of the young despatch-bearer, told him to come back in an hour and the return despatches would be ready for him.

Major Whitehead said that from that moment he always pictured in his mind that grave, strong figure who was so

VER since I have grasped the idea of evolution I have wondered, and more and more wondered, how any one can think of it as irreligious in its spirit or tendency. In my casual reading I recently came upon a passage in S. T. Coleridge's " Aids to Reflection" which furnishes a poet's interpretation of the spiritual meaning of evolution before its scientific meaning had been interpreted by such writers as Darwin, Huxley, and Spencer:

Let us carry ourselves back, in spirit, to the mysterious week, the teeming work-days of the Creator, as they rose in vision before the eye of the inspired historian," of the generations of the heaven and earth, in the days that the Lord God made the earth and the heavens." And who that hath watched their ways with an understanding heart, could, as the vision evolving still advanced towards him, contemplate the filial and loyal bee; the home-building, wedded, and divorceless swallow, and, above all, the manifoldly intelligent ant tribes, with their commonwealth and confederacies, their warriors and miners, the husband folk, that fold in their tiny flocks on the honeyed leaf, and the virgin sisters with the holy instincts of maternal love, detached and in selfless purity, and not say to himself, Behold the shadow of approaching Humanity, the sun rising from behind, in the kindling morn of creation! Thus all lower natures find their highest good in semblances and seekings of that which is higher and better. All things strive to ascend, and ascend in their striving. And shall man alone stoop? Shall his pursuits and desires, the reflections of his inward life, be like the reflected image of a tree on the edge of a pool, that grows downward, and seeks a mock heaven in the unstable element beneath it, in neighborhood with the slim water-weeds and oozy bottom that are better than itself grass and more noble, in as far as substances that appear as shadows are preferable to shadows mistaken for substance! No! it must be a higher good to make you happy.

I have a friend under whose inspiring guidance I occasionally visit a picture gallery. In every picture he sees the artist who painted it. He does not speak of "The Man with a Glove" or of "Pilate Washing His Hands," he speaks of a Titian or a Rembrandt. I have a friend who is a teacher of literature. When we talk together, he speaks more frequently of Gibbon than of the "Decline and Fall of the Roman Empire," of Thackeray than of "Henry

KNOLL PAPERS

absorbed in the care of his people that the wildest storms could not divert his attention. M. C. DE K.

BY LYMAN ABBOTT WAY OF DOING THINGS " Esmond," of Shakespeare than of "Hamlet." And this is not merely a matter of phraseology. The artist is thinking of the creator of the picture; the critic is thinking of the creator of the book. Evolution has taught me to think of the Creator of the landscape. Creation has become for me a process, not a product. I see the artist painting the picture, the author writing the book, the architect building the house.

Therefore I expect imperfection. An . unfinished work is always an imperfect work. The apple in June is quite different from the same apple in October. The apparent imperfections in a growing world puzzle me no more than the imperfections in a growing boy. They add to the interest of the process which I am watching.

The revelation of God to man must always be imperfect-a gradual and growing revelation; because the infinite can only be gradually and imperfectly revealed to the finite; a perfect character can only be gradually and imperfectly comprehended by an imper

fect character.

Nor is it only the Creator I see in the process of creation going on about me. I see a Lawgiver. I think Huxley must have felt, though he did not always clearly affirm, the presence of a great Lawgiver worthy of our loyalty, for he affirmed that education includes the fashioning of the affections and the will into an earnest and loving desire to move in harmony with the laws of nature. I may yield obedience to power, but power cannot inspire in me a loving desire to move in harmony with the laws which it proclaims; a loving obedience can be paid only to a Lawgiver who deserves my love. The laws of

nature

are immutable, eternal, unchangeable, never repealed or set aside or disregarded or weakened by emotion. We know what we can depend upon. The laws of health are the laws of God, and it is as truly a sin to violate them as to violate the Ten Commandments. Nature is continually telling me that in her government-that is, in God's government-there are no favorites, and I wish to live in a government in which there are no favorites. I do not wish to live in a city in which some can disregard the city ordinances and some cannot. I do not wish to live in a world in which some can disregard the laws of nature and some cannot, in which I must generally yield them obedience but sometimes

may disregard them with impunity. The doctrine of evolution has made clearer than before the presence of an immutable Lawgiver, and the evolutionist does not believe that what men have called miracles are a violation of law. He can believe in miracles only as they are conceived of as a higher use of law.

And evolution has also made clearer to me than before that I am ever in the presence, not only of a great Power and a great Lawgiver, but of a great Healer. "Take what figure you will," says Ralph Waldo Emerson, "its exact value, nor more nor less, still returns to you. Every secret is told, every crime is punished, every virtue rewarded, every wrong redressed in silence and certainty.'

That is true; but it is equally true that when the violation of law ceases the work of healing begins. When I was a little boy, in some careless climbing I fell and broke my arm. The law was not set aside for my benefit. Nature did not say: This is a little boy who did not know any better and I will not break his arm. But as soon as the doctor had set the broken arm and put it in splints, nature began to build the bone together again, and now I have forgotten which arm it was that was broken. It is not true that there is no escape from the inexorable law that we reap what we have sown. On the contrary, the moment we stop our sowing a way of escape from the dreadful harvest is pointed out to us. When the dyspeptic ceases to violate the laws of health, the stomach begins to repair the ravages which he has made in it; when the drunkard abandons his cups, the body begins to cast out the poisoned tissues and build new ones to take their place.

Did we not always know this? Yes. But evolutionary science has made this truth clearer. Healing is as essential as imperfection in the process of growth; and the doctrine of evolution is simply the doctrine that life is growth. It is not an explanation of origins; it is simply the history of a process. John Fiske has defined evolution as "God's way of doing things." What is the effect on the religious spirit of regarding evolution in development as God's way of doing things in the material world is all I have spoken of in this paper. I may in some future paper consider the significance of considering it God's way of doing things in the world of spirit.

MR

IS AN

ONSIEUR TURGOT, who became Marquis de l'Aulne, is one of the most famous taxgatherers of history. He was Minister of Finance for France in the reign of Louis XVI. It is related that when he took office the credit of the state was tottering, but that he was so successful in reducing the deficit that the Dutch bankers who had a short time before refused to buy French securities at all were eagerly offering to take a loan of 60,000,000 livres at 5 per cent.

His motto was, "No bankruptcy, no increase of taxation, and no borrowing," and when he was asked how, with such a policy, he could increase the public revenue, he is said to have answered that "the art of taxation lay in the ability to pluck the goose without making him squawk." That he was master of his art is attested by his record, and he practiced it by so rearranging the French taxes that every one and everything paid a little, but not enough to restrain development or enterprise. The result was that commerce, which had previously been hampered by oppressive and inquisitional taxes, grew rapidly and the public revenue reflected the increased prosperity of the entire country.

Now, despite its seeming cynicism, there is much truth in Turgot's remark about the goose and its squawk. For several years to come our Government I will have to raise somewhere between four and five billions annually by taxation. There is not much hope of any reduction, for even if we do pay off part of the public debt the money will have to be provided by taxation, and it is much to be feared that Congress, whether it be Republican or Democratic, will fail to practice the economy that both parties are now preaching on the stump.

Now, is the sum so overwhelmingly large? Even before the war had made of us a creditor nation we were voluntarily taxing ourselves about three billions a year to pay for the liquor that we bought. It cost some two billions at wholesale, to which should be added about a billion for the saloon-keepers' profit and the expense indirectly involved in the maintenance of almshouses and penitentiaries, many of which are now vacant. There are some who are even clamoring for the reimposition of this tax, because for them it was a pleasure to pay it.

1This supplements an article by Mr. Price printed in The Outlook on July 14, 1920, under the same general title, and is the substance of an address delivered before the National Association of Cotton Manufacturers at Maplewood, New Hampshire, September 23, 1920.-THE EDITORS.

BY THEODORE H. PRICE

EDITOR OF COMMERCE AND FINANCE"

"ONE OF THE MOST FAMOUS TAX-GATHERERS OF HISTORY," MASTER OF THE ART OF PLUCKING THE GOOSE "WITHOUT MAKING HIM

SQUAWK "

Our expenditure for automobiles and their upkeep during the year 1919 must have been nearly as large, if not larger, for there were seven millions of them in use on the 31st of December last, about 1,600,000 of which were last, about 1,600,000 of which were new machines manufactured and sold during the preceding twelve months. So it is not so much the amount of the taxes that we pay as the method by which they are collected that makes us uncomfortable.

The income surtaxes and the excess profits tax were popular with the economists because it was thought that they were in theory equitable, and with the legislators because it was believed that they would yield the largest returns and make the smallest number of people uncomfortable. According to the returns of 1917 (later figures are not available), there were only 161,996 persons in the United States who reported incomes of $10,000 or over in that year, and it did seem equitable that a rich man who had a lot of property for the Government to protect should pay more taxes than the poor man who cost the community little or nothing. But experience has proved that in taxing the few we have only increased the burden of taxation for the many.

Chief Justice Marshall's famous decision, under which State and munici pal bonds and the interest received from them are not taxable by the Federal Government because "the power to tax is the power to destroy " and Congress has no right to destroy the governmental agencies of sovereign States, is, for instance, the cause of the

high rents that are a consequence of the housing shortage.

As Mr. Otto H. Kahn has pointed out, a man with an income of $1,100,000 a year will get as much net return from a tax-exempt bond paying 534 per cent a year as from a taxable bond yielding 21 per cent, and one with an income of $200,000 a year would have to get 16 per cent on his taxable investments in order to have the same net income that he would derive from tax-exempt securities yielding only 534 per cent. In the case of an income of $100,000 a taxable yield of 13 per cent would be required to equal a tax-exempt return of 534 per cent, and so on down the scale.

These calculations take into account only the Federal income tax; if State income tax and other taxes are also considered, the advantage in favor of non-taxable securities would be even greater; and the result is that a very large share of the country's capital which might otherwise be invested in new houses or mortgages on them is being put into municipal or State securities. Their issuance has been correspondingly stimulated, and the ease with which they can be sold has in some cases led to great extravagance and wastefulness.1

There are many other ways in which the high interest rates on taxable investments caused by the high income supertaxes increase the cost of living and limit production. The manufacturer or merchant who has to pay, as at present, eight or nine per cent for the capital he requires is naturally disposed

1 Since the above was written John S. Parrish, secretary of the advisory council of real estate interests of the City of New York, has testified before the United States Senate Committee on Reconstruction and Production that the withdrawals from mortgage investments in real property in the borough of Manhattan during the first half of 1920 amount to approximately $83,000,000

net.

In the newspaper report of this testimony Mr. Parrish is quoted as adding that "nowhere in the history of the city can there be found a parallel for such a drainage of basic capital from any field of investment." It indicates a rate of withdrawal of money from investment in mortgages in Manhattan alone of over $165,000,000 per year.

"An explanation of this unprecedented course of investment money will be sought in vain outside the operation of the income tax laws, Federal and State. This movement in and of itself supplies the most complete and sufficient explanation of the Nation-wide shortage in housings. It will inevitably continue its strangle hold on the building industry until the incidence of the income tax is raised from mortgage income and shifted to another point.

"The income tax is fundamentally uneconomic. It is an obstruction to the foremost of the industries, the great building industry with all its ramifications, and discourages the people from investing in it. This may not have been foreseen when the law was enacted, but the experience of the last three years and the cessation of housing construction and the prostration of the mortgage market has afforded a demonstration of which there can be no question."

to limit his activities. He employs fewer men, carries smaller stocks, reduces his turnover or output, and tries in every way to avoid borrowing money. The predicament of the railways and the higher freight rates recently authorized are in part due to the fact that the money needed for the improvement of the roads cannot be borrowed by even the best of them at less than from seven to seven and a half per cent.

But I could employ all the space allotted to me in an exposition of the injustice and disadvantages of the high supertaxes and the excess profits tax. To a reasonable and reasonably graduated income tax I see no objection, but the present surtaxes penalize success. They compel the enterprising man to pay the Government an immoderate share of his gains in a profitable year, and leave him to bear the losses of an unprofitable year alone. They kill the ambition and initiative of those who can do big things and are willing to take risks, thereby throttling the development by which society might benefit. They are inquisitorial, they are difficult to collect, they put a premium upon legalized evasion, against which the Government cannot protect itself without laws that would be, in fact, confiscatory; and they do not, as it was hoped they would,lessen the economic burden of the poor, for they have greatly increased the cost of existence for every one.

Of the disadvantages of the excess profits tax I need hardly speak, for they have become so apparent that both candidates for the Presidency have declared themselves in favor of the abatement or repeal of the tax, and it is highly probable that it will soon be abandoned. If not, it may be that there will be no excess profits to tax, for with production costs increasing and prices declining as they have latterly it is quite possible that the word profit may shortly become obsolete.

This is, in fact, one of the chief objections to the excess profits tax from the standpoint of the Government. The returns from it are too uncertain. In a good year they may be large, and in a poor year almost nothing. From the standpoint of the people, or the average business man or manufacturer employing a moderate capital, another disadvantage of the excess profits tax is the opportunity that it offers the large concern to strengthen a monopolistic grip through advertising, whose cost, being deducted from the profits made, is largely paid by the Government. A recent case in point is to be observed in the grocery trade, where a great commotion has been caused by the announcement that the manufacturers of a nationally advertised article would hereafter sell to the retailers direct, so cutting out the jobbers' discount and being better able to undersell their competitors. If the theory upon which this action has been taken works out in practice, other manu

facturers who are not able to follow the same policy will be excluded from the market.

I must admit that I have but recently come to the conclusion that the very high supertaxes and excess profits tax are inequitable and inexpedient. The theory which underlies them had a strong appeal for me when they were at first imposed, for it did seem just that those who had the most should pay the most and pay largely.

I am, however, convinced that in taxation, as in other matters, it is impossible for us to foresee the conflict between fact and theory until the latter is applied.

I well recollect a cartoon which was published when the Titanic collided with an iceberg and sank, despite her water-tight compartments, double bottom, and all the other devices to make her unsinkable with which she was equipped. The iceberg was labeled "Fact" and the Titanic "Theory." It was "Theory" that perished.

I doubt if any one, even the so-called tax experts, can say in advance what the incidence or effect of any new or untried tax will be, and we should therefore be careful before we decide to flee from the taxes we have to others that we know not of.

Even if it be admitted that the present taxes are against the interest of the public, it must also be admitted that it

is politically impossible to get them radically changed at once.

It is probable that the excess profits tax will be repealed. It is possible that some reduction in the income supertaxes may be secured, and it has been suggested that the tax on earned incomes should be revoked, leaving "unearned incomes" alone subject to taxation. The unwisdom of attempting to discriminate between earned and unearned incomes will probably become apparent as the proposal is considered. It would drive capital into tax-exempt securities, penalize thrift, and encourage people to spend their earnings instead of saving them.

This is the most we can hope for some years to come. The popular belief in the justice of the income surtaxes is too deep-seated to permit of their entire surrender; and in so far as new taxation is concerned, the practical question is, by what method shall we raise the revenue that may be required to make good the deficit that will result from a remission of all the excess profits taxes and a reduction of the surtaxes?