The Birmingham age-herald., 1921-08-05
CUT EXPENSES OR INCREASE TAXES,
 MELLON WARNING
Treasury Head TeIlsCongresS Additional Cuts of Quarter Billion for This Fiscal
 Year Necessary
Rr Assnriaied Press

Washington. August 4.-Consress was warned today by Secretary Mel lon that it must reduce government expenditures or increase the nations tax burden.
 Appearing before the House ways and means committee, the treasury head said that additional cuts of more than s250. 100000 would have to be made by the estimated expenditures of $4.45O DOC, 000 for this fiscal year If additional taxes were to be avoided
 Under estimates of federal outlay for all purposes this year as presented by Mir. Mellon ss,s3O,OOO.O0o would have to be raised by taxation, where as he estimated that the present reve- nue law would provide $260000,0OO less than that sum, due largely to the shrinkage in the yield from excess profits and income taxes.
 Without the assurance of substan- tial additional reductions in e&pendl- tures," said MT. Mellon, would be folly to proceed to reduce revenue merely in the hope of reduced eA- penditure. Even without change in the law, revenue will shrink from natural causes and will shrink, according to the present outlook, at faster rate than current expenditures.
 Expenditures Increasing
 Then the secretary proceeded 10 show that expenditures thus far Tn thissfiscal year had actually increased as compared with these year ago. He told the committee that ordinary expenditures for July, the first montn of the fiscal year, were $322, ,0OO,ooo as against $307. 100000 in July, lszV' leaving current deficit of $llS, GOO, GOO as compared with detlcit of s76,0o0,000 in July year ago. VT the total expenditures last month $115, 100000 was for the account v. the military and naval estimates ana s32. ooO, 900 for the shipping board
 If expenditures are to continue at anything like these rates, the est- mate will be greatly exceeded, ae- clared MT. Mellol.>
 Representative Mondell of Wyom- ing, the republican leader, declareo in formal statement that It was entirely practical in his opinion to reduce the total tax levy by al least $500 o00, 900, and still meet all proper necessary and essential expenses oi the government"
 The excess profits tax and the higher income surtaxes should be re- pealed and nothing substituted Tor them" said he "The so called null stance fax and the transportation tax, in whole or in part, should be re- pealed and some simple, easy un- derstood tax, as for instance the proposed five per cent flat increase or corporation taxes, enacted to pro- vide funds lost by the repeal of these last mentioned taxes,
 should Lift, Not Shift
 "Possibly some other form of addl- tonal tax may be necessary put l doubt it. In any event. we should not. in my opinion, adopt the stamp, that character that have been sug- gested and I doubt either the neces- sitv or the advisability of the auto mobile tax.
 "'People are expecting real re- duetion--a lifting and not wholly shifting of the burden"
 In estimating the outlay this year at $4,55e, 900, 900, Secretary Mellon said account had been taken or the latest information from the spending departments as to their actual cash expenditures for the year. of cuts ir expenditures already reported to the treasury and of annual appropria tons for this year already by Con- gress.
 Ordinary expenditures were placed at s4O02 657,952 with an additional 51,354,S65 public debt expenditure fixed by law The ordinary outgo in- cluded s545, 200, 900 for payments to the railroads on account of the transportation act and federal control but it was explained that no allow ance had been made for possible cash expenditures resulting from withdrawals by the war finance cor