Evening star. [volume] (Washington, D.C.) 1854-1972, 1927-06-11

ficiency bill. The tax refunds will fan
SIS, 900 900 short of the estimate, due
to change in the revenue law. Then,
again, the fact that the French debt
settlement has not been ratified has
necessitated a revision Of the amount
chargeable under the head of debt
retirement.
Value Of Surplus Doubted.
''As guide to the future this years
surplus is of doubtful value. 1t in
cludeS number of extraordinary re-
ceipts that can not be counted on for
more than a limited period. Back in
come taxes and the capital-stock tax
will yield $2S7, 000, 900. Deducting from
this $125, 100000 of internal revenue
refunds, leaves net income of $780,
100000 from a source which will rap
idly grow smaller. Collections from
farm-loan bonds and other miscella-
neous securities will make a non.
recurring item of $63,0O0,0 900. Rail-
road receipts, which can not be looked
to for any substantial amount after
1929, will account for $50 900 900. These
items alone aggregate $315 900 900 of
our 1927 surplus.
1--WE are sure of surplus of $780,
100000 for this year, but the $685.
100000 for next year, 1928, is neces-
sarily an estimate. But here it is inn
portant to point out that no less than
$133 100000 Of our expected receipts
for next. year will be derived from the
sale of capital assets. This resource
is we'll nigh exhausted. The proceeds
thereof, because of their homecoming
character, can more appropriately be
devoted to debt rather than tax re-
duction. Moreover, in 1928 back.tax
collections will continue to exceed re-
funds, adding to that year a revenue
which we can not safely count Upon
for future years.
I'm considering the possibility Of
tax reduction we must keep in mind
that our revenue laws can not be
written from the standpoint of a sin
gle year, but must be expected to yield
adequate revenue over q period of
years. 1t is essential therefore to dis.
count temporary and homecoming
items and to base the estimated reve-
nue. on those resources which can be
looked upon as essentially permanent
in character. We have no fear our
present revenue laws will not pro-
duce ample income to carry on the
business of the Government. But this
does not justify an enlargement of our
expenditure program. Rather does it
dictate and demand that we make
renewed effort to keep within our
present expenditures. One thing is
certain. Unless we succeed in holding
expenditures at about their present
level, hope Of further tax reduction
will be gone.
Cut Interest Charges.
"In the face Of each Of the three
reductions in taxes since the fiscal
year 1921 we have continued to &C
cumulate SURPRISES at the end of each
year. We should not overlook, how.
ever, the great influence these sur
pluses have had in making tax reduc-
ton possible. Their application to the
further reduction Of the public debt
has permanently reduced our interest
charges. It has been an investment
for the people of their own money. In
the business Of government, as in pri-
vate business, the time to liquidate
indebtedness is in the time Of prosper
ity. The reduction of fixed charges
serves a twofold purpose. 1t mate
rally assists in maintaining prosper
ity and would be particularly helpful
in adversely.
There could be no more striking
illustration of the benefit accruing
from this policy than is furnished by
a comparison of the interest charges
of the years 1927 and 1928. Due to
debt reduction and the refunding oper-
ations conducted by the Treasury, in.
terest payments next year will be $685.
900, 900 less than for the current year.
| This is a most remarkable showing.
| 1t Is permanent annual saving. The
mere recital of the figures brings out
more clearly than any words the great
| burden of interest charges. From
| April 6, 1917, to June 80, 1927, the
Government will have paid the stu
pendous sum Of $S.31S,571.3SS in in
| terest alone.
Another task now facing you is
the preparation of your estimates for
the fiscal year 1929. We are striving
as always to pave the way for further
reduction of debt and Of taxes. This
in itself necessitates unremitting ef-
| fort to hold the level Of our expendi-
ture program. After a careful study
of our probable financial condition in
| 1929, it is my desire that the estimates
of appropriations for that year be held
| within total of So acc, 10000 This
| is exclusive of reduction of the debt,
| the postal service and tax refunds.
This maximum has not been fixed ar
| -