Watertown leader. [volume] (Watertown, Jefferson County, Wis.) 1909-1911, 1909-12-10
SECRETARY M'VEAGH ISSUES AN
NUAL REPORT OF UNITED
STATES STRONGBOX.
REDUCTION Is DUE TO SYSTEM.
Heal of Treasury Advocates Completion
of Legislation Respecting New
Panama Canal Bonds.
CUSTOMS PURGE NOT COMPLETE.

I WASHINGTON, D. c., Dec. S.-Re-
trenchment is the keynote in the esti-
mates of expenditures for the executive
departments of the government for the
fiscal year 1911, embodied in the annual
report of Franklin MacVeagh as secre-
! tory of the treasury, made public today.
This is in line with President Taft's
declared policy of greater economy in ad-
ministering the affairs of the govern
| ment.
The total estimates. for 1911 are $685.
! l32,l91, including the naval building pro-
gramme. Excluding the increase in the
| Panama canal estimates, the total esti-
mates for 1911 show a decrease of $57,-
! 244,493 under the appropriations for
! 1910. Including the increase in the
! Panama canal estimates to total, esti-
mates for 1911 show a decrease of $42,-
S1S,969 under the appropriations for
| 1910.
Deficit in Receipts.
/ The ordinary estimated receipts for the
current year are $64S, 100000 and the or
! binary disbursements at S6S2, 0I5, 620,
leaving deficit in ordinary receipts of
S54,OTo,62O. When the payments on ac
count of the Panama canal and the pub
| lie debt are added, the total deficit of
the fiscal year 1910 is estimated at $73.-
Ol5,620.12. The estimated ordinary re-
ceipts for 1911 are $672, 100000, and the
estimated ordinary appropriations $685.,
O6S6l2, or surplus in ordinary receipts
of S35, 1871 40. When the Panama canal
estimates for 1911 are added, the surplus
is turned into deficit of $12, 1872, 1877.
Naval Programme Omitted
For the fiscal year 1910, the naval
| building programme was not included in
the estimates submitted to Congress.
When the naval programme is eliminated
from the estimates for 1910 and 1911,
the total estimates for 1911 are $94,OO1,
~ less than the total estimates for
1910.
-, Secretary MacVeagh, emphasizing the
'hard rlgldlty of the present revenue sys-
TEN, with its recurrent economical agita
tons and its long intervals of fiXity,"
says it will be necessary to meet these
dehclts to sell either bonds or certificates
OF indebtedness. In due course" he
adds, 1T would seem that it must be
made practicable to both estimate re
celpts, with close appropriation to the
actual, and to provide for their annual
rise or fall by some flexible factors in our
annual taxation"
Improvement in System.
Reductions in the present estimates,
Mr.. Macy eagh declares, result from i'm
proved handling of the government work
and the postponement of expenditures
which can be delayed in an effort to
adjust immediate expenses and receipts.
He sounds warning, however, that the
reductions in appropriations will be dis
appointing unless equal attention is given
to other important savings
Secretary Ma Yeagh reviews the Or
ganization, or rather lack of organiza-
ton, Of the fiscal responsibilities of the
executive and legislative branches of the
government and the reorganization there
of now in progress. He voices the hope
that there will be constant progress
away from the extreme disorganization
of the past and observes that ''eyen if
our country is rich it cannot afford to
be wholly unscientific in its appropria
tons"
Would Increase Tax
Probably the most important recon-
mendation made by the secretary is that
the tax on bank circulation secured by
United States bonds hereafter deposited
bearing interest higher than 2 per cent,
shall be increased in exact proportion to
the Increase In the rate Of interest above
per cent He advises continuance of
the rate of one-half of 1 per cent. for
circulation based on per cent. bonds.
Mr.. MacVeagh says that if the Panama
bonds authorized by the law of August
5, 1909. should be issued at 3 per cent,
they would have much better circula-
ton privilege than the outstanding per
cents, the tax being only 1 per cent
Mr.. MacVeagh would make the tax on
them ~ per cent; otherwise the already
low market value of the per cents
would unduly decline
On Bond Legislation.
At the same time, Mr.. MacVeagh says
it is desirable to complete the IegiSla-
ton respecting the new Panama bonds
to make them available so as to begin
the settlement of the Indebtedness to the
general fund of the treasury of the Pan
anna canal He suggests that if the sale
of any of those bonds should produce
more cash than the treasury balance
needs some of the 2 per cents might be
brought in the market for the sinking
fund, thus keeping the market price of
the latter class above par.
Declaring that the government has
not, and never has had. a 2 per cent.
borrowing power, Mr.. MacVeagh says it
possibly would have been better never to
have issued 2 per cent. bonds or bonds at
any rate below the governments borrow
ing power in the open market He says
that as a basis for circulation they have
no elasticity; that they are practically
all held by the banks as a basis of cir
culation; and that the banks would suf-
fer so heavy a loss in an attempt to dis
pose of them that the influence of the
situation is consequently decidedly
against the retirement of circulation.
Would Not Change Result
The issuance of 8 per cent. bonds at
~. says Mr.. MacNeagh, would not
change in any way the net interest re-
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