The Omaha morning bee. [volume] (Omaha [Neb.]) 1922-1927, 1922-06-25
Decrease in
i. S. Debts
1sPlanned
Treasury Department Out
lines Method for Continue.
ton of Campaign to
Lower Public Debt.
No Mention Of Loans
BY GRAFTON S. WILCOX.
Omaha lee LEASED Wire.

ury department for further Substan'
tial reduction OF the S22,950,000,00C
public debt,
Having already reduced the deb,
since il reached its highest point dur
ing the world war by S3.600000,000
treasury officials propose TO cut j,
down appreciably during the mex,
few years by the following methods
/. The provision in each year S
budget for the. creation OF a sinking
fund TO be established by the ordi.
nary receipts OF the government.
VIII Sell Surplus.
2. Realization from the sales OF
war surplus materials by the ship
ping board, the War and Navy de-
partments.
3. The moneys derived from the
liquidation OF the War Finance cor
poration, the federal land banks and
the obligations of the carriers ac-
quired during government control OF
the railroads.
In outlining the treasury's plan for
reducing the public debt, which has
the endorsement of Secretary Mellon,
Under Secretary OF the Treasury
Gilbert did not touch the possibili-
ties Of the United States using funds
derived through the refunding of the
Sll ,0O0,000,00O allied debt 1t is sig
nihcant that no mention whatever has
been made OF this source OF possible
revenue which, by law, must be ap-
piled to the retirement of Liberty
loan bonds outstanding
Debt Is Decreased.
The $3,600.000,000 reduction had
been accomplished by cutting down
the average balance in the general
fund from $l,4GO,0O0,OO0 to $780,
100000 and applying it to the liqui-
dation OF the debt; the application Of
about $200,00C.0CO or repayments by
foreign governments to the retire
ment OF Liberty bonds in accordance
with the requirements OF the Liberty
bond acts; the receipts of funds from
salvage and other realization to debt
retirements OF about $1,000, 100000
OF surplus tax receipts during the
fiscal years 1920, 1921 and 1922, MAIN
ly through the sinking fund and other
rcdempt,ons chargeable against or
dinary receipts.
From now on the liquidation of
the debt will have to be accomplished
chiefly from surplus revenue receipts.
and particularly through the sinking
fun' and other similar accounts"
said Under Secretary Gilbert. The
treasury balance las already been
reduced to about as low figure as
is consistent with the proper conduct
of the governments business, and
there is little expectation of being
able to accomplish further debt re-
ductiors by cutting down the work.
ing balances in depositaries. Some
further realization of war assets may
be expected, to a limited extent,
through the sale of surplus supplies
and equipment still held by the War
department the Navy department
and the shipping board, but for the
most part from realization on the
governments investments in war
emergency corporations such as the
War Finance corporation and in Sc
curities of various classes, particular
ly those of federal land banks and
the obligations of carriers acquired
under the railroad control account
and the transportation act.
Need Sinking Fund.
OF the war emergency corpora
tions, the War Finance corporation
is now the most substantial and since
it is due to expire by limitation on
May 81, 1923, the treasury should be
able to count on receiving within the
next year or two the bulk of its re-
manning investment in this corpora
ton, amounting to about $250,0OO, 600.
A good part of this sum is already
taken up in the estimated ordinary
receipts for 1923. but much of it
Ne ,-rrrt to be applied in ordinary course
to the reduction Of the public debt,
since it is now reflected in the trea-
sury's borrowings.
The sinking fund and other similar
accounts must be relied on, however,
to accomplish the most substantial
retirements of debt in the years to
come, and as to them, the treasury
has already established the PROPOSE
ton in the first budget which was
submitted to congress by the presi-
dent in the fall of 1921 that expend-
itures on this account must be made
out of ordinary receipts and be in
cluded in the ordinary budget on that
basis. This means that provision
must be made for these items OF ex-
penditure before the budget can bal
ance, and a balanced budget each
year means a reasonable amount of
debt retirement out Of current reve-
nues. To do otherwise. Of course,
would nike a farce of the sinking
:und, for on any other basis pur-
chase of obligations for retirement
on this account would accomplish no
debt retirement whatever and would
simply mean a shifting OF borrowings
from one form to another.