Omaha daily bee., 1920-12-14
Bonds
For War Notes Is
Plan Of Fordney
Congressional Leaders Fear
I. S. Cannot Meet War Debt
Maturing Within Next
Three Years.

Washington, II. t., Dec. l5.--Con-
Germ of congressional leaders as to
ability of the treasury to meet the
81, 500, 100000 of war debts maturing
within the next two and half years
was indicated by Chairman Fordney
of the ways and means committee
today, both in the house and at the
opening of hearings by his commit
tee on revision of revenue legisla
ton.
The ways and means committee
chairman expressed doubt as to
whether the estimate of $4,000
100000 annual tax levy would be suf-
ficient to meet the requirements of
the government over the period OF
maturing treasury certificates and
Victory notes. AS solution, he
advocated refunding into long-term
bonds of the certificates now aggre
eating $2,350,000,000 as we'll as OF
the first issue of war savings stamps
and the Victory note issue.
Adoption of such a solution, Mr..
Fordney declared, probably would
enable a reduction of taxes below
Secretary Houston's estimate of $4,-
0O0000,000. 1t also, he said, would
permit tax levy for several years,
sufficient only to cover current fiscal
needs of the government and interest
on the public debt and sinking fund
operations,
Tax Expert Disagrees.
The first witness before the COM
mittee at the tax revision hearing,
however, disagreed with Mr.. Ford
ney on the proposal. In reply to
questipns by Representative Long
worth, republican, Ohio, Thomas S.
Adams, treasury tax expert and
economist, said the program of the
treasury appeared to provide suffi-
cient revenues to take care of the
maturing obligations except the saw
ing stamps, which would be paid
through the sale of other issuesN of
such stamps as each yearly issue
,ialls due. He added, however, thai
the treasury estimates for taxation
could stand no reduction if the pro-
gram were to be carried through
and maturing obligations met.
Politics entered into the discus
sions of the methods to be used III
paying off the war debt when the
committee reached the subject later
in the day. Representative Garner,
democrat. Texas, vigorously opposed
the Fordney suggestion, saying it
meant that the government was
breaking faith with the people
whom it had ASSURED that it would
take up the floating debt to make
the Liberty bonds retain their prop
er level of market value" To float
another loan, Mr.. Garner asserted,
would materially weaken the quota
ton of the Liberty bond prices.
Redemption Promised.
"When we passed those loan bills
and tax measures, we told the people
certain things" Mr.. Garner contin-
ued. 1--WE surely cannot go back
on those assurances. 1t would be
breaking faith with the people"
well" Mr.. Fordney countered,
tHOSe tHlHSS wei tHe Wol VI tie
democratic administration. That
floating debt was the product of
the democratic administration. But
as much as we have it, it has now
become an obligation of the repub-
i;can party and l mean to do all
l can to get rid of ut without bur
dening our people with taxation"
Discussion of actual tax revision
questions by the committee devel-
oped an almost unanimity of opinian
among its members with respect to
repeal of the excess profits tax. DR..
Adams, speaking for the treasury
concurred on this point, but warned
the committee congress should keep
in mind difficulties attendant upon
collection Of sales tax.