Evening public ledger. [volume] (Philadelphia [Pa.]) 1914-1942, 1914-12-09
M'ADOO'S REPORT
HINTS OF TAX ON
GROSS INCOMES
Suggests Possibility P of
Amending Present Law.
Tells of Emergency Pro-
visions and Says Catas-
trophe Was Narrowly
Averted.

WASHINGTON, Dec. 9--Secretary Nc
Adoo's annual report on the state OF the
Government finances, made public today,
reviews the financial aspects Of the war
crisis and the emergency measures taken
efieially and by banks and other in
tarests throughout the country.
Mr.. McAdoo points out that steps are
being taken for n more complete colleo-
tion of the income tax. and hints that
ho may urge an amendment calling for
returns on gross incomes, instead Of net,
as at present.
His report is in effect chronology of
emergency steps taken after the outbreak
Of the war. in addition to being a state
ment on the various activities of the
Treasury Department.
"The outbreak OF the European war"
says the report, "precipitated many
grave problems. International credits
and exchanges were completely dsorgan-
lied, tocean transportation was for n
time partially paralyzed. the entire busi-
ness and economic structure in this coun-
try was shaken to It's foundations, and
q catastrophe OF enormous proportions
was narrowly averted.
y TT is a tribute to the economic strength
and soundness Of the country and to the
patriotism Of its people in every class
and walk of life that the shock has been
20 admirably withstood.
"A panic of. cataclysmic proportions,
might easily have resulted. and, II It
had, the injury to the country would
have been incalculable. and many years
would have been required to overcome
its effects. Through the prompt and ef-
fective action OF the Treasury Depart
ment, and with the cordial and intelli-
gent cooperation of the banking and
business interests OF the country, the
danger has been averted. Confidence
has been restored and specie payments
have been maintained in the face Of the
world.
"At no time since the war broke out
has there been. to the knowledge OF this
department. with the exception of few
isolated cases, n failure on the part of
any solvent national bank to honor its
checks In currency or money, or to meet
its obligations.
LOOKS FORWARD WITH CON-
FIDENCE.
THE general revival of business
throughout the country is the best evil
dence that confidence has been restored.
Interest rates have come down from the
high level to which apprehension had
lifted them. restriction of credits has dis
appeared, foreign exchange has reached
= normal basis and feeling of optimism
pervades the business world.
There is every reason why the country
should look to the future with confidence
30 far as its trade, commerce and in
dustry are concerned. This has been ac-
complshed, Notwithstanding the fact that
the Federal reserve system authorized by
the act OF December %, 1913, was at that
time In process of formation, and was
therefore unable to render any service in
the situation"
Secretary McAdoo then recounts the
steps taken by the department and by
Songress since the closing OF the New
York Stock Exchange.
THE COTTON PROBLEM.
'It was realized" says the Secretary,
''that the cotton problem was involved
in that OF foreign exchange. and It had
early become apparent that unless the
price OF London exchange could be re-
duced from the high level then obtaining,
the interests of our people would suffer
seriously The war found our business
men and bankers indebted to London in
the sum OF approximately $3.50 900, 900 ma
turing by January /. 1915.
"The city of New York owed ssOOOOOOO
IN London and Paris. maturing in that
period. A fund OF $1OO,OOOOOO in gold was
raised to meet the situation This, to-
gether with the increasing export trade
OF the United States. has had salutary
effect in reducing the price OF exchange
70 normal basis. This. in turn, has |
produced favorable effect upon the for
sisn demand for cotton"
On August 10 the Federal Reserve Board |
came INTO being and with respect to IT, |
Mr, MeAdoo says that it has taken hold |
or the many problems confronting 1t /
with Flgor, loyalty and intelligence and 1
l believe II will render services OF the |
greatest value TO the country" he adds /
He calls the reserve act the most im- |
portant piece OF legislation enacted since |
the Civil War.
Interest on crop moving deposits for
the fiscal year OF 1914 totalsd 81 zoo 42s, |
compared with s122, ,zis in 1918. the increase /
being due to the fact that beginning with /
June. 1918, interest has been charged /
upon all public deposits at the rate OF |
per cent, per annum. The war rial bu- /
ssau has proved successful. according to
hr. McAdoo.
N@NA4~o AAAAARF a 6QGAEHH.
Collections OF revenue for the fiscal
year ended June 80. according to Mr..
heAdoo. show the success Of the tariff
act. It was estimated to produce in its
hrst year $40, co. 900, and there was aetu-
ally produced In excess or the estimates
81. .s200lb. The income tax law has
brought in szs,1s5ss5 on individual in
comes. and siS,l1i.T4o on corporations.
The Treasury Department Is making
; careful investigation of the facilities
by parcel post or registered mail for the
transportation OF All moneys ana secure
ties between the Treasury. the subtreas-
urles and the banks. From test ship
msnts already made a saving has been
erected. MF. AcAdoO says.
The expenditures on account % the
Panama Canal during the nseal year
amounted 70 SSis2s.e42 ana there was no
sale Of additional bonds. The total
amount expended FOR he canal from ne
general fund to June 80 1914. reimburs-
able from proceeds Of bonds not Jet sold,
was s2l4 4452o55
The ordinary receipts for the fiscal year
1918 are estimated At N&.o00.000. inelud-
ing 4ze0.0Qo.000 from customs. Tie ordi-
uary receipts for 1915 are estimated under
fa.rl 1Nn