New Britain herald., 1924-12-04
MELLON PREDICTS ERA
 OF GREAT PROSPERITY
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half; public expenditures which In 1920 exceeded s6,5oO,OOo,O00. were only $500. .o0O. 900 In the fiscal year which ended last July 1, and the complete disorga nization" of the economic structure by the collapse of prices in 1920 and 1921 has been rectihed,
 Tho lifting of the tax burden, ai- though slight as the decrease has been, has done much for business, Mir. Mellon said, and he expressed the hope that more could be done soon. He said he desired tax reform as we'll as tax reduction and warned against using the field of taxation as a neld Tor soclalistlc experiment or as s club to punish success" If thb were done, he said. the condi- tons of few years ago may come back.
 While 1t has taken time for this situation completely to remedy it. self" the secretary continued, 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, pro- duction has increased 20 or 25 per cent, bank debts, IS or 20 per cent. and employment eight or ten per cent. Interest and discount rates as a rule, have been reduced more than half. Discount rates of the Federal Reserve Bank of New York, for ex- ample, have been reduced from seven and one-half to three and one-half per cent. Bank deposits have in- creased six or eight billion dollars from the low point of 1921. or over 20 per cent,
 At the same time reserves are unusually high, frozen loans have been almost completely liquidated and the country's banking and credit structure was never In stronger position and more able to support continued business and in- dustrial expansions. 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 8 basis of ef- fciency. The building and automo- tive industries are prosperous and in turn are big factors In maintaining the country's general prosperity. While recovery of agriculture has been slow. it has been substantial. and today due largely 10 changing conditions In world crops and world markets, faces a new era. The maladjustment between agriculture and other industries has been re- moved, and the farmer Is nearly re- stored to his proper status in the economic system"
 { But American commerce and tn- dustry must maintain on anchor to the windward in future world trade, , the secretary said for. as America has recovered, so now Europe Is be- coming stabilized. MT. Mellon gave credit to the Dawes reparation plan as providing foundation of eco- homie recovery there. While de- claring improved conditions in Eur ope meant benefits to the United States, Mr. Mellon argued that cheaper production and lower living standards abroad would force closer calculation here In world market selling.
 Those countries (concerned with the reparatlon question: have al- ready developed a new mental at- , titude' and outlook" the treasury chief said. "and something of the oldtime industrial vigor and thrift are returning. The effect of more prosperous Europe means the broad ening of our markets and opportuni- , ties and a quickening of our eco homie 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. Mir. , Mellon suggested that since the pow CT to tax was the power to destroy. 1t seemed the advisable course to lay down a program for levying taxes that would permit commerce and in- , dustry to expand rather than to suck It's life blood. He reiterated his views, those which caused the bitter political battles of the last session of congress, and called attention to rec concentrations from the same eco- homie viewpoint" by two previous secretaries of the treasury, both un- der another political adminletro- | ton"
 MT. Mellon again attacked the con- tinucd issue of tax exempt securities as a menace. saying that surely 1t will mean in the end continued haa,tN toy hurdepa for tho statas and