Evening star. [volume] (Washington, D.C.) 1854-1972, 1927-07-01
CONFIDENCE SEEN
IN u. S. FINANCES
Treasury Heeds Call for Tax
Cut Next Winter-War
Debt Reduced.
g.. DAVID LAWRENCE.

Although the administration hest
tates to make any promise about the
future, there is no question that the
fiscal year which has just Z. ded has
brought out a feeling of confidence
about the Governments finances which
is significant.
Apprehensive that the school of
thought which believes in spreading
the retirement of the public debt over
a period of 62 years might gain the
upper hand, the Urea Sury has managed
by means of Democratic as well as
regular Republican support to with
stand any such maneuver, and the
books have just been closed, with every
cent of surplus and general balances
that were available being used to re-
tie the public debt.
Revenues Are Safe.
Tax reduction, which looked for a
while as If it would disturb that pro-
gram, was successfully held in abey-
auce. and now the Government knows
that when Congress meets in Decem'
Der and passes a new revenue act next
Winter it cannot possibly affect the
revenues to be received by the Treas
+, ury between now. and next January,
which represents half a fiscal year,
and can cut down only the revenues
to be received from next January to
June.
While there is necessarily a good
BIT of uncertainty about the amounts
of money needed to take care of the
Mississippi food problem and the
added requirements Of public build
ings. as we'll as unforeseen needs,
there is hope that the Geneva Con-
ference will succeed in limiting naval
armament so that one source OF add
ed expenditure will be avoided. AS
for the exact amount of money that
the Treasury can afford to deny itself
by means of another tax reduction,
there is no one who can tell at this
date, though the probabilities are that
about $3.50. 100000 can. be safely cut
from the Nations tax bill. and posi-
bly, more. The drive will not he so
much on the change Of rates for
individual incomes. but on the modi-
fication of the indirect taxes, which
now affect more individual votes than
the personal income returns. More
than half of the tax receipts come
from indirect taxation. and the oppor-
tunities to show how the cost of pur-
chases by the consumer are affected
are, of course, numerous.
Saving i'm Interest.
Economy Is again the WaLcHWOTu
throughout the Government depart
ments, but it is growing more and
more apparent each year that with
total expenditure of about S641, 000,-
900 for civil administration out of
total of more than three and a half
billion of expenses for war debt inter-
est, sinking fund requirements, PEN
sions, veterans compensation, ETC.. the
biggest economies can only come from
cutting down the interest, charges on
the public debt. The Treasury eSti-
mates that it saved $50, 900, 900 in in
terest charges this year by applying
all the surplus available to retirement
of the principal of the war debt.
Borrowings by the Treasury have
been managed at low rates Of interest,
so there is a saving accomplished in
refunding war loans as they mature
and even before they fall due. The
refunding process has increased conf
dence in the Governments inherent
financial strength and has kept at bay
efforts to interfere with the retirement
of the public debt. But the demand
for tax revision win be needed next
time, indeed the Treasury now is get
ting ready it's recommendations for
presentation informally to the ways
and means committee. which is to con-
vene at the end of October. The new
fiscal year begins in an atmosphere of
satisfaction that though less than nine
years has passed since the end of the
war, the United States has cut off
more than eight billions of it's public
debt and has eighteen and half bill
lions outstanding.
downright. 1877