Douglas daily dispatch., 1927-12-04
MELLON SAYS
Of
IAXGI)TNR0NG
Secretary Of Treasury Chal-
lenges Statements of
Critics.
CITE S FIGURES
Analyses Structures of u. S.
Chamber of Commerce );
Shows Fallacy. 90


WASHTNGT On. Dec. 8 (l9 - The
Chamber oi Commerce Of the United
States was charged today by Secretary
Mellon with having presented a sur
prising misccnception OF facts and an
argument hardly worthy of a business
mems report in urging a $400 100000
reduction in taxes.
Mr. Mellon wrote to Lewis z. Pier
son, president of the chamber, in a
continuation of the controversy that
has arisen between the administration
and the chamber over the size of the
tax reduction to be made by the con-
gress, which begins sessions on Mon
day. The treasury favors a $225 ,000,-
600 reduction, while a slash of $780,
100000 is proposed in Tie revenue bill
drafted by the house ways and means
committee.
In assaiiing the chamber of com
merce program, Secretary Mellon fol-
lowed the lead OF President Coolidge,
whose view that the chamber was ad-
vocating an unWarranted reduction
was disclosed recently at the White
House After this, the chamber reiter-
ated it's demand for $400.000,000 tax
cut and defended its course in advocat
ing it,
Secretary Mellon today expressed
surprise that the chamber had made a
tax demand in '}the entire absence of
detailed figures as to future revenues
and expenditures" and charged that its
estimated yield from the corporation
income tax represented ''inexcuSable
careleSsneSS"
BY it's own argument, the secretary
said, the chamber disproved the wis
dom OF repeating the excise tax on
automobiles or on admission and club
dues, as it would make a too narrow
tax base and force the government to
rely solely on the income tax in cor
porations and individuals, the tobacco
tax and customs duties.
I In conclusion, the secretary said
"let me take serious exception to the
statement in the chambers report that
there would be no great cause for
alarm even though a deficit should,
through unexpected developments, arise
in any year. >
"For the United States government
to borrow to pay for current expendi-
lures would be in my Judgment in
excusable,' Mr.. Mellon added "A bal
anced budget is an essential element
of any sound fiscal system, and as
long as am secretary, the treasury
department will resist the undermining
OF this principle and will continue TO
advocate a tax system adequate to
produce every year the revenues nee
sssary to meet current expenditures.
Mr. Mellon advised the chamber OF
commerce that he was in accord with
some OF its revenue suggestions, as
serting:
Il believe that the corporation tax
rate should be reduced, though cir
cumstanceS do not permit as sweeping
4 reduction as you advocate; and I
favor the repeal Of the federal estate
tax"
Turning to the administration own
tax program, the treasury head said:
Detailed figures have been sub
mitted to the ways and means COM
mittee If the chamber Of commerce
will point out to me in what respects
these figures are inaccurate, either In
the case of estimated receipts or o1
estimated expenditures l shall well
come their criticism. They were pre-
pared after studies made independently
by three experts having access to all
of the facts The estimates for 1928
! as finally submitted to the committee
1 exceeded the average of the estimates
! Of these individual experts by over
| $45 100000 1 mention this in order tc
disprove the charge that has been
made that the treasury deliberately
i erred on the side of conservatism
! Mr.. Mellon repeatedly challenged the
accuracy of statements made by th5
chamber in advocating its tax pro-
gram, and emphasized the care with
| which he said the treasury's plan was
determined and outlined to the house
committee
! I'm my statement before the ways
and means committee" he said, 81
pointed out that the revenue from
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