Albuquerque morning journal. [volume] (Albuquerque, N.M.) 1903-1926, 1922-02-03
ImpracticabIe to Depend on
Proceeds From Refunded
Foreign Debt He Tells
House Committee,
RElTERATES OBJECTION
TO BONUS LEGISLATION
Secretary Opposes General
Sales Tax or Re- Enact
nlent of Excess Profits
Tax Cites New Sources,
lBy The Associated PrcssN

Washington, Feb. Funds to
finance a soldiers bonus r.ust be
raised by internal taxes as it would
be impracticable to depend on
proceeds from the refunded for
eign debt for this purpose, Secre-
tary Mellon declared today before
the house ways and means COM
mittee.
Reiterating his objections to the
enactment of bonus legislation at
this time. he said that in levying
taxes congress would have to tan
mostly new resources, as the lev
les now in effect were abnormally
high for peace times. He opposed
a general sales tax, re-enactment
Of the excess profits tax, or an in.
crease in any existing taxes ex-
cept possibly those on cigarettes,
tobacco and documents.
New sources of revenue he sug-
gested included three cent first
class postage to raise $7O.0O0,OOO;
an increase in second class postag.
rates to produce 100000, 900; a
TWO cent tax on bank checks to
yield $3O,000,000 and license tax
OF fifty cents per horsepower on
automobiles, to produce $t0O,OGO,-
600. Mr.. Mellon estimated in
creased documentary stamp taxes
would produce $4O,O0O.O0O and
that an additional $4,000, 600
could be had from an increase Of
! fifty cents per 1000 on cigarettes
ana two cents a pound on tobacco,
tlguring that the bonus would
cost S425, 100000 a year for the
tlrst two years, the secretary said
congress could pick out other
sources Of taxes whore the burden
would fall with the least hardship
and make up the deficit of the
$l25, 200, 600, as between the WELD
from the specific suggestions he
had made and the cost of the
bonns. He called attention that
there had been suggested con-
sumption taxes on coffee, tea. su-
gar and other articles and a tax on
gasoline, but he did not approve
such taxes.
AS TO the use of any part of the
proceeds from the foreign debt. tha
secretary said the time that re-
turns should be had from that
source was problematicaI and that
IN any event the ultimate cost
would be greater than If direct
taxes were laid. He explained
that II the interest were used the
government would have to extend
lts domestic debt refunding oDcra.
uons that much longer at n cost r.
the taxpayers, while if the forcigr
ponds were sold in the Trnited
States the government wou1d bovl
70 guarantee the interest and the
prlnciple, and even then the sacur.
ltieS probably could not be sold ot
par. '" at
To a suggestion that the treas.
ufy issue certificates of iudebt.
edness to raise the $3.50, 600 0or
lor the first two years and retire
them out Of interest from the for.
elgn debt, Mr.. Mellon said mi.
would hinder the domestic deht
relundlng operations. The amount
10 be refunded, he asserted wa,
so large that no additional securi.
ties should be thrown on the mar.
ket during the operations. He aIs(
called attention that the govern
ment was facing a deficit of $500.
VoO,OOo in 1928 which must b,
made up,
Asked as to the imposition o
tax on light wines and beers a,
means of raising the bonu.
funds. Mr.. Mellon declared that witt
the high tension" in the coun.
try on the prohibition question
1T was not feasible to depend upol
this as a source of revenue.