Evening star., 1926-10-06
TAXCUT DECLARED
UNW|SE THIS YEAR
Winston Tells Bankers Pres
ent Rates Should Be Given
Full Trial.
By the Associated Press

BY the Associated Press.
LOS ANGELES, October 6.-Further
Federal tax reduction hinges on the
insurance Of an annual surplus OF
$10O 900 900. which can be determined
only after a full years trial. or the
present rates, the American Bankers
Association convention here was in
formed today by GaI7ard B. Winston,
Undersecretary Of the Treasury.
A good surplus Is in sight Tor THIS
fiscal year, he says. but warned that
'it is quite too early to be assured
that revenues will keep up.
THE people do not want a reduc-
ton one year." he declares. "and new
taxes the next. The administration
has gone far in the past few years
and it should be sure the next step
is not over the line. Reductions IN
expenditures are not likely. we
should consider an annual surplus OF
S1OO 900 900 as no more than a prop
erly balanced budget"
Hits political Finance"
Mr.. Winston demanded that the
debt be wiped out at the present uni
form rate and denied that the DEBT
had been reduced at the expense Oh
ADEQUATE tax reduction. He criticized
..pojitical finance" which, he said
has recently resulted in a proposal
that the surpluses of two years pe
added 10 allow for a total tax cut or
that amount.
1T has been the policy Of the Treas
ury." he explained, ito recommend a
balance between debt reduction and
tax reduction. If the 1920 return
from internal revenue had been main
tained for the succeeding six years
to date, the American taxpayer Wou!d
have given his Government nearly
S14. 900 900 900 In additional taxes.
Compare this with $6.O00,000, 900 OF
decrease in debt in that per1od.
He said that much Of the pubic
debt retirement had been with runos
which would rot hereafter be avail
able, including returns from war sur
plus and capital investments maze
during the war.
Living on Stored Goods.
I'VE have been living on the bar.
rel of -four. sides of bacon and canned
goods which we bough in previous
years and stored away he SAID:
''When these are exhausted. we Will
be restricted to current taxes ana
have less surplus"
Of the debt reduction Of $6.0oO'-
OOO. 900 since the war. the Secretary
explained that IS per cent came from
the general fund balance on hand at
the end of the war and 312, per cent
from miscellaneous sources. neither
of which will influence future debt
reduction.
"Of the remainder" he continued.
"35 per cent came from surplus. and
half of this represented return OF
capital investments. Thirty per cent
came from the sinking fund and 1912
per cent from our foreign debtors.
Compares Two Programs.
Adverting to suggestions in Con
gress that retirement of the debt be
extended over O. years, he said this
program would cost American tax
payers $71 900, 100000 compared with
Sal 900, 900, 900 required by the 20
year program. as a result of added In
terest charges.
The Secretary warned against con-
gressional proposals for amending the
sinking fund requirements. declaring
the Government will need all this
fund to meet $2,50O. 900 900 in Third
Liberty Loan bonds. which mature
within two years.
The association today accepted a
mandate to prosecute vigorously the
enactment of the McFadden branch
banking bill now before Congress,
minus, however the two Hull amend
mentS.
Action Is Reversed.
In a special session of the fifty
second convention of the bankers as
sociation, which started last night,
but ended early today. the McFadden
bill was Endorsed after much argu-
ment. The vote was Alb to 26s This
reverses the action of the association
taken in Chicago in 1924 when the
Hull amendments were indorsed.
In substance, the Hull amendments
are designed to confine branch ba nix
ing to the % States in which it is
now permitted by State laws.
The bill and its amendment. which
has been a permanent convention
topic, was first debated Monday when
the State bank division, in a stormy
session, first voted down a resolution
indorsing the measure with amend.
ments. but adopted II when it was