Middlebury register. (Middlebury, Vt.) 1886-1937, 1920-12-24
UNCLE TED'S BED
y THE STORIES Il
Collect The Nations Bills

bed time. Uncle Ted settled himself
in his easy chair. lighted his cigar, and
invited Jack to suggest a topic for the
evenings talk.
This morning at school, said Jack
"one of the boys told the teacher he
had been reading that some Congress
men and Government officials at Wash
ington had been saying about the need
Of taxes being kept just as high as they
are now, and that if they are reduced
at all the Treasury will not have
enough money to pay its bills He
wanted to know why, now that the
war is over, it is necessary to have such
big government expenses. The teacher
said that one of the reasons for the
high taxes was the need of paying in
terest every year on Liberty Bonds. 1
wish you would tell us, Uncle Ted,
why it is that so much OF our tax
money has to go for interest, and if
there is not some way Of stopping
those payments and cutting down tax
es that much"
"That is a pretty big question for
children of your age to understand"
replied Uncle Ted surprised that Jack
should want to know how the Govern
ment raises and spends its money.
But the matter of taxation is one
that affects all of us very closely, and
the children in the schools should have
some idea, at least, of the reasons for
it, 1t is too big a subject for me to
tell you everything about it tonight, so
| will just talk to you about the Lib
erty Bonds and why it is we have to
pay so much interest upon them. Per-
haDs some other night l will tell you
about other features of our tax prob
lem.
"Of course you remember that dur
ing the war there were FIVE Liberty
Loan drives. Everybody was urged to
buy bonds until it hurts. Millions of
men, women, and children took their
money out of the savings banks and
bought Liberty Bonds with it. Some
Of the bonds have been bought back
by the Treasury, but today almost
twenty billion dollars worth of them
are still in the hands of the people
who bought them or of other people
who purchased them from the original
owners. Each year the Treasury is
going to buy some of those bonds back
with money appropriated by Congress-
and as the amount held by the people
grows smaller OF course the interest
paid by the Government will grow less,
but at the present time it is about
$900.0O0,OO0 year. That is a tremen-
oil
ter of all the Governments tax money
to pay, but there is way that it can
be reduced more than half, and that
is what l want to tell you about so
that you can explain it to the other
boys when you go to school tomorrow
When Congress passed the laws d.
recting the Secretary of the Treasury
to raise money by the sale of Liberty
Bonds, a paragraph was included say
ing that he could lend some of the
money to the allies to aid them in car
rying on the war with Germany The
Secretary was told that those loans
must not exceed Sl0,000,000000, just
about half of all the money the people
paid into the Treasury for the bonds.
Beginning with April Is, 1917, the
Treasury turned over millions of dol
lars almost every day to the represen-
tatives of the allied governments sta
toned in Washington. Even as recent
" as September % of this year a pay
ment of $l0000,000 was made to
France. and the Secretary says that
other payments are to be made in the
future. Altogether the money the Uni
ted States has loaned to foreign gov
ernments amounts to about $9,500,000,-
90.
Nov, when that money was reCeiV
ed by the allies they gave a receipt for
it, called a prOmissOry note, stating
that interest on the loan, at the rate of
5 per cent every year, would be paid
until the loan was returned to the
United States Treasury. OF course if
that interest were actually to be paid
it would amount to about S475OOO0OO
a year and could be applied by this
Government toward the payment Of
more than half the interest which has
to be turned over to Liberty Bond
holders every year At first the inter
est was paid by the foreign govern
ments when it became due, and our
Treasury received about $437,000,000 in
that way, but in recent months prac-
tically none of it has been forthcoming,
and in November Is, 1920. there was
due from that source over S00OOOOOO.
Moreover. there is no immediate pros
pect of the interest payments being re-
sumed or of the back interest being
paid"
81 know that when my father has
borrowed money at the bank he has
to pay the interest on it promptly on
the day it is due" said Jack. why is
it that the United States cannot col
lect the interest that is due it from
other governmental"
"The reason is" explained Uncle Ted,
that the Secretary of the Treasury has
made no effort to collect it. On De-
cember Is. 1919, he wrote a letter to
the chairman of the tax committee Of
the House of Representatives stating
that he did not want to insist that the
allied governments furnish that huge
sum of money at once, as it would ser
iously interfere with their work of re-
construction after the war. Congress
agreed with the Secretary, and no de-
mand was made for the interest.
"But the Secretary has tried to in
d,,ca tba o1l;pe IN aVchanOe the nroruic-