The watchman and southron. [volume] (Sumter, S.C.) 1881-1930, 1922-02-08
TREASURY :
WILL FACE
LARGE DEFICIT
See. Mellon Brings
Unpleasant Facts to.
the Attention o f
Bonus Advocates

Washington. Feb. Funds 10
finance soldiers bonus must be
raised by means Of internal taxes
.as it would ,be impracticable TO
depend upon proceeds from the
refunded foreign debt for this pur-
: pose. Secretary Mellon declared to-
day before the. house ways and
means committee.
Resserating his objections to the
enactment of bonus legislation at
this tinle fhe treasury secretary
said that in laying taxes congress
would have 70 tap mostly new
sources as the leeies now in effect
were abnornaaiiy high for peace
times. He opposed a general sales
tax. reenactment Of the excess. pro-
fits tax, or an, increase in any eS-
sting taxes except possibly those
on cigarettes. tobacco and docu-
naents.
New sources Of revenue suggest
ed by the secretary included three
cent first class postage. 10 raise
s7G,e0D 600, an increase in second
class postage rates to produce
$91,1a8, ,8eo: q two cent tax on
bank checks to yield $30.000.000
and license tax of 80 cents per
horsepower on automobiles. to
produce 500, ,000.00 Mr.. Mellon
estimated that increased documen-
fary stamp, taxes would produce
s48,de0,8G0 and that an addition
al sec. .o00,00o could be gained
from sal increase OF 80 cents per
1000 on cigarettes and two cents
a pannd ON tobacco.
Figuring that the bonus would
cost s425.a0e,00a 4 year for the
arsts two years. the secretary said
congress coi1ld pick out other
sources of taxes where the burden
wonid fall with the least hardship
IN order TO make up the deficit of
SI23s800.090 as between the yield
from the specific suggestions he
had made and the cost of the bonus
In this connection he called at
tention@ that there had been sug-
sested edsonsnmption taxes on tea.
cofee, sugar and other articles. but
he did not approve such taxes.
As 20 the use Of any part Of the
proceeds from the foreign debt,
Mr. Mellon said the time that re-
turns would be had from that
source was probiematical and that
ian any event the ultimate cost to
the government and the country
would be greater than if direct
taxes were laid He explained that
f the-in1 crest We're used the gov
srnnrent would nave 10 extend its
domestic flebtsrefunding operations
that much 4onser at a cost TO the
taxpayerS,: while ii the foreign
bonds We're sold in the United
States the government would have
to guarantee the interest and the
pyincipaf and even the securities
probably could not he sold at par.
- To q suggestion that the treas
ury issue certificates Of indebted
ness 70 raise the $S50.000, 600 for
the first two years and retire them
out Of interest from the foreign
debt. Mr.. Mellon said this would
hinder the domestic debt refund
Interpretations upon which the
EeasarS soon must embark. The
a1nount to be refunded, ne assert
ed. was SO large that no additional
securities should be thrown on
the market during the operations.
He also called attention that the
government was facing n deficit
OF s3G0.89G.0oo in 1923 which
Hsast be made up.
Asked by Representative Gard
ner Of Texas as TO the imposition
Of q tax on light wines and beers
as a means Of raising the bonus
fund. AR. Mellon declared that
with the high tension" in the
country on the prohibition ques-
ton it WIS not feasible to de-
pend upon this as Il source OF reve-
nue.. Chairman Fordney suggest
ed that there was a constitutional
<ssAN.DAhtO4A S'iA oi's3 4li pei Ilill-
ting the sale of beer and wine.
Brisadier General Lord. budget
officer for the war department, told
the committee that the department
had estimated that if all the SOL
die.sr took cash the total cost of
the bonus to the treasury would be
sf.0S2.408.0o0, hut he declared
that he and other officers believed
this otai too low Members of the
comm ittee agreed that the figure
probably was small and Pepresen-
sative Longworth Republican, of
Ohio said it would be better for
the committee to follow the ST.
5e0.009,000 estimate contained in
the senate finance committee re-
port on the bonus bill.
When n girl marrics :. man with
pass just for his presents. she