The sun. [volume] (New York [N.Y.]) 1916-1920, 1919-05-26
WANTS U. S. TOPAY
BILLION ANNUALLY
smoot Working on Programme
for Reducing Big
Debt.
HUGE SUMS TO BE NEEDED
Republicans Plan to Discour-
age Further Foreign
Loans.
HUGE SUMS TO BE NEEDED

Special Despafch 10 The Sun.
WASHINGTON, May 2b.-Uncie Sam Il
going to maintain the interest on his
debts, pay running expenses and,
through the operations Of . sinking
fund. pay off billion dollars annually
Of his debt
This is the programme which Senator
smoot tUtah) 10 working into the form
Of a legislative proposal which he win
shortly lay before the Senate. Il win
come with the authority Of the man
generally recognised as the foremost
authority in Congress on the operating
finance of the Government and one who
Is not given to visions Of easy financial
programme.
Ever since Congress adjourned In
March, and indeed for . long time before
that, Senator Smoot has been studying
the details Of the present needs Of the
Government finance. He concludes that
unless the country 10 going to be salts
ned to carry the burden Of an irnrnense
debt indefinitely II must at once set
about the reduction of its commitments,
The proceeds Of the last Victory
Loan" he said to-day to TIE SUN.
will be used as short time certificates of
Indebtedness. It will be necessary to
issue still more Of these and they win be
carried by the financial institutions. OBJ
waiting hope, the necessity to sell more
and more bonds at public sale. But we
can take our choice: about 5000, 0oo,-
900 more bonds or $4,000. 900, 600 in GER
tiicates Of Indebtedness will yet have to
be issued.
Huge Interest Burden.
we now face the necessity Of raising
about 5000. 1000 900 q year to meet the
interest alone on our public debt Il II
true that our loans abroad, amounting to
$4,000, 000.0 900, will bring in some con-
tribution toward meeting this amount:
but 1t is uncertain how much. It will be
good many years before we will know
how much OF our war loans to our allied
states can be collected. Some of n
never will be. some will be very slow
and we must take measures that will In
sure independent provision to take care
Of everything.
TN the next fiscal year we win raise
$4,000. 100000 by taxation, and I hope
that sinking fund plan can be put into
effect Immediately. I have been study
ing the whole subject with this in view,
and while have not drafted the meas
ure and cannot now give an outline of II,
l will introduce such q bill in the near
future.
within the next fiscal year. In ad-
dillon to the $4,000, 900, Oov we will pro-
duce from taxes. we will have to put out
$4,000. 100000 in certificates. There 10
no escaping this conclusion from any
careful. fair confederation Of the finan-
cial position. Nor within the next quar-
ter OF century will our national tax
alton burden fan below $4,000, 900, 900
year. believe. however. as we have
To. 49,
begin to discharge the debt. We can
and should assume the burden of can
ceiling billion Of Il every year"
In assuming authority over the legis-
lative policy Of the Government the Re-
publican leaders intend to make II clear
and without delay that they have In
hertted the situation which Senator
smoot outlined and that the future bur
dens which must be met BY the country
are those that have accrued during the
period Of Democratic administration of
Government finances In connection
with the discussion OF coming financing,
especially providing for q sinking fund,
detailed explanations Of the whole fiscal
situation win DO given TO the country.
Against Foreign Loans.
One thing is emphasized by all Con-
gressional leaders who have been giving
any thought to financial matters. It Is
that no Legislative encouragement is
likely to be given from this time for
ward to plans which contemplate ad-
vancing more money to foreign Gov
ernments. They think this country has
done its full share and cannot be ex-
pected to continue loaning money abroad
except az American bankers on banking
terms may make the advances That
Will be very different matter. It Is
pointed out. from Government loans to
Governments
There IL a distinct impression that
when the terms Of the peace treaties
are known they win Be found to en-
brace programmes looking to important
financial advances to some Of tho new
States that arc being created by the
Peace Congress OF Paris. In some cases
these win be the advances TO Govern
ments. in others they win represent
loans to financial syndicates for the pur-
pose of enabling the new countries to
consolidate and rehabilitate their fnan-
cial and economic positions.
The loans. II n expected. WIN be IN
the nature OF joint advances from the
more wealthy OF the associated and
allied countries Thus Great Britain