The Madison daily leader. [volume] (Madison, S.D.) 1890-current, 1921-03-10
FINANCES ARE ON
A SOUND BASIS
NEW TREASURY CHIEF ASSERTS
NATION CANNOT AFFORD TO
WASTE AT PRESENT.

Washington, D. c.. March 10
Secretary Mellon, of the treasury. in
his first official statement made pub
lie tonight i'm the form of letter to
bankers appealed to "the people gem
orally" 10 stand for rigid economy in
governmental expenditures and urged
immediate establishment of a ma
tional budget system. He discussed
the financial conditions, declaring
that the showing made in the last
eight months had been particularly
encouraging"
There are, however, heavy drains
/ TO come on the treasury this month
and next, he said, and these require
more short term certificates of in
debtedness. announcement of which
he made eo-ineident with teh letter
The nation cannot afford extra
vagance." ne asserted. and so far as
possible il must avoid entering new
fields OF expenditures. Figures on
current operations of the government
show that the country's finances are
sound. but that the situation calls for
utmost economy.
The heavy requirements of the
government on account of necessary
expenditures. including interest and
sinking funds on the public debt. and
the maturity of s7,500,O00 900 in
short dated debt in two years or
thereabouts. make it imperative that
the greatest-eare and economy be ex-
ercised in matters affecting govern
ment expenditures.
THE people generally must be-
come more interested In saving the
governments money than in spend
ing it. A thoroughgoing national
budget system must be established
and the governments expenses
brought into relation TO its income"
He expressed the belief. however,
that the first nine months of the fis-
cal year, OTTO March 81, wonld show
that the treasury had made both ends
meet, with slight surplus TO use
against the great war debt. Payments
ON the war debt must be slow, he
said, explaining that the heavy pay
ments to the railroads would ham,
per previous plans to lower the debt.
Issues of certificates announced
will aggregate $500. 900. 900 and will
bear interest at five one-half per
cent, half having maturity date of
one year and the remainder for six
months. Both issues will be accepted
in payment of income and profits
taxes
In notifying bankers, Mr. Mellon
said he felt it his duty to inform
them of the probable requirements
of the government and to say some
thing concerning its financial pro-
gram. said 100000, 600 in GER
tificates must be paid off March is,
and an additional s11S,000. 900 4
month later Besides, there is to
be paid the semi-annual interest of
about s75,000.00O on Liberty bonds
March Is. The treasury also must
make payments estimated at $780,
100000 to the railroads during
March.
To partially offset the heavy out
go. the regular quarterly payment
of income and profits taxes is due
March Is from which the treasury
hopes to realize approximately
$500. 100000. This tax payment.
therefore. will be used in retiring
certificates due on the same date.
Funds obtained from the new issues
then will become available for car
ing for other debts. of which the
railroad payments and the small
previous issues of certificates con-
stitute the greatest amount
Mr. Mellon also observed opti-
mistic signs in the financial condi-
tions, noting that the vast quantities
of government securities were wide
iy spread and that each new issue
was being taken more largely by
investors. He cited market QUOTA
tions on treasury certificates show
ing that they had been quoted at par
or at a premium as an indication of
healthy and sound finance. Those
now held by banks-treasury rec
ords showing that many financial
institutions were heavy holders
are being gradually absorbed by
real investors Mr. Mellon said,
adding that the situation generally
as regard the loans eQuired by the
government was much improved
over conditions few months ago.