The watchman and southron. [volume] (Sumter, S.C.) 1881-1930, 1922-01-28
How MUCH MORE
TAXES CAN The
PEOPLE STAND :?
Secretary Mellon Re
iterates Opposition
to Soldier Bonus and
Explains Why the
Burden is Too Great

Washington, Jan. 24.-Treasury
opposition to soldier bonus re-
mains unchanged, but if there is 10
be bonus ii must be provided.
through taxation IN addition to
taxes imposed by existing laws.
Secretary Mellon declared tonight
in a letter TO Chairman Fordney
Of the house ways and means COM
mittee. Any attempt TO provide
for the bonus through the use OF
the principal and interest of the
foreign debt to this country he
contended, would be futile as well
as unwise.
Mr.. Melons letter. was in re-
sponse to a request from Mr. Ford
ney for an expression Of the views
of the secretary and the treasury
department on the government
financial outlook for the coming
year and a half and for sugges-
tons as to legislation. Submit
ting detailed estimates of govern
inent receipts and expenditures for
the fiscal years, 1922 and 1923 and
the. treasury plan for refunding
the short dated debt. Mr.. Mellon
declared no allowance had been
made for any extraordinary expep-
ditures for a soldiers bonus, which
would. cost on the most conserva-
.; 7, n Al
not less than $3.50. 100000 in the
first two years.
The figures he contended.
show there will be no available
surplus but moro probably a de-
felt. and that with the enormous
refunding operations which the
treasury has TO conduct it would be.
dangerous in the extreme TO at
tempt to finance the expenditures
involved in the bonus through new
borrowings. The position OF the
treasury remains unchanged, but
if there is TO be soldiers bonus,
It is clear that it must be provided
for through taxation and through
taxation in addition to the taxes
imposed by existing law
On the other hand no indirect
means of financing the bonus
would make it any less an ex-
pense to he borne in the long run
by the tux payer. Mr. Mellon
declared, taking up the proposal to
use the foreign debt rs 4 basis for
bonus payments.
1t is Impossible, he n aiptained,
in advance OF funding arrange
ments OF estimate wha: Eiay be
collected on the foreign cebs in the
near future by way of principal
or interest. The ohligati ,ns, which
are in the form of dema ID 9biiga-
tions, are not, ne asserted. In
shape TO sell to the pui.iic. while
to offer them viii, the guaranty
Of this government woulc interfere
with the treasury's refun .il; oper-
ation> and prove more expensive
than the sale of direct Obligations
Of tic government
''At the same time" he added.
at would enormously compiicate
the international situation and GER
:ainly embarrasS the funding ne
gotiationS."
It would accomplish nothing, Mr..
Mellon argued, to set aside the for
eign debt for the payment of the
. bonus. even it enough could abe
realized in time. ass
Discussing the financial outlook
Of the government Mr.. Mellon
presented detailed figures covering
! budget estimates which. he said,
indicated u deficit Of over $4,000
900 for 1922. and a deficit OF OYER
$1S7. 900 for 1928. No; ALLOW
ing for $5o,o0Q.00o requested by
the shipping board TO-. the pay
mcnt of claims, $1,000 .ooe to he
spent for Russian relief by. the
United States Grain corporation
and 5000. 900 10 be paid as the
1928 installmcnts under the treat.
with Colombia. Il total OF $i12,-
900. 600
To overcome these deficits. he ex-
planned. expenditures must be re-
due"d i! the aggregate by about
| $500. 600 900 in the next two years.
while at the same time the gov
crnment faces Il heavy si,rinkage Of
receipts. IN View OF tho dcpres
sion in business. he added, there is
grave duobt whether the estimates
Of receipts which appear in the
, budget can lie realized
The overshadowirg problem OF
the treasury. Mr. Mellon declared
WAS in the handling of the public
! debt. amounting IT ;he end OF the
past year to $23, 3,i2S, 9Si.30l Of
which $500. 100000 fails due
| within The next 1G months. The
rcfundins OF this vast maturity.
he asserted. would require the
treaSury's constant attention fron.
now on.
How much additional taxation
would hc necessary to paE j sol
| diers bonus, Mr Mellon declared.
would be difficult 10 estimate but
on the basis Of the McCumber Dill
it would appear that the total cost
| would bc about $1,000, coo. .0oe, of
which at least $3.50, 900 GOO would
fall duc in The first Two years OF
operation and possibly rs high rs
100000, Gee if an uncNp"e edly
/, large number of veterans x. ouid
choose cash. The minimum cost
hc placed at about $I.560 900 ,000
J based on ,,lSh l,aN.InrnfS aud the