xt7wwp9t2q46_95 https://exploreuk.uky.edu/dips/xt7wwp9t2q46/data/mets.xml https://exploreuk.uky.edu/dips/xt7wwp9t2q46/data/59m61.dao.xml American Liberty League 37 linear feet archival material English University of Kentucky This digital resource may be freely searched and displayed.  Permission must be received for subsequent distribution in print or electronically.  Physical rights are retained by the owning repository.  Copyright is retained in accordance with U. S. copyright laws.  For information about permissions to reproduce or publish, contact the Special Collections Research Center. Jouett Shouse Collection (American Liberty League Pamphlets), No. 98 "Wealth And Income: A Factual Analysis of a Situation Frequently Obscured by Misinformation and Attempts to Arouse Class Prejudices," February 10, 1936 text No. 98 "Wealth And Income: A Factual Analysis of a Situation Frequently Obscured by Misinformation and Attempts to Arouse Class Prejudices," February 10, 1936 2013 https://exploreuk.uky.edu/dips/xt7wwp9t2q46/data/59m61/59m61_98/Am_Lib_Leag_98_001/Am_Lib_Leag_98_001.pdf section false xt7wwp9t2q46_95 xt7wwp9t2q46 AN INVITATION TO JOIN THE     *
AMERICAN LIBERTY LEAGUE  
We extend to every American citizen who believes in    
the fundamental principles which gave birth to the Q
Constitution of the United States an invitation to be-  
come a member of the American Liberty League.  
You may indicate your acceptance of this invitation Q
by Elling in the necessary information as to your name Q
and address on the enrollment blank below and mailing Q * * *
it to American Liberty League, National Press Building,  
Washington, D. C.   y
There are no fees or dues. If you are willing and able §
to give monetary help for the League’s support your §
contribution will be appreciated, as our activities are   »
suppcérted entirely by the voluntary gifts of our   A Factual Analysis of a Situation
mem ers. : _ _
  Frequently Obscurecl by M1s111f0r»
ENROLLMENT BLANK   mation and Attempts to Arouse
  Class Prejudices.
Date.A._...A  
I favor the principles and purposes of the American  
Liberty League and request that I be enrolled as a  
regular b Q
*contributing mem Bl" Q ,
Signature .._.....   
  v.  c·
Name (Mr. Mrs. Miss) _ an-lm; _—m i l;   ru
E cv   °
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+=  ______ ;
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@9   ;
E Town E
County State E I
A ,   AMERICAN LIBERTY LEAGUE
*As a contributing member I desire to` give 8........ I Nat1OnalHmdquayteYS
S NATIONAL PRESS BUILDING
to help support the activities of the League: Cash here-   WASHINGTON, D_ C_
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  * ·k
E Document N0. 98
  February, 193,6
(98) “   n e _ s  

 ; · Wealth and Income
  *
l Misleading and even false statements with
{ reference to the distribution of wealth and in-
; come make it pertinent to review the facts.
l While the continued circulation of misinforma-
tion by those who would arouse class prejudice
has been facilitated by the lack of complete
· E data, suflicient infomation is available to de-
  molish the idea of such an extreme concentration
rl of wealth as frequently pictured. Assertions
that 1 or 2 per cent of the people own from
li 60 to 90 per cent of the wealth come within the
‘ ·~ realm of pure fiction.
  The distribution of income is an index of the
use of wealth. Information with respect to it
» has more bearing on the extent to which all the
i people share in the advantages of the American
`x}HEN you have fmtshed with this economic system than that with respect to actual
_ ownership. It is much more important to know
P“mPme’ Please Pass lt °" W wma who benefits from wealth than who holds title
fyian;1 or acquaintance who might be to it. Official statistics relating to income,
interested, cutting his attention to the which are considerably more extensive than
_ those relating to ownership of wealth, show that
m¤mb¤*’¤l"P bl°’*‘*’< °” P“g° ’·*· it is very widely distributed.
i The most authoritative information available
shows the facts to be as follows:
1. Net incomes below $5,000 for 1934 ac-
j counted for 60 per cent of the total net income,
i although bearing less than 7 per cent of the total
' A tax burden. _
2. Net incomes above $5,000 represented only
about 10 per cent of the estimated national
income.
3. Net incomes above $100,000 accounted for
· less than 4 per cent of total net income and less
than 1 per cent of the estimated national income.
4. Equal distribution of all net incomes above
$5,000 among all the people of the United States ,
would give each less than $40.
5. From 75 to 80 per cent of the total national
· income is in the form of wages and salaries
as distinguished from returns on property.
» 3

 6. Known facts relating to homeS, f&1‘111S, at all `in the Internal Revenue Bureau’s tax re-
stocks, bonds, savings deposits and insurance ports,
policies testify to a wide distribution of the i Net income as computed for purposes of tax-
ownership of wealth.   ation under revenue laws is very different from
7. Forms of property constituting wealth can- A   the national income. As defined by the Depart-
not easily be divided. Its redistribution would   ment of Commerce the "national income pro-
mean a destruction both of wealth and of in- Q duced" represents "the aggregate value of all
come. _ T commodities produced and services rendered,
8. If the entire present national wealth, which i less the value of raw materials depleted and
includes both public and private property, were   capital equipment worn out in the processes of
in money and could be distributed equally   production." More briefly it is defined as "the
among the population, no individual would have   net product of the national economy." The
as much as $2 400. , "national income paid out" is defined as "the
9. More and, more production under the Amer- l compensation paid to or received by individuals
ican system of free enterprise offers a much bet- for their productive services, whether labor,
ter prospect of an improved status for those in Q management, or the furnishing of capital." The
the lower income classes than any utopian difference between the "national income pro-
scheme for a redistribution. duced" and the "national income paid out" rep-
t resents either "business savings" or "business
In me Statisti S losses." All figures available with respect to the
CO C , national income are estimates.
Information with respect to income comes While the aggregate net income of individuals
chiefly from two general sources. Official and reporting their earnings for the calendar year
authoritative although inadequate facts are 1934 was $12,456,262,000, the estimated national
available in connection with the payment of i income for that year was about four time-s that
income taxes. More comprehensive although much. The estimate by the Department of Com-
less exact and reliable information is found in 11101`00 101 11·011011€=1»l 111001110 P1”0d1100d W¤S $48,-
eetimetee ei iietienei income. 561,000,000 and for national income paid out
It is obvious why there is s considerable dis- $50,1%,000,000, the differenee being eeeennted
srspsnsy between the total sr net income ss rs- fer by $1,0%,000,000 ef bnelneee 1¤eeee·
ported to- the Internal Revenue Bureau and the Concentration Disproved
total national income as est1mated by the De- . . . . .
. _, The income tax statistics, while incomplete
partment of Commerce and by private research d . f . h . h
iwtions an unsatis actory 1n some respects, s ow wit -
Organ , ' . out question that the bulk of the income is scat-
Net mcome as defined under the revenue law is tiered among the middic and iower income groups
gross income m1nus certain deductions but melu- instead of being concentrated in the higher
sive of amounts allowed for personal exemptions brackets
and Cerlialn other CI`€dItS. Because of €X€IHpl`4]OIIS   the total net, income Of   1,6-
mcome tax returns were filed in 1935 for the cal- ported for 1934, about 60 pei, cent, Oi, $7,485i_
Bndar Year 1934 by Only ebeuf 4{OOQOOO ent ef 000,000, was that of persons with incomes under
the 48,000,000 persons who according to the 1930 $5,000 Despite this greet preponderance ei iii_
00110110 W01`0 011g·0g0d 111 @1111111 00011P0»'01011S· come among those in the lower groups, those
TI10 1110011100 ef the 0}°h01` 44,000,001% 011 P10- above $5,000 carried proportionately a much ,
0111110blY 111 1110 10W 111001110 §1`011PS, de 1101 0PP001` heavier burden of taxation. Out of a total of

 of theisum of $4,971,262,000, the net income of
$506»481»000 Paid in taxes PY individuals, Ohly those above $5,000, among 126,000,000 people
6.42 per cent, or $32,500,000, came from those would mean less than $40 for each.
with incomes below $5,000. The class above The shrinkage of incomes between 1929 and
$5»Qee» with cnly 40 Pa? GBM of 016 total 11615 1934 was much greater in the case of those with
ineeme> Paid nearly 94 P9? 06105 of 016 total incomes above $5,000 than those below. The
taxes. total national income produced, according to the
The net income of persons with incomes above Department of Commerce estimates, Shrlmk
$100,000 was $4].6,389,000 This was less than fygm $31,034,()()(),000 in 1929 to $48,561,000,000
4 per eent ef the total Hall income 1`€P01"¤€d· in 1934, a reduction of $32,473,000,000, or 40
Nevertheless these in the i¤¤¤m¤ SYOUPS above per cent. During the same period the net income
$100000 Paid total taxes of $1%,520,000, which of the group above $5,000 shrunk 70 per cent,
was about 35 per cent of all individual income M While that ef the group below $5,000 went down
taxes collected.   only 7 per cent. ‘
The income tax returns for the year 1934  
numbered 3,988,269. Of these, 3,568 788 or 89 l ·
per cent, had net incomes below $5,000., Those   Nauonal Income
above $5,000 numbered 419,481, while those 1 The itemized estimates of national income by
above $100,000 numbered 1,891. the Department of Commerce tend to confirm
Comparisons between net income and esti- i the conclusions, based on net income figures, with
mates of the national income obviously cannot - respect to the wide diffusion of income.
be made with any degree of accuracy. It is ap- The Department of Commerce divides its esti-
A parent, however, that the amount of the net in- mate of $49,440,000,000 of total income paid out
j come of the wealthy classes does not constitute during 1934 into $33,109,000,000 of labor in-
a very large part of the total national income. come; $8,103,000,000 of entrepreneurial with-
V The net income reported by those with in- drawals, which are the income of owners and
 T comes above $5,000 is about 10 per cent of the partners ·of unincorporated establishments, pro-
total e·stimated national income produced, while fessional practitioners and other self-employed
` that of persons with incomes above $100,000 is persons; $7,143,000,000 of property income, in-
less than 1 per cent of the total. On the other cluding dividends and interest; and $1,085,-
hand, the net income reported by persons with 000,000 of net rents and royalties.
incomes below $5,000 is about 15 per cent of the ~ The labor income constitutes 67 per cent of
total national income produced. It can be l the total; entrepreneurial withdrawals, 16 per
reasonably assumed that the income of the 44,- cent; property income, 15 per cent; and net
000,000 persons ordinarily employed who did not rents and royalties, 2 per cent.
file income tax returns accounts for a large part In the year 1929 at the peak of the speculative
of the estimated total national income. Even boom the total income paid out was estimated
after making allowance for deductions from . at $78,576,000,000. Of this total $51,088,000,000
gross income in the totals of taxable net income, was labor income; $12,424,000,000, entre-
it appears a certainty that the bulk of the na- preneurial withdrawals; $11,632,000,000, prop-
. tional income is distributed among the great erty income; and $3,432,000,000, net rents and
mass of the people. royalties. Labor income represented 65 per cent T
An equal distribution among all the people of of the total; entrepreneurial withdrawals, 16 per
the net income reported by those with incomes CGM; P1`0P€1“’¤Y income. 15 Per deem? and net
above $5,000 would not greatly improve the rents and royalties, 4 per cent.
status of those in the lower groups. A division 7
6

 The total employee income from salaries and EFOUPS-‘ Tl'1€ estimates f01° 1`€0€I1’0 years Whlell
Wgggg plug the gntrgprgnguyjal income h3,S 3»I`€ `l.1S€d l1'1 pI1blIC3il»IOI1S of JDl"1€ BI`OOklI1gS II1SlZl*
gmguntgd in ygggnf, ygayg tg fygm   {,0   per tLll3l01'1 8,I`€ those of DI`. Walter R.€I1IiOI1 II1g&llS.
cent of the total national income paid out. These The ¤a’¤l0Y1al Wealth in 1929 tetaled abeut
figures support the theory that the wealth of the $460,O00,0UO,O00 according to l·h€l Ingalls eSl»l·
nation is being so used as to spread its benefits mam- OH ’®h€ Same basis the Wwlllh laS@ Yea?
over the great mass of the population. had ¤S shrinkage ul Valua Would at Once nalin preferred stock or a bond issue. In the light of
place in the separated segments of present prop- proposed inheritance tax rates running as high as
erty.~ 75 per cent, such a procedure would mean the
0116 may VlSL1&llZ€ what would happen if the loss of complete OOIIJUYOI of thi? COmP9»UY by l»h€
J property of the Ford Motor Company woro di- Ford family. The effect quite conceivably might
I A vided up as part of a general redistribution O; be injurious to the thousands of families whose
wealth. Information recently published showed moomos ho‘Vo_oopooooo olooo sho somlsoolo _
that this company over a period of 32 years had Expert sssomooy ss to sho sffsos of hssvai m`
sold 12% billion dollarss Worth of products Of heritance taxesoupon the Ford estate was given
the company’s income 95 per cent was paid out to the ssosts Fiosmss Csmmllitss by Boy C' Os-
* as fast as it came in. For wages 3% billions were good, Vlos Prssldsos of tho Foss Nsslsssl Bank
paid out during the 32 years, for raw materials of Ch1¤¤s¤» who oppsorsd for sho Chamber of
o and other purchases nearly 8 billions, and for Commsros of the Umsso sss‘sss‘
bsxos moio ilioii half ii billioo o On the basis of information presented by Mr.
Except for a concentration of wealth in this J¤§>k$¤¤» MI" Osgood ssslmstsd that lhs soon
huge enterprise the results achieved would not l oxlssmg ssdsssl ood slots ssxss togsshsr with
i have been possible. Incomes were provided for   tho nsw lnhsmtsmss tsxss prspsssd by lhs ads
thousands of “yOrk€I·S Wbo by iliomsoivos could   ministration would exhaust all but $27,500,000
bays done nothing with what might have been of the Ford estate upon the death of Henry Ford.
their share of the invested wealth. A redistribu- The sompussslss wss bsssd upon an sstlmstsd
iioii iii this osso would dosiroy Wealth- value of $354,000,000 for the part of the estate
l 14 15

 still owned by H€¤1‘Y F01`d ami Hct siiccdy iii by mere redistribution of the existing wealth and
the possession of Edsel Ford. income of society."
Mr. Osgood asserted that while the payment   Di; Moulton oontinnoor
of the huge taxes might be nnanced by issuance r wrhg amount to be divided is Simply not large
ef eteeke and beads "‘¤he ehaaeee are that the enough to afford dee desired lever of well-being.
shrinkage on the market incident to the Sale, At the most, a few hundred dollars might thus be
that is, tho Whgigggllg Valug ag distinguished added to the incomes of the families constituting
from the retail value of the stock, would prob- thflgriéig §;SSt(;’fat;‘;’€`i;;p;‘1i;ti°:)iéLl of Smsfacto
ably absorb a' good part Of that $27’5O0’0O0 and standards of living for everyoni, the first require;
WiPc eut every ceiit ef the Feid estate-,) Mr- ment is to increase progressively the total amount
Osgood pointed out that the normal underwriting of the income to be divided. Only as the aggregate
Costs in a financing pygjggf, Of   ghargtgtgy I18.tl0Il8.l income iI10I‘€8BeS fI‘Om 80 billions 3 ye&I‘
would be 10 por. Cont. A 10 por. cent charge in to 100 billions, to 150 billions, to 200 billions, will
this case would be greater than the $27,500,000 if aiiggingfr 3 hlgh Standard of hvmg for EVHYODB
During the testimony Senator Gore of Okla- P °
houla raised ar question as to Whether Such ar after rejecting various specific proposals for
tranotor of Ownership of tho Ford Motor Com, achieving a better distribution of wealth and in-
“ pany Would not Mont the Snoooso of the business come Dr. Moulton concludes that the greatest
in jeopardy.,) Sonator Klng of Utah rornarkod promise lies in "the gradual but persistent re-
that "it would place the control of the property VemPiiig ef Piicc Pciicy sc cs te Pass OH ths
in the hands of Wall Street or tho hankors, poS_ benefits of technological progress and rising pro-
Sibly to the dlsadvantago of tho inStitutiOn·" ductivity to all the population in their role of
Senator Lonergan of Connecticut said that under cciieiimeien
P conditions representing virtually a forced sale Di`- Mcuitcii gccs ciii
"the priee Weuld be far below the appraised rsdet e preeeddie seems to ue to eeedee the
h valuation." maximum gain to the masses both in the short-run
  While tho Congi·oSS did not adopt tho admin- and in the long-run. At the same time it does not
1 istration’s recommendations for a new Federal g?;r°g;  izhplggrtrgl°a2V;r;°£€g§;i;ardi:§ ;°;n°;?I;
mhemtance te“X’ It enacted m the Rereaue Act our capital fund and make possibley the flndncing
ef 1935 an mereaee iii eetete tax rates to 9- of improvements in plant and equipment on a basis
maximum of 70 per cent as well as higher income even more liberal than that now obtaining.
,                   "TO     acceleration of economic pI`OgI`€SS
P s in both instances were designed to promote a by means °f.pri°° reituctmn is not t° attack the
 . redistribution of wealth, the possible revenue be- igsiil? V(;,ypIl;g;€u:;1t;i;iI;1 gist r§;iLt;a;€g1;
, ing I‘elat1Vely L1111II1p0I‘t&I1t. tified and extolled by both lay and professional
h students of the economic process during the days
The Brookings Conclusions ;s;h;'1;‘cth1e,,system was assuming its present general
Dr. Harold G. Moulton, President of the i
h Brookings Institution, in Income and Economic The American System
Progress, the concluding book of the notable series  
of four recently published by this research or- Uiidci the Amciiccn systcm ef free €11t€1‘l¤1‘iS€
ganization of preeminent standing, asserts that c iiighci Standard ef living has b€€11 attailled
"the provision of reasonable standards of living than ciiywiicic else iii thc Wciid- The 9·V€1“9»g€
for the masses of the people cannot be achieved working man has had 00mf01`tS aud luxuries un-
16 17

 known elsewhere by those inthe same station _ _
of life. The United States has made greater morongo m production Wnicn is n€0€SS&1‘Y f01‘ the
strides toward elimination of poverty than any cmimop Oi new Wealth Qusck Schemes for a
other nation. Distress during the depression has Hgdgcigbutlo? Of Wealth threaten 8* ococrocoon
been world-wide and cannot be attributed to O O ltgea th Fwd Income] Problems bowing
maladjustments peculiar to this country. On WBa· -3nd  ncome mmam to be Solved but
ppptptp tt opportunity ttt prevailed under Z¥°§§t?’22Etl1t$tZZtElt§§l