Atlanta tri-weekly journal. [volume] (Atlanta, Ga.) 1920-19??, 1922-04-06
HIGHER: TAXES SEEN
UNLESS c. 0. P. CUTS
DOWN 1928 BUDGET
Mellon Drops BombsheII in
Congress With Announce
ment That Estimated In
come IS Shy $4,000, 900
BY DAVID LAWRENCE
Ueased Wire Service to The Journal.)
(Convripht 1927

(Copyright, 1927
WASHINGTON, April 5.-Secre,
tary Mellon has dropped another
bomo shell in the halls of congress.
He has officially disclosed that $215'-
100000 less will be available rom
tax collections during the twelve
months beginning this July than
was estimated in the budget. This
means that unless congress finds
days to cut down some of the esti-
mated expenses contained in the
Is. budget, the American people
will be asked to pay higher taxes.
Congress has been hoping that at
the fall elections some kind of show
Ing could be made that would prove
the Republicans had reduced the tax
burden. The prospects now are that
on account of the falling off in bust
ness the tax collections will be so
much less than was anticipated that
the government will face a deficit,
which in normal times would be re,
boI0SQ DIS u1DISCGQGulGus
This deficit will arise irrespective
Of whether congress enacts a bonus
law and provides compensation for
ex-serv.ce men. The only difference
deficit will be much larger. For
several weeks there has been talk
Of using approximately 100000, 900
expected to be paid by Great Brit
ain as interest on her war debt to
America as basis for the issuance
or bonus certificates.
Until Secretary Mellon announced
that there had been a shrinkage of
receipts from tax collections, the
plan has encountered little opposi-
ton, except that President Harding
has said he wouldn't sign a bonus
D. unless it were definitely estab-
lshed where the funds could be rails
60 and treasury officials insist that
there IS no certainty about the Brit
lsh paying any interest money this
year.
The treasury also has insisted that
the British did not pay their inter
lSt the money should be applied
according to statute to offset the
Equivalent in taxes imposed on the
american people at present for the
interest on the allied war debt. A
Total of nearly $500,00O,00 is re-
~-sufred annually to meet the coupons
On government bonds issued during
he war. The experts have been fig
1ring that the British payments
would cut down that amount con-
;iderably, and enable the government
20 give the American people the
benefit of the reduction on their
next years tax bill.
But all this has suddenly been
swept aside by the disappointing fig
ares issued by Secretary Mellon. No
body, of course, could estimate eX-
Actly what revenues would be OBJ.
aimed from tax collections, andsthere
IS really no responsibility on the adj
ministration for the tentative fig
ures it used in the budget to cover
estimated receipts.
NoW,s however, when a more COM
prehensive knowledge of the exact
receipts available from internal rev.
enue is at hand, congress cannot
spend as much as was estimated
would be possible.
The budget itself for 1928 showed
h possible excess of expenditures
over receipts of approximately $751;.
100000, and congress has gone ahead
II one house at least and appropri.
ated sums not called for in the orig.
r.al budget.
1t is true the senate has not
tackled these bills yet, and it is fair
10 assume that the $215, 100000
shrinkage in tax receipts will carry
considerable weight when congress
ls whole reaches a final decision
pm pending measures.
The effect on the autumn cam.
paign is admitted on all sides. If
the Republican party adjourns con.
gress with the prospect of being
compelled to revise the tax laws up
ward to meet a deficit, the Demo.
Gratis will make political capital out
Of it. Furthermore, if the British
government doesn't pay it's interest
and bonus bill has been enacted
into law, the necessity for higher
taxes will not be denied
Altogether Secretary Mellon has
Just written an important chapter
in the governments fiscal history
for the year, and if the truth be
known the leaders of congress who
were so sure the deficit would be
trifling, now are somewhat con
cerned.
Practically all the sources of taxa
ton have been tapped, and the alter
native is higher rates from existing
sources. When all the facts are
digested in congress, and when Sec
rotary Melons disclosures are fully
studied, there will be a wave of econ
omy sentiment, not merely with re
spect to the army and navy, bu
other government projects.
Nobody with political experience
here seriously believes the Repub
lican congress will venture to gC
to the country with an unbalanced
budget and big deficit.