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Croly, Herbert David, 1869-1930

"The Promise of American Life"


The objection will, no doubt, be immediately urged that a system of this
kind would prevent any improvement of service from going beyond a
certain point, just because it would cease to be profitable beyond a
certain point. But such an objection would not be valid, provided the
scale of taxation were properly graduated. I shall not attempt to define
any precise scale which would serve the purpose because the possible
adoption of such a plan is still too remote; but the state should, in
return for the protection it extends to these semi-monopolistic
corporations, take a certain percentage of all profits, and, while this
percentage should increase until it might at a certain level reach as
much as one half or three quarters, it should not become larger than
three quarters--except in the case of a corporation earning, say, more
than 20 per cent on its capital. To be sure the establishment even of
such a level would conceivably destroy the interested motive for
increased efficiency at a certain point, but such a point could hardly
be reached except in the case of companies whose monopoly was almost
complete.


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