The Washington herald., 1921-03-09
MELLON LINKS
ECONOMY PLEA
WITH BUDGET
New Secretary Finds
Government Finances in
Sound Position.
TREASURY PLANS
$780, 100000 ISSUE
Railroad Guarantees, Ger
tificates and Interest on
Libertys Soon Due.

In his first letter to the banks OF
the country, Secretary OF the Treas
ury Mellon yesterday declared that
while the figures as to the public
debt and the current operations OF
the Treasury show that the finances
of the government are in sound
position, the situation calls for the
utmost economy.
Mr.. Mellon asserted that the ma
tion cannot afford extravaganza and
must avoid~entering upon new fields
Of expenditures, There is impera-
tive need, he said. of the establish
ment of a national budget system
which will bring the governments
expenses into relation to its income.
New Certificate Issue.
Secretary Melons comments on
the financial situation were occa-
stoned by the announcement of the
issuance of certificates of indebted
ness totaling about s400.000,000 on
March Is. This amount will be nee
essary. Mr.. Mellon said, because Of
the fact that partial payments under
the railroad guarantee totaling
about $500. 100000 are expected to
be made during the next month. be-
sides payments to meet maturing
certificates OF indebtedness totaling
s61S,000, 900 due between March Is
and April Is. Income and profits
tax payments during March are
counted upon to about match the
maturities of indebtedness and an
interest payment of s75,000.0o0 on
the third Liberty loan.
The new certificates of indebted
ness will be in two series. one ma
turing in six months and bering "a
per cent interest and the other ma
turing in six months and bearing 5 Il
per cent interest. The maximum
rate of interest on the one-year GER
tificates has been 6 per cent.
Gives Figures on Debt.
The gross debt of the govern
ment on February IS. 1921, amount
ed TO s24.o51.6s4.72s on the basis of
Treasury daily statements, while on
the same date the floating debt loan
and tax ceBtificates unmatured
amounted to- s2,4sf.oS2. 600" said
Secretary Mellon. These figures
contrast with a gross debt on De-
cember 81. 1920. of s23.9sg224.16s
and a floating lebt on the same date
OF SZ,0OO,65b,UUU.
"As a result of the Treasury's
operations, on March 1s, 1921, these
increases in gross debt and floating
debt (Which are to be expected in
the odd months when no quarterly
income and profits tax payments are
made) should be largely offset and
perhaps overcome. The progress to
be made during the balance OF the
current year in the retirement of
gross debt and floating debt will
depend. of couse, upon the extent
of the demands made upon the
Treasury and the volume of its re-
ceipts from taxes and salvage.
This progress Is likely to be SER
iously limited by reason of the
heavy railroad payments to be ex-
pected during the next two or three
months.
These figures show that the
country's finances are sound. but
that the situation calls for the ut
most economy. The nation cannot
afford extravaganza and so far as
possible it must avoid entering up
on new fields of expenditure.
The heavy requirements of the
country on account of necessary ex-
penditures, including interest and
sinking fund on the public debt, and
the maturity of $500. 100000 of
short dated debt within the next two
years or thereabouts make It i'm
perative that the greatest care and
economy be exercised in matters af-
fecting governmental expenditure"