Page:Popular Science Monthly Volume 48.djvu/13

Rh never as yet fully tested experiment of universal suffrage, have become, at least theoretically in the United States, the sole arbiters of the policy of their Government and of the selection of the legislators who are to enact laws in conformity with such policy.

The problem of the acquisition of wealth having thus been solved, that of the proper distribution of wealth logically and necessarily follows, and the character of the measures which directly or indirectly involve what is called taxation for the attainment of such result, which seem to commend themselves to the people of the United States, are especially worthy of attention. They are indicated in part by the adoption of a pension system unlike anything of the kind ever known in history, and which necessitates an annual expenditure of money (raised by taxation) to meet the military expenses of the country—army, navy, and pensions—in excess of that entailed by the immense military establishment of any of the countries of Europe, and the enactment of an income-tax statute whose primary object was not to raise revenue for the support of the Government, but an unmistakably political and socialistic measure, which threatened to annul the most important and exceptional feature of the Federal Constitution.

That the diminishing rate of returns, in way of interest or profits, by the force of laws which no combination of capital can resist, is seriously impairing the relative value of wealth, and may eventually reach a minimum which will greatly diminish the inducement to individuals to economize or save it, although not generally recognized or appreciated, can not be denied. And neither is it recognized that the current rate of taxation on capital in all civilized countries even now approximates, and to an extent actually exceeds, the current rates of interest or profit on its use. Thus, for example, the rate of discount at the Bank of England during the greater portion of the years 1894 and 1895 has not been in excess of two per cent, and the discount (borrowing) rate for three months during this period was not infrequently less than a rate of three quarters per cent per annum. If taxes, according to popular theory, do not diffuse themselves, but remain a burden on the person, business, and property subject to their