The Birmingham age-herald. [volume] (Birmingham, Ala.) 1902-1950, 1914-12-10
Secretary of Treasury Sub
mits Annual Report to
Congress
GIANT CATASTROPHE
NARROWLY AVERTED
Financial Shock Caused By European
War Withstood By America In
Manner Highly Compliment
tary to Its Judgment

Adoo, in MS annual report &c congress TO-
day. outlined at length the steps taken
by the treasury department to restore
confidence and support American business
shaken and weakened by the European
war.
"A catastrophe of calamitous proper
TONS" said the report, was narrowly
averted. 1t is a tribute to the economic
strength and soundness of the country
and to the patriotism of it's people in
every class and walk of life that the
shock has been so admirably withstood. A
panic of eatciysmic proportions might
easily have resulted and if 1t had the in
jury to the country would have been
incalculable and many years would have
been required to overcome its effects
BY formation of the 100000, 900 gold pool,
the s1s50oo,ooo cotton loan fund, issues of
emergency currency and the deposit of
crop moving money in national banks,
the situation was relieved, and confidence
was revived, the report says.
Danger Averted
Through the prompt and effective ac-
ton of the treasury department and with
the cordial and intelligent cooperation of
the banking and business interests of the
country. the danger has been averted,"
says the report.
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 fail
ure on the part of any solvent national
bank to honor its checks in currency or
money or to meet its obligations. The
general revival of business throughout the
country is the best evidence that conf
dence has been restored. There is every
reason why the country should look for
ward TO the future with confidence so
far as its trade, commerce and industry
are concerned"
In spite of drains from Europe where
the nation owed about S450O00,000 at the
outbreak of the war, Secretary McAdoo
says that the treasury's gold holdings
show a reduction of only $S3,656,279 on
October 81 1914, compared with holdings
| of $1,25S, 21S,3 1857 on June 80, 1918.
Secretary McAdoo referred in some de-
| tail to his action against banks which,
| he publicly announced, were boarding up
money, pllins up reserves and charging
| high interest rates without good cause.
| 1t was a disagreeable duty. he said, but
/ one which resulted in a determination on
his part to withdraw government deposits
| from banks not using such funds for
| the benefit of their communities.
Statutory Influence
| "This action" he said, had a salu-
| tory influence, because it was followed by
a general loosening up of credits; and
while it is not for a moment commended
that the improvement is attributable
| wholly to the action of the department
1t is, nevertheless. believed to have had
a beneficial effect upon the situation"
| Mr.. McAdoos report is devoted large
| ly to a review of the activities of his
| department for the fiscal year ending
on June 80, before the war began, but
| he included detailed statements of the
treasury's participation in various
! postwar problems.
| The secretary makes several recon-
| mendations. He suggests to Congress
that the war revenue tax law should
not expire December 81, 1915, but that
it's operation should be extended until
the end of the European war, by proc
Iamation of the President.
| Discussing the income tax law the
secretary advocates a change in the
| law so that persons having a gross in
come of $4,000 be required to make 8
return instead of those persons with
a net income of that amount or over
| ."Such an amendment he says
| would simplify the administration oil
the law, assure more complete returns
| and materially increase the income tan
revenue and save an immense amount
of expense to which the government Is
/ how subjected in maintaining suf-
| fcient corps of inspectors and inves-
II h.tx,f he IA r
| have failed to make returns" He rec
/ ommends also the repeal of the provi-
/ sion by which taves do not accrue UNI
Il til 10 days after the close of the fiscal
| year and would make them accrue July
| 1 each year.
| Although the law did not produce
| the revenue expected, the Secretary
| says, 1t has proved satisfactory and
| explains the administration of a law
| of that character has many obstacles
| to overcome at the outset and that folk
! are unaccustomed and must be edu-
cateo to it. Taking the tables of re-
| turns Mr.. McAdoo infers that there
| must be many who failed to pay the
| tax.
| ut is clear" says he, - that there
| were thousands of persons who failed
| altogether to make return as re-
| quired by law. The remedy for this
| of course, Is to have the collectors OF
| Internal revenue III tdCH oiStiict ma he
an assessment upon those who, in the
| opinion of the collectors, are liable to
| the tax; and In addition, to make such
| investi cations as may be necessary to
| determine who in each district have
| failed to make proper returns. Inc ex-
| periencc of the department shows that
| many erroneous and faulty returns have
| be en- made" The work of discovering
| such cases, he adds. Is being pushed
forward with all possible rapidly.
Tariff Bill Success
THE collection of revenue for the Gsca
year ended June 80, 1914" says Mr.. Nc
Adoo, SHOW the success of the tariff act
| of October 3, 1913, as revenue measure
| He goes on to show that this act was csti-
mated as the producer of $270,OOO,000 In Its
| first year and that there was actually col
lected $292, 320,014. That, however, in
| cluded nine months under the new law
and three months under the Payne-Aldricf
| law He shows that the total raised under
| the new law with it's corporation and in
| come tax features was 1868, 701 2Sa. oil
! s., S03, 593 in excess Of the previous years
receipts under the preceding revenue
measure.
"vhe European war;" said the Secre
| tary, seriously affected the revenues OF
the government from imports. The reve'
| nue. from customs for October, 1914, was
$16,27, 1923, and for October, 1918, 1t wal
4 $50, 13S, 049. a decrease of $13,866,220 Thu
reduction Is solely due to the falling off II
importations. The estimate made by thu
department indicated yearly decrease o.
between $50, O0O, 900 and 100000, 900. 1t is OBJ
violls that these estimates cannot be &C