The Manitowoc pilot. [volume] (Manitowoc, Wis.) 1859-1932, 1909-12-16
RETRENCHMENT
is POLICY OF
THE TREASURY
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.

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 MacNeagh as secre-
tory of the treasury, made public today.
This is in line with President Taft's
declared policy of greater economy in ad-
ministerng the affairs of the govern
ment.
The total estimates for 1911 are $G4S,-
132,191, including the naval building pro-
gramme. Excluding the increase in the
Panama canal estimates. the total esti-
mates for 1911 show a decrease of ST.
pa, 1913 under the appropriations for
1910. Including the increase in the
Panama canal estimates to total, esti-
mates for 1911 show a decrease of $40
SlS,ab9 under the appropriations for
1910.
Deficit in Receipts
The ordinary estimated receipts for the
current year are S64S, 100000 and the or
binary disbursements at SGS2, 0I5, 620,
leaving deficit in ordinary receipts of
S34,OIJ,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,-
OI5,62O.12. The estimated ordinary re-
ceipts for 1911 are S612, 100000, and the
estimated ordinary appropriations $685.
O6S,672 or a surplus in ordinary receipts
of $3o,931 40. When the Panama canal
estimates for 1911 are added, the surplus
is turned into a deficit of So, 1872, 1877.
Naval Programme Omitted.
For the fiscal year 1910, the naval
building programme was not included in
the estimates submitted to Congress.
Wien the naval programme is eliminated
from the estimates for 1910 and 1911,
the total estimates for 1911 are S94, OO1,-
fJ2 less than the total estimates for
1910.
Secretary MacNeagh emphasizing the
hard rlgidity of the present revenue sys-
TEN, with It's recurrent economical agita-
tons and its long intervals of fiXity,"
says 1t will be necessary TO meet these
deficits 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
ceipts, with Il 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., MacNeagh 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.
/ 10 IL h.,. h,t tha
reductions in appropriations will be dis
appointing unless equal attention is given
To other important savings.
Secretary MacNeagh reviews the or
ganization, or rather lack Of organi2a-
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
of the past" and observes that even if
our country is rich it cannot afford to
be wholly unscientiic 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 > per cent,
shall be increased in exact proportion to
tho increase in the rate of interest above
- per cent. He advises continuance of
the rate Of one-half of l per cent. for
circulation based on > per cent. bonds.
Mr. MacNeagh says that if the Panama
bonds authorized by the law of August
>. 1909 should be issued at 3 per cent,
they would have a much better circula-
ton privilege than the outstanding . per
cents, the tax being only l per cent.
At r.. l., ~
them ~ per cent; otherwise the already
low market value of the 2 per cents
would unduly decline
On Bond Legislation
At the same time, Mr.. Mac Veagh says
it is desirable to complete the legsa-
ton respecting the new Panama bonds
to make them available so MS 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 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, > per cent.
borrowing power, Mr., MacVeagh says it
possibly would have been better never TO
have issued per cent bonds or bonds at
any rate below the governments borrow
ing power in the open market He says
that as q 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 per cent bonds at
IL. says Mr.. Ncagh. would not
III, In, Il, int