Evening star. [volume] (Washington, D.C.) 1854-1972, 1927-06-30
1927 i. s. SURPLUS
IS S35,0[)D,00O
Exceeds Estimates $4,000
600, but Is Not Tax Cut
Guide, Says Mellon.

The Federal Government ends its
fiscal year of 1927 today with a sur
plus of approximately $685., 100000,
exceeding Secretary Melons estimate
by 100000
The Treasury Department, at the
same time, indicated that the record
breaking surplus could not be taken
as a forecast for tax reduction at the
next Congress.
Although the surplus far exceeds
estimates made by the Bureau Of the
Budget, and announced by the Presi'
dent. it was disclosed that the Treas
ury is preparing to show that great
part of the surplus was due to non
recurring items, and therefore holds
out false promises as to the amount
of tax reduction the American tax
payer may expect.
May Start Dispute.
With the Democrats already out in
the open with deliberate criticism of
the administration estimates, and a
determination to launch a drive for a
tax reduction. which would eliminate
huge SURPRISES in the future, the
year-end figures promised to turn into
material for one of the big impending
disputes before the new Congress.
The exact figures for the end of the
year will be announced tomorrow
morning by Undersecretary of the
Treasury Ogden l.. Mills, who in the
absence of Secretary Mellon, now en-
route for vacation in the Mediter-
ranean, is Acting Secretary.
wi
mate size of the year.end surplus, of
record breaking proportions was shown
in the Treasury's daily statement, is
sued today, for the date of June 2S.
Up to that day Federal operations, &C.
cording to the statement, showed sur
plus of $636,217, 957.42 of receipts over
expenditures. With the surplus con-
stantly mounting during the past few
weeks, there was every indication that
it would soar toward $640,000,000, I'M
less some unexpected item came in.
Predicted as S3SO,3O7, 1894.
The surplus for the end of lhis year
had been predicted by the President
and Bureau of the Budget, when the
years budget was presented, as $780,
307. S94.56.
The estimate was revised by the
L
message to Congress to S383,079 ,095,
and on the occasion of the last reg
ular business meeting of the govern
ment held June 10, in Memorial Con-
tinental Hail. the President announced
that the estimate for the surplus was
then $500, 000,0 900.
Many unexpected items came into
the expenditure side Of the calcula-
tons, it was explained today by Act
ing Secretary Mills, and some entered
into the revenue side but for the most
part the Treasury's estimate on ac-
tual collections of taxes from customs
and internal revenue for this fiscal
year 1927 had been more nearly cor
rect than ever
Elements Not Expected.
Among the unexpected elements,
which had entered into the situation,
it was explained. were increase in the
collection of back taxes, an additional
sec, 000,0 900 revenue resulting from rail-
road securities from the period of Gov
eminent operation and control of rail-
roads, and failure of the second de-
ficiency BILL which would have added
$50 900 coo more expenditures.
The surplus for this year is being
applied to reduction of the public debt.
The administration decided during the
past session of Congress that the new
1925 revenue law needed further time
to prove its efficacy as a producer
of national, income, and therefore
there should be no tax reduction at
that time. A tax cut bill died in the
House ways and means committee,
over the protest of Democrats.
Through application Of the surplus
and of other funds to the public debt,
it rs expected final figures will show
it has been reduced during the year
by far in excess of a billion dollars.
This reduces materially the carrying
charges. The Government retired last
fiscal year 1878 100000 of the public
debt.
Receipts from the two greatest
revenue-producing sources, customs
and internal revenue, both showed big
gains in 1927. as compared to 1926,
according to the daily statement for
June %.
Up to that date, the customs eollec-
tons were 1901, 6S4,232 for 1927, as
compared to $576, 055, Ill for the full
prior year. Income taxes produced
S2,221, $685. 1898 in 1927 up to June %,
as compared to $1,973,962,417 in 1926.
The surplus at the end of the fiscal
year 1926 was 1917, 1852, 1888, as COM
pared to the one this year, which will
run over $3.50, 000,0 900.
The largest prior surplus was $685.
000,000 in 1924.