Mr. MARSH (interposing). No, sir; we believed that the resolutions adopted by the National Grange, the National Nonpartisan League, the Society of Equity, the Gleaners, the Farmers Union. the Dairy Union, the Buttermakers' Association, etc., on the subject of revenue, or on the means of raising revenue, were pretty indicative of the opinion of the people of this country; and I might add parenthetically, although I have no right to speak for organized labor, that they have adopted substantially the same resolutions as most of those adopted by those big farm organizations. But you gentlemen are well aware how valuable it is to have an organization for a specific purpose. We do not want you to accept a single one of our suggestions because it emanates from the Farmers' National Committee on War Finance, but we want you to consider our suggestions solely on their merits.

Mr. HAWLEY. Did you have a public meeting or some assemblage at which your organization adopted a platform of principles? Mr. MARSH. No, sir; we discussed that in this committee. Mr. HAWLEY. How many were here when it was discussed? Mr. MARSH. They have not been here. We got this committee together here. We knew the principles of most of them, because we knew what resolutions their organizations had adopted, and we submitted these proposals. You will hear from every one of those organizations, and I hope your mail will be full of this.

Mr. HAWLEY. You have never had any meeting of your organization?

Mr. MARSH. We never had a meeting of this organization, but the organizations which these gentlemen represent have had meetings and have adopted substantially the same proposals. I can quote what they were in some cases. I explained one of them on Friday when I said that the grange had suggested a maximum income of $100,000 if anything like the amount that it is anticipated will be necessary next year is to be raised.

Now, I would like to take up the discussion at the point where I stopped last Friday. Last Friday, as the meeting was closing, the question was asked me whether or not I thought that we ought to have nationalization of industries, and I said that that was to be taken entirely in connection with the question of financing industries. My reply was that we would have to win the war. I did not mean by that that the Government should take over and operate all industrial organizations, but we were discussing then the question of the financing of industries, and it was in that connection that I said that we would have to have practically a nationalization of industries during the war. Now, if the Federal, State, and local governments spend, exclusive of the war, about $3,000,000,000, and if the war costs what it is estimated to cost next year, then the cost of Government next year will be about one-half of the total national income this year. That is something that I think we will agree upon.

Mr. Moore asked me concerning the validity of some of my figures the other day, and I said that I would show the facts by the figures of the Commissioner of Internal Revenue, and I have been informed since that he has approximately those same figures. It has been stated frequently that this war has got to be paid for out of the earnings of the present generation, or paid out of the earnings of

the people during the war. I want to refer to that, because the point was raised as to whether or not those wealthy men could stand it to have their incomes in excess of $100,000 or $50,000 taken. Now, as a matter of fact, is it not true that this war will not be paid for out of earnings during the war, but that it will be underwritten out of earnings or savings made during the war? Now, if gentlemen with an income, we will say, of $10,000,000 do not contribute all of their income in excess of $100,000 to the cost of the war, then, in order to raise for the purposes of the Government during the war one-half of the total national income, the Government will have to take that money as a loan. Can anybody suggest any other alternative? We must raise in the neighborhood of $30,000,000,000. Now, there is a certain minimum which the people have got to have for subsistence, and the Government can not tax below that minimum necessary for subsistence. So far as the business of the individual is concerned. it does not make any difference whether the Government takes all of his income in excess of $100,000 or not.

It does not make any difference, so far as the immediate conduct of that business is concerned, if the money is taken out of the individual's control, whether by taxation or in the form of a loan, because it is out of the control of the man to use it in his business. There are two or three other aspects of the matter to be considered in connection with this financial bill besides merely the question of how to get revenue. When I suggest to you that we are in this war, and are in this war to win, I think you will agree with me that billionairism is pretty nearly as big a menace as Kaiserism. I sug gested that to a Federal official yesterday, and he said, "No; billionairism is a greater menace." However, I did not agree to that, because I think that Kaiserism is the greater menace right now until it is defeated. Now, we have men in this country with these enormous incomes of ten, fifteen, twenty, twenty-five, or fifty million dollars, and I do not know how many million dollars a year, and if we do not compel that wealth to be as patriotic as the great mass of the people of this country are it is going to have a bad effect upon the country and will create a condition of general industrial revolution and unrest. We therefore suggest that you will achieve two purposes by making the principle of equality of service and sacrifice the principle on which this bill is drafted-that is, you will raise this revenue and you will reinforce the morale of the people of this country.

Frankly, I can not conceive of a better stroke against Kaiserism nor anything more apt to bring Russia back into this war with us, where she belongs, than to have the inspiration of the American Government saying, "We are going to put property on a par with individuals or human beings in this war." It has been stated, but stated unjustly, that this is a rich man's war. In proportion to the number of men engaged in the war, I think that there are as many rich men's sons in the war as there are poor men's sons. When you take a large proportion of the earned income of a working man he has nothing to fall back upon, but when you take the incomes of those men who derive their incomes from securities and investments, their capital remains. Now, frankly, it seems to me that any man who asserts that the 10,000 men, roughly estimated, who have incomes in excess of $50,000, would refuse to work if the Government

limited their income to $50,000, is asserting something that is very unfortunate, because that is equivalent to saying that those 10,000 men are traitors and slackers. If they are, they should be treated as traitors and slackers, and if you gentlemen have any hesitation or misgivings about those men responding to the levies made in this war revenue bill, if incomes are limited to, say, $100,000, or even $50,000, I suggest that their names ought to be made public so as to let the people know where they stand on this question of financing the war.

I say that because it will be a very unfortunate thing for the impression to get abroad that we can not bring these men to exactly the same basis of service and sacrifice to which we are bringing the people of smaller means. In urging that at least $10,000,000,000 should be raised by means of a revenue bill, I want to refer to the fact that if we do not raise the maximum possible proportion of the revenue necessary for the prosecution of this war by taxation, we are going to have a tremence uld like to read into this record two statements. One of them is from a report recently published by the Treasury Department of a special committee of the American Economic Association. I will read one paragraph of the report, as follows:

While the war lasts the commodity price level will inevitably mount by leaps and bounds unless we adopt rigorous preventive measures. In particular we must avoid, so far as possible, lending by borrowing. Loans to the Government made not from savings but from borrwings will tend to increase bank credit. Further extension of bank credit will chiefly bring about a rise in commodity prices.

The British select committee on national expenditure, in its second report, discusses the causes of the increase in prices and the possible check that may be applied and says:

The chief causes are

The expansion of credits during the war.

The demand for commodities exceeding the supply and the inadequacy of Government action to control prices.

While this committee found it difficult to determine the order of importance of these factors it said that

It is certain that among the most important is the extension of credits. When the committee made its recommendations as to what might be done to keep the cost of living from going higher and higher, its first proposal was:

Whatever measures are possible should be taken by the Government to avoid the creation of new credits in financing the war.

I completely concur in that suggestion.

Now, I want to read at this point four specific recommendations as to the new revenue bill. We think that the revenue bill should

1. Make it a criminal offense not to give the real equitable ownership of stocks in corporations and business concerns.

2. Compel all corporations and business concerns to declare dividends and prohibit the issuance of stock to conceal earnings.

3. Provide for full publicity as to incomes of over $25,000.

4. Levy flat instead of graded rates.

In other words, instead of saying that between $5,000 and $10,000 the rate shall be so much and between $10,000 and $20,000 the rate

shall be so much, to say that there will be a flat rate on the whole income.

Mr. GARNER. Let me see if I understand you: Under that arrangement you would not have a supertax at all?

Mr. MARSH. I would put a supertax or a higher rate on all of the incomes. For instance, on all incomes from $2.500 or $3,000 up to $5,000, say, have a rate of 6 or 8 per cent, or have that rate on all income in excess of $2,000. On incomes from $10,000 to $15,000 have a flat rate. say, of 10 or 15 per cent on all surplus in excess of $2,000. That would greatly simplify it and would yield a great deal more revenue. I hope I have made it clear that I am not trying to get an exemption for myself or anybody else. I think that with an income of $3,000 or $3,500, which my wife and I earned last year, instead of paying $32 income tax we ought to have paid $100. I expect to have an income larger than that this year, and if we have an income of $4,500 or $5,000, I think we ought to be compelled to pay a tax of $400 or $500.

Mr. GARNER. Are you representing all of the people you spoke about? Have you authority to represent them?

Mr. MARSH. I am speaking personally now.

Mr. GARNER. But from what you said this morning, I am frank to say that I do not know whether you represent the farmers in Texas, Indiana, Washington, or anywhere else. It appears that you simply organized a little committee while here three or four weeks ago and wrote to these other people asking them if they agreed with you, and, as I understand it, they have not authorized you to speak for them. That, it seems to me, from your statement is the size of it. I am frank to say to you that I have a great deal of respect for the element of people for whom you are undertaking to speak through this committee you have referred to, and if I knew that you had full authority to speak for them I would give much. greater weight to your testimony. Of course, you want me to be frank with you, and I certainly want to be frank with you.

Mr. MARSH. As I said earlier in my statement, you will be getting letters from these people shortly, and you do not have to rely upon my statements.

Mr. GARNER. I understand that, but I would like to know whether or not, in your opinion, these people you speak for want this limit reduced for single men from $1,000 to, say, $700, and for married men from $2,000 to $1,200?

Mr. MARSH. I think they would rather have that than a consumption tax.

Mr. GARNER. Do you believe that the people you purport to represent would like to have those exemptions reduced to $700 for single men and to twelve or fifteen hundred dollars for married men? Mr. MARSH. As I said, I was speaking there personally

Mr. GARNER (interposing). What is your opinion as to their position on that subject?

Mr. MARSH. I think, frankly, having talked with representatives of those big farm organizations and with individual farmers from at least 15 or 20 States within the last few months, that if you will take all incomes in excess of $100,000 they will say "Yes" to that proposition.

Mr. GARNER. But suppose we do not do that?

Mr. MARSH. Well, I think they would say, then, that it was not fair to do it. I will not say that it should be exactly that figure of $100,000, but it should be approximately that.

Mr. GARNER. You were just speaking of the menace of billionairism. You stated that that should not be permitted, and with that statement I agree. Have you ever studied the question of how you would take care of that problem? Of course, we will have to take up all of those questions in the course of time; but we are now talking about war revenue. We have undertaken in this committee heretofore to levy an inheritance tax. By imposing a stipulated rate of inheritance tax you can in the course of two or three generations dissipate those large fortunes or turn them into the Treasury. Is not that a better way to deal with that problem than to levy a rate of income tax now that would produce that result?

Mr. MARSH. You asked me first how I would do it. Personally, I think, Mr. Congressman, that the Government has got to take over all of the natural resources from which those big fortunes come. For instance, the Government must take over the oil resources, and pay nothing for that which is given by nature and nothing for good will. The same thing is true of coal and water power and everything else of that kind. That would simply mean taking the investment and wiping out the huge unearned income derived from such resources. I think that the second, and equally fundamental, measure would be to take over all of the land into the Public Treasury— and by that I do not mean a single tax but a triple tax

Mr. GARNER (interposing). You have gone clear off from the question we were discussing. I asked you what was the best way to dissipate those great incomes, or whether it should be done by means of an inheritance tax or an income tax?

Mr. MARSH. I think that for the present an income tax would be preferable, and I will tell you why: I do not think that this is the final way of doing it, but I think the income tax is preferable, because the raising of revenue by an inheritance tax now would mean the unscrambling of a good deal of property; and it seems to me that an inheritance tax of that sort would practically mean the taking of large amounts of money from business; and I think that during the war we ought to be as careful as possible not to upset or disturb existing business arrangements. I think that we ought to allow a fair amount of profit in business; and, therefore, I think that to levy so large an inheritance tax would be an unfortunate thing during the war, because we want the capital that is invested in business to be kept intact and unmolested, so as to secure the maximum production. I think that a reasonable inheritance tax would be all right. However, I do want to say this very strongly, that, in addition to paying a big excess-profits and a large income tax, it seems to us that there ought to be imposed a tax of 13 or possibly 2 per cent on the value of unused or inadequately used lands held for speculation, because that is one class of property that is exempt from Federal taxation.

It is completely exempt under the law. I was informed that some people are investing in unusued land as a safe investment that could not be reached by the Treasury officials, or as a safe investment