The Washington times. [volume] (Washington [D.C.]) 1902-1939, 1920-03-11

billion dollars would Dc serious
one at this time" Houston said
"An EFFORT to sell bonds at this
time would present a very grave pos
sibillty. The nations npAnces are
In a critical condition al THIS TIME
"With prudence In handling our
finances this nation can proceed In an
orderly fashion. think a proposal
10 roat two billions OF dollars might
be disastrous. do not know II you
could float bonds at the present rate
of interest.
eff bonds were nosted at a higher
rate IL would tend 10 depreciate the
present bonds.
"If We Increased taxes II would
cause an increase in the cost OF Nv
ing. Wages would be forced upward
Eve are doing all We can to bring
about a stable condition OF nnAnce.
I'VE are having difficulty to do that
now. The fotation of bono issue
would counteract this ana make
further progress toward the normal
difficult
Would Favor Taxes.
Il would recommend Increased taxes
as the least harmful means or raising
the money. Taxes are high now ana
our problem now Is TO survey taxes
and adjust them that they VIII not be
to business.
81 am not prepared TO recommend
additional taxes or incomes, houston
proposals TO give sol
diers bonds or Government paper are
more vicious than the popular nota-
ton OF a bond issue"
Can we materially reduce taxes TO-
day on a basis Of contemplated appro-
priations and obligations Congress
man Garner. Texas. asked.
I'VE cannot, but our tax system
should be adjusted" Houston replied.
you say fotation OF a $4,000, 900 900
bond issue would tend to inquire our
financial SYSTEM. Our national debt
Is far less compared with our re-
sources than II was after the civil
War. We cleared that debt In a few
years. How do you account for your
view in the natter" Congressman
Republican. Pennsylvania
asked.
OpSoses McAdoo Plan.
III we are economical in the next
few years we will be on better
financial basis. but at present we are
faced with a military and naval ex-
penditure war has taught us Is neces-
bdTy. or VI yS~sS 49, 80.
tional expenses will be between
SO 200, 600, 900 and $4,000, 900. ooo." Hous-
ton continued.
what do you think OF the plan OF
former Secretary McAdoo that taxes
should be decreased" Representative
Frear, Republican. Wisconsin, asked.
~ do not approve IT," Houston ans
wered.
In answer to Congressman Frear
Houston said he did not approve the
issuance of bonds against the Euro
pean debt to the United States.
How do you account for the flota-
ton Of bond issues by France whose
war obligations are far greater than
ours" Frear asked.
Had Flscan Policy.
THE trouble in Europe today Is the
working of a fiscal policy that has
caused initiation of the money mar
ket." Houston said. "If we follow
their plan Of bond flotatino we will
go just SO far toward their difficult
ties as we issue bonds
HAS the issuance of Treasury GER
tihcates against prospective taxes in
creased costs?" Frear asked.
"That Is a broad feld you are en-
terinR but we must retrace our steps
to bring down COSTS Houston an
swered.
Immediate decrease Of taxes is i'm
possible" Houston said. T think 1t
unwise to- tamper with the sinking
fund"
Asked to what extent the decision
of tho Supreme Court to exempt stock
decrease the receipts of the Govern
ment, Houston said "the amount of
loss by tho decision has not been
How much do you think tho flota-
ton of q bond issue would decrease the
value of present obligationsT Con-
gresham Garner askde.
at might force them down as low
as $780," Houston said.
Governor Harding of the Federal
Reserve Board said, "there is less
than $4,000, 600, 900 in gold held by the
Federal Reserve Banks to secure Fed
eral Reserve notes"
Our debts are being paid in gold.
We are not receiving gold from the
nations indebted to us. This Illus
two billions in bonds at the present
time" Harding continued.
ave do not have the patriotic i'm
pulse we had during the war to sell
the bonds. i do not know what rate
of interest we would have to make
the bonds to sell them.
"If we must raise the money we
should raise it by taxation. The ma
tional wealth of the country does not
figure in the question:" Harding said.
Six Per Cent Bond.
"rhe proposition that bonds be
given to the beneficiary is a particu-
larly dangerous one. II a man can
hold these bonds he does not need
them. He is going to market them to
get the money.
Issuing bonds as an obligation is
not far short of issuing of greenbacks
to meet Government obligation.
From the point OF view of the Federal
Reserve banks, would recommend
the pay-as-you-go plan Of taxation.
IAN interest rate OF 9 per cent
would have to be fixed on n twenty
year taxable bond to sell IL at par"