Sixty years before Leona Helmsley, J.P. Morgan says that only the little people have to pay taxes.
Since the date is approaching when many of us must pay the June installment on our 1932 income taxes, or go to jail, it may be interesting and timely to review the cases of two citizens who will pay no income tax this year, and paid none during the last two years. Case Number One is a coal miner, living in a squalid village in southern Illinois. In none of the last three years has his income equaled $600. He is a widower with five children. They occupy a three-room frame shanty on a company “street” which is a mudhole after every rain. The mother is dead. Two months before the sixth child was due to arrive, she made the mistake of trying to do the family washing with water which she carried from the community hydrant, four blocks distant. She had a sixty-dollar funeral. The miner owes the company store more than $200. He is hopeful that things will improve under Mr. Roosevelt, and that the black damp won’t get him before the children are old enough to look out for themselves.
Case Number Two is J. Pierpont Morgan, head of the private banking firm of JP Morgan and Company, which at the beginning of the present year owned unimpaired assets worth $53,194,000. Mr. Morgan has homes at 231 Madison Avenue, New York; Glen Cove, Long Island; 12 Grosvenor Square, London; Watford, England; and owns a shooting box in Scotland. He spends considerable time each year on his famous yacht, Corsair, which is reported to have cost $4,000,000. I have never seen any figures on what it costs to keep her in commission. Mr. Morgan is a member of the following clubs: Union, Knickerbocker, Harvard, Metropolitan, New York Yacht, Racquet and Tennis, Century, and University (New York); Athenaeum, Garrick, and Whites (London); Somerset (Boston) and Metropolitan (Washington). Honorary degrees have been bestowed on him by Harvard, Oxford (England), Princeton, Cambridge (England), and New York University; and he possesses the following decorations: Legion of Honor (France), Order of Leopold II (Belgium), Order of the Crown (Italy), and First Order of the Sacred Treasure (Japan). He is a director in seven of the world’s largest corporations, and is generally regarded as the most powerful banker in the world. Great industrialists, great bankers, distinguished jurists, and at least one President of the United States have been recipients of his favors. It is easily seen, therefore, that his situation in life is quite different from that of the coal miner. But in one respect both are in the same boat — neither paid any federal income tax in this country during the last three years — although it should be stated in justice to Mr. Morgan that he paid in England in all three. No doubt that is why he admires and imitates the English, even to the point of referring to the office manager of Morgan and Company as “my clark.”
Disclosure before the Senate Banking and Currency Committee that Morgan and his nineteen partners, including such celebrities as Thomas Lamont and E. T. Stotesbury, paid no federal income taxes in this country for 1931 and 1932, and that those who paid for 1930 contributed the paltry total of $48,000, has excited tremendous surprise and no little indignation, to judge from the newspaper headlines and the private comments of one’s fellow taxpayers. The revelation was no surprise to me. It confirmed precisely the opinion which I have had about Morgan and all his tribe ever since I have been old enough to read and reflect. For them to seize upon the “capital-losses” provision of the existing law for the purpose of withholding contributions to the support of the government under which they have prospered so greatly, was as natural as for a hog to snap up an ear of corn. Nor was there anything to amaze the judicious in the discovery that high government officials had repeatedly accepted Morgan’s largess. The trick of putting such officials under obligation is one which the big bankers have practiced from time immemorial. Doesn’t everyone realize by now that we entered the World War mainly because Morgan and Company had bet on the Allies, and were in danger of losing? Is there any mystery as to why the marines were dispatched against Haiti, Santo Domingo, and Nicaragua when those countries defaulted, or threatened to default, on their debt payments to American banks?