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Show Figure Out This Scheme By ELIOT JOiNES Professor of Transportation and Public Utilities, Stanford University Shortly before the adjournament of Congress the Senate Military Affairs Af-fairs Committee, against the com-hineri com-hineri oDDosition of the War. Navy. and Treasury departments, made public a report recommending recom-mending legislation legis-lation to draft wealth in the event of war. Briefly stated, the proposal was that every one having net wealth of $1,000 or more must buy government govern-ment bonds, the purchases to range from 5 of the net tie of It Is In cash. Their wealth Is In the form of land, buildings, machinery, machin-ery, tools, livestock, crops, etc. If they happen to have cash on hand equal to 5 of their net wealth, and can spare the money, their problem is met, but most farmers would be compelled to sell a part of their wealth to obtain the necessary funds. But who would buy? Confronted with a capital levy very few people would have surplus funds available for the purchase of farm property, and the decline In ItJ value would be terrific. . The case of the farmer Is typical. Everyone who did not have the applicable ap-plicable percentage of his net wealth in cash would have to sell or borrow. But from whom? With everyone dig-ping dig-ping down into his purse, sock, mattress, mat-tress, or savings account, as the case may be, to get cash, few would have funds with which to buy the vast amount of property and securities pressing for sale, and the result would be bedlam. Moreover, how would net wealth be computed? Presumably on the basis ba-sis of orderly conditions in the market, mar-ket, whether It be the stock, commodity, com-modity, or real estate market. But the rush to sell would completely disorganize disor-ganize the markets, and reduce enormously enor-mously the net wealth of the country. When It became apparent that wealth cnuld not be converted inlo cash without causing disaster, the government, If It persisted In the scheme, would have to tak paymenl for its bonds in property or securities. And this would lead to government ownership of a large part of productive produc-tive enterprise. As General Sherman said, "war is hell": and we should leave no stone unturned to purvent It. But should war come to our shores, we would be frjolish indeed to set about defending i the natiotr by first completely disor-. disor-. gani.ing our economic life. wealth in the case of those having only $1,000 up to 75 of the net wealth in the case ot those having $100,000,000 or more. The bonds, though redeemable at the government's govern-ment's option, were not to mature for fifty years, and were to bear an interest rate of not more than . In essence, therefore, the plan was a capital levy. The Committee In advocating this plan must have had a political motive, mo-tive, because from the economic standpoint it is obviously impracticable. impractica-ble. Where, it may be asked, are those who are to be compelled to buy government gov-ernment bonds to obtain the necessary neces-sary fu:Kls? The obligation to buy bonds is based on the posrsion ni net wealth, but most wealth is not in the form of cash, and it would he exceedingly ex-ceedingly difficult, therefore, to get the cash with which to pay Tor the bonds. . As an Illustration, take the farmers In the aggregate they have an enormous enor-mous net wealth, running up intc many billions of dollars, but very lit- |