The Washington herald., 1921-08-05
Republicans Shocked by
Statement of Head
of Treasury.
DEMOCRATS HAPPY;
OFFER NO REMEDY
Nation Faces 800 Million
Deficit for the Year,
House Told.
BY RALPH III. TURNER.

|
admittedly are concerned over Sec
retary MelIon's presentation Of the
governments fiscal situation, while
Democrats declare the most vulner-
able point in the opposition's policy
is now barred 70 attack. Because OF
Congressional elections coming next
year. the situation is INTENSIFIED
with unusual emphasis.
mellon Gives shock.
With frankness that almost
caused a shock. Secretary Mellon
informed the House Ways AMI
Means Committee yesterday that:
Taxes must increased s2se.0O0.eOS
annually IL the government meets
all it's expenditures during the pres
ent fiscal year.
Reduction OF taxes is impossible
q n the basis Of existing expense es-
Inmates.
Unless the tariff bill is passed b. 4
the end Of the year, an additional
S7o.oOO.ooo must be collected by in
ternal taxation.
Even with proposed reductions.
the internal revenue yield cannot
Re permitted TO fall below $3.50
COZ. 900.
Total current expenditures for the
present year are about s4.554.OIz.-
| SI7. With maximum receipts placed
at s4.2I7,C4S. 900, this leaves a deficit
Of S336.369,Sl7 on the basis of pres
ent laws
| The government still is spending
i more than flO.oOO.OOo a day. Ex-
penses for July, 1891, were s322.ooO,-
700 or $l5,oOe,oO0 more than in July.
1890.
Borrow, Says FOrdney.
Commenting on Melons statement.
tChsirmhn n FSordney, Of the Ways and
Means Committee, said taxes should
De reduced in spite CT Melons ng-
ures, and that money should be bor-
r0wed 10 make up the deficit. NJ.
Mellon, however, is opposed TO this
Representative Garner, ranking
\ Democrat on the Ways and Means
Committee. predicted trouble" for
the Republicans.
It's like this" Mr.. Garner said.
Mellon says here are our obliga-
tions and We can't evade them And
the Republican committeeman reply,
| But you must cut the expenditures.
and We mast cut the taxes, for the
! lake Of our political lives And
no one kItows' how it's going to be
zone. On the basis Of Mr.. Mellon-s
statement the only way expenses
and taxes can be reduced is by evad-
ing obligations or by impairing the
functions Of the government"
Representative Monden. Republi-
can House leader. conceded that
some alarm has arisen from the tax
situation and cOuntered with this
! statement:
There seems to be a persistent
! effort to create the suppression that
it will not be possible to appreciablv
tighten taxes and that the best that
can be expected is a shifting Of the
burden. But the American people
are expecting a lifting rather than
shifting. In my opinion they will
not be disappointed"
Cut, Urges MondeIL.
Government departments viii not
be permitted TO spend the sums they
had anticipated spending. Mondel.
said. He believed It was entirely
practical" 20 reduce the total tax
levy by at least $500, ,eOO, 900 and stilI
meet essential expenses.
The excess profits tax and the
higher income surtaxes should he re-
pealed and nothing substituted for
them" Monden explained The So
called nuisance taxes and the trans
portation tax, in whole or in pars.
should be repealed and some simple
1 10 = anF
| nat increase on corporation taxes.
should be enacted in their place"
Mondell was opposed 10 increased
postage. the bank check stamp and
the automobile tax.
Representative Longworth. Of the
Ways and Means Committee, pointed
out that the proposed payment OF
$500. 0.o0o, 600 to the railroads, and
several other items, would be dis
posed of by next year. making Il
possible to Tighten the burden. Long
worth also indicated radical cuts In
appropriations. The Shipping Board,
which has asked for $3.50, 900. 900
probably will get no more than
500. 0.0OO. 900. he said.
Garner. attacking the suggestion
that the railroad debt be funded and
certificates Of Indebtedness issued.
said the country already was satu-
rated with these certificates" and
doubted whether more could be ab-
sorbed. He also said that the
salvage of war materials. which
Mellon included as income, was
diminishing daily as a source Of
revenue.
Senators Worried.
Senate leaders Of both parties In
/ dicate that the tax situation Is sub<
hitting the Administration TO It's
most trying task. but decline to be
quoted before the bill is through
the House.
Secretary Mellon made the pointed
remark that the Treasury cannot
take into account paper savings or
hoped-for reductions in expenditures
which cannot reasonably be expected
to materaiize." The Treasury is on
q cash basis, he said, and can con-
slider only cash savings.
The current deficit for last month.
according TO Mellon. was about
100000. as against f76.00o.0oo
for July. 1920. He cited these priv
cipai expenditures for July. 1891:
War Department. $4,000 .0Oe: Navy
II