Low of Diminishing Returns

ft was Adam Smith writing in his immortal book on economics, "The Wealth of Nations," who warned that w,hen taxes are allowed to rise too high, they invoke ..the law of diminishing returns."

The truth of that statement ha,s bee,n proven countless times in the history of this and other ndtions. Let a tax become exorbitant and, in a large assortment of ways, those upon whom the tax is imposed seek ways and means of evading it, and thus cut down the total income from that source,

Recently there appeared before the Subcommittee on the Economic Report an American business man who warned that we had better think carefully about Adam Smith's warning in our taxing matters; that the law of diminishing returns could easily reduce rather than increase our i,ncome from certain taxes, arnd reduce needed production.

The gentleman was the president of the great du pont industry, and his name is C. H. Gree,nwalt. He said we should remember that the greatness of the United States depends heavily on the ability of industry to produce. He said that "an industrial corporation is not ar machine that can be run by automation, but is a team of human beings,', which might well be influenced by taxes.

The highest bracket man in this country today gets to keep only 9 cents of each dollar he earns, after taxes, and the question naturally arises, are men going to continue to wear out brain and brawn for such a return? "Industry must rely most importantly on financial compensation and