Evening star. [volume] (Washington, D.C.) 1854-1972, 1926-06-22
COOLIDGE CAUTIONS
NATION ON TAX CUT
Must Wait to See Effect of
1926 Slash, He Tells U. S.
Budget Organization.

Announcing a Federal surplus of
$500 900 900 for the end of the current
fiscal year. and stating that such re-
suits tended TO prove soundness of
the administration theory that re-
duCtlon of tax rates economically ap-
piled will stimulate business and
thereby increase taxable revenue"
President Coolidge last night sounded
A note of warning to the country not
to raise too high hopes for further tax
relief until there was sufficient oppro-
tunity for the 1926 revenue law to be-
come fully effective.
According to present prospects. he
told the heads of the business organ
ization of the Government assembled
in Memorial Continental Hall, there
will probably be a surplus of about
S5,000,000 for the next fiscal year,
ending June 80. 1927, and a surplus
of only $50 900. 900. which is negligible
and might easily be converted into a
deficit, for the year ending June 80.
1928.
Further. Economy Urged.
A further call for constructive
economy was made by the Chief
Executive. He was seconded by Di-
erctor Herbert NJ. Lord of the Bureau
of the Budget. who announced the
Presidents plan for "a per cent per-
sonnet club" intended to reduce
Federal personnel by that percentage.
This would be effected by not filling
vacancies
Ut would be unfortunate to raise
hopes of further tax relief" said the
PRESIDENT. until we are sure that
the state of our finances justifies il
There IS S110h
ness was quick to anticipate the last
tax reduction. 1t was justified in so
doing. To raise such hopes at this
time might be to encourage business
TO anticipate again. as it did in 1925.
iurther eax reduction. This might
nave a detrimental effect upon the
stabiliza ton of the country under the
present tax law"
Reviewing the reduction in tho nub.
Tic debt and consequent relief for the
American citizen. President Coolidge
SAID this debt had been cut from
about $4,000, 100000 in 1921 to about
$4,000 .o00,0 at the end of this wear.
mere had been a reduction in year
~ expenditures from 1921 to 1926, he
pointed out. of nearly two billions of
dollars. with a resultant reduction In
taxation from s54.14 per capita to
&27.28, not counting the 1925 tax c,,t
Sets Minimum Estimate.
The President called upon his bust.
ness chiefs to continue their policy
Or economy. as further expansion of
the business of Government which
would add to our costs should await
better estimate of our future in
come"
Survey of the requirements for fis-
raj year 1927, the Chief Executive re-
vealed. pointed to the possibility of
'eaching a minimum of $500 900 900. |
while for the year 1928 the President
asked expenditures be kept within
The $4,000, 100000 mark
Attention was called by the Presi
dent to the decrease of Federal ex. !
and taxation as contrasted
With the increasing amount of State
ard municipal taxation. There is
,ause for grave concern in this situa.
1on,' said the President. 1T is fraught
With grave consequences to the pub
lie welfare"
Coming to the question of Federal
personnel, President Coolidge pointed
out that the salary and wage ex.
pendlture Is the most costly single
item of the budget. While the Post
DcpdI liiieHl mas necessarily
had to increase its personnel with it's
growth of business. we have been de-
,reasing personnel elsewhere" Fur
her decrease. he showed, could still
be accomplished without "the sum-
mary separation of any one from the
Federal service" through operation
Of the simple device Of not filling al.
the vacancies that occur
Shows Cut i'm Personnel.
Gen. Lord in amplifying this ques-
ion pointed to the gradual reduction
n size of the Federal payroll since
day. when there were 656.672
employees in the civil service exclusive
Continued on Page 4, Column 6.)