The New York herald. [volume] (New York, N.Y.) 1920-1924, 1920-12-09
THURSDAY, DECEMBER 9. 1920.
Secretary Hou tons Recommends
tons OF Billions of New
Taxes to Replace OIL.


Taxes to Replace oil.
In the massive report of the Secre-
tary of the Treasury, which is nothing
less than a book Of some 800 pages,
there Is a vast wealth of material
facts not only of immediate concern
to this nation but of great moment to
the whole world. There is as well n
gratifying exhibit by Secretary lloUs-
TON on the whole of clear thinking
and close analysis, of frank discus
sion and courageous argument.
OF cardinal Importance to the Gov
eminent and TO the nation are his
chapters on taxation, revenues and ex-
pendiHres. There is no question that
the industry and business of the coun
try and the bread and butter of its
workers depend in large measure upon
the methods which Congress hence
forth follows to collect the moneys
necessary to cover the still stupendous
spendings of the Government and to
pay the pressing debts which must be
met in the near future of not less
than seven and a half billions of
dollars.
Not merely must American industry
and business know in advance what
tax burdens they have to bear during
the period of detiatiOn and readjuSt-
ment; they should have the encour-
agement and incentive of feeling they
are not to be punished for striving to
overcome the adverse conditions they
face at the threshold of the new year.
They should understand they are not
to be stripped of the surplus earnings
many of them now desperately need
to put back into the development of
the property and to lay up against
the possibility Of further financial
stress and storm.
But there must be a revision of the
present vicious and dangerous tax
methods for other reasons as COM
polling as the needs of business. The
excess profits taxes, having stripped
business interests of ready cash and
slowed down the productive machin-
cry of the nation. are themselves be-
ginning to disappear; so they are now
stripping the Treasury itself. The
slowing down Of business likewise
tends to diminish Treasury returns
from income taxes paid by corpora
tions and partnerships a as indi-
viduals lose their employment or have
their earnings cut even the personal
income taxes will fall. So for the
sake of the Treasury there must he,
MS the Secretary of the Treasury puts
It, drastic revision without reduction
of revenues.
The new Administration has 10 pay
more than a billion dollars year in
tcrest on the war debt. 1t has to pay
charges known as war items-that
Interest, the military establishments.
pensions, etc.-amoynting In round
numbers to three billions of dollars a
year. If Congress cuts the depart
ment estimates by three-quarters of
billion or by full billion of dollars
II will still mean, merely to operate
the Government as going concern,
paying interest on its notes and its
funded debts, not less thar three and
half billions of dollars, perhaps
three and three-quarter billions OF
dollars a year. To retire imminent
floating debt and to make provision
for redemption Of War Savings certih-
Gates and Victory notes-that seven
and half billions of dollars due to
be cleaned up within two and a half
years-the Government cannot safely
get along with less than four billions
Of dollars a year. 1t would be better
for 1t to have nearer five billions Of
dollars year. because the faster the
national debts are reduced. the sooner
the interest costs will come down.
With the Treasury facing financial
demands upon II in the next two fiscal
years--July 1, 1921. to June 30. 1923
Of perhaps eighr billions Of dollars
In rvp,,fpr oz-pnprag N ~ 80 ,.....s,, 80. 4
a half billions Of debt payments, or
oil told not less than fifteen billions
Of dollars. the question, them is how to
get the money. And It Is a very grave
question, 50 far as concerns the pro-
ducing power Of the existing revenue
measures.
AS against the estimated $1,000