New Britain herald., 1922-09-25
MUST ECONOM|zE OR PAY HIGH TAX
Govt. Now Faces S672,OOO,0OO Deficit, Report Advises


 bert, Jr., Under Secretary of the Treasury in an article written for the current issue of The Nations Busi- ness published by the Chamber of Commerce of the United States, eX- presses the view that the nations budget for the fiscal year ending June 30, 1928, must be balanced and predicts that a policy of retrenchment will be adopted by the administration. ,tr, Gilbert contends that this Is nec- essary for the best interests Of this country and to put the United States in a position to be more helpful in the rebuilding of Europe.
 In announcing the article by Mir. Gilbert, the Chamber of Commerce puts the deficit faced by this govern ment for the current fiscal year at s672, ,000.C coo The argument made by Mir Gilbert, however, is not pessi- mstic, and while he expresses the opinion that new taxes must be lev fed if new economies are not prac- ticed. he indicates that budget bal ancing will be accomplished without additional taxation. Mir, Gilbert con tends that it would be national CalaHllN to Impose ueW taxes. I1e continues;
 And yet, if there is persistence in any program of expenditure beyond the limits or the governments in come there would be no other course open than the introduction of new taxes to restore the balance.
 ITO reduce the deficit and if pos sible to eliminate 1t by the end of the year IS the end toward which the whole administration is striving and the best hope of accomplishing it will be through increased revenues from realization on securities and surplus property, and more particularly in furthering reductions in expenditure
 Nothing can be clearer than that this government owes it to itself and to the rest of the world to keep it's finances clean and to make every ef- fort to balance it's budget in 1923 and in 1924 as successfully as in the three previous fiscal years. The sound way to accomplish this is to reduce expenditures and to avoid new avenues of expenditure to such an extent as may be necessary to wipe out the indicated dificits
 Says ENpnditures Must Be Down.
 During the fiscal year 1922 the government made record of reduc- tion in the tax burden, and there Is a still larger reduction for the fiscal year 1923, amounting to about sSOO,- 100000 as compared with what would have been levied under the old law, but it will not be possible to hold to these reductions, and certainly not to make the further reductions that are so necessary to the restoration of nor nal conditions in business and indus try unless all hands unite to keep gov ernment expenditures down to the minimum and to avoid all manner of useless and extravagant expenditure
 This country came through the war with gross public debt at the high point, on Aug. 31, 1919, of s26,- 5a6, ,000,0 900 an increase of over s25,- o00, 0,o00,o00 during the war period. On August 31, 1922, the total gross debt stood at s23,o42, .O0o, a re- duction since the peak of about s3,- 554,000,000. The greater part of this reduction has been accomplished through CD the reduction in the bal ance in the general fund of the treas ury. CD the operation of the sink ing fund and other debt retirements chargeable to ordinary receipts. and (3) the application to debt retirement of receipts from salvage and other liquidation Of war assets and to much smaller extent, through the use of ordinary revenues.
 From now on the liquidation of the debt will have to be accomplished largely from surplus revenue receipts through the operation of the sinking fund and other similar accounts. The treasury balance has already been re- duced to about as low a figure as is consistent with the proper conduct of the governments business, and there IS little hope of being able to accom- plish further debt reduction by cut ting down the working balances in depositaries.
 The sinking fund and other sim liar accounts must be relied on, how ever, to accomplish most of the debt retirement in the years to come, and the treasury has already established the proposition in the first budget submitted to congress bk the president in the fall of 1921, thaA expenditures on these accounts must be made out of ordinary receipts and be included in the ordinary budget on that basis. This means that provision has to be made for these items of expenditure before the budget can balance, and a balanced budget each year thus means a reasonable amount of debt out of current revenues.
 Sound Financing Is Fundamental.
 Thoughtful people, I believe, are coming more and more to realize that a sound policy, orderly refnancing and gradual liquidation of the public debt, is fundamental, not only to the economic development of the country but also to it's preparedness for future emergencies. and probably never be-