Evening public ledger. [volume] (Philadelphia [Pa.]) 1914-1942, 1919-12-03
CUT IN u. S. TAX
NOT YET IN SIGHT.
Report Of Secretary Of Treasury
Says Government Borrow
ing Must End
URGES REVENUE REVISION

( YEAR Is to PC JnOuRnl o. CtNINNdIN NiH"S !
declared in his annual report sent today
to Congress. Government receipts must |
be kept at their present figure. he said, |
in order TO bring government borrowing |
to an end.
Facing expenditures estimated Mt |
81. COG. ass. .350 for the year ending June !
80 1920, and 81 4T3 .6o6. .3JS for the |
year ending June 30. 1921. the govern
n!ent must enforce rigid economy, Mr.. (
Glass declared He placed the dcf"it |
for the current year at 81 .N01 600 900 !
and for thc year ending Juno 30. WI, |
at appro Nimately S2.0O5, coo 900. /
On this basis. Mr.. Glass urg"d con
gress to deny every approximation for /
exnpnditurp in new fields. We said the /
same policy should obtain until the gov
crnmen. had it's sinking fund well under
way and repayment Of the war debt
s'Satisfartori)y begun
Mr.. Glass charged that excessive gov
ernmeut expenditures were 'thc most
vital factnrs" IN increasing the cost OF
livsng and 0rgued that it was Urgent
necessary to keen down public expenses
for this reason as well as because OF
the drain on the taxpayers.
Against Excess Profits Tax
The present revenue laws need rcvis
ing TO meet new conditions, he said. lie
referred particularly to the excess
profits tax laws as being objectionable
even as wartime expedient. II wnu
be still more objectionable in ncarotim" I
he added. "T.ess harmful forms OF
deriving funds for the government
should be employed. the secretary said.
adding that the excess profits tax had
been responsible for much Of the w
crease in living costs because it had
been passed on to the consumer.
''Tt encourages wastcful expenditures,
puts premium on overcapitallzatlon
and penalty on brains" the secretary
continued ''It discourages new ven
lures and new enterprises and estab-
fishes old ventures in their monopoLieS
in many instances, it acts as a con-
sumption tax. is added to the cost of
production upon which profits are
figured. determining prices. 1t has
been, an I will so long rs it remains on
the statute books. continue to be a
material factor in the increased cost of
living"
Mr.. Glass also urged redrafting Of
the revenue laws to prevent the evasion
of federal taxes through the investment
of wealth in the obligations of states
and municipalities. He said laws should
be enacted which would compel the re-
porting of such incomes, although they
are wholly tax exempt, and that that
sum with other income of an individual
should be computed as the basis for as
sessing federal taxes on tie amount de-
rived from taxable sources.
Europe's Needs Exaggerated
Relations between conditions in Eu-
rome and those in the United States
were discussed also by Mr.. Glass. lie
said that, undoubtedly, there was very
4 great need in Europe for financial as
sistance, but that the situation had
been much exaggerated.
1--WE must all feel deep sympathy for
Z Europe today" he said, but we must
not allow our sympathy to warp our
Judgment and, by eXaggerating Euro
pean financial needs, make them more
difficult to fill. The problem
of financing Europe belongs largely to
4 the exporter because industries cannot
be reopened without raw stocks Gov
ernment financial assistance in the past
and talk of future government or bank
ing aid to finance exports have appar-
entity led our industrial concerns to the
erroneous expectation that their war
profits, based largely on exports, vii
continue indefinitely without any risb
on their part To them will fall the
profits of experts and upon them viii
fall the consequences of failure to make
the exports.
The Treasury viii continue its pol
fey, in effect since the armistice, to re
store private initiative and remove gov
( ernmental control and interference
with respect to the nation $ foreign
trade, Mr.. Glass said Only through
this means, he argued, could ''healthy
economic life be gained He added that
removal of any influence by the govern
ment should provide the incentive fol
American commerce to go into the word
markets and establish itself.
Ratification of the peace treaty Will
IA measurably stimulate export trade, Mr..
sf Glass declared. because operation OF the
Z pact would eliminate numerous politl
cal risks and provide Surer invest
ment basis.
Closely related to any activities o.
the government in foreign trade is the
subject of Incorporated government
agencies, withdrawal of which Mr.
Glass strongly urged. He said theii
ssmanifest weaknesses' were proof suf
sicient that such arrangements were
not happy ones for the government MOI
for the persons charged with admins
tration of the corporation. While not
saving that any of the agencies, created
during the emergencies of war, haC
been guilty of wastefulness, Mr.. Glass
pointed out that there was no objective
such as business profits, to hold expen
iitures down. On the other hand
officers managing the agencies operate
an capital for which there is no ac.
c0,,ntability or check and always have
access to more funds if a real neet
EXISTS. Gases where government funds
are employed semi independently, Mr.
{ Glass declared, largely justified gov
Nernment red tape in accounting"
>Returning to the estimated govern
n,4ut expenditures for the fiscal yea
ending June 80, 1921, Mr.. Glass sait
the military establishment would asl
appropriations aggregating $3.50 ,57S,
657. OF this sum, 1897 1902, 900 woulC
be required, he said, for maintenance
Of the army proper, while $50 ,4OS ,00t
would be apportioned to the nationa
guard. The Military Academy woult
receive $6,77S. .637.
For the navy, the appropriation o
$542, ,031 ,S04. including $1S5, ,24S, ,00t
for building program, is to be asked.
An aggregate of $194 SIS, 900 will
4 Be sought for public works In thi
Is included funds for rivers aud har
bors' Improvement totaling $53 $50.
285. Fortifcations, arsenals and mill
tary posts will require about $129,
600 900.
The legislative establishment vii
need So. OPS. .297, it was estimated
while the executive branches of tn
government combined will seek a tota
of S140, iii .463. Chief among the lat
fer departmental expenditures is a.
estimate of S73 .405. .101 for the Treas
urv Department. This sum, which
much larger than in former years, in
3fenfpr tbe added expense to be born