New-York tribune., 1920-12-24
u. S. Facing
Deficit Of
Two Billions
CONTINUED from pass sne)

to the General Electric Company, the
international Harvester Comps and
the Bethlehem Steel Company to aid
in prosecuting war industry. If the
War Finance Corporation should be
authorized to do business again, the
Secretary said, he did not doubt the
same concerns would 20 before Il
again for funds, preferring govern
ment credit to private credit.
Emphasis was laid by Secretary
Houston on the fact that the net float
ing trade balance of the United States
against the world, with all deductions
from the apparent balance Of some ten
billions. is still about three and one
half billions. and referring incidentally
to the tariff measure, which he de-
clined to discuss in detail, he said this
should be taken into account in any
effort to promote exports or restrict
imports.
Stress was laid by the Secretary on
the statement that the financiers Of
Europe are working hard to discover
new securities which might be offered
TO the United States as a basis for
loans, and he had no doubt if this
were found private capital would stand
ready to supply all necessary credit.
Loans on Bad Security
"To insist" he said, shat if the War
Finance Corporation should loan money
for foreign trade it would be simply
upon inadequate security"
He said the Treasury has no money
available for such purposes and to
get it the corporation must either call
on the Treasury for funds, which the
Treasury would have to borrow as best
it could, or the corporation would have
to'sell bonds bearing nigh interest
rate. The transaction must compete in
any event with Treasury issues.
In expressing his opposition to re-
facilitating the War Finance Corpora
tion Secretary Houston said such eff
forts were especially questionable, in
view Of the attempts to unity organza-
tion of the export trade. Two corpora
lions for this purpose have been
formed, he said, yet il is doubtful if
through any Of the agencies discussed
the export of foodstufs will be ma
terially increased.
The committee was reminded by
Secretary Houston that before the war
american exports of agricultural prod
ucts were relatively small. The first
ting the 4o,oOo,Oo0 fighting men OF
Europe did when they stopped fight
ing was to look around for food.
Now, France is practically back on
normal farming basis,'' said the Sec
retary. Germany nes had excellent
successes with her largest crop, po-
tatoes,. shipping facilities have in
creased, and although Eurore's total
takings have increased. our exports OF
1000 products have fallen off," He
held it a rather dangerous game to
shut off imports while we are still
SCI ing three times as much IS we buy
abroad
New Burden for Treasury
Taking up the proposed billion dol
lar credit for Germany, the Secretary
opposed it because he said it would
only shift the financial burden to the
Treasury of the United States
Without specifically criticizing the
bonus, the Secretary said all propo-
sails for financing exports, large bor-
rowings and other current remedies
were simply "attempts of the nation ia
lift itself by its bootstraps" He did
not suppose, he said, the people wanted
the country TO be put any further into
debt.
Certain sources Of revenue are de-
clining, according to Mr.. Houston
They are principally the excess profits
LAX ana the hlgher group OF income
taxes. He gave q warning against
"tampering with the sinking fund" and
held that present plans to retire the
war debt are sound and should be con-
tinued.
Referring to reduction Of estimates
he held that material reductions could
be made only in army and navy fig
ures. These estimates total more than
s1,6OooO0, 900. Largo reductions can
be made in these by Congress only by
reductions in these forces below the
strength for which the department
bo1ya ectip, o3