The sun., 1919-10-10
FAVORS FEDERAL
BUDGET SYSTEM
Chambers Committee Also
Recommends Reduction
of Taxation.
TO FUND ALLY WAR DEBT
Increase of Government Cost
Enhances Living Expenses,
Says Report.

Inc adOpttOn OF budget system Dy
the national Government and the re-
vision OF taxation to a much smaller
annual amount were the chief recon-
mendations carried in the report made
yesterday by the executive committee of
the Chamber Of Commerce OF the State
OF New York following its extended In
vestlgs ton Of the causes Of the present
high cost of living. Taxation, the re-
port asserted. was zone Of the most po-
tent causes of high costs and the largest
single element and influence that can
be modified to reduce the cost of living"
The tremendous amount Of money to
be raised by taxation, which Is $50 per
cent. higher than in 1914, is pointed out
in the report and the committee makes
the following recommendations to the
Chamber:
81. That the Federal Government con-
slider funding. temporarily. so much as
may seem advisable Of the interest on
its loans to its allies in the great war.
"2. That the interest payments or the
funded obligations received by the Fed
erai Government in lieu of interest on
loans to allies be treated as sinking
fund investments for the payment of
our own war debt
D. mat not more tHan Sz,tUU,UUU,OUV
be raised annually by Federal taxation.
-. That the revision of taxation nee
essary to reduce the annual total to
50. 700. 100000 be accompanied by the
substitution of taxes tending to the
elimination of waste and checking Of
extravaganza for taxes which tend to
interfere with the accumulation Of in
dustrial capital.
Want Budget system Adopted.
"5. That a budget system at once be
adopted by Congress"
Cost OF government" says the re-
port. "is a necessary cost OF existence
But IL the Government undertakes I'M
necessary functions or is extravagant in
its performance of legitimate functions
the cost of living is unduly enhanced to
its people. The Secretary Of the Treas
ury estimates the total war debt will
be. June 80. 1920. s26,516,509,1 1850. This
includes S9,102, 00o,o 900 loans to our al
lies The net debt, subject to reduction
by realization on war assets is, there
fore. $17.414.50s,160. The total cost of
the war has been s21.075. 900, 900. OF
this approximately 81 per cent. or
s7,134. 1000 900. has been paid by tax
alton.
Had this huge sum been collected
States It would have increased the aver
age cost Of living to each by $322.40
for Federal taxes. This indicates one
CT the most potent causes Of high costs
and points out the largest single ele-
ment and influence that can be modified
to reduce the cost Of living.
1.-The Secretary of the Treasury esti-
mates that Federal taxes for the year
ending June so, 1920. will be: Internal
revenue taxes. $3.50, 900 900: customs
duties. $3.50. 100000: total. 5000, 900. 900.
Were these taxes. to be collected
equally from the families OF the United
States, the average cost of living to each
would include 1886 for Federal taxes.
In 1914 Federal taxes amounted to less
than $36.75 a family. In other words,
this element threatens to show an in
crease Of more than $40 per cent.
Estimate Cost of Government.
up to July /, 1915. the ordinary ex-
penses Of the Federal Government, less
interest on debt, never exceeded in time
Of peace $702, o00, 900. In the absence of
budget It is difficult to apprrss he
future, but surely $500, 100000 a year
should be ample to cover cost of govern
ment. Therefore, a liberal estimate of
the annual amount needed. for interest
and ordinary expenses in the immediate
future would be s2.700, 600, 900. This as
sumes that the interest on the total debt
of 326.516, 5o9,160 will for time become
n Federal expense and includes charge
of $3.50, 100000 for that purpose.
american fiscal policy has always re
quired payment of governmental debt tc
follow promptly events that caused it,
incurrence. This policy should not BIZ
abandoned. But II the Allies pay theil
interest a sinking fund In excess Of pei
cent will thus be provided for retiring
our war debt
mot to hamper our allies IN their re-
covery. It would be wise for time to re
fund their interest payments. Should
this policy be followed the repayments OF
these additional debts would aid greatly
in retiring our own war debt Our est
mate of an annual tax levy Of s2.700,
| 000.0 contemplates such procedure.
when one considers how greatly
taxes become magnified In their severa
step shifting to the ultimate consumer
the Importance of reducing the Secreta
rys estimate of $500. 900, 900 to oui
suggestion Of S2.700.000.O0 becomes evil
dent.
Tax revision should not cease there
A system OF taxation that Il an incentive
to frugality and interferes as little a,
possible with saving should be adopted
Waste Is the parent of high prices. Take.
that reduce unnecessary consumption ar,
an antidote to waste and Ill timed lux
ury, which is identical with waste. A
league OF frugality would help Americt
greatly at this time and exert a tremen
dous influence in enabling production
and supply TO catch up with demand ant
consumption, with attendant reduction II
the cost OF living"
Charles 7. Gwynne. secretary Of the
Chamber, was at his desk yesterday
| after an illness OF several months.