Senator SMOOT. Lots of it is decreasing.

Senator MCCUMBER. Two-thirds of the land in the city of Washington has not increased in value in 15 years.

Mr. MARSH. Then, why did you not pass the antirent profiteering bill? Do you mean to tell me that rents here have not increased? Senator MCCUMBER. We have passed one.

Senator SMITH. We have passed two. Are you living here?

Mr. MARSH. Yes; I had to come down and bring my family here. I am working at the Washington headquarters of the Farmers' National Committee on War Finance. I would like to refer you to the report made by the late Congressman Henry George on land values in Washington. I would be glad to get it and send it to you. Land values are increasing.

Senator MCCUMBER. Increasing in some sections and decreasing in others.

Mr. MARSH. Granted; but whether it increases or decreases is not due to the ingenuity or work of the individual who chances to hold title thereto, but exclusively to the industry and presence of population.

Senator SMITH. The world's population is increasing and the land is not. Therefore the land must increase in value.

Mr. MARSH. That is inevitable. I do not need to debate an axiom. I did not mean to get off on the land question because, frankly, that is not the only important item in the program of the farmer. It is only one of the items by which this revenue could be raised. Some of the farmers from out West told me and I have talked with many of their representatives within the last 10 days-" Here is the situation we are up against. The boys have been taken from the farms. They have volunteered and went gladly. They sold their equipment at a loss. Unfortunately, some folks would not pay them full value. They went into the Army, and they are coming back by the millions in a few years. They have not saved much of their $30 a month, we will concede. What are we going to do with them?"

I talked last night with a man just over from England, a very well-known business man. He told me what the British boys in the trenches were saying there. And, by the way, may I interject. the statement that our boys who are coming back own no land here. The English boys call England "Blighty." This man told me that the boys in the British Army were saying, "We are fighting for Old Blighty. We do not own a square inch of Old Blighty, but you can be jolly sure that when we get back we are going to. have a bit of Old Blighty that we are fighting to save." And they are going to get it and our boys are going to get it.

Land values are going to be tremendously inflated in some sections; not in all sections. When these boys come back by the millions, some of them cripples, some of them armless, some of them legless-we hope not very many-what are we going to do with them, gentlemen? The after-the-war problem is more serious than the present war problem, since we have unity of command. If you tax land values, you are going to make it easier for those boys to be settled on the land. I have talked with some of the gentlemen of the Senate about these after-the-war problems, and they are very serious. If I should tell you some of the things the boys in

khaki have told me you would think I am pretty radical. I am I have talked straight to them and they have talked straight to me, and while I have addressed audiences in Carnegie Hall and Madison Square Garden, I have never had such frank and sincere approval of just the point I am presenting to you here on behalf of the farmers as I have received from the big crowds of boys in khaki, most of whom have now gone to France.

Now, I have taken the time you have assigned me. Those are our suggestions. We do not see any need for all these detailed taxes on consumption and things of that sort. I hope you will not proceed to rob the workingman by consumption taxes, because that is all consumption taxes are, indirect robbery of the workers. I think it would be better for the average workingman and farmer if you would reduce the exemption a little, if necessary, rather than impose any consumption tax. It would be easier for the farmer in the long run. Those four taxes I mentioned will raise all the revenue you need to finance the war, and a direct income tax is an honest tax, because you know what it is.

Now, I criticise, on behalf of the farmers, the suggestion of the Ways and Means Committee and the Treasury Department about these consumption taxes on luxuries.

Senator SMOOT. What is your business?

Mr. MARSH. I am now secretary and director of publicity of the Farmers' National Headquarters. I am executive secretary of the Farmers' National Committee on War Finance. I am secretary of the Farmers' National Committee on Packing Plants and Allied Industries, a committee organized to carry into effect the essential recommendations of the Federal Trade Commission. I am assistant secretary of the Farmers' National Wheat Growers' Association. Senator SMOOT. You are not a farmer, then?

Mr. MARSH. No; I am not a farmer.

Senator SMOOT. Do you live in New York?

Mr. MARSH. I have lived in New York, but I have worked on a farm. I worked a good bit of my way through college, getting up at half past 4 in the morning and working until late at night.

The CHAIRMAN. Mr. Marsh, you have been interrupted a good deal. Would you like to have more time?

Mr. MARSH. I would like to have two or three minutes more in which to finish. Occasionally, of course, you gentlemen have asked me questions, and in answering them I could not speak officially for the farmers.

Senator JONES. Let me see if I do not get your point of view. You consider that all taxes, however levied, must come out of incomes?

Mr. MARSH. Out of production.

Senator JONES. It is a question of whether you should get that income directly through an income tax or indirectly through a consumption tax, and you favor getting it all by direct taxation?

Mr. MARSH. I always favor direct taxation, because then you know just what is happening. When you have indirect taxes the man who advances the tax will add his profit and his commission on that tax, and the purchaser of the product pays more.

Senator SMOOT. But you are always perfectly willing to have exemption on the direct taxation?

Mr. MARSH. Since we have been doing that a little bit with the fellow with an income of $2,000, I do not think it would be bad to do it with the fellows with over $50,000, and while you have to be practical to do otherwise than I suggest, you have to say that the organized farmers and laborers are a bunch of idiots. They know the fight that is on in this country and throughout the world. They understand what this is all about, and they propose to see that the thing is put through in this country and that nobody makes a dollar unjustly out of the war.

Now, we are a rich country. We have got to get revenue out of incomes; out of production primarily; production, and more production. I think we all agree to that. Mr. William Kent brought that out very clearly in his address to the Ways and Means Committee. We have to increase production. Now, a tax on unused land values will help that. But, gentlemen, a debt of seventy-five or even fifty billion dollars on the industry of this country after the war is going to be a very serious thing. According to the press-I have not seen the Congressional Record yet of this morning-Mr. Kitchin said yesterday that we could never look forward to a smaller national budget than $4,000,000,000. That is one-third more than the total expense for all governmental expenses, National, State, and local in 1915, before we entered the war.

Now, forty or fifty billion will be the lowest debt at the rate we are going now, if the war goes on for two years longer. It will be easier and better for every legitimate business interest, we submit, farming included, and workingmen included-they are all in industry-if we pay two-thirds or 60 per cent of the cost of the war by current taxes. It will come pretty hard, but I have read a good deal about these patched breeches and shirts, etc. I have worn them myself in the last few weeks. I have not observed them on any of the gentlemen who advocated them publicly, and I will say I think it would be a good thing to get right down to that proposition.

I started to raise the farmers' objection to luxury taxes, and it is a fundamental one. If we do not buy the luxury you do not have the tax and you have a deficit. If you do buy the luxury you are wasting man power. That is a most radically illogical suggestion on the part of the Treasury, and I do not speak personally about Mr. McAdoo, but may I say that we should not waste the power of a single man or woman during this war? We have been looking over the fashion plates of the New York papers containing pages of advertising, asking people to spend their money for luxuries and things that are utterly unnecessary. I was talking to a farmer the other day about it. He said, "My wife spends $24 a year for clothes." I said, "Did you see the story of the New York woman who asked to be allowed $20,000 a year for clothes?" It is not only the folly of spending that money for clothes, but it is the folly of employing anybody to make those clothes. We have a serious proposition to win this war. After they get beyond the Rhine, we will have a big job. We have to conserve the man power of the country.

Senator SMITH. Are you a native of New York?

Mr. MARSH. No; I was not born in New York. I have lived there about 11 years.

Senator SMITH. Are you a native of the United States?

Mr. MARSH. My father and mother were native born. I happened to have been born in Bulgaria. My father and mother were Congregational missionaries.

Senator SMITH. What is your business?

Mr. MARSH. It has been stated in the record.

Senator TOWNSEND. What salary do you receive?

Mr. MARSH. I receive the munificient salary of $3,600 a year.

Senator SMITH. From all the organizations?

Mr. MARSH. From all the organizations combined.

Senator THOMAS. Is that exclusive of your expenses?

Mr. MARSH. Well, my expenses for car fare, etc., amount to a few dollars a month.

Senator THOMAS. Well, I do not care whether they are large or small. Do you get your salary exclusive of your expenses?

Mr. MARSH. Yes.

Senator SMITH. They do not pay your hotel bills in Washington, do they?

Mr. MARSH. No, sir.

Senator SMITH. Do you live here?

Mr. MARSH. I live here with my family and pay my rent. Would it be in order for me to reciprocate and ask the Senators what their income is and where they get it?

Senator THOMAS. I will answer that question if you want me to. The CHAIRMAN. Well, I do not think it is quite necessary. I do not think it is fair to either side.

Mr. MARSH. Why is it fair to ask me that? I am perfectly willing to tell. I have been offered two or three times that salary, and could have had several times that salary, to shut up and do nothing. Are there any further questions?

Senator SMITH. My reasons for asking you where you were born was because I wanted to identify your connection with American life. It was not meant in any way except for that purpose, to show that you were really a citizen of New York and actually identified with American life.

Mr. MARSH. Yes, sir; I went through college at Grinnell, Iowa, and worked at farming. I have had three years in Chicago and Pennsylvania universities, and thank God I have been able to outlive it and really understand something about economics.

The CHAIRMAN. You are here properly representing what you regard as the interest of the farmers?

Mr. MARSH. I am here speaking officially for the organized farmers.

The CHAIRMAN. You are representing a very important interest of the country.

Mr. MARSH. I am representing an industry of the country which is on the "blink," let me add, Senator, and the farmers have got to be recognized as an essential industry, but the Congress of the United States will have to take some action pretty soon to change and improve conditions or the farmers can not do their share toward winning the war.

Senator JONES. Who is at the head of your organization?

Mr. MARSH. Hon. Arthur Capper, governor of Kansas, who, it is said, is going to join you shortly in the United States Senate. I

$116,425,299. Five hundred and twenty-three stock and bond brokers received an income of $50,000 to $500,000, 16 an income of $500,000 to one million, and 9 an income of over one million.

AGRICULTURISTS.

The census of 1910 (used by the Bureau of Internal Revenue for occupational distribution of population) reports that there were in that year 6,047,615 agriculturists-farmers, stock raisers, orchardists, etc.-in the country. In 1916. 14,407 of these made returns under the income-tax law-that is, 0.24 per cent (less than one-quarter of 1 per cent of the total number). Their total income was $129.642.432; their average income $8.998.57. Of this number, 245 had an income of $50,000 to $500,000, 9 of $500,000 to one million, but not one an income of over one million.

WHAT OCCUPATIONS ARE MOST PROFITABLE.

The Commissioner of Internal Revenue gives the following percentages in various occupations, taking the number of persons as per census of 1910, who filed returns in 1916:

Medical profession: Physicians, surgeons, oculists, dentists, nurses, and other medical specialists..

6.97

Public service-civil

.78

Public service-military.

7.08

Theatrical profession: Actors, singers, musicians, etc_

55

Teachers: From kindergarten to university, also school and college officials.

.47

Agriculturists: Farmers, stock raisers, orchardists, etc.
Real estate brokers: Agents and salesmen.

.24

Stock and bond brokers.

4. 88 20.68

Merchants and dealers: Storekeepers, jobbers, commission merchants, etc_
Mine owners and mine operators.

4.36

17. 88

B. Corporate income.-The gross income of the 341.253 corporations reporting for 1916 was $35,327,631,015, the net income $8,765,908,984. The main divisions and net income of each were:

Stone, clay, and glass products_

Metals and metal products other than iron and steel.

Miscellaneous industries_

Public utilities

Banks and insurance companies.

Merchandising companies

Miscellaneous companies.

Total

329, 622, 002 383, 111, 197

1, 129, 416, 965

114, 683, 677 137, 134, 999

212, 764, 655 83, 159, 751 694, 351, 657 88,357, 208 565, 362, 713 419, 661, 076 1, 541, 076, 130

528, 505, 811 464, 875, 807 1, 205, 079, 556

8,765, 908, 984