Ottumwa tri-weekly courier. [volume] (Ottumwa, Iowa) 1903-1916, 1915-02-16
MAY HAVE TO BORROW.

"a n criterion of the enect when Tue
concentration of the collection or the
Aincome tax at the close of the nscai
ycar will have on the government MS
E,al policy. But when the war IS over
hnd the emergency tax law ceases 10
operate. a. problem which the treasury
|slepartment will have to face each year
His how to tide the governments imam
Eces over the spring when the revenue
Nreceipts fall off and deficit is being
Erolled up. 1t would appear that the
Hgovernment would have to resort 10
ktthe expedient used by the English gov
Eernment. which is similarly placed IN
Wresnect to the course Of It's recelpts
Eand disbursements, and borrow IN an
Eticipation of the income tax collection
Under the republican protective tar
ykffs the revenues derived from Gus
eatoms duties combined with the inter-
Asnal revenue receipts. sufficed to meet
he expenditures, and being fairly even
#hy distributed throughout the year, the
Il current receipts we're large enough TO
III ay off the current disbursements. me
y Eoyernment paid as it went, and IN nor
,iisnal wears there was no necessity OF
M ,orroVing in advance Of future receipts
kvor the purpose of building up a de-
gMclinine working balance in the treas
gry. w. !, n.,.r
IN with the Inauguration of the binder
Mood tariff, this parallel course OF
Mcurrent receipts and expenditures mas
atbeen broken. The lower customs du-
Mites are resulting in lessened revenues,
which In ordinary years will cause
current deficit which is to be made up
from the income tax collections IN
June. Last fiscal year the amount col
lected on the score of both the corpora
ton and the personal income tax was
s63, 1888. But the tax was based on
only ten months individual incomes.
What with this fact and the losses, due
To defective organization of the collec-
tiop system, which will naturally be
prevented in the future as the system
Is perfected. it is safe to assume that
the years revenue from this source
will approach 500, 900 900, which is the
estimate made by the treasury ONO
Assuming that the total receipts TOT
the year will equal the expenditures,
the fact is obvious that prior to June,
when the income tax receipts com
mence to flow in, the revenue receipts
will have run behind disbursements IN
the course of the year to such an ex-
tent as to practically wipe out the
treasury working balance. Even the
withdrawal of public funds now in ma
/ tional banks and their deposit with the
federal reserve banks, where they will
be more available for the governments
use, will not prevent this contingency
l recurring in the spring of each year.
Each winter, therefore, the govern.
ment will have, no other alter
Y native than to make temporary loan
after the manner of municipalities
which are regularly in the market for
short-time funds in anticipation OF
their tax receipts.
To raise the funds the government
will have two expedients at its dis
N posal It might secure loans from the
f federal reserve banks and pay them OH
from the receipts of the income tax In
June. Or it might model it's course al
ter that Of the British government and
Issue treasury bills to be discounted In
the open market. OF the two, the lat
ter is probably the safer policy, as 1t
!. would hardly be in accordance with
sound banking policy for the reserve
banks to lock up tremendous amounts
Of their resources even in loans to the
government.-Wall Street Journal.