The spectator., 1920-10-12
MUST PLAN T0
 GUT EXPENSES
CONGRESS WILL BE OBLIGED TO OPEN THE WAY TO REDUCE
 FEDERAL TAXES.
BOTH PARTIES ARE PLEDGED
Some Interesting Figures on Present Financial Condition of the Nation Issuance of Treasury Certificates Must Stop Soon.
By JAMES p. HoRNADAY.

By JAMES p. HORNADAY.
 Washington-How to cut down the expenses of the federal government and thus open the way for a reduc- l ton in federal taxes will be one of 1 the important questions congress will be obliged to take up when 1t comes ! back in December. Both the big pO- litical parties are pledged to reduce expenses of government. and both have promised to reduce taxes. Prom ises are, of course, cheap, but in this case public sentiment Is so over- whelmingly in favor of cutting down expenses and also reducing taxes that some effort to keep the promises that have been made will have to be put forth.
 Treasury certificates of indebted ness to the amount of about $640 OO0,- GOO matured on September 15, and about S16O0O0,000 mature on October 15, 1920. The greater part of these SS0O000,000 maturing certificates will. the secretary says, be co>ered by the installment of income and protits tuAtS DdAubie hil ScDttllIbci lp III order to provide for the balance of the certificates requiring 10 be Ts- funded and to meet the current re- quirements of the government up to October b. the treasury has decided, on the basis of the best estimates available nj this time. to offer treas ury certificates of indebtedness in the amount of about $400,000,OO0 in two series, both dated September 15, one series designated T NJ 3-1021, bearing 5a per cent interest, maturing March 15, 1921, and the other series deSig- mated T S-1921, bearing per cent in terest, and maturing September 15. 1921.
 First Quarter May Show Surplus
 On the basis of daily treasury state ments, during the first two months of the current fiscal year beginning July 1. 1920. the ordinary receipts of the government amounted to S62S. .16I.- 191.13. while the ordinary disburse- ments during the same period amount ed to S754, ,072 ,901.76. leaving net cur rent deficit (excess of ordinary dis bursements over ordinary receipts) of S125,305. .710.63. This net current deficit for the first two months of the fiscal year Is due chiefly to actual cash pay ments in amount of some S130,0OO 000 made necessary by the provisions of the transportation act in connection with the return of the railroads to pri- vate control. According to the latest estimates. payments on account of the railroads will probably continue on a large scale during the balance of the present calendar year. and will be relatively heavy during the month of September.
 Notwithstanding the net current Geficit during the first two months and these extraordinary payments on ac- count of the railroads It is expected that the first quarter of the fiscal year, ending September 30. 1920. will show a surplus.
 Debt to Be Further Reduced.
 Further issues of treasury certih- cates during the months of October and November may subsequently, re- suit in temporary increases in both gross debt and floating debt. but the treasury confidently expects that by the completion of the second quarter of the fiscal year. on December 31, 1920, any such temporary increases will have been overcome. and that the gross debt and floating debt on De- cember 3i will have been further re- duced below the amounts outstanding on September 30.
 The treasury has no difficulty in sell ing certificates. They go like hot cakes because they bear a high rate of interest and are exempt from state and local taxation. except inheritance taxes. and from normal federal income tax and the corporation income tax. and are admissible assets for the pur- pose of calculating profit taxes But 1t Is obvious that the treasury depart ment must some time. and the sooner the better, stop offering these certif. cates for sale
 Sursar Prices Down to Stay.
 The government authorities he- lieve that low prices for sugar l uIt UtIt to stui. lIilS On1nlpn is reached by both the department of justice and the agricultural depart. ment, after each has made its own in vestigation. The authorities express the view that the protiteer and the specuator have had their day and that the law of supply and demand will get back to work
 
 there was buI little excuse for the hys- teria over sugar during the last year. and there Is further agreement that prices never should have gone as high as they did go. IL is asserted that there has always been sufficient SUD. | ply of sugar: that the speculators and