 ing or misinterpretation of my motives, permit 
 me to say that the attitude which I took un- 
 hesitatingly on the side of the Allied nations 
 from the day the first shot was fired in 1914, 
 because their cause was that of right and liberty, 
 ought to absolve me from the imputation of bias 
 in favor of Germany. 
 
 The Tragic Plea 
 of Devastated France 
 
 I know and feel full well the all too elo- 
 quently tragic and moving plea which con- 
 templation of the devastated regions makes to 
 the feelings of every one, how much more to 
 those of a Frenchman. 
 
 I sympathize deeply with, and fully under- 
 stand and endorse, the passionate determination 
 of France to protect her children now living 
 and those of coming generations, as far as hu- 
 manly possible, against the dread eventuality 
 of having to face once more the appalling ordeal 
 of war and invasion from across the Rhine. I 
 share wholly the feeling and conviction that the 
 safety and wellbeing of France do concern, justly 
 and greatly, the people of the United States, both 
 sentimentally and actually. 
 
 [ 41 1
 
 I am far from forgetting that, from the moral 
 and legal point of view, Germany must go, or 
 must be made to go, to the utmost limit of 
 her capacity to atone for the hideous wrong 
 and destruction wrought by her. I am far from 
 under-appraising the right and the need of 
 the Allied nations, especially France, to take 
 every warranted safeguard for their future peace 
 and security. 
 
 I endorse unqualifiedly the title of the Allied 
 nations, and again pre-eminently France, to 
 exact every practicable contribution and guaran- 
 tee from Germany toward overcoming the grave 
 fiscal and economic difficulties and problems 
 which, owing to the war, are weighing upon 
 them. 
 
 I do not shut my eyes to the instances, within 
 the past four years, of conduct and tendencies on 
 the part of Germany calculated to arouse the 
 resentment and misgiving of the Allied nations, 
 of things done which should not have been done 
 and other things not done which should have 
 been done, nor to the fact that a considerable 
 and influential portion of the German people 
 continue to show an ominous spirit of truculence 
 and of obliquity to her guilt. 
 
 But all these considerations, however weighty, 
 do not make right the defects, moral and prac- 
 tical, of the peace treaties. Nor do they justify 
 self-opinionated refusal to recognize or admit 
 realities, and stubborn insistence upon untenable 
 and unfulfillable conditions. 
 
 ( 42 ]
 
 The most urgent and most immediately 
 troublesome of the problems calling for action 
 by the Allied Governments, is that of the repara- 
 tions due from Germany. 
 
 That the situation in Europe cannot be nor- 
 malized until this question and others related 
 thereto have been definitely and finally ad- 
 justed, is now a matter of general recognition. 
 That Germany is utterly unable — and under no 
 conceivable circumstances will be able — to pay 
 the fantastic sum assessed against her by the 
 London ultimatum of the spring of 1921, is like- 
 wise understood by informed persons everywhere. 
 
 (Incidentally, it should be borne in mind that 
 the appraisal of that sum rests upon an inde- 
 fensible interpretation of the armistice terms. 
 Under these terms, Germany was held to make 
 compensation "for all damage done to the 
 civilian population of the Allies and to their 
 property by the aggression of Germany by land, 
 by sea and from the air." In the peace treaty, 
 against the unanimous advice, on legal, moral 
 and practical grounds, of the American experts, 
 but, regrettably, with the consent, though re- 
 luctantly given, of President Wilson, the natural 
 meaning of these terms was twisted to include 
 German liability for Allied military pensions 
 and "separation allowances," and thereby the 
 total amount assessable against Germany for 
 reparation was more than doubled.) 
 
 [ 43 ]
 
 The Appraisal of 
 What Germany can Pay 
 
 In appraising Germany's ability to pay repara- 
 tions, it must be remembered that not only has 
 the peace treaty taken from her a vast amount 
 of property (estimated — though doubtless over- 
 estimated — by the late Dr. Rathenau at about 
 twenty billion dollars in value), some of it of 
 irreplaceable national value economically, but 
 that she is called upon to pay the cost of the 
 Allied armies of occupation, the expense of 
 numerous Allied commissions and other items 
 not generally known, all of which aggregate a 
 huge sum, apart from reparations. And the 
 vital fact must never be lost sight of that what 
 German industry yields at home is paper marks, 
 but what she has to pay in reparations is gold 
 marks or their equivalent. 
 
 According to official figures submitted to the 
 German Parliament, the cost to Germany of 
 the Allied armies of occupation from the 
 Armistice to March, 1922, was 5,537,000,000 
 gold marks (about one and one-third billion 
 dollars) and 14,000,000,000 paper marks. For 
 the past twelve months, it is officially stated, the 
 cost to Germany of the Allied armies of occu- 
 pation has been over $400,000,000. 
 
 Germany Must Pay to the 
 Full Limit of Her Capacity 
 
 The conscience of the world will not be satis- 
 fied until Germany will have made that degree of 
 
 [ 44 1
 
 at least material reparation which, by her utmost 
 practicable efforts, she is able to produce. But 
 all competent observers agree that the amount 
 now fixed not only is far beyond her capacity to 
 pay, but that insistence upon, and efforts to 
 enforce, the unrealizable, results merely in 
 steadily diminishing that capacity. 
 
 Suggested Settlement 
 of Existing Deadlock 
 
 It would seem manifest that the situation calls 
 for the granting of a moratorium for a few years. 
 Within that period, under the effective super- 
 vision of the Allied powers and, to the extent 
 needed, with their co-operation, she can and 
 must put her house in order, prevent the evasion 
 of German capital, stop her paper printing 
 presses, impose and rigorously collect severe 
 taxation, balance her budget and stabilize her 
 currency. She must show unquestionable good 
 faith and the utmost sincerity of effort, and so 
 conduct herself in action, spirit and disposition 
 as to invite and warrant indulgence on the part 
 of the Allied powers. 
 
 After the expiration of that moratorium, she 
 should inflexibly be held to pay such reparations 
 as observation and experience in the meantime 
 will have shown to be practicable, and as long as 
 she does pay, there should be no measures or 
 gestures of latent coercion, military or otherwise. 
 
 In pursuance of such a program, a German 
 loan could be floated of sufficient size to enable 
 
 I 45 ]
 
 the stabilization of the mark and the making of 
 a substantial payment on account of reparation. 
 
 It has been suggested — and it may perhaps be 
 wise — that the reparations payments to be 
 exacted from Germany in such a final settlement 
 should not be an arbitrarily fixed amount which 
 may prove too high or too low for her capacity, 
 but a definite yearly percentage of her exports, 
 for an adequate length of time. 
 
 Incidentally in the very interest of the repara- 
 tion claimants, those treaty provisions which 
 place undue discriminations against her exports 
 and prevent her from controlling her imports, 
 ought to be reviewed. 
 
 The Menace of 
 Germany's Collapse 
 
 It is doubtless true that the present critical 
 situation in Germany is due not merely to exces- 
 sive exactions, and to harassments and errors on 
 the part of the Allies, but that a large part of the 
 responsibility is attributable to the faults of her 
 own policy, whether due to reprehensible design 
 or to lack of strength and resolution in the 
 Government. 
 
 Nevertheless, the fact is that by the methods 
 heretofore employed the Allied nations have 
 not been able to obtain any but a small part 
 of the reparations justly due, that the prospect 
 of obtaining adequate payment is getting slim- 
 mer the longer these methods are pursued, that 
 things in Germany are going from bad to worse, 
 
 [ 46 ]
 
 that she is drifting into economic chaos, that she 
 is threatened with civil war, that she is being 
 driven fatally into the beckoning arms of Russia. 
 
 What the repercussion upon all Europe would 
 be of total despair and collapse in Germany, 
 cannot be measured. But surely it has become 
 plainly manifest that the sheer policy of the 
 iron hand can bring neither profit nor safety to 
 those employing it. 
 
 Surely, it is possible to be inflexibly firm in 
 insisting upon and enforcing just dues fixed 
 within the limit of the reality of things, without 
 making confusion ever worse confounded. 
 Surely, the time is due and overdue to re- 
 establish genuinely peaceable intercourse be- 
 tween all the leading nations. 
 
 [ 47 1
 
 V 
 
 THE PROBLEM OF AMERICA'S 
 ATTITUDE TOWARD EUROPE 
 
 In contemplation of the European situation, 
 what, then, should America do? 
 
 It is no use crying over spilt milk, but there is 
 use and indeed there is need, for the American 
 people to aid in preserving from further spills 
 what milk there is left, and in replenishing the 
 world's all too scanty supply. 
 
 Not seeking any exclusive advantage for our- 
 selves, deriving our compensation out of the 
 results flowing from the enhanced well-being of 
 all nations, we are peculiarly qualified to illumine 
 the murky gloom of post-bellum and post-treaty 
 Europe with the clear rays of well-intentioned, 
 judicious counsel and to contribute effective 
 collaboration. 
 
 America Cannot Disregard 
 Her Responsibility 
 
 Such as Europe is today, America has been a 
 strong factor to make her, through her decisive 
 participation in the war and through President 
 Wilson's part in the framing of the peace 
 treaties. We cannot in decency or in wisdom 
 disregard that responsibility and wash our 
 hands of Europe. 
 
 I 48 ]
 
 America is in the fortunate position of not 
 having any axes to grind. She is not suspected 
 of ulterior motives. 
 
 The European nations, both our comrades in 
 the war and our former enemies, have confidence 
 in her disinterestedness and her intentions. They 
 have reciprocally involved themselves in a snarl 
 which they find it an almost hopelessly difficult 
 task to unravel by themselves. 
 
 In the tumultuous clash of conflicting inter- 
 ests, aims and claims among the nations, 
 America's voice will be heard and her counsel 
 will be potent. 
 
 In the face of a Europe seething with turmoil 
 and gripped by distress, is America to pursue a 
 policy of narrow self -protection, over-cautious 
 reserve and cold, diplomatic correctness? Is she 
 to stand aside in sterile and self-righteous 
 aloofness? 
 
 The World's Consuming Power 
 Essential to American Prosperity 
 
 In part, through the destruction of the war 
 and no less, probably, through the faults of 
 statesmen and the disruptive effects and eco- 
 nomic vices of the peace treaties, the consuming 
 power of Europe is greatly impaired and that of 
 many millions of her people crippled almost to 
 the point of extinction. 
 
 ^ <§> <§> 
 
 The consuming power of the world is an essen- 
 tial element in our prosperity, for our own pro- 
 
 f 49 ]
 
 ductive capacity has outrun our consuming 
 capacity. 
 
 The purchasing power of the European mar- 
 kets may not, for a certain length of time, be 
 wholly indispensable to the prosperity of our 
 manufacturers and merchants — though it un- 
 doubtedly is to some of them — but it is abso- 
 lutely indispensable to the lasting prosperity 
 of our farmers and cotton growers, because they 
 have no other market for their surplus. 
 
 I venture to propound, in respect of the 
 European situation, that the following things 
 might well and safely be done by the United 
 States, consistent with American traditional 
 policies, with freedom from political entangle- 
 ments in Europe, with the inviolate preservation 
 of our liberty of action and our untrammeled 
 sovereignty and with altruism, duty and self 
 interest: 
 
 1 
 
 Official Representation on 
 Reparation Commission 
 
 I believe that America should long have been 
 officially represented on the Reparation Com- 
 mission, on which she has had from its beginning 
 an admirably qualified but unofficial and non- 
 voting delegate, and that she should be so repre- 
 sented henceforth unless the outcome of the 
 present Inter-Allied Conference on the subject of 
 reparations should make this uncalled for or 
 
 [ 50 ]
 
 impracticable. I also believe that America 
 should take official part in the work of other 
 Commissions of a smiliar character, destined 
 to settle controversial questions and aid the 
 recuperation of Europe. 
 
 These Commissions, in their conceptions and 
 functions, are essentially akin to arbitration 
 bodies. I can see no categorical reason why 
 America should not take a full-fledged part in 
 their deliberations and conclusions. I see strong 
 reasons why she should, and believe that her 
 doing so would mean a valuable contribution 
 toward terminating embarrassing and harmful 
 deadlocks and toward bringing about fair and 
 reasonable solutions of gravely troublous prob- 
 lems pressing for settlement without involving 
 the United States in tangible commitments or 
 undue responsibilities. 
 
 II 
 
 Definite Indication as 
 
 to International Collaboration 
 
 A vast majority of the American people, 
 at the last presidential election, pronounced 
 their emphatic unwillingness — in my opinion, 
 rightly so — to subject this country to the 
 obligations and "involvements," actual and 
 moral, of the League of Nations as it came to 
 us from Versailles. 
 
 Notwithstanding the political reversal regis- 
 tered at the election of last month, it seems 
 to be conceded that the preponderating verdict 
 
 51
 
 of the electorate continues to be opposed to 
 America's joining the existing League. 
 
 On the other hand, there are indications of a 
 growing undercurrent of popular feeling and 
 recognition that the United States cannot afford 
 to be indifferent or inactive in respect of the 
 disarray in Europe. 
 
 I would venture the suggestion that it has 
 now become fairly incumbent upon the United 
 States to indicate precisely and officially what 
 are the terms, conditions and limitations under 
 which she would be prepared to take part in 
 an organized and permanently established inter- 
 national effort, destined to serve justice and 
 welfare, to aid the maintenance of peace, and 
 to promote understanding, fair dealing and 
 goodwill among the nations, but so circumscribed 
 in its functions and powers as to be in accord 
 with the spirit of the traditional limitations in 
 respect of America's attitude toward the affairs 
 of Europe, and to involve no approach to any 
 moral or actual interference with American 
 sovereignty and freedom of action. That sug- 
 gestion is not in conflict with precedent. 
 America, prior to the war, did co-operate offi- 
 cially in international conferences called to serve 
 the purposes above stated. 
 
 I do not speak about the manifest desirability 
 and propriety of the United States joining the 
 International Tribunal of Justice at The Hague, 
 because it is understood that our government is 
 already in negotiation with the view to that 
 consummation. 
 
 [ 52]
 
 Ill 
 
 The Allied Debts to America 
 
 I submit that our manner of dealing with the 
 indebtedness of the Allied nations to the Ameri- 
 can Government should be practical, broad- 
 gauged and liberal. 
 
 4> <^ <§> 
 
 Before proceeding to discuss this subject, I 
 beg your indulgence for a few words which, in 
 my capacity as banker, I feel called upon to say 
 in connection with it, in view of the constantly 
 reiterated imputation that the views of the 
 banker, and especially of the so-called interna- 
 tional banker, concerning this question are 
 colored by considerations of selfish interest. 
 
 Well, that simply is not so, and there is nothing 
 in the nature of things to make it so. Indeed, 
 from the merely material and personal point of 
 view the banker has no more particular reason 
 to be concerned about a settlement of the matters 
 affecting the situation in Europe than the aver- 
 age American citizen, and much less reason than 
 the farmer and others whose prosperity is sub- 
 stantially affected by Europe's capacity to make 
 purchases in this country. 
 
 The often repeated and widely believed asser- 
 tion that American bankers hold from four to 
 six billion dollars of foreign securities is wholly 
 untrue. To begin with, the total amount held 
 in America of securities of those nations which 
 are indebted to our Government, is not four to 
 six billion dollars, but less than one billion dollars. 
 
 f 53 1
 
 And, secondly, these securities have been widely 
 distributed, and the great bulk of them is held 
 not by bankers, but by many thousands of 
 investors, mostly small investors, throughout 
 
 the country. 
 
 <#> <§> <§> 
 
 To return, after this diversion, to the course of 
 my argument, what are the facts and circum- 
 stances relating to the Allied debts to America, 
 aggregating, in round figures, without including 
 interest accrued but unpaid, $10,000,000,000? 
 
 (A) These debts are justly due to the United 
 States. There is no valid ground for reproach, 
 uttered, insinuated or felt, on account of this 
 government's unwillingness to relinquish or 
 compromise that claim. The contention that our 
 loans to the Allied nations should naturally be 
 considered and treated as a contribution to the 
 common expense of the war, does not appear 
 warranted. 
 
 It is not possible on the present occasion to 
 enter exhaustively into this question. I will 
 confine myself to enumerating the following 
 points, as bearing upon the contention above 
 referred to: 
 
 (1) The intrinsic circumstances of 
 America's joining in the war were essentially 
 different from the conditions and considera- 
 tions which determined, or compelled, the 
 course of the Allied nations when they en- 
 tered the conflict. 
 
 [ 54 1
 
 Neither compulsion of self-preservation 
 nor any fear of the intentions or actions 
 toward America of a Germany emerging 
 from the war unwhipped, nor any hope of, 
 or desire for, gain actuated America's de- 
 cision to throw her sword into the scale on 
 the side of the Allies. 
 
 (2) America made no secret treaty or 
 bargain as almost all the Allied nations did. 
 She was wholly uninfluenced by material 
 or political considerations. 
 
 Each one of the Allies took material com- 
 pensation from the vanquished, to the full 
 extent that there were assets to distribute, 
 territorial, physical or financial, not to men- 
 tion advantages accruing to them of a less 
 tangible, but none the less very real, nature. 
 (If some of the things which were believed 
 to be assets turned out later on to be rather 
 liabilities, that does not alter the essence of 
 the case.) 
 
 America, on the other hand, demanded 
 nothing and received nothing. We are carry- 
 ing the immense burden of our war expen- 
 ditures without any compensating tangible 
 return whatsoever, except a few ships and 
 the German assets now in the hands of the 
 U. S. Alien Property Custodian, all of which 
 assets, or their proceeds, according to pend- 
 ing proposals of the Government, it is in- 
 tended to refund to the former German 
 owners, outside of a sufficient amount only 
 
 [ 55 1
 
 to cover proven claims of American private 
 citizens against Germany. 
 
 (3) Of the $10,000,000,000 advanced by 
 us to the Allies, a considerable portion 
 (about $2,700,000,000, as far as I can ascer- 
 tain) were advanced after the war was won — 
 after the Armistice. (It must be recognized, 
 though, that a large part of this sum arose 
 out of commitments made during the war, 
 and that such part was needed, and no 
 doubt was used in connection with the 
 settlement here of contracts entered into, 
 prior to the Armistice, for the purposes of 
 the war.) 
 
 (4) Of the remaining $7,000,000,000, or 
 thereabouts, a certain portion was spent by 
 the recipients for purposes not directly 
 connected with the war. 
 
 (5) While the American government 
 loaned money to the Allied governments 
 unstintedly to pay for things which they 
 bought here for the war, it paid cash 
 to the Allied governments for everything 
 which it bought "over there" for the war, 
 and not only for what it bought but for a 
 good many other things, such as transporta- 
 tion, services and claims of various kinds. 
 
 The aggregate of what our government 
 thus paid in cash to the Allies, prin- 
 cipally France and, secondarily, Eng- 
 
 i 56 1
 
 land, is estimated to amount to the huge 
 sum of $4,000,000,000. 
 
 (6) On the other hand, it is but fair to 
 recall that prior to America's entrance into 
 the war our industries, farmers and work- 
 ingmen benefitted greatly from Allied pur- 
 chases in this country, that the bulk of 
 what America loaned to the Allies was 
 spent in making purchases in this country, 
 that from the profit accruing to the sellers 
 on these purchases the American Govern- 
 ment derived large revenue in taxes, and 
 that, owing to the immense depreciation 
 of foreign currencies, except that of Eng- 
 land, the sum which the debt to America 
 now represents in their own respective 
 moneys, is vastly greater than the sum, cal- 
 culated in foreign currencies or values, 
 which America's debtors received at the 
 time the loans were made. Also, as against 
 the amount due to America from the Allied 
 Governments, certain offsets are claimed, 
 which claims are, of course, entitled to full 
 and fair consideration. 
 
 (B) Congress has constituted a Debt Refund- 
 ing Commission, but has limited its authority to 
 arranging for the repayment of the Allied in- 
 debtedness to us within twenty-five years, with 
 4^4 per cent interest per annum. 
 
 It should be remembered that this really 
 means imposing a charge of 6% per cent per 
 
 [ 57 ]
 
 annum, because if the debt is to be repaid at the 
 expiration of twenty-five years, there must be 
 provided a sinking fund of 2 per cent per 
 annum in addition to the interest. 
 
 (C) The Allied nations on the European 
 continent maintain, the facts of the situation 
 being what they are, that they cannot possibly 
 meet these terms. Indeed, with the single excep- 
 tion of England, all the Governments concerned 
 indicate that they are not now in a position, in 
 view of existing circumstances of sentiment and 
 actuality, to obtain from their people the funds 
 with which to make any substantial payments 
 on account of their indebtedness to the American 
 Government.* 
 
 Whatever may be called for in theory and 
 abstract justice, no Government, in order to 
 pay debts abroad, can exact from its own 
 people greater deprivations, renunciations or 
 sacrifices than public opinion will sanction, or 
 place upon it burdens which would intolerably 
 lower the standard of living in its own country 
 or seriously impair national welfare or jeopardize 
 what are looked upon as essential national 
 interests or safeguards. 
 
 *It is significant to note, in this connection, that while 
 all the Allied nations together, victorious and augmented, 
 find themselves unable to pay us an aggregate of $10,000,- 
 000,000 within twenty-five years, yet the governments of 
 these same nations, last year, committed themselves to the 
 stipulation that Germany alone, defeated and diminished, 
 is capable and obligated to pay to them more than three 
 times that sum, i. e., $32,000,000,000, in addition to several 
 hundred million dollars annually for the cost of their 
 armies of occupation. 
 
 [ 58 ]
 
 Some of the nations who are our debtors, have 
 reached the very limit of what it is possible to 
 collect by taxation. Even in the case of those 
 countries in which governmental policies and 
 action would seem practicable and called for, 
 which would improve their domestic budgets and 
 relieve their fiscal position, it does not follow that 
 such measures would enable them to increase 
 proportionately their capacity to liquidate debts 
 abroad, inasmuch as such liquidation necessarily 
 requires gold or its equivalent. 
 
 (D) An all round reasonable and broad- 
 minded settlement of the financial status of 
 the European nations that were engaged in the 
 war, is a prerequisite to setting the house of that 
 Continent in order and making itagainapeaceable 
 habitation. To such an end, I believe, America 
 might well and wisely contribute a certain por- 
 tion of her Government's claim against the 
 Allied nations.* 
 
 I am convinced, quite apart from considera- 
 tions of sentiment, that it would be to the 
 ultimate advantage of the United States to 
 do so. I feel sure that such action would turn 
 out a good investment. 
 
 These reciprocal debts and claims between 
 nations, in their undiminished magnitude, hang 
 like a millstone around the neck of the Euro- 
 pean peoples. Whatever may be the arguments 
 
 * I also think that prompt and liberal action should be 
 taken in the matter of settling with German private owners 
 on account of property which, in opposition to all precedent, 
 except that set by the Allies during the late war, was con- 
 fiscated by our government. 
 
 1 59 ]
 
 of strict logic, the item of the debts due from the 
 Allied nations to the American Government does, 
 in fact, enter as an element into their attitude 
 toward the determination and settlement of the 
 reparations problem and kindred questions. 
 
 The repercussion from the disordered state 
 of Europe is bound to be felt in this country to 
 a greater or lesser degree — it has been and is a 
 strongly aggravating element in the plight of 
 our farming population — and if continued much 
 longer cannot fail to have a seriously detrimental 
 effect upon America's prosperity, not to mention 
 the eventuality of graver and more far-reaching 
 consequences which are conceivable if develop- 
 ments in Europe are permitted to drift to an 
 acute crisis. 
 
 However, it must be recognized that the 
 greater part of public opinion in this country 
 seems definitely opposed, for the time being, to 
 the suggestion of cancelling any part of the Allied 
 indebtedness to America. The present Adminis- 
 tration appears to be as little inclined to favor 
 that suggestion as the preceding one was, and 
 the same holds true of Congress. 
 
 (E) If, then, Government and public opinion 
 will not countenance the relinquishment on 
 America's part of a portion of the Allied debt — 
 which relinquishment, be it understood, is sug- 
 gested only in return for, and simultaneously 
 with, measures on the part of the European na- 
 tions to bring about that change of mental and 
 moral attitude and actual conditions which is 
 indispensable if the world is to be again on an 
 
 [ 60 1
 
 even keel — then, in view of all the circumstances 
 above set forth and the practical impossibility 
 to enforce payment between governments, I 
 would suggest the following tentative outlines 
 of a plan: 
 
 A Definite 
 Plan Suggested 
 
 Of the $2,750,000,000, or thereabouts, which 
 our Government loaned to the Allied nations 
 after the Armistice, that portion, at least, as was 
 not applied to the settlement of war contracts 
 here or is offset by valid counter claim, is in- 
 trinsically distinguishable from the balance of 
 the Allied debt to us. It should be promptly 
 put in the way of repayment with a reasonable 
 rate of interest. For instance, America might 
 stipulate interest at the rate of 334 P er cent, 
 and an annual sinking fund of 1 per cent, the 
 latter to begin after, say, five years. 
 
 As to the remainder of the debt, there should 
 be no attempt to apply the same formula to 
 every country. The Refunding Commission 
 should go thoroughly into the economic and 
 financial and general situation of all countries 
 concerned, and make a fair and final settlement, 
 subject to the approval of Congress. 
 
 That does not imply any suggestion that 
 we should be quixotic about this business, but 
 merely that we should take understanding ac- 
 count of the moral and economic factors involved 
 in each case, and should err, if at all, on the side 
 of liberality, always, however, with the distinct 
 
 61
 
 proviso that there must be, on the part of those 
 nations which are our debtors, a reciprocal 
 attitude of moderation and of enlightened action 
 to terminate effectively the ill-conditioned era 
 of dispeace — lamentable and sinister inheritance 
 of the war and the peace-treaties — which has 
 been keeping Europe in turmoil, bitterness and 
 crisis all too long. 
 
 Terms Imposed by 
 Congress Too Burdensome 
 
 Even upon America's financially most potent 
 debtor, and, at the same time, best customer, 
 Great Britain, we should not impose the exceed- 
 ingly heavy burden of paying 434 per cent inter- 
 est from the start and redeeming the principal 
 within twenty-five years. I would suggest, in 
 the case of that country, as an illustration, that 
 there be paid an annual sinking fund of three- 
 quarters of one per cent. Such a sinking fund, if 
 invested at the rate of 4 per cent, would extin- 
 guish the debt in forty-seven years. As to the 
 interest charge to be imposed in addition to the 
 sinking fund, I would start at a very moderate 
 rate, perhaps as low as 2 per cent, and gradually 
 increase that rate, say every six or eight years, 
 until at the end it reaches 434 per cent or 4] ^ 
 per cent. 
 
 A similar formula might be applied toward 
 France. It might possibly be thought appro- 
 priate, in her case, to make the sinking fund 
 one-half of one per cent only, which, if invested 
 at the rate of 4 per cent, would extinguish the 
 
 1 62 ]
 
 debt in fifty-six years; the rate of interest to be 
 charged might be made for the first six or eight 
 years a merely nominal one (or, possibly, be 
 waived altogether for the first few years), after 
 which a gradually rising scale of interest would 
 come into operation. 
 
 The question of the feasibility, acceptability 
 and extent of "payment in kind", or in whatever 
 other equivalent in lieu of cash, should also be 
 within the purview of the Commission's investi- 
 gations and recommendations. 
 
 All these, of course, are the merest tentative 
 suggestions. The Refunding Commission would 
 be able, after investigation of the pertinent facts, 
 and conference with the representatives of the 
 nations concerned, to evolve carefully elaborated 
 formulae to fit each particular case. 
 
 <§> <§> <§> 
 
 America has Entered 
 a New Phase 
 
 I do not flatter myself that in this all too long 
 dissertation I have succeeded in making con- 
 verts to my way of looking upon the problems 
 before us, but I am sure you are in accord with 
 me in recognizing that we do find ourselves face 
 to face with grave and immediate problems. 
 
 With the war and the developments, social, 
 economic and political, springing from the war, 
 directly and indirectly, America has entered a 
 new phase. 
 
 Heretofore, in this country, the path was a 
 relatively smooth and easy one to travel. 
 
 1 63 ]
 
 Since the Civil War, the nation has not found 
 itself compelled to tackle any really hard and 
 complex major problem. To a great extent, 
 it was a case of attending, with due diligence, 
 energy and enterprise, each one to his calling or 
 affairs, and the Constitution, the inherited things 
 which are ours, the bountifulness of nature, 
 largely did the rest. We could afford to be 
 provincial nationally, and, however reprehensible 
 the neglect of the duties and responsibilities of 
 citizenship, we could and did manage to get 
 along without serious harm while too many of us 
 were complacently easygoing, if not more or less 
 indifferent, in our attitude toward public affairs. 
 Those easy days are gone. The fact that they 
 are gone should, I believe, be welcomed rather 
 than lamented, because the discipline of harder 
 tasks is good for a democracy and good for 
 the fibre of the race. 
 
 The Challenge to Our 
 
 Capacity to Meet the New Issues 
 
 Now we are confronted with new situations, 
 new movements, new tendencies, new problems. 
 We are living in a portentous time, big with the 
 destiny of the world, for good or ill, for many 
 years to come. It challenges the capacity of the 
 American people to play worthily the part which 
 the turn of events has made theirs. 
 
 We must give more serious thought than 
 heretofore to matters of general import and 
 national concern. We must increasingly get 
 together, we men and women of different occupa- 
 
 [ 64 1
 
 tions and viewpoints and from different sections, 
 and find out what is wise and right and making 
 for the progress of the country and the welfare of 
 all. We must take the pains and the time to 
 formulate reasoned convictions, and have the 
 courage to stand up for them. 
 
 We must not shirk the burden of leadership 
 for America. Our collective responsibility, as 
 well as the individual responsibility of every 
 American, is heavy in the face of the times. 
 
 The Words of Lincoln 
 
 Nearly sixty years ago, President Lincoln 
 addressed these words to Congress: 
 
 "You cannot, if you would, be blind to 
 the signs of the times. I beg of you a calm and 
 enlarged consideration of them, ranging, 
 if it may be, far above personal and partisan 
 politics. ... So much good has not been 
 done, by one effort, in all past time as, in the 
 Providence of God, it is now your high 
 privilege to do. May the vast future not have 
 to lament that you have neglected it." 
 
 That noble invocation applies today. We dare 
 not hope that a leader will arise comparable to 
 the immortal American who uttered it, but, in 
 going to meet the problems before us, we may 
 and should seek guidance and inspiration from 
 his wisdom, vision and steadfastness, from his 
 tolerance, kindliness and forbearance. 
 
 i 65 1
 
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