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The Commoner
MARCH, 1921
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President Harding's Problems
President Harding enters the White House
with tho largest majority received by any chief
executive in recent years and with the, largest
popular Vote given to any man in history. This
is a great distinction, but he will And awaiting
him more difficult problems than any previous
president .has encountered.- It may be worth
while to consider a few of the more important
of these problems.
First, the world awaits his "Word on interna
tional relations. Co-operation between tho na
tions for the prevention of war hangs on his de
cision, providing, 6f 'course, the Senate 'supports
him in his plans: Ho is pledged to an Associa
tion of Nations in which the United States Will
do its part without surrendering its right to de
cide for Itself when and on what terms it will
employ force iii aid of any other nation. This
means that Article 10 will be eliminated from
the covenant, "but that will not impair the value
of the documentr Article 10, while it kept our
country but of the League of Nations and con
tributed largely to "the wrecking of the Demo
cratic party in tho recent campaign, never was
worthy of the attention given to it.' It could
not override the constitutional provision giving
to Congress tho right to declare war; the moral
obligation which it purported to create was
powerful as a disturber of tho peace but qu te
impotent as a protection to other nations. Our
Allies understood this and were anxious to sur
render Article 10 and admit the United States on .
any terms that our country would name-.
Whether President Harding will insist on
dropping the word League and substituting the
word Association does not yet appear, but he is
a practical politician and is not likely to sacrifice
substance to form. It is quite probable that
Great .Britain and France will give him a lead
pencil, nd a sheet of paper, and ask. him to sug-ff-AKf
th rthanim desired. If he ins'sts on chang-
', ing the name it can be done very easily, but he
is not likely t6 put other nations to any un
necessary trouble or to require any phraseology,
that will be embarrassing.
ThePresident is committed to but two 'propo
sitions in connection with international Peaco.
He, is for co-operation with othei' nations for the
prevention of war and ho is against any terms
that will impair; the independence of this .nation.
He has shown himself open minded -and anxi
ous to receive information from all Bources be
fore proposing any definite plan, "and, happily,
entirely free to follow his conscience in interpret
ing his obligation to the country. His nomination
came to -tiim In such a way as to make him more
Independent than nominees sometimes are and',
his majority was so large, that no man, no group,,
no faction can claim to haver exercised "a con-,
trolling influence.
But, while he is-free to follow his personal
convictions, he is not free to ignore the, known
sentiment Qf the country, and he knows what
the sentiment Is. A large majority of the mem
bers of the Senate, including Senator Harding,
voted to accept the League with reservations
a majority of 18 on the final vote and' twenty
more favored the League, but opposed the reser
vations. " Only 19 Senators out of a total of 96"
opposed .the League entirely and that is probably
a larger percentage of opposition then exists
among the voters as a whole. An overwhelming,
majority of the American people demand some
form of international co-operation; without it,
it is impossible to hope for permanent peace.
The enormous increase in expenditure for arma-.
ments proclaim only too clearly the fears of the
world. Without disarmament we must expect
returning wars, each more expensive and more
bloody than the one before, until bankruptcy of
the weaker nations makes tliem subject to the
stronger nations. T3urdpe is powerless to save
itself. Land hunger," commerciriLgreed, "and the
spirit of revenge are driving the nations of the
Old World toward war. No one of them,' or
group, has the moral strength and the unselfish ,
spirit necessary, for the solut i of the difficulty. -Our
nation alone has the Influerice and the -disinterestedness
to act as" arbiter, and we will have
more influence when we reserve tho right to de
cide our action lor ourselves than wo would
.have if a foreign council could commit ns to war
and call our soldiers to battle.
Many of those who favored ratification with
out reservations, .as long' as that seemed possi
ble, did sb as i did not- because Article -Qj was
deemed vwise butf because it" seemed better to gov
into the Leagueat once and eliminate Article ro
afterwards than to risk the" evils- that mighicomcT
with delay. Now that the American people have
issued their mandate all friends of the. League
will join the friends of an Association of Nations -and
hasten the carrying out of tho voters' decree.
This is the first problem with which the new
presidont will have to deal and every citizen
who has the welfare of his country at heart will
hope that he will act wisely and, by throwing
our nation's Influence on tho side of conciliation,
help to lay the foundation for an enduring peace.
.The second problem that confronts the new
occupant of tho White House has to do with
taxation. Itevenue is tho continuing question in
G.overnpient; other questions may come and go,
but taxation, liko Tennyson's Brook, "goes on
and on forever." It is more acute now than
usual because of the enormous levies made neces
sary by the war. The people are crying out un
der the burden of taxation, and every important
class of taxpayers is clamoring for a relief. Tho
loudest clamor as usual, comes from those least
deserving, namely, the profiteers, but it so hap
pens that this is the class that has the ear of
the public. "Repeal the excess profits tax,"
shouted Wall Street, and tho shout is taken up
by every organization under tho influence of the
profiteers. Tho cry was so loud that an echo
came back from the Treasury department, and
from the candidates of the two leading parties.
The argument relied upon to secure the repeal
is that the tax is transferred to tho consumer
a strange argument when It is remembered that
the tax is not collected until after the profiteer
has already collected it from the consumer. In
the year 1,921 the profiteers will give to the gov
ernment a part of the excess which they col
lected in 1920. What reason is there to believe
that they would collect less profit if tho tax was
removed? So far as logic can be Invoked to de
cide the question the inducement to excess profits
would be greater if they could keep it all than
it is when they have to give a large per cent of
it to the government, and -yet this argument is
brazenly advanced by those who seek to relieve
the profiteer of this tax.
Another argument sometimes heard is that the
excess profits tax discourages "Incentive what
incentive? The incentive to collect excess profits?
If so - it ought to be discouraged. We do not
need to encourage unfairness in the business of
the exploitation of society. Ordinary and rea
sonable profits are not subject to the excess
profits tax it is only the unreasonable and il
legitimate profits upon which tho excess tax is
laid.
But more serious still, how are we going to
support the government without revenue? If
the exc.ess profits tax is repealed wo must either
make up the deficit by some other form of taxa
tion or suffer a reduction to the extent of the
excess profits tax Will the taxpayers consent
to bear the burden they now carry in order to
release the least deserving of taxpayers? Or,
us is really demanded, will-, they consent to
higher imposition upon themselves 'in order that
the profiteering may bo favored?
The substitute usually suggested by those who
desire to repeal the excess profits tax is a tax on
retail sales which would, of course, be paid by
the purchaser. No matter what the profit of tho
manufacturer, wholesaler, jobber, and retailer
after all these have been added to the original
price "the government tax would be collected
from the purchaser, Teaying the intermediate
profits, whether fair or unfair, untouched. A
consumption tax overburdens, the poor and un
derburdens the rich because people do not buy
the necessaries of life in proportion to their
possessions or Incomes. It takes as much food
to supply theneeds of the poor as of the rich
and as much to clothe one as the other. While
the rich spend more for food and clothing han
the poor, the amount spent is not proportionate
to' the benefits which they receive under the pro
tection of the government. A consumption tax,
being paid out of the income, is, in effect, an in
come tax a graded income tax, but the heaviest
per cent is levied upon the smallest -inoome, and
the" smallest per cent upon the largest income.
If the Republican party stands by its high
tariff record and raises customs rates on imports,
the poor will again be overburdened and the rich
underburdened, and, in the case of tariff duties,
the amount received by the government may be
only a small part of the total amount collected
fromHhe consumers, because' the increased price
of the domestlcarticlef goes to the manufacturer
instead of to the government. - -'-: .
If, in "addition to imposing tariff dn consump-
tfpn and a tax on retail sales, tho Republican
Congress yields to the entreaties of the rich and
reduces tho tax on largo incomes without a
similar reduction on small Incomes, tho average
man may bo aroused to a protest that will ma
terially affoct the fato of that party in tho
congressional elections next year.
President Harding will alzo find tho profiteer
question an embarrassing one to deal with. Tho
profiteers were quite largely Republicans last
fall and it Is not easy to cope with such influen
tial wrong doers when they are In one's own
party. They will not bo slow to point out to
those in authority tho contributions which they
made to tho party's success and they will be very
much offopdod.if any attempt is made tp class
them with ,tho transgressors. And yet some
thing must be done. We are creating anarchists
. by wholesale, or, o,t least, encouraging very radi
cal Jdeas by tho inequality exhibited in tho pun
ishment of crime. If a man stoals a small
amount of money or merchandise, ho sins against
society and no one pleads in his behalf. His
trial is brief and his punishment both swiftxand
severe. No one. will complain of this If big of
fenders are treated in tho same summary way.
But, unfortunately, it is more difficult to appre
hend and punish those who rob on a largo scale.
Senator Calder of Now York has recently es
timated at one billion and a half tho extortion
pract ced by tho coal men fh a single year, and
yet,, the criminals go unpunished. A man con
nected with the coal busineflWndignantly denied
Senator Calder's charge, and declared that the
amount could not have been more than six hun
dred million. But six hundred millions is
probably more than tho total amount stolen by
all tho thieves in all the penitentiaries in the
nation. If we have laws sufficient to protect tho
public from profiteering, thoy should bo en
forced; if the laws are not sufficient, new laws
should be enacted. The present situation is not
only a grqss injustice to tho masses but a real
menace to the stability of our government.
We have a Federal Trade commission which is
doing excellent work, but tho information which
it furnishes is not being utilized by Congress.
The states should have trade commissions with
powers adequate for tho protection of the public
from profiteers in the state, and each city should
have a municipal trade commission for the pro
tection of its citizens from local profiteers, but
much of the big profiteering is nation-wide in
extent an,d can be dealt with only by the Federal
Government. President Harding will not be in
office long, before he atrd his attorney-general
will realize the seriousness of tho prpblem pre
sented by tho profiteer.
The decision of the Supreme Court declaring
unconstitutional the law Intended to prevent
profiteering gives tho President an opportunity
to recommend a law embodying such remedies as
he has in mind. The House and Senate also will
be tested by this unexpected opportunity for con
structive legislation.
A fourth problem of very large proportion is
the one presented by the growing antagonism be
tween labor and Capital. On the one side we
have a group of influential employers, who are
,bent on destroying the labor organization and,
on the other side., We have the labor organiza
tions, conscious of the attempt that is being
made upon their very existence. The labor
leaders are not always wise but they have lots of
companionship In their imperfections. They are
not more liable to err than the leaders of the
capitalistic forces, and can plead a more urgent
necessity if in their efforts intheir own behalf
they are not always careful about the interests
of others. r
Democracy does not mean government by any
class. Democracy rejects the idea of government
by bankers, manufacturers, merchants, lawyers,
lobbyists, laborers, farmers or any other group,
.but it must constantly be borne in mind that
the men who cry out against government by a
large class, like the laboring class or the agri
culturists, aro the very ones who insist upon
government by a small .class. State conventions,
under the control of the commercial interests"
have sometimes declared in favor of a govern
mpnt by.business men for the benefit of the busi
ness Interests of ,the country and their defini
tions of the businessman included but a small
percentage of the yoters.
The safety of our government lies, not in the
domination of it by any class, but in machinery
which will enable tho whole people to protect
themselves from injustice at the hands of any
fractiofn of the people. The number of persons
directly, affected by any industrial dispute is
small compared with the total population. When,
"fdr."instanee( tile country was threatened with
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