The sun. [volume] (New York [N.Y.]) 1916-1920, 1917-08-28
Chairman kitchin Estf.
mates Actual War Cost
at $1O,OOO,OOO,OOO. II
GIVES REVENUE PLANS
All Loans to Entente Will
Be Met by Bond
Issues.
POPULAR SAVINGS DEVICE
Five Year Certificates of Small
Denominations to Be
FlOated.
Special Despatch to The SuS.

WASHINGTON, Aug. 27.-Chairmau
Kitchin of the Ways and Means Com
mittee of the House estimated to-day
that the total expenses Of the United
States for the fiscal year 1917-1S for war
and all purposes would reach $19,300,-
100000. This total, based It is UNDER
stood on estimates of the Treasury De-
partment. shows far greater expendi-
ture for the first year Of the war than
any previous estimate
Chairman ktchin also was able to
give comprehensive summary Of the
manner in which it is proposed to raise
the $4,000. 900, 900 in revenue to meet
the expenses He gave some details not
hitherto published in regard to the ST.
53S,s45.i60 bond bill pending before tho
Ways and Means Committee.
1T seems probable" said Mr.. Kitchin,
that the total amount of appropriations
for the next fiscal year will be in round
numbers about $4,000, 900. 900. In this
Is included the $1,000. 600, 900 proposed
to be loaned to the Allies. 1t also In
cludes about $1,000. 900, 900 for current
expenses exclusive OF the war. leaving
as it seems about $40 00O, ,O0O. 600 for our
war expense. 1t also includes 100000
600 for interest on bonds Sl16.OO0,O00
for the new insurance bill and $1,000
100000 for the Shipping Board.'
How Expenses VIII BE Met.
To meet this vast expense all money
loaned to the Allies will be met by bond
issues. Chairman kitchin expla ned. since
such loans are investments rather than
expenditures. All current expenses will
be paid by the present tax laws OF the
lsOEerDmAnf
first year will be paid on the basis of
three to seven for taxes and bonds In
other words for every 50 raised by taxa
ton 81 will be raised by bonds Whether
such proportion Is to be regarded as
the permanent financial policy of the
United states Chairman kitchin did not
say. He bas sed this estimate on the as
sumption that the pending revenue bill
Will be amended to raise $4,000. .OOO. 900
before it is finally passed
The pending bond bill authorizes
100000 in war savings certif-
Gates. new form OF bond issue in ad-
dition to $1,000. 900 in Treasury GER
t'ncates OF Indebtedness. Tho bond bill
passed several months ago authorized.
| in addition to the $4,000, 900, 900 loan to
the Allies to be taken up in the new
oil. $4,000 900 to cover war de-
| nciencies and $o,OOO0o0,OO0 In certif-
| Gates of Indebtedness. These items would
| make up the $4,000, 100000 required
! but since half OF the Treasury certiii-
| Gates are 10 be used as n safety margin
and are not to be regarded as permanent
revenue an additional bond issue OF
s2.oO0.000000 to meet war deficiencies
| will be necessary.
! This bond issue may be authorized nj
| this session. although the chances are
that 1t will be put over until the next
| session, Chairman kltChin said
Makeup OF Bond BiII.
The sll.53s.s45,46o bond bill now
pending before the WAYS and Means
! Committee. and which Secretary NCAdoo
will explain to the committee tomorrow
Is made up Of the following items, It
was learned to-day:
Proposed new loan 10 Entente
| Loans formerly authorized. ......... 3ano noo aoo
War savings certificates. .......... a,0 ooO o01
Certificates Of Indebtedness ...... p.) so0 ohi
| To take up miscellaneous out.
| standing bond issues ,.,.-......... 5GS ei5 4sO
When the committee meets to-morror.
the members will be ready with many
| questions that they wish to ask Secre
| tary McAdoo In regard to tho bill The
/ principal question will be in regard 70
the rate OF interest to be allowed on the
| forthcoming issue of bonds. The bIl
as submitted by the Treasury Depart
mont provides for per cent, interest
| along with the convertl hle feature ana
the provision that the bonds are subject
| TO the income tax as far as affected by
| the supertax on incomes
This provision. Mr. McAdoo has ex-
! planned informally. would make the
bonds Yield about az per cent. to tho
/ large holder. while they would he worth
bit more to the small investor. Just
/ how the taxing provision would work
| out and why 1t is necessary to make the
I bonds subject to conversion into future
! bonds that may be issued at n higher
rate OF interest are subjects that the
committee would like to have explained.
supcrtnN Feature.
The supertax affects only incomes above
/ $1,000. In other words, man having
an income of less than So 900 would nav
no tax on his income from the bonds.
! while the man having an income OF nor,
than $4,000 would have to nay .
graduated supertax on the income no..
ceivcd from the bonds, Heretofore In.
come from Government bonds has 10;
! been taxable.
! Members are Inclined to favor 4 II,
! $4,000, 900. 900 issue of war savings cr..
tihcates authorized by the bill ThD~s
bonds are similar to the short term
low denomination bonds issued ny 'Ea
French ard British governments aHl
! are made unusually attractive 10 sinai!
investors.
The bill stirua,es that bonds must
| mature in not less than FIVE years u .
exact time to remain AT the dlscretrou
OF the Secretary of the Treasury. Th-v
may be discounted and retired at a'r
time in advance Of maturity. No person
would be permitted to buy more Z n
500 worth OF the bonds at ono tire
and II would he illegal for any person
to have more than $1,000 worth OF ~
bonds in his possession Mt any time
This latter provision was made to keep