The New York herald., 1922-12-07

and too high at the distributing centers.
Gold Accumulation's Eject.
Meantime the country has been ac-
cumulating gold, imported within the
last two years or thereabout. aggre-
eating about $1.00c. 100000 more than
was held during the expansion of 1919
1920, and this gold, itself directly infla-
tionary has a tendency to expand credit
and to create an unnatural ease OF
money for purposes of expansion and
speculation.
"At the same time the uncertain state
of Europe and the disorder of foreign
currencies and the foreign exchanges
have impaired the corrective eorces
which used to operate in normal times,
and have created such unSettlement in
foreign trade and so reduced the buying
power of foreign countries as to de
stroy or endanger the foreign markets
for many of our products.
"This has tended to keep the prices OF
agricultural products below the general
level. while rising costs of manufacture
on the other hand. are tending still fur
ther to restrict foreign buying in our
markets and threaten our ability to
compete with manufacturers abroad.
Preparations and indemnities and other
intergovernmental debts are still un-
settled and are contributing their share
tosthe arrangement of markets and the
disorganization of international trade
Reduction of Surtaxes.
Mr.. Melons recommendation for re-
duction of surtaxes is as follows
"The higher rates of income surtaxes.
as have previously stated In the letter
Ct April so, 1921. to the chairman of the
Committee on Ways and Means, put
constant pressure on taxpayers 10 reduce
their taxable income, interfere with the
transaction Of business and the free flow
of capital into productive enterprise and
are rapidly becoming unproductive. De-
velopments since that time have more
than confirmed these statements.
Under the revenue act of 1927 the
surtaxes rise to maximum of so per
cent, which applies to all net incomes
over 100000, with rates on intermediate
incomes graduated on this basis. Ac-
cording to the best estimates available
the total yield of all surtaxes in respect
10 the business of the taxable year 1922
will not exceed $3.50, 100000 and the re-
-urns for several years have been stead
lily declining from about $500, 100000 for
1919 to about $500 900 for 1920. and
about s450,00o.000 for 1921 (estima led).
THE statistics of income for recent
years llkeWlSe snow that thrrG has been
remarkable decline in the larger tax
able incomes at the very time that net
incomes generally have been increasing.
Figures show that while net incomes
of all classes during tn period from 1916
TO 1922 increased from S6.29S,577,62J in
1916 to s2S, 7S5, ,629, 1888 in 1920, and the num-
ber of returns from 437 ,036 in 1916 to
I,2os.9i4 in 1890. the number of returns
of incomes over 100000 decreased dur
ing the same period from 1895 In 1916 to
395 In 1920, and the amount of incomes
over $4,000 from $780,, ,972,9S6 in 1916 to
s2i6.354.5S5 in 1920. During this same
period investment income of all classes
increased, while incomes over 100000
investment income shrank from $780,
945,75s In 1916 to 500, ,052. .039 in 1920
Processes OF Evasion
THE pressure operates in different
ways, but among the means frequently
used to reduce the amounts OF income
subject to taxation are the following:
Il. Deduction of losses on sales of cap
ital assets with the failure to realize