Evening star. [volume] (Washington, D.C.) 1854-1972, 1911-01-01
CUT IN THE DEFICIT
Federal Treasury Better Off
Than It Was a Year AGO.
HARD STRAIN SUSTAINED
Proposed Issue of Panama Canal
Bonds.
POSSIBILITIES TO CONSIDER
POSSIBILITIES TO CONSIDER
Under Adverse Court Decision Gov
$27, 900, 900 Corporation Taxes.

The coming of new year finds the
finances of the United States Treasury
far improved over the condition in which
the business of 1910 was begun.
When 1899 tolled out the Treasury had
spent some s26,GO0.OOO more than it had
taken in. That sum took no account OF
the extraordinary expenditures for the
Panama canal
The beginning Of 1911 finds that deficit
reduced to $1,000. 900, and the total deficit.
including Panama expenditures, reduced
to almost S26.0OO.UO on all accounts
practically half Of what it was a year
ago.
The year closed with about $S6.0o0,oaO
in the general fund and a working bal
ance of $}4.GOO,OO9 in the Treasury offices,
both considerably lower than a year ago.
This is considered by Treasury officials
a remarkable showing in the face of the
fact that more than S13oG0a.00o has been
advanced out of ordinary funds for the
canal construction The showing seems
to sustain Secretary MacVeaghs declara-
tion that the Treasury would be able to
keep an even keel until Congress passed
legislation to allow an issue of securities
upon the plan which Mr.. MacVeagh has
laid down.
Proposed Issue of Canal Bonds.
Such a plan as Mr.. MacVeagh and
Senator .Aldrich have so far worked out
contemplates the issue of s5o.CO0.0oO or
$1C0. 100000 of Panama bonds, not to be
available for national bank circulation.
and at a rate OF interest high enough
to make them attractive to investors.
Such plan promises to develop into
legislation when Congress settles down
to work.
The beginning of the new calendar
year also marks the opening Of the sec
ond half of the current fiscal year 1910.
which began on July l.
Not only do the working balance and
the general fund show their strength
after the six months strain. but the Or
binary deficit for the fiscal year has been
actually reduced. The close of the first
month of the fiscal year found the cash
drawer out some $9,OO0.OO0 on ordinary
account. The first half of the year closes
with that reduced to $6.GOU.OO, although
it had been as high as $14,O0O,OG3 during
the six months. Close check on eXpendi-
lures. with added receipts. in some quar-
tiers, which, however. have probably been
offset by decreases In others. have grad
ually worn it down.
The working balance is now A,T0.Oo
better than the close of the first month 5
business found it. and when it is consid-
cred that several times since the fiscal
year began the ready cash has sunk as
low as SIG, 600 600 and the general fund as
low as $S4,OOO.OOO the present condition
gives satisfaction to those Treasury Of
ficials who have been predicting that the
governments finances would right them
selves in the face of an abnormal drain.
Two Important Possibilities.
Two important possibilities. however,
are to be reckoned with during the next
six months in any study of the national
finances. The first is the decision of the
Supreme Court in the corporation tax
cases. Should that be adverse to the
government. the Treasury would be called
upon to pay out $27.OO0O00. That, ad-
mittedly would be met by an imme-
date issue of :: per cent certificates of
Indebtedness. to run one year. The law
tingency.
The second is that the reclamation
service may call for s2OOOO,COO for i'm
portant works in the west. That would
be met by an issue of bonds, already
authorized, but the Treasury cannot issue
bonds until il Has paid OIN the money.
The expenditure Of the s2OOO0. 900 will not
be in a lump and tine Treasury will have
to pay it out in comparatively small
sums. Any issue of bonds on that score,
therefore, seems to be some time dis
tant.
The issue of Panama securities at rate
of interest which will attract investors
and supply funds without initiating the
is the next big move on the slate.