Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1924-12-05
HEALTHY REGIME
CONTINUED from Page One)


expenditures which in 1920 exceeded
Sc, 500, 00O. 200. were only $500, 100000
in the fiscal year which ended last
July l, and the complete disorganiz-
alton of the economic structure by
the collapse Of prices In 1870 and
1921 has been rectified.
The lifting of the tax burden. al
though slight as the decrease has
been, has done much for business.
Mr.. Mellon said, and he expressed
the hope that more could be done
soon. He said he desired tax reform
as well as tax reduction and warned
against using the field of taxation as
a field for socialistic experiment or
as a club to punish success" If this
were done, he said. the conditions OF
q few years ago may come back.
'While it has taken time for this
Situa ton completely to remedy it,
self" the Secretary continued. 1.-THE
adjustment has now been made, and
both banking and business conditions
are in a thoroughly sound position.
Prices have been comparatively
stable for two or three years. produc-
ton has increased twenty or twenty
five percent, bank debts. fifteen or
twenty per cent and employment
eight or ten per cent. Interest and
discount rates, as rule, have been
reduced more than half. Discount
rates of the Federal Reserve Bank
of New York. for example, have been
reduced from seven and one half to
three and one half percent. Bank
deposits have increased six or eight
billion dollars from the low point OF
ftYa nt1y 4
AT the same time reserves are I'M
usually high. frozen loans have been
almost completely liquidated and the
country's banking and credit struc-
ture was never in a stronger position
and more able to support continued
business and industrial expansion.
The traffic handled by the railroads
continues at almost record levels,
and many roads are returning to a
dividend paying basis after years Of
financial difficulties and struggles TO
build up road and equipment to n
basis of efficiency. The building and
automotive industries are prosperous
and in turn are big factors in MAIN
tanning the country's general pros
perity.
"yNhile recovery of agriculture has
been slow, it has been substantial,
and today, due largely to changing
conditions in world crops and world
markets, faces a new era. The mall
adjustment between agriculture and
other industries has been removed,
and the farmer is nearly restored to
his proper status in the economic
system
But American commerce and in
dustry must maintain an anchor to
the windward in future world trade,
the Secretary said, for. as America
has recovered. so now Europe is be-
coming stabilized. Mr.. Mellon gave
credit to the Dawes reparation plan
as providing a foundation of econom-
ic recovery there. While declaring
improved conditions in Europe meant
benefits to the United States, Mr..
Mellon argued that cheaper produc-
ton and lower living standards
abroad would force closer calcula-
ton here in world market selling.
Those countries Concerned with
the reparation question: have al
ready developed a new mental atti-
tude and outlook. 1.-The Treasury
chief said. land something Of the
oldtime Industrial vigor and thrift
are returning. The effect OF a more
prosperous Europe means the broad
ening Of our markets and opportun-
tiles and quickening Of our eco
nomic development. The situation in
America looks more favorable for
sound and orderly economic develop
ment than at any time since the
war"
Turning to the purely domestic
question of a taxation policy, Mr..
Mellon suggested. that since the pow
er to tax was the power to destroy,
it seemed the advisable course to lay
down program for levying taxes
that would permit commerce and
industry to expand rather than to
suck Its likelihood. He reiterated his
views. those which caused the bitter
political battles of the last session
OF Congress, apd called attention TO
recommendations from the same
economic viewpoint" by two previous
Secretaries of the Treasury. both
under another political administra-
ton,
Mr.. Mellon again attacked the con-
tinued issue of tax exempt securities
as a menace. saying that surely it
will mean in the end continued heavy
tax burdens for the states and nu-
inequalities For the federal govern
ment. he said. it means that SO long
as high surtax rates are effective,
the possessors of large fortunes will
continue TO avoid the federal levy by
investment in the tax exempt paper
He renewed his recommendation for
constitutional amendment limiting
the issue OF tax exempt obligations,
but suggested a more immediate
remedy in the form of changes in
ne
by the Treasury.
a reasonable tax rate will make
elaLo: ate. expensive methods Of
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