Spencer Heath Archive

Item 1060.

Draft of a letter to the Editor of the Baltimore Sun composed at 522 South Braddock Street, Winchester, VA, followed by the completed letter submitted August 16 and published August 22, 1933 as per thermofax copy, and a related letter (also from Winchester) submitted August 21, 1933 and suggested for the Evening Sun

 

Original is in item 1057.

To the Editor of the Sun:

With the Administration so hotly engaged in hiring people to destroy the nation’s so-called surpluses of clothing, grain, meat and other necessities, purchasing the promises of farmers to lessen their future production, combining all other industries into a congeries of monopolies for raising costs and prices and reducing output and with it dragooning all unclassified businesses into a frame of artificial costs and restricted operations, it may be not amiss to pause and ask: Why is a surplus?

 

If Texas wants wheat for bread she produces a surplus of cotton. If Minnesota wants cotton for shirts she raises a surplus of wheat. How are these two surpluses liquidated? Clearly by trading (exchanging) the one for the other. Without this, Texas loaded with surplus cotton starves for bread while Minnesota bulging with wheat shivers for a shirt of cotton. When these surpluses are exchanged, the name for it is Trade or Commerce.

Government alone can prevent or destroy trade. Some of the weapons they use are taxes, licenses, quotas, tariffs, excises, inspections, restrictions, regulations, codes, quarantines, monopolies, embargos and blockades. These destructive measures bear specifically on cotton and wheat in many ways so as to create an apparent surplus. Among the worst of these are taxes on processing, that is, taxes that reduce or destroy the profits of the milling and other secondary industries both of cotton and of wheat. Increasing five-fold in recent years, taxation has destroyed the miller’s profits. Mills without profits are closed down, their operatives discharged. With the mills closed, the cotton and the wheat appear at once as unsalable surplus on the farmers’ hands. Damming the streams of trade at tax-blighted mills is but one example. Taxing profits out of production in the secondary industries reduces first the value and then the quantity of taxable commodities, dries up the sources of public revenue and destroys the value of real estate, for there can be no healthy demand for land where no business profits can be made.

The Government can correct this condition only by reducing taxes as much or more than the national income from business has been reduced and by cutting down its operations and expenses so as to live within its reduced income without borrowing. There never was a royal road out of profligacy except by honesty and economy, any more for governments than for individuals. The alternative is public bankruptcy and revolution whether it be under a new deal or under the old.

Spencer Heath.

 

Winchester Va. August 16, 1933

522 South Braddock St.,

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­­­­­­­­                                          /As published/

 

“Why Is a Surplus?” — Or The Road Out of Profligacy 

 

To the Editor of the Sun:

With the Administration so hotly engaged in hiring people to destroy the Nation’s so-called surpluses of clothing, grain, meat and other necessities, purchasing the premises of farmers to lessen their future production, combining all other industries into a congeries of monopolies for the raising of costs and prices and reducing output and with it dragooning all unclassified businesses into a frame of artificial costs and restricted operations, it may not be amiss to pause and ask: Why is a surplus?

If Texas wants wheat for bread she produces a surplus of cotton. If Minnesota wants cotton for shirts she raises a surplus of wheat. How are these two surpluses liquidated? Clearly, by trading (exchanging) the one for the other. Without this Texas, loaded with surplus cotton, starves for bread while Minnesota, bulging with wheat, shivers for a shirt of cotton. When these surpluses are exchanged the name for it is Trade or Commerce. Governments alone can prevent or destroy trade. Some of the weapons they use are: Taxes, licenses, quotas, tariffs, excises, inspections, restrictions, regulations, codes, quarantines, monopolies, and blockades. These destructive measures bear specifically on cotton and wheat in many ways so as to create an apparent surplus. Among the worst of these are taxes on processing, that is, taxes that reduce or destroy the profits of the milling and other secondary industries both of cotton and of wheat. Increasing five-fold in recent years, taxation has destroyed the miller’s profits. Mills without profits are closed down, their operatives discharged. With the mills closed, the cotton and the wheat appear at once as unsalable surplus on the farmers’ hands. Damming the streams of trade at tax-blighted mills is but one example. Taxing profits out of production in the secondary industries reduces first the value and then the quantity of taxable commodities, dries up the sources of public revenue and destroys the value of real estate, for there can be no healthy demand for land where no business profits can be made.

The Government can correct this condition only by reducing taxes as much or more than the national income from business has been reduced and by cutting down its operations and expenses so as to live within its reduced income without borrowing. There never was a royal road out of profligacy except by honesty and economy, any more for governments than for individuals. The alternative is public bankruptcy and revolution whether it be under a New Deal or under the old.

 

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/Submitted for Evening Sun/

To the Editor of the Sun:

To raise their living standards, people practice what is called Division of Labor, that is, each man (or his group) makes one kind of goods in quantity, perhaps a hundred times as much as his own needs require, while a hundred others likewise produce a hundred other kinds a hundred-fold more than their needs require.

This is just as true of men working in large groups with high organization of personnel and using elaborate tools and materials (which are capital) as it is of men working singly or in small groups with simple tools. In any case, when the surplus products are exchanged, each man gains a hundred kinds of goods and has an excess of none.

Would it not be better for the Government to encourage the exchange of surpluses rather than pay premiums to have them destroyed? Are not these very premiums (by the hundreds of millions) drawn from taxes laid on goods in course of exchange and do not these taxes check the natural flow and distribution of surplus goods?

Spencer Heath

This letter suggested for Evening Sun, in view of letter from the same writer appearing in The Sun today August 22.

 

SURPLUS — WHY A

To the Editor of the Sun:

Sir:

To raise their living standards, people practice what is called division of labor, that is, each man (or his group) makes but one kind of goods in quantity, per­haps 100 times as much as his own needs require, while a hundred others likewise produce a hundred other kinds a hundred-fold more than their needs require.

This is just as true of men working in large groups with high organization of personnel and using elaborate tools and materials (which are capital) as it is of men working singly or in small groups with simple tools. In any case, when the surplus products are exchanged, each man gains a hundred kinds of goods and has an excess of none.

Would it not be better for the government to encourage the exchange of surpluses rather than pay premiums to have them destroyed? Are not these very premiums (by the hundreds of millions) drawn from taxes laid on goods in course of exchange, and do not these taxes check the natural flow and distribution of surplus goods?