manifest that any rich man in his senses must have known that his selfish interest was best promoted by the continuance of the conditions of the last three years in which America furnished funds and supplies to Europe at huge profits, whilst our entering the war was bound to diminish those profits very largely (indeed, to entirely eliminate some of them), to interfere with business activity in many lines and to compel the imposition of heavy taxes on wealth?

It is to the credit of our rich men that, though fully realizing the extent of the monetary loss and sacrifices which war between this country and Germany must necessarily bring to them, there were but very few of them who supported the Peace-at-any-Price Party or favored the avoidance of America entering into the war when it had become plain that our participation in that war could not be avoided with honor and with due regard for our duty to our own country, or to the cause of right and liberty throughout the world.

Yet, somehow, the pacifists seem to have singled out the rich as mainly responsible for the war.

It may be due, consciously or unconsciously, to a resulting feeling of resentment that the proposal to confiscate during the war all incomes beyond a certain figure is actively promoted by leading pacifists—a proposal based upon ignorance of, or disregard for, the laws of economics, teachings of history and practical considerations.

If any such scheme were to be adopted, the consequences to the country at large would be far more serious than to the victims of the proposed action.

If such a measure of outright confiscation were seriously apprehended, at a time moreover and under conditions which are far as yet from calling for extreme measures, capital would cease to flow in its accustomed currents and some of it would seek other channels legitimately open to it.

It would certainly cease flowing into constructive use and would instead confine itself, to an extent at least, to municipal, state and federal tax-exempt securities. Enterprise would be seriously hampered and in some respects brought to a standstill entirely.

Many thousands of workmen would be thrown out of employment. Many businesses and shops would close.

There would ensue, as a natural consequence and without any conscious determination, a nation-wide strike of constructive activity and enterprise in commerce and finance, because men will not look upon it as a "square deal" if they are to take all the risk and responsibility, all the hard work and ceaseless strain and care of business effort, whilst the Government would needlessly take from them an unduly large share of the fruit of their labor, let alone all of it except an arbitrarily fixed sum.

I say "needlessly" because, were it really needed, business men would willingly sacrifice their entire income for the country's cause.

They would work for patriotism, without any recompense whatever, just as hard and harder than they do for gain or for ambition, if the occasion required it.

But, of course, everyone knows that nothing remotely approaching such drastic taxation is required in this country at this time.

It is absolutely right to proclaim and to enforce by legislation that no man, as far as it is possible to prevent it, shall make money out of a war in which his country is engaged, but there is all the difference in the world between that just and moral doctrine and between the doctrine that no man shall be permitted to have more than an arbitrarily fixed income during a war.

If $100,000 or any fixed sum is the limit of what may be permissible income during war time, why not by and by a lesser sum?

If the principle is once admitted, where will its application stop, even in time of peace?

Why is not the proposed plan, or anything in the nature of that plan, simply license for the materially unsuccessful to despoil the materially successful?

History shows more than one instance where this road inevitably leads to when once entered upon.

And who are our successful men? The vast majority of them are self-made men who started at the bottom of the ladder.

It is trite to say that inequality of endowment and therefore inequality of results in human beings, as well as in inanimate things, is a law of nature. The capacity for creating, organizing, leading, etc., in short, the possession of those qualities of brain and disposition which beget success, is rare.

It is in the interest of the community, whilst carefully guarding and fostering the rights, the opportunities and the well-being of all of its members, to give liberal incentives to men possessing those gifts to put them to active and intensive use. It is hardly open to doubt that, generally speaking, the work of able men, engaged in serious and legitimate business (I am not speaking of gamblers and parasites), whilst naturally benefiting them, benefits the community a great deal more.

The income of hospitals, orphan asylums, institutions of learning and of art and many other altruistic enterprises depends largely upon the voluntary taxation, aggregating a great many millions annually, to which those men in America who have attained financial success have always willingly submitted themselves—more so, probably than in any other country.

Who is to take care of all of those institutions if extreme taxation compels the rich to cease their contributions?

III

The arguments above set forth apply likewise, though naturally not quite in the same degree, to the proposal of levying an income tax rising to an excessively high level, as, for instance, the suggested tax of fifty per cent. on incomes over $500,000.

There, again, the test should be whether so radical a tax is wise and required by the necessities of the country.

The nations in Europe have been fighting for nearly three years and have been under an infinitely greater financial strain than our country is or will be, yet none of these nations have resorted to extreme taxation of income.

Even in Great Britain, whose financial burden is the heaviest of all, whose debt is many times the total of ours and who has loaned about $5,000,000,000 to her Allies, the highest income tax rate, the maximum percentage in the graduated scale of taxation, is to-day no more than approximately forty per cent.

In the last budget, introduced a couple of weeks ago, the British Chancellor of the Exchequer declined, so I am informed, to consider an increase in the income tax rate, because of the damaging effect which such increase would be apt to have on the country's business and prosperity.

In France and Germany the burden laid on incomes is much lower than in England. In Canada where war loans have been raised equivalent on the basis of comparative population to what would be more than $10,000,000,000 for America, no Federal Income Tax exists at all.

I doubt whether this latter fact is generally known in this country and whether its significance is receiving the measure of serious consideration which it deserves.

I understand that it is the deliberate policy of the Dominion Government to endeavor to avoid resort to an income tax in order to attract capital to Canada.

There can be little question that if our income taxation is fixed at unduly and unnecessarily high rates, whilst Canada has no or only a very moderate income tax, men of enterprise will seek that country and there will be a large outflow to it of capital in course of time—a development which cannot be without effect upon our own prosperity, resources and economic power.

The financial dislocation, the discouragement and the apprehension caused by unduly heavy taxation of incomes will not only act as a drag on enterprise and constructive activity, but will make it exceedingly difficult, if not impossible, for corporations to sell securities in sufficient volume and thus to