Taxation without Representation
Many years ago James Otis is reported to have said, “Taxation without representation is tyranny” and with history repeating itself we believe some of our administrators in Washington have forgotten this complaint.
While we were at war, everyone with true patriotism, submitted to rules and regulations without a squawk—we all wanted to get through with the war—and quick! Now that hostilities are over and our efforts are directed toward civilian economy government controls become a bugaboo. Try as we might, we cannot conceive by any stretch of generosity why OPA arbitrarily reduced the price ceilings on used machine tools 7% to 22% in issuing Amendment No. 9 to Maximum Price Regulation No. 1 on December 21, 1945.
We wonder if the average user of machine tools knows what this means? It represents a veritable tax on every piece of metalworking machinery in his plant. The dealer in used and rebuilt machine tools, particularly if he happened to have a large inventory, already knows. There are approximately one million machine tools in the United States over four years old. The impact of this drastic amendment will not be felt by the average user of machine tools until he offers some of his equipment for sale.
To the best of our knowledge, OPA did not consult the industry primarily affected by this amendment. OPA’s reasoning in Amendment No. 9 of M.P.R. No. 1 is contained in their statement of consideration, “Age Classifications—The accompanying amendment revises the age classifications applicable to second-hand machine tools and extras in order to make the correction necessary for the passage of time since the first establishment of these classifications in 1941 . . . with the passage of time, any specific machine will automatically pass into the appropriate older, age classification.”
The issues involved are why was this price reduction necessary and why was the industry ignored by OPA? In our opinion this gets back to the famous statement about “taxation without representation.” We all know that a limited amount of government control is necessary, but the economy under which we have prospered was based upon a free competitive system, which is the best device for keeping profits within limits. The law of supply and demand will continue to level prices of all commodities, so long as we operate under a free enterprise system.
There is no telling how far-reaching this drastic reduction will be in its effect on millions of dollars worth of capital goods in manufacturing plants. The small plant operator often depends upon his ability to locate good, used machinery if he wishes to continue in business . . . let alone expand it. If the larger user of machinery decides that the current market for his surplus tools is so low that he would be as well off in scrapping it, there will be thousands of tools that will never get back into production again.