New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1917-08-28
$7,oOO,OOO,OOO To Be
Loaned to the Allies by
United States
Military Plans to
Cost $4,000, 900, 1000
Great Issue of Securities Is
Discussed by the Lower
House of Congress
[ snn.laI Cnrr,spondenceI

WASHINGTON, Aug. 27.-The full
financial programme of the Unlted
States government for the fiscal year
ending Jyne 80. 1918, which will cover
virtually the first year of the "ar'
was revealed to-day by Chairman
Kitchin of the Ways and Means Com
mittee Of the House, showing that II
will require approximately Sl9,3Oo'-
600 900 TO run the government during
the wear, or approximately fifteen
times as much as in ordinary years.
At the same time, some details, not
hitherto disclosed, in regard to the
pending bond bill Of sll,63o,94s,4oo
were obtained, together with an ex-
planation or an entirely new scheme
of raising money devised by the Treas
urv Department and submitted to the
committee.
According to Chairman kitchins
estimates. based, it is understood, on
figures submitted to him by the Treas
ury Department, the first years cost
of the war TO the United States, eX-
elusive of loans TO the Allies and ex-
penses Of the Shipping Board, Will be
about $4,000, 100000. Loans to the
Allies will aggregate s7,ooo,ooO,ooo'
the expenses Of the Shipping Board
about $1,000, 900, 900, and the ordinary
expenses Of the government will sweu
the total 10 $4,000, 100000.
Sharp Change in Figures
These figures are entirely different
from any hitherto published on the
cost OF the war to the United States.
Senator Reed Smoot some time ago
estimated the cost of the first year OF
the war. including loans to the Allies,
at $4,000, ,0OO,O 900. Later figures OBJ
tained from the Treasury Department
made it appear that the total cost
would be about S14.500,0 100000.
I'm raising the revenue to meet this
great cost the Treasury Department
has recommended, and the Finance
committees of the House and Senate
have tentatively agreed. that the pro-
portion Of money 10 be raised by tax
alton 10 the money TO be raised by
bond issues will be about , TO !. In
other words. for every SO raised by
taxation to carry on the war, bonds
to the amount of 81 will be author
lied 10 be paid b. future generations.
OF the money TO be raised, all but
g.. 900. .00O,0 is provided for in bills
already passed or bills now pending be-
fore the Senate or before the House
committee The pending bond bill be-
fore the Ways and Means Committee
authorizes over $1,000. 900 900 in bonds.
Of which $4,000 100000 is to take up
bonds formerly authorized TO be issued
at a lower rate of interest.
Huge Sum Already Voted
A total of $4,000 900 900, plus $4,000
100000 in certificates of Indebtedness,
was authorized several months ago by
the first bond bill. OF this amount
81, 900. 900. 900 would be taken up by the
pending bill. leaving $4,000, 100000 IN
bonds and S2,O0O.000.0 900 in certificates
of Indebtedness which have been or
will be issued 20 raise revenue.
In addition, $1,000, 100000 worth of
new kind of bond, called war savings
certificates. is TO be authorized by the
pending bill. along with $1,000. 100000
more i'm certificates Of Indebtedness, 10
be used as a safety margin for the
Treasury Department, and not neces-
sarily TO be issued.
This would make a total OF $4,000
600 900 in certificates of Indebtedness,
half OF which would be in circulation
practically all the time, and thus would
be counted as permanent revenue, while.
the other half would be used only when
necessary, and would not be counted as
a part of the permanent revenue.
In addition TO these amounts, the
present tax laws of the nation provide
for about 81 300, 100000 year IN reve-
nue.. Assuming that the pending reye-
nue. bill will contain total OF s5,0o0,,
600 600. this leaves about $4,000 900 900
to be raised by bonds not yet author
lied or pending in the form OF bill.
This bond issue. Chairman hltchin
stated. may be authorized at this ses-
sion. but the chances are that 1t VIII De
put over until lie next session OF Con-
gress.
Pending Bond Bill
Inc penang Dohd DliI' "hlSh my
WAYS and Means Committee discussed
informally to-day, but put over until
tomorrow. when Secretary McAdoo
will be called before the committee to
explain it. contains provision for sll,-
538, ,845 .460.
The principal thing which Secretary
McAdoo will be asked TO explain when
he appears before the committee to-
morrow will be the amount of interest
TO De raid on the forthcoming bond is
sues. and the method by which it
would be taxed Under the bill sub
mitted by McAdoo 4 per cent interest
would be allowed on this bond issue.
with the conversion feature in the
bill. and also the stipulation that the
income from these bonds would be
subjec. % taxation in so far as they
would be affected by the supertax on
incomes.
Like Small Foreign Bonds
The war savings certificates provided
Tor in .hc hill are much like short time,
small denomination bonds put o., By
the French and British governments.
II is stipulated that such bonds shall
not run longer than five years and
that they E@y bs discounted IN advance