The New York herald., 1921-08-05
Warns That Far Greater
Economy Is Needed if
Reductions Are to
Be Made.
CITES EXACT FIGURES
Estimates Include Savings
Enforced as Result of
Efforts of Budget
Director.
4
u. S. RECEIPTS SHRINKING
Says Problem Is Brought
About by Slump in Business;
Mondell Says $500, 100000
Can Be Cut From Budget.
j. S. RECEIPTS SHRINAING
peciar Despatch to THE NEW YORK HERALD.

| Special Despatch to THE NEW YORK HERALD.
New York Herald Bureau,
Washington, ID. C., Aug. A.
Federal taxes will be 1856, 100000
above the present high war rates dur.
ing the present fiscal year unless Con
gress reduces estimates by that
amount, Secretary of the Treasury
Mellon to-day told the House Ways
and Means Committee. Basing his
statements on cold" figures from
Treasury files as to probable expen'
ditures, the Secretary emphasized
that far greater economy measures
than any under consideration must
be adopted at once II reduction IS
to be made in Federal taxation.
He submitted a comprehensive re.
port of the entire Government fiscal
situation and added that his esti
mates included reductions that have
been made as the result Of the econ
omy efforts of Budget Director
Dawes.
Mr.. Mellon revealed that expendi.
lures last month were greater than
those for July last year. The deficit
for the month was 100000, as
compared with s76,00o.0e0 last year.
The total for July this year was
! S322, 100000, a spending at the rate
Of more than SO, 900, 900 day.
Business slump Is Cause.
The present difficult fiscal problem
is largely brought about by the big
slump in the yield of the present rev.
enue law. due TO the business depres-
sion, Mr.. Mellon showed. Under the
present revenue and tariff laws the
maximum yield was in excess OF s6.-
! 900, 100000. During the present year
these laws will yield only $3.50, ,00o,-
900. with an additional s347 $4,000 10
be obtained from salvage and miscel-
| laneous sources.
Mr.. Mellon estimated the grand total
expenditures Of tie Government dur
| ing the current year will be s4.554,-
| 012,S17. The estimated revenues he
gave as s4,217, ,643, 900. Thus. should
the present high tax rates remain un-
touched, the Government deficit would
be 336.36s,s17 II the Fordney tariff
bill is enacted by January / about
$40 10000 more than the yield under
the present law will be obtained,
making il necessary for Congress- un-
less big cuts in expenditures can be-
made to provide about 6s,0o0,oo0
more than the present war rates on
internal taxes yield
or the total expenditures, Mr.. Mel
lon said. s4,2OO,OoOOoo would Rave to
be met by internal revenue and Gus
toms and s35o,oo0.0 900 could be OBJ
tanned from the salvage Of war mate
rials and from miscellaneous sources.
| Certain Cut Can he Made.
The Secretary estimated that his
programme OF tax revision. with the
increased revenue from the Fordney
tariff bill, would yield ss,s93, ,000, 900.
taking into consideration all the new
and increased taxes he proposed. This
still is more than s200,000.000 under
the amount the estimates show will be
necessary 10 come from internal reve-
nue. and the tariff. but the Secretary
apparently feels certain a cut Of $780,
900 900 at least can be made.
Some changes were made In TIE
Mellon programme by the recretary
to-day. He suggested doubling the
stamp tax on documents. the repeal
Of the luxury taxes on wearing appar-
rel and the levies on perfumes, cos
metics and proprietary medicines. The
Federal automobile tax would be based
on horse power instead Of flat rate
on all cars other features OF the
programme are:
Repeal Of the excess profits and
soda water taxes reduction OF surtax
creased postage two cent stamp on
bank checks; halving Of the trans
portation tax on January |, 1922. and
Anal repeal on January /. 1923.
The Mellon figures 50 astounded the
committee that Chairman Fordney sug-
gested II would be wise to reduce taxes
and borrow money 70 make up the
deficit ~ this M Mellon was unai
bly, opposed. saying that additional
borrowings would complicate and en-
harrass the Treasury ia the big rcfund-
ing ~ the war debt
Members IL the committee. however.
arc determined to force greater econo-
mics In the Government so as 20 make
tax reductions possible. Various de-
partmcnt heads are being called before
the committee and virtually ordered to
cut everything TO the bone. Republican
Leader Melideli said he stili believed the
tax bin can be cut $500. 900 600.
Part OK the unexpected increase In es-