The Carlisle independent., 1920-05-06
THE NATIONAL CAPITAL
(By J. E. Jones)
Flying High

The man who remarked that "it beats all how expenses keep up" must have been studying the banking situ- ation of the country, from which it appears that the discount operations of the Federal Reserve Banks during February totaled $6,517 ,439 ,082, which is an increase of 30 per cent over the total for February, 1919. War paper constituted 85 per cent of the total discounts for February of this year, but the proportion of war paper in the total of customers paper rediscounted decreased from 36 in February, 1919, and 22 per cent in January of this year, to 16 per cent for February, 1920. The decrease in the relative volume of war paper is accounted for in the Federal Re serve Bulletin as due in part to the diminution in the volume of outstand- ing Government securities, in part to the progress made by the public in absorbing such securities as longtime investments, and also to the abolition of the preferential rate previously granted" According to the Federal Reserve Bulletin "the improvement of the financial position of the Gov ernment is closely dependent upon the continued maintenance of a policy of economy" With the American public calling on their bankers to such an ex- tent as to make it necessary to shoot six and half billions of dollars of se- curities-mostly Liberty Bonds, thru the banks in this manner, there is only one inference-and that inference is that as individuals and as a people we are flying high"
 Although the war ended year and half ago our Government expendi- lures are still tremendous. It has re- gently been reported that England has balanced the budget" bringing it about that Government expenditures are less than Government receipts. But over here on this side of the wa ter there is but little evidence of the reduction of public expenses.
 Official reports give the Govern ment's total expenditures from April 16, 1917, to March 3l, 1920, excluding principal of the public debt, at $37,- 455,853 and the receipts for the same period excluding principal of the pub lie debt, were $14,198, ,247,7 ,793. The excess of the disbursements over re- ceipts for the war period was $23 ,257- 398,060, and this amount represents the increase in the public debt, or the amount the country went behind. This great sum is represented in Liberty bonds, Victory notes and War Saw ings securities that are outstanding.
 The Soldiers Bonuses
 The one big drive for economy seems to be in the determination in Congress to prevent the former sol diers from getting their bonuses, which it is estimated would cost the Government s2,0O0,O00,00 The pro- posal to issue bonds to former ser vice men is opposed by the Treasury Department and the other custodians of the public finances on the ground that bond issue for the necessary amount could not be foated on the basis of interest which governed the Liberty loans-and if it could be put over, that it would further disturb the credit of the country, which all ready appears to have it's maw full of Liberty bonds and other war paper.
 Another evidence that we are fly ing high is shown in the payments of nearly a billion dollars into the Gov ernment treasury during March of the first instaf1naent of the income and profits taxes for the year 1920. The reaction comes in the vir- tual strike of possessors of large in- comes against investing in taxable securities except at higher rates of interest than were ever known before. Thus the cost of capital is boosted to take up the slack imposed by the Government taxing process. Industry