New-York tribune., 1921-03-09
Mellon Asks
Budget Plan
And Economy
Treasury Head, in Letter to
Banks, Says the Nations
Finances Are Solid. but
Waste Must Be Avoided
Urges Public to Aid Him
May Help in Reducing Gov
ernment Expenditures,
He Asserts, Citing Debts
From The rriosn.'s Washington Bureau

WASHINGTON. March S.-Secretary
OF the Treasury Mellon to-day issued
an appeal to the people generally to
stand for the utmost economy in the
conduct Of the government. He also
urged the establishment Of thorough
going national budget system.
His recommendations were embodied
in letter to the bankers of the coun-
try setting out his conclusions and out
lining in a general way the future
course of his department. This was
the new Secretary's first important Off
cial act.
The country's finances are sound, but
omy, is the keynote of Secretary Mel
Ions letter
The gross debt of the government on
February 2S, 1921, amounted to S24,~
O5, ,,6S4,72S while on the same date
the floating debt. including unmatured
loan and tax certificates. amounted to
$2,4Si ,032 000 said Secretary Mellon
These figures, he said, show an in
crease which is to be largely offset and
possibly overcome by the issuance on
March Is. 1871, of S40o 900 900 in
treasury certificates of Indebtedness in
two series, bearing interest at the rate
OF 52+ per cent per annum, payable
semi-annually.
The progress to be made during the
balance of the current year in the re-
tirement of gross debt and floating debt
VIII depend, OF course, upon the ltent
of the demands made upon the treas
ury and the volume Of its receipts from
taxes and salvage,' continues the Sec
retary's letter. This progress is likely
TO be seriously limited by reason 81 the
heavy railroad payments to be expected
during the next two or three months.
Economy is Imperative
'The nation cannot af ord extrava-
gance, and so far as possible it must
avoid entering uNon new fields of ex-
pendituTe The heavy requirements Of
the government Oh account Of necessary
expenditures. including interest and
sinking fund on the public debt and
the maturity Of seven al one-half bill
lions. OF sholt-dated debt within the
next two years or thereabonts. MIKE it
imperative that the greatost care and
economy be exercised in matters affect
ing government expenditure. The
people generally must becosAe more in
terested IN saving the governments
money than n spending 1t A thor
oughgoing national budget system must
be established and the government's S
expenses brought into relation to its
income"
Secretary MELONS letter in part
-ollows:
at the outset of my administration
OF the Treasury | am addressing this
letter to the banking institutions of
the country 70 inform them Of the
state Of he nations finances, the
probable requirements Of the Treasury
for the coming months and is financial
plans for the immediate future
About 100000 600 Of Treasury GER
titicates of indebtedness mature Oh
March 15, 1921, and about Sis, 600 900
additional on April 10, 1921. On March
%, 1921. there viii become payable the
semi-annual interest on the third Lib
erty Lean, amc anting to about S75,-
600 600. The Treasury must also make
large payments under the recent legls-
iatlon authorizing partial payments on
account o. the railroad guaranty, which
may amount to as much as $500, ,OOO,-
600 during the course of the next
month.
''ln order to meet these heavy re-
quirements and at the same time 2ro-
vide for the current expenses Of the
government the Treasury relies in
large part upon the quarterly install
ment OF income and profits taxes due
March IS, 1921 Advance payments of
March taxes have been up to expecta-
tions, and, though it is impossible to
forecast the results with certainty, the
Treasury has good reason to hope that
income and profits tax payments during
March will about balance the I1arch Il
maturities of principal and interest.
s4OO,OOO.OO0 in Certificates
ITO provide for its further require.
ments the Treasury has decided, on tbs
basis of the best available estimates, tc
offer Treasury certificates of indebted
ness to the amount of 100000 600, OF
whereabouts, in two series, both date(
March Is, 1921, one series designated I
S.2-1921, bearing 5 z per cent interest
maturing September Is, 1921, and The
other series designated T. M.-1922