The sun., 1918-09-20

TAXATION LIMIT
SET BY M ADOO
Doubts if Productive Pow
ers Will Permit Spending
of Over q Billions.
DISCUSSES NEXT LOAN
Reaches No Decision, but Out
look Is for at Least
OOO,OOO,OOO.
Special Despatch to TIE srx.


WASHINGTON, Sept. 19.--No more
than $4,000, 600. 900 In taxes will be de-
manded by the Administration for the
current fiscal year. This statement,
made to-day by Secretary McAdoo, set
al rest the fears of Congress that $10.-
000,o00.000 in taxes and a great in
crease in bond issues would be neces-
sary to finance the Government for
the balance of the fiscal year ending
June 80 next
1t is known that the Secretary Of
the Treasury is one Of those holding
the view that the productivity Of the
nations industries cannot match the
indicated programme of spending
about 100000. 100000 instead OF $24.-
100000. 900 to pay this years war bill.
Senator Simmons, chairman of the
Senate Finance Committed; Senator
Smoot, the leading Republican Of that
committee. and Chairman Sherley Of
the House Appropriations Commit
tee are understood to hold the same
view.
However, some members Of the last
named committee. after only two days
hearings on the enormous deficiency
appropriation sought by the War De-
partment, are becoming convinced that
ss billions are to be spent in France
1; is entirely possible that billions more
than is expected by the Administration
Can be expended before June 80 next.
Expects Peak in December.
Mr.. McAdoo is understood to entertain
the view that Government expenditures
are increasing at the rate OF about
800 OOO. 600 a month. but that the high
point will be reached in December. Af-
ter that date he believes the expendi-
lures will not continue to increase.
II this view is correct the present
programme of raising $4,000. 100000
through taxation and $4,000, 100000 in
bonds will be large enough to meet the
needs OF the Government
1t was strongly intimated by Mr.. Nc
Adoo and Congressional leaders. though.
that IL the beliefs of the Secretary OF
the Treasury are not borne out by fu-
tgre developments another tax bill on
top OF the one now before Congress will
be necessary. To maintain the ratio OF
TO 8 between taxes and bond issues II
will then be necessary also to increase
the amount of bonds to be sold. How
ever Mr.. McAdoo said he believed 1t
"unwise to go further at present and
tat conditions that may develop in the
future will determine the question OF
further increases in taxation"
This statement by the Secretary was
Interpreted to mean that Mr.. McAdoo in
tends TO wait until he can determine
definitely whether governmental ex-
penses are to continue to increase after
December. and II they do to ask for
further revenue legislation then. prob
ably in the form OF consumption taxes.
Confers on Liberty Loan.
Secretary McAdoo held a long confer
ence to-day with his chief aids and
heads OF the Liberty Loan organization.
The subjects under discussion were the
Issues to be made between now and
July next. but no definite conclusion
was reached
Three $4,000 0Oo, 900 loans were sug-
gested as the surplus over the amount
needed TO aTply to the Governments bill
Tor the next year. Three loans of $5,-
100000, 900 minimum each were sug-
eested also on the theory that oversub-
scription of the three loans would make
up the billion lacking from the $l6.-
ooo.OO0,OO0 called for by the financial
programme as Mr.. McAdoo believes Il
can remain for the present
While no final decision was reached
to-day II is regarded as almost inevitable
that the next loan will be for at least
$4,000, 600 900. Judging from the amount
OF the certificates OF Indebtedness which
nave been issued and are to be issued
before the bonds are disposed OF.
The House almost finished with the
revenue bill to-day. putting over for ac-
uon tomorrow only two points still at
issue-the question OF the proper amount
OF depreciation to allow mines and gas
ana oil projects and the proposal TO ex-
empt from the income taxes the salaries
OF all army and naval officers up to
NJ'1oO instead of having this apply only
To those outside OF the United States.
The House was in a turmoil all day
to-day over four attempts to amend the
tig money bill. Two amendments to put
TAX on cotton were beaten. one on
point Of order which was sustained and
tNe other on a direct vote. An effort
10 remove the tax on mixed flour went
out on point OF order. as did the pro-
posed amendment to put per cent,
tax, in addition to all other taxes. on
products OF child labor.
Representative Rainey (Il.), Demo-