The Washington times., 1915-05-28
Step Favored by Treasury Is Be-
Iieved TO Have Support Of
President.
HURT BY COURT DECISION
Governments Financial Condi-
ton Giving Concern-WiiI
Appeal to Supreme Court.

With the cash balance in the general
fund of the United states Treasury at
a low ebb-probably the lowest for
many years-and with the Administra-
ton facing a deficit for the year even
under the most favorable conditions.
Secretary of the Treasury McAdoo is
confronted with a trying situation. as
a result of the decision of the court OF
customs appeal, upholding the per
cent rebate in customs duties on i'm
ports carried in American bottoms and
vessels owned by favored nations.
Notice has already been given by
of an intention to appeal to the Su-
preme Court from the customs appeal
courts decision. which Is Of far-reach-
ing Importance from a Government rev.
enue standpoint.
To File Appeal.
1t is probable that an appeal will be
Immediately filed to stay the effect OF
the decision. which otherwise will be-
come effective within thirty days from
last Tuesday.
The entire situation with respect to
the Government revenues Is aggravated
bv the war. Not only have customs rev.
enues fallen through lack of estimated
imports. but the war has had far
rea ching effect on the s per cent clause.
When this clause was incorporated in
the Underwood tariff II was designed to
stimulate American shipping and prove
n n n n
sells. Then came the war, and the pass
age as an emergency measure Of the
act for American registry Of foreign
built ships
Many vessels focked to the American
flag for protection, and such vessels are
bringing a great bulk of imports. and
getting the per cent rebate. The Court
of customs appeals not only upheld the
the contention that all countries with
which the United States has a most
favored nation treaty should get simi-
lar treatment for its ships. America has
countries, thus the customs receipts un-
der the Underwood tariff will be re-
duced per cent In most instances.
Wants Act Repealed.
Because of this situation, it was learn
ed on good authority today. the Admin
istration will take immediate steps for
the repeal of the per cent clause as
soon as the next Congress convenes.
Though no official statement can be had
at this time, 1t is known that such a
step is favored by Treasury officers, and
1t will no doubt be approved by the
President.
In the meantime the Customs Court
decision will be fought in the Supreme
Court. Should the decision finally go
against the Government. nearly $4,000
600 in customs receipts will have to be
paid to importers In back rebates.
Payment of such sum now would
>ipe out the cash balance in the gen
ury statement In addition there
>;ould be an average monthly loss OF
revenue estimated at $4,000.
Turn Is Expected.
Wiping out of the cash balance In
the general fund would not be as Sc
rious a blow as imagined. This is
largely bookkeeping balance. and
does not mean the cash available TO
the Treasury Department. which runs
into the hundreds Of millions. 1t
would, however, show the Government
to be running exceedingly short OF
revenue.
The present cash balance in the gen.
eral fund is about sl3, ,O0.O 900. and a
shrinkage has been going forward for
several weeks. turn In the tide is
expected as soon as income tax col
lections begin coming in next month.
up to the estimates of Secretary Nc
Adoo, and other revenues do not fall
far behind, the deficit may be held
within the S25 900 900 expected