rnment
ownership of railroads, which, wherever tested, has proved its
inferiority except, to an extent, in the Germany on which the Prussian
Junker planted his heel and of which he made a scourge and a horrible
example to the world; and the very reasons which have made state
railways measurably successful in _that_ Germany are the reasons which
would make government ownership and operation in America a menace to our
free institutions, a detriment to our racial characteristics and a grave
economic disservice.

I

_PUNITIVE PATERNALISM IN TAXATION_

I have spoken of the treatment of our railroads in the past ten years as
"punitive paternalism." In some respects this same term may be applied
to our existing and proposed war taxation.

Of course, the burden of meeting the cost of the war must be laid
according to capacity to bear it. It would be crass selfishness to wish
it laid otherwise and fatuous folly to endeavor to have it laid
otherwise.

We all agree that the principal single sources of war revenue must
necessarily be business and accumulated capital, but these sources
should not be used excessively and to the exclusion of others. The
structure of taxation should be harmonious and symmetrical. No part of
it should be so planned as to produce an unscientific and dangerous
strain.

The science of taxation consists in raising the largest obtainable
amount of needed revenue in the most equitable manner, with the least
economic disturbance and, as far as possible, with the effect of
promoting thrift.

The House Bill proposes to raise from income, excess or war profit and
inheritance taxes $5,686,000,000 out of an estimated total of
$8,182,000,000. In other words, almost seventy per cent. of our
stupendous total taxation is to come from these few sources. It seems to
me that the effect and meaning of this is to penalize capital, to fine
business success, as well as thrift and self-denial practised in the
past, thereby tending to discourage saving.

The House Bill fails, on the other hand, to impose certain taxes the
effect of which is to promote saving. Intentionally or not, yet
effectively, it penalizes certain callings and sections of the country
and favors others.

Let me say at the outset that my criticism does not refer to the
principle of an eighty per cent. war profits tax. Indeed, I have from
the very beginning advocated a high tax on war profits. To permit
individuals and corporations to enr