Spencer Heath Archive

Item 1077

Elkridge, Maryland

September 27, 1933

To the Editor of the Sun:

John Smith, Taxpayer, raises bales of cotton. Some he sends to the mill for a competitive price. The mill must pay process taxes and many other taxes, seen and unseen, also N.R.A. extra wages for less work. These taxes and extra wages are loaded into the price of the cloth. The consumers can’t buy all the cloth, with all the taxes and extra wages loaded on it. So the mill can’t sell all the cloth and therefore can’t buy any more cotton. So John must sacrifice the balance of his cotton to a speculator for less money than he owes the bank and his mortgage becomes one of the bank’s frozen assets.

Mills in China need cotton, but our tariff keeps Chinese goods away from here and so the Chinese have none of our dollars wherewith to buy cotton from us. Therefore China needs a loan. Therefore an agency of our Government places in Mr. Morgan’s bank a credit to China, and China gives to our Government some Chinese paper promises. The speculator ships China the cotton. Mr. Morgan sends the speculator a check. Mr. Speculator deposits the check in his account. The American taxpayer (John Smith) has now paid or is bonded to pay Mr. Morgan (or his assigns) for advancing the money to pay the speculator for sending the cotton to China. When the Chinese paper promises are redeemed (sic) John Smith, taxpayer, will think he is getting back the money he paid to the speculator for the cotton to go to China. Thus does the Government help the farmer. But this hocus pocus is immensely better than destroying the cotton — better for the speculator, better for the banker and better for the Chinese. But John Smith, taxpayer, doesn’t have even a Chinaman’s chance.

John Smith, Junior