American Brethren and War Taxes in 1972

The Church of the Brethren decided to divest from U.S. government bonds, and considered engaging in corporate phone tax refusal as well, and in the debate began to spill over into more conservative branches of American Brethren.

Church of the Brethren: Messenger

Chuch Investment in U.S. Bonds

In , the Church of the Brethren General Board met, and among the items on the agenda was Church investments in the war industry and in U.S. government bonds. The Messenger covered this in its edition (source). Excerpt:

Government bond ownership by the church, like the war that bonds are said to support, may be winding down, but not winding up — as some persons are urging. Replying to the National Youth Conference resolution calling on the church to dispose of all government bonds, the General Board rejected a proposed reply from its investment committee and asked the Administrative Council to bring further options in March for handling fiscal operations without the use of bonds. Board members also called for the investment committee to consider selling any stocks held with the dozen top corporations supplying war materials.

The rejected proposal would have put the board on record as reconfirming its opposition to war, not purchasing additional bonds as long as the national budget is so heavily military oriented, permitting the sale of bonds held as cash needs arise, and opposing immediate liquidation of the remaining bonds held.

Board views ranged from those who sought to dispose of the $617,933 in bonds held by the church “as a witness to the nation” for peace, to those who saw the bonds supporting many good things of government. Other arguments against disposal included the cash liquidity on short notice of the bonds, the loss that would be suffered in the sale of the bonds, and the fact that $259,880 of the total is pledged for a Bethany Seminary loan.

One staff member challenged the assumption that the bonds are a means of financing the war, but rather lend stability to the government. Another indicated that the cash put into a savings account could be invested by the bank in bonds anyway, and that the church owed a fiscal responsibility to donors of the money in not risking a financial loss in any premature sale of the bonds.

“The government bonds in the investment portfolio are not considered war bonds,” noted the board’s investment committee, “but are issues which were put out from time to time for general government operations, including programs that we enthusiastically support.”

Many of the bonds held by the Brethren were purchased in the 1950s, and no further purchases have been made since 1965. During the past fiscal year the church sold half a million dollars in government bonds.

Likely to come before the Cincinnati Conference next year is a query from Southern Ohio that the church investigate payment of the telephone tax and the holding of U.S. government securities which are believed to support war.

The issue brought more details about where these queries were coming from (source). Excerpt:

Southern Ohio district is bringing a query to the Conference asking for a study of the payment of the telephone tax and the holding of U.S. government securities by the church’s national offices.

Likewise, the Pacific Southwest Conference, at the initiation of some youth and the Lynnhaven, Phoenix, and Glendale, Ariz., congregations, has requested Annual Conference to “consider the moral question of holding United States Savings Bonds when we as a church are trying to divorce ourselves as far as possible from the military-industrial complex.”

The General Board gave in to the pressure, as reported in the issue (source). Excerpt:

The Church of the Brethren General Board will sell its stock holdings in corporations directly producing defense or weapons-related products and its governmental securities that are believed to channel funds into military appropriations.

Meeting at Elgin, Ill., in , the board also tightened its investment guidelines, declaring that words and acts should be brought together “so that the clearest possible witness can be given to the inclusive reconciling love of Christ.” The statement recognized, however, that “at any given moment the commitment can be one of direction only — it cannot be one of absolute achievement.”

The implication is that mergers and company reorganizations sometimes bring into the firm products or ideals inconsistent with the Brethren stance.

Based on market prices the divestment of stocks represents four percent of the general investment portfolio and 6.5 percent of the pension fund portfolio. US Treasury bonds being sold amount to $248,813. The board declined, however, to sell the $274,894 in bonds pledged for a loan to Bethany Theological Seminary. They will be sold only as they are released from escrow.

Board treasurer Robert Greiner estimated a loss of $18,300 instead of an $18,000 gain that would have been realized if the bonds had been held until maturity. Any possible loss on the stock investments being sold and reinvested was not known.

Last year’s National Youth Conference in a resolution urged the board to sell its US Treasury bonds. And in the National Council of Churches’ Corporate Information Center, in which the Brethren participate, divulged the stock-holdings of ten denominations in the top 60 firms in military sales. The Church of the Brethren had investments in nine such companies, totaling $329,258 in cost value prices. The church’s pension fund also held $613,303 of common stocks in 13 corporations appearing in the list.

The revised guidelines now declare that the board will not knowingly invest in corporations producing defense or weapons-related products; in companies which fail to practice fair and equal employment opportunities; nor in banks or firms which transact business with governments having apartheid policies. Similarly prohibited are investments in the tobacco and alcoholic beverage industries and companies making excessive profit.

More positively, the guidelines stipulate the board will invest in companies working to improve the environment, in government agencies that are clearly non-military, and in such industries as food, housing, clothing, utilities, education, and medical supplies.

When the board discovers that it has holdings in a company that does not meet the religious, racial, or social ideals of the church’s official statements, the investment committee may approach the company or speak at stockholders’ meetings. Failing to effect a change in company policy, the stocks are to be sold.

Producing the sharpest disagreement was the question as to whether government bonds contribute to the Vietnam war effort or simply toward regular government operations. Still, a strong majority of the board believed that the bonds directly supported the war effort and should be divested.

Such action, some contended, bespeaks a “disengagement from the US government” and fails to recognize that a large part of the federal budget goes toward programs of which Brethren could heartily approve.

On the other hand, a couple speakers noted that even in such nonmilitary programs as agriculture and economic development, government policy can be repressive and manipulative and divergent from Brethren ideals.

Moderator Dale W. Brown of Lombard, Ill., said that the church needs to confess its credibility gap. “I’m calling for an acknowledgment that we haven’t done our best.”

Among a few board members disassociating themselves from the majority action was Jesse H. Ziegler of Dayton, Ohio. He described the sale of the government bonds as a “divisive act that finally will drive the Church of the Brethren to the point of increasingly making people ask what we’re about.” He pleaded for the board to take healing and compromising action that would leave room for various views among the membership.

The board’s officers were instructed to estimate any loss of principal or income that may accrue from the divestment of Treasury obligations and issue an appeal for interested members to make special contributions so that the ongoing ministry of the church or the equity of the pension funds will not be curtailed. The guidelines are also commended to other church agencies and to individuals.

Despite the eight hours over two days of sometimes intense debate, David B. Rittenhouse of Dunmore, W. Va., expressed the feeling of most board members in saying that he voted for divestment of the stocks and bonds not with enthusiasm, but out of genuine humility, struggle, and soul-searching.

The discussion of the issue at the General Conference was covered in the issue (source):

Investments: What is Caesar’s, what is due to God?

the General Board voted (not unanimously) to divest itself of government bonds and stocks in corporations involved in defense-related contracts. The action resulted in some loss of income and brought severe criticism from many individuals and from some congregations.

Conference delegates, however, voted to approve the Board’s investment guidelines which state that the Board will not knowingly purchase securities in corporations or industries that are “direct producers of defense or weapons-related products; involved in tobacco and alcoholic beverage produce: involved in unfair employment practices; or involved in excessive profits.”

In reporting to the Conference the Board indicated that it had decided to sell all US Treasury bonds or notes except for those pledged to secure a loan for Bethany Theological Seminary. Disposing of these prior to their maturity resulted in a loss of more than $20,000. The church’s holding of US Government bonds was questioned at its last Annual Conference and forcefully opposed by the national conference of Brethren youth. In commending the Cincinnati conference for its support of the Board’s action, the Rev. Wendell Flory, a delegate from Staunton, Virginia, noted the persistence of youth in their opposition to war and urged them to help make up the financial loss resulting from following the new investment policies.

War Tax Resistance

In addition to the bond investments issue, ordinary war tax resistance was also a topic of discussion.

The inaugural issue of included a profile of Church of the Brethren moderator Dale W. Brown (source) that noted: “He refuses to pay his telephone tax because it was levied specifically for war.”

The issue noted (source): “The La Verne, Calif., church board voted to support the Southern California Telephone War Tax Suite, involving the withholding of the ten-percent federal excise tax.”

The Annual Conference debate over whether the Church of the Brethren should resist the phone tax corporately was covered in the issue (source):

Telephone tax: Delegates decline to counsel tax refusal

…[D]elegates in are not quite ready yet to counsel tax refusal for their Board and its offices. They were made aware that a growing number of individual Brethren as well as some Brethren institutions have been refusing to pay the telephone excise tax, which they say is specifically designated as a “war tax” helping support the Vietnam war.

The Conference agreed to appoint a committee of five to study “the problem of the Christian’s response to taxation for war.” But they voted down a proposal directing the General Board to withhold payment of the tax on the telephone service to its Elgin, Ill., headquarters. Board officers said that the tax, which amounts to about $130 a month, currently is paid under protest.

Earlier conference statements on the payment of war taxes, while deploring the use of tax monies for war purposes and recognizing the right of tax refusal, noted several optional choices and left the decision up to individuals.

General Board member Leon Neher, Quinter, Kan., said in the floor debate that he regarded refusal to pay war taxes as being compatible with a positive attitude toward government. He said “resistance comes because of our love for our nation.”

Other delegates noted that a study was needed so that members could be aware of the legal implications as well as the moral implications of tax refusal.

(The members selected “[t]o study a response to taxation for war” were Dene E. Denlinger, Galen Detwiler, Vemard Eller, James F. Meyer, and Robert B. Myers.)

The issue brought this news: “In Illinois the York Center congregation has voted to ‘instruct the church treasurer not to pay the federal excise tax on the church telephone as an act of conscience against the Indo-China war, and that the Internal Revenue Service be informed of the decision.’ Pastor Dean Miller noted, ‘We felt we’ve tried all [other] channels open to us.’ ” (source)

The Etownian

All this while I’ve been scanning through issues of the Elizabethtown College student newspaper, The Etownian to see if there has been any mention of tax resistance there. Finally, in the issue, there’s a mention of “A Tent (‘Freedom’) City” that was being erected on campus and hosting teach-ins (source). The first one on the agenda: a 45-minute discussion of “tax resistance.”

A later report (source) said that a rainstorm had cut into attendance, but that the teach-ins had gone on:

Ted Landon started the morning by speaking on the background of resistance and its meaning for the individual who practices it. Bob Blatt enlarged on this as it related to tax resistance. He pointed out that 61% of the nation’s yearly budget is spent for military matters, and that all other pressing bills must be paid from the remaining 39%.

The Brethren Evangelist

The stodgy Brethren Evangelist was forced to take note when the General Board of the Church of the Brethren decided to divest from military industries and U.S. government bonds, though they merely reprinted a wire service dispatch about it (source):

Brethren Will Drop Defense Investments

All holdings in corporations directly involved in defense or weapons-related industries will be dropped by the General Board of the Church of the Brethren.

The vote, not unanimous, was seen as an attempt by the denomination to bring its investment practices into line with its peace pronouncements.

The church officials also voted to sell $248,813 in U.S. Treasury bonds and not to purchase new governmental securities that might channel funds into military appropriations.

The board of 25 members also voted to withhold investments from companies failing to practice fair and equal employment opportunities, and from banks or firms which transact business with governments having apartheid policies.

Bible Monitor

Even the Bible Monitor finally added its voice to the debate. It included an article on “The Christian’s Relation to the Nation” in the issue that touched on the war tax resistance issue:

The Christian also obediently pays his taxes (Romans 13:6,7; Luke 20:25). One pacifist used his “fist” against the government by calling upon Christians to withhold some of their taxes (war taxes) by saying that when Christ said, we are to “render… unto Ceasar the things which be Ceasar’s,” He did not say how much.

May we remember that Christ did tell us how much to pay to the state when He said that we should render that which bears his image. Therefore, when the nation asks for it, we give it to them and it is never our responsibility to tell the government how it may use its money. If I owe a person some money, I have no right to refuse to pay it on the grounds that he will not use it properly. Nor can I refuse it unless he promises to use it the way I say he should.

While we find it our duty to pay Ceasar his required tax, it would be contrary to the principle of the Scripture to voluntarily or otherwise invest in war bonds, thereby becoming an investor in the war program. No non-resistant person would want to make a profit on the war.