Evening star., 1920-05-22
EIGHT BILLIONS DUE
NEXT THREE YEARS
American Citizen Must Dig
Deep Into His
Purse.

American Citizen is going to be called
on to reach into his purse and take
therefrom something more than SS,-
0o.000.o00 to meet the outstanding
obligations of this country that will
to the regular expenses of administer
J ing the government. which Will re-
, quire few more billions.
You will not hear much durirasr the
! next few months concerning the bill
| lions that must he raised within three
years. either from the republican or
he democratic members of Congre: 6.
said one House member in private
conversation few days ago. But
all of us know that as soon as the
election is over we are going to be
face to face with the diSagreeable
task of obtaining every available dol
lar to meet the obligations that Will
shortly fall due. We have assurance
that ii can be done in a satisfactory
manner, but the task is one that
neither the majority nor the minority
party Will RELISH
Victory Notes Big Item.
The biggest single item to be met
is S4.405. 100000 in victory notes eX-
elusive of interest. that will mature.
| Treasury certificates constitute an
other So. O00. .00O. 900, while war savings
stamps and thrift stamps which will
mature within three years come to an
additional billion. Included in the
second amount is the floating debt
represented by s2.2SO.000.000 in tax
certificates. and something less than
$500 900 900 in loan certificates.
Whatever method Congress may fix
on for meeting these payments. Treas
ury Department officials are insistent
that only personal economy on the
part of the people at large. consistent
operation Of leading industries and
conservative banking methods will
enable the country to come up to the
mark.
Mr.. LefingweIl's Views.
+. c. Leffingwell. assistant secretary
of the Treasury. in charge of fiscal
bureaus. is the official most directly
concerned with this part of the future
financial program. and his position is
that the country is in sound condi-
tion if-and he capitalizes the word
if it attends to business.
An Industrious man in good health
has no trouble paying his debts il he
works regularly and saves his money.
But if he spends money as fast or a
little faster than he makes it there is
going to be trouble on the day of
reckoning.
ITO meet the problem of the next three
years the most rigid economy in gov
ernmental expenditure should be en-
forced. adequate revenue from taxes
DS pioNiOeu iISoiOuS salvage
methods adopted with view to the
rapid retirement of the floating debt and
of a portion of the victory loan before
maturity. If due progress is thus made
in reducing the floating debt, victory
notes should be accepted at par in pay
ment of the five income and profits tax
installments falling due in the calendar
year 1922 and the first quarter of the
calendar year 1928: or. if the notes are
then selling at or above par. a portion
of them should be called for redemption
in June and December. 1922. This would
raise the level of all other government
securities and make possible the refund
ing of the reduced balance of the victory
loan on terms advantageous to the gov
ernment.
These measures are feasible and nee
essary. If. however, We reduce taxes,
increase expenditures and delay salvage
operations. the governments financial
predicament will be grave, for the debt
outstanding and maturing within three
years amounts to $4,000. 900, 900"
Bankers Restrict Loans.
4 special meeting of bankers was
held in Washington recently at the call
of Gov. Harding of the Federal Re-
serve Board. and it was agreed that
loans should he restricted to essential
industries and even legitimate means
taken to reduce imitation. 1t is the
contention of the governments finan-
cial experts that unhealthy stimulated
commercial business has been proceed
ing unchecked.
From March. 1919. to March. 1920.
though holdings of and loans on gov
ernment war securities in some 500
member banks of the federal reserve
system decreased from $4,000 600. 900
to something over 81 900. 200. 900. other
loans and investments increased from
,, $1o.000,000,000 to more than s14.000.-
G00.6 For every dollar of credit re-
leased by the government two dollars
were extorted by business.
High rates of interest and discount
limitations of currency and credit, and
other traditional methods of finance
control should he used courageously,
in the opinion of Mr.. Leffingwell, but
even these will hardly suffice under
the abnormal conditions now prevailing
and the real solution must lie in pro-
ducins more and consuming less.
| Copyright. 1920, by The Washington star.)