Daily Kennebec journal., 1919-12-04
ANNUAL REPORT
SEC. OF TREASURY

S'"eee sSouS.sou AZ e@AeS toF tue ae3t
fiscal year is to be thought of. Sec,
rotary Glass declared in his annual
report sent today to Congress. Gov
erumeut receipts must be kept at
their present figure, he said, in order
to bring government borrowing to an
end.
Facing expenditures estimated at
$5,62s,4s6,S59 for the year ending
June 80, 1920, and $4.473.6s6,35S for
the year ending June 30, 1921, the
government must enforce rigid econ
omy, Mr.. Glass declared. He placed
the deficit for the current year At
$S.eo5. 100000 and for the year ending
June 80, 1891, at approximately g.,
0o5, 900, 900.
On this basis, Mr.. Glass urges Con-
gress to deny every appropriation
for expenditure in new fields" He
said the same policy should obtain
until the government had it's sinking
fund we'll under way and repayment
OF the war debt satisfactorily be.
gum"
Mr.. Glass charged that excessive
government expenditures were "the
most vital factors" in increasing the
cost Of living and argued that it was
urgently necessary to keep down
public expenses for this reason as
well as because Of the drain on the
taxpayers.
The. present revenue laws need re-
yising to meet new conditions, he
said. He referred particularly to the
excess profits tax laws which he des-
cribed as being objectionable even
as a wartime expedient." 1t would
be still more Objectionable in peace
time, he added. Less harmful
forms of deriving funds for the gov
ernment should be employed, the
secretary said, adding that the excess
profits tax had been responsible for
much of the increase in living costs
because it had been passed on to the
consumer.
'It encourages wasteful expendi-
lures, puts premium on overcapi-
talization and Il penalty OH brains.
the secretary continued. 1T discour-
ages new ventures and new enter
priSes and establishes old ventures
in their monopolies. in many in
stances, II acts as n consumption
tax. is added to the cost of produc.
ton upon which profits are figured.
determining prices. II has been and
will. SO long as it remains on the
statute books, continue to be ma
terial factor in the increased cost of
living"
In this connection, Mr.. Glass also
urged redrafting of the revenue laws
to prevent the evasion of federal
taxes through the investment oi
wealth in, the obligations of states
and municipalities. He said laws
| should be enacted which would com
| pei the reporting of such incomes. al
! though they are wholly tax exempt
| and that that sum with other income
Of an individual should be computed
as the basis for assessing federal
taxes on the amount derived from
taxable sources.
Relations between conditions ir
Europe and those in the United
States were discussed also by Mr.
! Glass. He said that. undoubtedly
there was very great need in Eu.
rope for financial assistance. but thai
the situation had been much exag.
gerated.
| I'VE must all feel deep sympathy
for Europe today" he said, but We
must not allow our sympathy tt
warp our judgment and, by exag
| gerating European financial needs
make them more difficult to fill
The problem of financing
Europe belongs largely to the ex'
porter because industries cannot bt
reopened without raw stocks. Gov
ernment financial assistance in the
past and talk of future government,
| or banking aid to finance exports
have apparently led our industria
| concerns to the erroneous expecta
tion that their war profits, basee
largely on exports, will continue In
| definitely without any risk on theil
part. To them will fall the profits
| of exports and upon them will fal
the consequences of failure to make
| the exports"
The Treasury will continue its pol
| lev. in effect since the armistice, t.
! restore private initiative and remove
| governmental control and interfer'
ence with respect to the nation.
foreign trade, Mr.. Glass said. Only
through this means. he argued, coulC
a healthy economic fife be gained
| He added that removal Of any indu'
| ence by the government should pro.
vide the incentive for American
commerce to go into the world mar.
kets and establish itself. Ratifica'
ton of the peace treaty will meas
urably stimulate export trade, Mr.
Glass declared, because operation o1
the pact would eliminate numerous
political risks and provide surer In
vestment basis
Closely related to any activities o'
the government in foreign trade Il
the subject of incorporated govern
ment agencies. withdrawal OF which
Mr.. Glass strongly urged. He sa1c
their manifest weaknesses" weFs
proof sufficient that such arrange
/ ments we're not happy ones for the
government nor for the persons
charged with administration Of the
corporations. While not saying that
any of the agencies. created during
the emergencies of war, had been
euilty of wastefulness, Mr.. Giasl
nointed out that there was no OBJ
iectiye such as business profits to
hold expenditures down. On the 9TH
er hand. officers managing the ayen'
cies operate on a capital for which
there is no accountability or check