Cordell Hull. Taxes, Trade, and World Order, Oh My!


Recently, while re-reading Bernard Fall's excellent chronicle of the French war in Indochina, "Street without Joy," I stumbled across a reference on the US secretary of state, Cordell Hull. My prior knowledge of him was from the 1970's war movie, Tora, Tora, Tora, where he is portrayed indignantly castigating the Japanese diplomats following the attack on Pearl Harbor. The details of Hull's involvement with Indochina will be explained later – sufficient to say, my interest was piqued, and I did some online research on him. And boy-oh-boy, talk about turning over the proverbial rock and seeing what was underneath it! I discovered a man who, nurtured by Wilsonian progressive philosophy and serving under FDR, single-handedly authored some of the most oppressive taxes and international consortiums ever inflicted on mankind. Quite an accomplishment for a relatively shy political figure not noted for his charisma or public speaking. But Cordell Hull possessed a condescending moral certitude that fueled his endeavors to make a progressive agenda a terrible reality. Reading Hull's quotes, it is easy to discern a declarative and puritanical tone mimicking a benevolent dictator patiently telling his subjects what is best for them. Yet his philosophy would live on in the Cordell Hull Institute, his name found on many memorials and buildings, and his cabin home in Tennessee turned into a museum. There is even a Cordell Hull Folk Festival held annually in his home state. If those who revered his name really understood the ramifications of Mr. Cordell Hull's 37-year political career, the only memorial they would make for him would be an effigy to hang from the highest tree.

Where's your 1040, citizen? For every American who struggled, sweated and cursed while filling out a tax return to make the April 15th deadline, this is the guy to blame. Hull authored the US income tax laws during 1913–1916. Cordell Hull sums up his philosophy on taxing citizens:

“Every good citizen should be willing to devote a brief time during some one day in the year, when necessary, to the making up of a listing of his income for taxes to contribute to his Government, not the scriptural tithe, but a small percentage of his net profits.”

If you, "good citizen," need to pause reading and run to the bathroom to throw up, I will understand. Do you suppose there are portraits of him hanging on the walls of every IRS building, after the cult fashion of Stalin or Mao?

Grave robbing, en masse. Not content with just taxing income, Hull also sponsored the inheritance tax laws in 1916. Here's a telling Q&A from the US treasury website that explains the necessity of this tax.

Question: I want to know about the origin of the Federal estate tax. Can you tell me when it became part of the tax code and the rationale behind it?

Answer: In 1916 Congress for the first time levied a tax upon the transfer of a decedent’s net estate. The Committee on Ways and Means of the U.S. House of Representatives explained that a new type of tax was needed, because the “consumption taxes” in effect at that time bore most heavily upon those least able to pay them. The Committee further explained that the revenue system should be more evenly and equitably balanced and “a larger portion of our necessary revenues collected from the incomes and inheritances of those deriving the most benefit and protection from the Government.”

The Committee recommended an estate tax rather than an inheritance tax because many states already imposed inheritance taxes. It felt that the estate tax helped to form a well-balanced system of inheritance taxation between the Federal Government and the various states and that an estate tax could be readily administered with less conflict than a tax based upon inherited shares.

Various changes in the estate tax provisions of law, as well as their repeal, have been proposed over the years, but the principle has been retained.

This Treasury Department response can be traced to Hulls' original quote on the inheritance tax issue:

“I have no disposition to tax wealth unnecessarily or unjustly, but I do believe that the wealth of the country should bear its just share of the burden of taxation and that it should not be permitted to shirk that duty.”

Does the puritanical line, "not be permitted to shirk that duty" stimulate your gag reflex like it does mine? What Hull really means is it doesn't pay to prosper. So a working-stiff putting in overtime to afford braces for his kid’s teeth gets soaked for his efforts. The more you make, the more the government need to take, so why bother?

Say what you mean, mean what you say. Many online references I researched mention how Cordell Hull encouraged rearmament in the face of rising tensions with Japan and Germany in the 1930's, and particularly condemning the Japanese intention to invade French Indochina. But in late June of 1940, when the French military governor of Indochina requested the US to send 120 fighter planes and anti-aircraft guns already paid for by the French prior to the Fall of France, Hull agreed with Under-Secretary Welles refusal to do so. Hull in his memoirs explains why: "…with Japan in control of key points of Indochina, we were reluctant to sell any additional equipment to Indochina." He expresses optimism that French Indochina should be able to "delay and parlay and hold out against Japanese demands…. since Japan would not dare make a military attack at this time." This explanation contradicts itself on so many levels. Hull first writes off Indochina because the Japanese hold key positions for an invasion. He then lies that he does not want to sell "additional" military material to Indochina, when the truth was that the French were not asking to buy more, but only delivery of goods already purchased! In the ensuing sentence, Hull expresses the hope that the French, in their awkward predicament, can hold against the Japanese pressure, notwithstanding his refusal to give them the necessary bargaining chips, i.e., the fighter planes and AA guns. Finally, his assessment that the Japanese would not attack soon is ludicrous in view of the signs that an invasion was imminent. As a result, French Indochina fell to Japan in September of that year, leading to the ascent of the Ho Chi Minh and his Communist guerrillas, who became deeply entrenched in Vietnam society following the political vacuum that occurred after the end of the war. It can be argued that the Japanese would have succeeded regardless if the planes and guns were shipped, but it does not excuse Hull's convoluted rationale trying to justify his dealings with French Indochina.

No sanctuary for you! In 1939, the ocean liner SS St. Louis carrying Jewish refugees, sought asylum in the US to escape Nazi persecution. As Secretary of the State, Cordell Hull refused them because they had no "return addresses" to permit them visas. I think Hull failed to understand the concept of being a refugee means you have no return address to go back to. The ship, also refused by South America, Cuba, and Canada, was obliged to return back to Europe. 250 of the original 650 Jewish passengers would eventually die in the upcoming holocaust they sought to flee.

Whose side is he on? In December 24, 1941, De Gaulle's Free French troops captured two islands from the Vichy government near Newfoundland. Cordell protested this action, and went on to insist the pro-axis Vichy government to be reinstated! That those islands could have proved an ongoing security threat to the Canadian and US convoys crossing an ocean filled with prowling U-Boats never occurred to him.

Entangling fiscal alliances. Hull had initially sponsored a resolution after WW I to hold an international convention to initiate a world trade agreement. In 1934 he pushed Congress to pass the Reciprocal Trade Agreements Act, forerunner to the 1948 General Agreement on Tariffs and Trade (GATT), which would later mutate into the World Trade Organization (WTO) in 1995. Thus the free market becomes bound by artificial constraints under international political influences, counterintuitive to the natural law of supply and demand.

Peace at any price. Referred to the "Father of the United Nations" in drafting, along with his staff, the UN Charter. Receiving the Noble Peace prize for his efforts, Hull acceptance speech included the following remarks. Keep track of the bolded lines on Hull's use of aggressive verbs and technical terms – I will make comment on them shortly.

"There is no greater responsibility resting upon peoples and governments everywhere than to make sure that enduring peace will this time – at long last – be established and maintained. Fortunately, the war has brought with it not alone a stark realization of what another war would mean to the world, but as well the creation of an international agency through which the nations of the world can, if they so desire, make peace a living reality. Within a few weeks the organization for the maintenance of international peace and security, established by the San Francisco Charter, will be formally launched through the convocation of the first General Assembly of the United Nations. I fully realize that the new organization is a human rather than a perfect instrumentality for the attainment of its great objective. As time goes on it will, I am sure, be improved. The Charter is sufficiently flexible to provide for growth and development, in the light of experience and performance, but I am firmly convinced that with all its imperfections the United Nations Organization offers the peace-loving nations of the world, how, a fully workable mechanism, which will give them peace, if they want peace. To be sure, no piece of social machinery, however well constructed, can be effective unless there is back of it a will and a determination to make it work."

Notice the stress on the bolded words in connection with Hull's vision of global peace. I find it akin to the language on Communist propaganda encouraging peasants to meet their quotas to achieve a state paradise. This is contrary to the spiritual teachings of the Bible that peace must first begin with the individual. Peace coerced by a political mechanism like the UN can only resemble the peace that tyrants must feel after their citizen's individual rights are permanently removed, and become tractable as sheep.

I am also puzzled by his statement "United Nations Organization offers the peace-loving nations of the world, how, a fully workable mechanism which will give them peace, if they want peace" If a nation is "peace –loving" why would it need the UN to give it something it already has? Why is there a redundant query "if they want peace" at the end of the sentence? Obviously, the peace-loving nation must not have the right kind of peace as defined by the UN, and must be corrected! The following excerpt from Hull's memoirs supports this supposition:

"I am firmly convinced that in the world of today all nations will be forced to the conclusion that cooperation for law, justice, and peace is the only alternative to a constant race in armaments – including atomic armaments – and to other disruptive practices that will bring the nations participating in them on either side to a common ruin, the equivalent of universal suicide.

Again and again, his terrible moral certitude spills out in his words, letting one know that this is not a sincere plea or a request to prevent nuclear Armageddon, but a demand to conform to a single government construct to conform for the sake of peace – or else. I do not believe that Cordell Hull was an inherently evil man. In his own way, I’m sure he thought he had the best interests of the public in mind. His true sin is best defined by a quote by C.S. Lewis:

“Of all tyrannies a tyranny sincerely exercised for the good of its victims may be the most oppressive. It may be better to live under robber barons than under omnipotent moral busybodies. The robber baron’s cruelty may sometimes sleep, his cupidity may at some point be satiated; but those who torment us for our own good will torment us without end for they do so with the approval of their own conscience.”

August 1, 2008