Evening journal., 1921-12-09

In ono OF his messages tho Presi-
dent already had advised Congress
and the country OF the magnitude Of
tho fiscal transactions which loon
big and overshadowing In the report
OF the Secretary Of the Treasury sub
mitted yesterday The Director Of
the Budget had covered in detail the
Government receipts and expendi-
lures, actual and expected. Some Of
the edge has thus been taken of.
Secretary MELONS presentation Of
the Governments huge hnancia
business. but the fact remains that
his report is a fine exhibit Of the
trained. scientific. business manage
ment OF the Government finances
under one OF the country's clearest
thinkers and soundest bankers.
One OF the interesting and import
ant operations Of the Treasury
UNDER the direction OF a thoroughly
competent financier Is the way IL
has prepared for the handling OF
heavy Government obligations soon
to fall due. Within the next year
and a half six and three-quarters
billions OF dollars OF such debt will
mature. II IL were possible to do so
It ought to be discharged Refund
ing short term debt costs more in
the long run. OF course, than payinng
up. But in the present situation
clearing OF debt to stop interest
charges on 1t is a theory; the utter
inability to clear on the debt Is
condition.
The short term notes and bonds
must be refunded in the near future
because nothing else can be done.
with this in view Secretary Mellon
has been rearranging the maturities
OF Treasury certificates and short
term notes-this in itself a process
OF refunding-so that they will not
be coming in for payment at the
same time the 1913 series OF war
savings securities fall due little
more than year from now and the
Victory loans early In 1923.
with the work Secretary Mellon
already has done In redistribuung
the Treasury notes not only will the
field be clearer for the necessary re-
funding OF the bulk OF the savings
securities and the Victories, but
there will be better chance to cut
the interest rates to the further
Tightening OF the current tax bur
den. And every dollar that can be
taken off the interest load helps
Just that much TO reduce ultimately
the principal OF the towering debt.
Another important feature OF the
Treasury report is the attention 1t
gives to a thorough, lucid and con-
vincing exposition OF the bad effects
upon revenues OF the unsound taxa
ton methods which Congress has
continued to keep in force. II the
revenues In the last two years had
maintained anything like levels that
we're expected OF them, the Treasury
would not now be compelled to
make technical manoeuvres for re-
funding maturing debts; II would be
counting the cash already in hand To
meet them as they come due, OF buy
ing them heavily in the open market
to cancel them before maturity.
But. as Secretary Mellon shows
the bottom has been gradually fall
ing out OF the revenue Producer
that. are most favored by Cogress
The very highly taxed incomes
above $500, 900 a year. FOR example
dropped in number from 1926 II
1915 70 1.O15 in 1917 and $40 II
1919. The taxable incomes In tina
class went down from s9ss,0O0. 0Oi
, / In 1915 10 s731.O0O, 900 in 1917 an'
to s44O, 600, 600 In 1919. The income
above 100000 from dividends. In
terest and investments fell from
s7O7, 900. 900 in 1916 to $4,000,
600 in 1917; s344.oOO,OOO in 1911
and s315.00O,OO0 in 1919.
Still more striking are the igure