The Mankato free press. [volume] (Mankato, Blue Earth County, Minn.) 1879-1924, 1922-12-08

held for lngeStInsnt for cthc: pros
perty of LIKE kind without the rt,al-
ization Of taxable income. Mr.. Mel
lon says a taxpayer who purchase
a bond for 81 200 which appreciates
in value may exchange that bpad
for another Of the value of $1,000,
together with 800 in cash, without
the realization Of taxable income
This provision of the act is be-
I ing widely abused" he adds.
Aside from his recommendations
for tax revision, Mr.. Mvllon deals
in his report with conditions gen
orally over the country and with the
operations of, the various divisions
of the, treasury. He sounds an opu-
mistic note as to the business out
look and reports substantial pro-
gress bbth in the reduction of the
public debt and in economy in pub
lie expenditures.
The past twele months. he says,
have been marked by further liquid
alton aid recovery from depression,
and, more recently, by a substantial
revival of business. Prices of com
inodities have risen materially, the
volume of business has been mount
ing to higher levels and labor
throughout the country is again
Iully employed.
THE year is closing with bonnti
full crops" the report continues,
"and the severe depression in agri-
culture has been relieved. Banking
conditions generally are sound,
there Is sufficient credit available
to meet all legitimate demands.
Gross Debt Cut
"Il the treasury the year has been
a reduction in hle gross debt amount
ing to about $1,000, 000, 10000, a bal
anced budget for the fiscal year
1922, showing surplus of over
$500. 900, 600 above expenditures, and
subs taltiaI progress in the refund
ing of the short dated debt, which
has now been reduced to manage
able proportions. These develop
ments are all helpful, and afford the
basis for a revival OF business and
Industry on sound lines"
Into this situation. however, Mr..
Mellon iniects a note of warning.
He says the restriction of immigra-
ton AID the general resumption OF
industrial activity have resulted in
a scarcity of labor embarrassing to
some lines of business, He adds that
the railroads are suffering from IN
equipment, ald are finding it diff
Guilt to move commodities TO meet
the demands of business. AS a con-
sequence farm products are selling
too low at the farm and, to high at
the distributing centers.
Gold Holdings Increase
The secretary also declares that
the increase of $1,000,0 O0, 900 in the
gold holdings Mn this country since
1919 1920 has tendency to expand
credit and create an unnatural ease
Of money for purposes of expansion
and credit. Then, too, he calls at
tention that the uncertain state in
Europe has impaired the corrective
forces which used to operate in nor
NAL times and has so reduced the
buying power of foreign countries
az to destroy or endanger the fore
ign markets for many American pro-
ducts.
Enough forces are operating he
continues, ito make Ills cautious in
estimating the prospects for the
future and take care lest we build
on a false basis. Business in this
country can not progress indefinitely
without its foreign markets, and uh
due expansion now, with rising costs
aida artificial values, would inevit
ably SOW the seeds of reaction and
make more difficult the reestab iish-
ment of normal relationships abroad.
The treasury aims above all to
keep its house in order in the be-
lief that sound financial structure
here will in the long run afford the
best basis for extending needed as
sistance to Europe a1d for a health
full revival of domestic business on
constructive lines"