The New York herald., 1922-12-07
Advocates Revision of I'M
migration Law to Meet
Labor Shortage.
OPTIMISTIC ON BUSINESS
Secretary's Report Condemns
Tax Free Securities-GrOss
Debt Heavily Cut.
Special Dispatch to THE NEW yonK IInSALD.

Special Dispatch 10 THE NEW YoRK HERALD.
New York Herald Bureau.
Washington. ID. C., Dec. O.
Secretary Mellon in his annual re-
port to-day urged Congress to pro-
vide a stimulus TO Government rev.
enues by a reduction in surtaxes on
wealth, SO that hidden capital can
be forced into productive channels.
thus creating new natural revenue
sources
Secretary Mellon opposed imposition
of new taxes. despite the fact that the
Treasury Department faces a deficit
variousy estimated at from S200.ooo.-
900 10 oO.0O0,OOo. which may be re-
duced sharply by collection of back
taxes.
The most optimistic forecast of the
business outlook yet given by any ad-
ministration source was embodied In
Secretary Melons report. With money
plentiful, crops abundant and labor
FULLY employed, the Secretary saw 10
need for pessimism in any quarter.
Features Of the Report.
The outstanding features OF the
Secretary's report were:
I Congress Is urged to lower the
surfaces on big incomes from 80
per cent, to 25 per cent. which with
the. normal tax and surtax VIII not
exceed in any event 33 per cent. In the
aggregate as a tax on wealth.
? Amendment OF the present
rer cent Immigration law to al
low entrance to the United states OF
e larger number of the industrious
classes OF Europe. who would be use
full on the farms or in industry he
recommended no specific percentage
TO which the immigration should be
limited, but declared that II Is essen
tial TO the railroads. the mines and
other vital industries that the present
labor shortage be relieved by that
method aud thus provide better work
Ing strength for the country's Indus
trial structure. now badly crippled bY
labor shortage.
z. The tax exempt security was
condemned in unmeasured
terms Through this means. Secre-
tary Mellon said. 1000, 100000 in
tax exempt securities. now are heid
by investors. and such holdings are
increasing at the rate of sl,0oO,OoO,-
600 year He recommended that
constitutional amendment be adopted
forbiddkng such issues on the ground
that 1t will aid productive enterprise
and that IL will widen the field for
Federal Government securities.
a The Treasury's program for re-
funding the public debt has
progressed So far that the Government
has been able to reduce the gross debt
of the nation $1,000. 10000 In one
year, and the Treasury's balance
sheets show surplus of S300.0OO.OoO
above expenditures for the fiscal year
in 1922.
Comments on business.
Secretary Mellon commenting on busi-
ness said:
THE twelve months which have
passed since the last annual report have
been marked by further liquidation and
recovery from depression. and, more
recently. by n substantially revival OF
business. Prices Of commodities have
risen materially and inventories gem
orally are low, the volume OF business
has been mounting TO higher levels, and
labor throughout the country Is again
fully employed.
"The year Is closing with bountiful
crops. and the severe depression IN agri-
culture has been relieved. Many Of the
sections which n year or so ago were
in n precarious condition are to-day
working out OF their difficulties and
gradually paying their debts.
"a few weak spots remain. but bank
Ing conditions generally are sound.
money rates are reasonable, and there
is sufficient credit available to meet
all legitimate demands.
THE waste OF war Is being repaired.
and even abroad there are signs OF
progress In reconstruction. In Treasury
the year has seen reduction In the
gross debt amounting 20 about 81 COO coo. :
600. n balanced budget for the fiscal
year 1922. showing n surplus OF over
$40. OoO, 600 above expenditures. and sub
stantial progress In the refunding OF the
snort datcd debt. which has now been
reduced to manageable proportions.
These developments are all helpful. and
afford the basis for revival Of business
and Industry on sound lines.
There are, however factors opcr-
ating which contain elements of uncer-
tainty and make Il difficult to determine
the nature and extent cf the revival
which Is In progress. Owing to the re-
str;ctlon of immigration and the gem
arsi resumption OF Industrial activity
the country is already suffering from n
sea rcity OF labor. which is embarrassing
some lines OF business and leading TO
higher wage scales. where lower were
expected year or two ago.
'The railroads are suffering from un-
dermaintcnance and inadequate equip
ment. and are finding II difficult %
move commodities to meet the demands
of business. with resulting congestion
ir. manufacture and trade and disloca-
tion OF prices. Az a consequence farm