Evening star., 1927-12-07

experience of the past as our inde,
TO future operate If we proceed
along the orderly lines followed these
last years our continued success j:
assured"
Flood Control Urgent.
Adequate flood protection is ar
absolute and urgent necessity" the
President told Congress in explaining
that careful study of many factors
points to tax reduction of $225.000,
600 as the maximum. and tnat amount
only possible on the assumption that
the estimate of expenditure for 1929
be not materially exceeded and that
additional continual obligations be in
CURED only to the extent that abso.
late necessity from the standpoint OF
public need warrants" Discussing the
subject of tax reduction, the President
said:
"Since 1920 there have been three
reductions in taxes for the purpose
OF relieving the people of some of their
war burdens. The act of November,
1921. lightened the tax load by a re-
duction of S663 900, 900. The act of
1924 afforded additional relief of $519,-
100000 The act of 1926 made a
further reduction of S422 900. 900. TAX
in, these all together our tax de-
mands have been lessened by $1,604,-
600, 900. This in itself illustrates the
value of orderly procedure. The peo-
pie are permanently richer because of
the diminished demands made by the
Federal Government. And hand in
hand with these material curtail-
ments of the amounts taken from the
people the public debt has been re.
duced. From a peak of more than
$26,500 900 900 the debt had been re-
duced on June 80. 1927, by $S,084 ,794,-
716. This lowering of the debt means
an annual saving in interest of ap-
proximately 320,000,000. While this
tangible and extraordinary saving
emphasized the Importance of debt re-
duction as a preliminary to ultimate
adequate tax reduction, we have at
this time for consideration the ques-
tion of further relief to those who pay
Federal taxes.
'In planning for a revision down
ward of tax rates the first question
that presents itself is the amount of
money that can safely be devoted to
the purpose without curtailing neces-
sary activities of the Government or
threatening a deficit. The eXtraor-
dinary surplus of June 80, 1927, was
S635, ,S09, 900, and was made possible
by receipts from homecoming sources
of $414, 900. 900, only $221 ,000. 900 COM
ing from current and continuing
sources. OF this surplus s612 100000
was applied to the public debt, effect.
ing an annual interest saving of $24,.
600. 900.
1.-THE estimated surplus for this
year-which ends with June 30, next
is $454, 900 900, of which $31S,000, 900
Is from homecoming sources and
1896, 100000 from current and con-
tinuing sources. This is an increase Of
$254. .000, 900 over the estimate carried
in the 1928 budget, of which increase
$15S. .000, 900 is from miscellaneous re-
ceipts which include 1854, 100000 in
receipts from railroads. The remain
ing 5000, 900 Of the increase is found
in regular revenue returns.
Surplus of $751;, $4,000.
"The estimated surplus for 1928
the coming fiscal year-is $252, SAC, 900,
Of which 5000, 900 is from non-recur-
ring sources. This surplus Is reached
by means Of a fairly sanguine esti-
mate of receipts and a carefully re-
stricted estimate Of expenditure. The
expenditure estimate for 1929 Of 3d..
657. 100000 includes nothing for flood
control with the exception Of the fifth.
year allowance of $10,000,000 in the
six-year program authorized by Con-
gress. Other proposed major projects,
not yet the subject Of legislation, are
not provided for in this estimate. It
is reasonably certain that some of
them will be enacted into law and will
call for material advances from the
Federal Treasury. This will doubtless
have the consideration of the Con.
gress."
The President expresses his convic-
ton that the people of this country
are overwhelmingly in favor of keep
ing the budget balanced and just as
Overwhelmingly opposed to any meas
ures that would make any other re-
suit even remotely possible and says
that he is counting on the continued
prosperity of the Nation in setting his
limit on tax reduction and in explain
ing the importance of a balanced
budget.
Each of the three reductions in tax
rates since November, 1921" he says,
has been measured on the certainty
of our ability to stand such reduc-
tions. This is the only safe course.
l. has brought forth a balanced
budget. In this we have found our
financial stability. We have been oper-
ating on the wise plan that reduction
In rates Of Federal taxes should be
permanent. This is the only proper
basis for tax reduction. In business
of the magnitude Of that of the Fed
eral Government there must be a mar
gin Of safety. The fact that this mar
gin has grown to large proportions in
the past fiscal years carries no assur-
ance that that will continue. l am in
favor of tax reduction. / am not in
favor Of any such reduction as will
ieopardiZe our financial stability. The
assurance that Federal expenditures
will be kept within Federal receipts
has bulwarked public confidence. it
has contributed measurably to the
prosperous condition of the country,
it has ministered to the justifiabIe
pride of our people in their Govern
ment and in its orderly and sane proc
esses. To jeopardize our balanced
budget, to do anything that in the
most remote degree would threaten TO
interfere with the orderly processes of
wise financing, to take steps in the
interest Of tax reduction that would
necessitate either revolutionary cur.
tAilment Of important Federal projects
and activities or compel later up
ward revision Of tax rates, or both, is
unthinkable."
Budget Safeguard Cited.
The President calls attention that
under the law made by Congress the
President cannot countenance a pro
gram of expenditure or approve esti
mates for appropriations that threaten
to interfere with the annual balancing
of the national budget. He explained
that:
ESTIMATED receipts for the flsca
year ended June 80, 1927, as carried
in the 1928 budget totaled $4.026,7SO,
6SS and estimated expenditure was
33,643, ,701 ,593. The year closed, how
ever, with actual receipts of $4,129,
:s94,441.10 and actual expenditures o.
S3.493,584,519. We were fortunate
in having a marked increase in re
ceipts, while a material reduction IL
estimated expenditure, resulting large
ly from the contin ling policy of econ
onry, contributed to the creation o
the largest surplus in history, $685.,