Evening star., 1929-07-02
Expects to Have All Data
Necessary for Decision
by November |.
8 FACTORS AFFECTING
SITUATION ARE CITED
Legislation Increasing Expendi.
lures Beyond Original Budget Is
Held Primary Factor.

President Hoover may recommend a
further reduction in taxation at the
next regular session of Congress, he
stated at the White House today.
I'VE are giving careful study" said
the President. ito the possibility Of tax
reduction. We all hope that the situ-
alton may work out on the side of a
safe surplus for material relief. We
must determine three things before
there can be any conclusion upon the
subject.
First, we must know what the eff
feet will be of the legislation during
the last IL months, which has greatly
increased expenditures for the present
fiscal year beyond the original budget.
The new enlarged program for naval
ornaments, the increased expenditure
on Army and Navy aviation, the re-
building Of Army posts, and increased
expenditures on veterans Services--in
addition to the necessities in the Medi-
terranean fly and farm relief work
have all intervened since the budget
was passed by Congress.
Must Cut in Other Directions.
Second, we must know how far We
can reduce expenditures of the Govern
ment In other directions to partially
compensate for these increases imposed
during the last IL months. We know
that expenditures for the fiscal year
just passed exceed the original budget
by over 5000. .000, 900, and much OF the
legislation for expenditures has not yet
come into effect. The completion of the
a hne Ta.11g
1880, viii be helpful in determining the
rate of these increased expenditures
Third, we must know how far the in
crease in revenue is due to the tenn
porary stock exchange activity"
The President explained that he ex-
pected to have all the information
necessary for making decision with
regard to tax reduction ready by about
November 1. If the facts justify such
course he expects to recommend q
further cut when Congress convenes In
regular session In December.
The President has directed the heads
OF Governments departments and agen-
cies to make d study OF their financial
situation, with 4 view of possible re-
ductions in the ordinary expenses of
the Government. He hopes that by
cutting the ordinary expenses TO some
extent the total expenses Of the Gov
be kept within, or close to, those Of
the present hscal year.
Gratified by Estimates.
The President is gratifed at the es-
tii11ated Treasury surplus for the fiscal
year just closed and hopes that the ex-
traordinary expenses due to special
legislation enacted at the last session
Of Congress will not wipe this out in
the future.
Prior to the statement from the
surplus, put at $185, 900, 900. has started
congressional discussion of tax cut.
Nothing Doing" Says Smoot.
Democrats Of the Senate finance COM
niittee, here chiefly because of the tariff
revision hearings, lost no time in rails
ing the question, and chairman Smoot.
on financial affairs, had been prompt
with the declaration, Nothing doingp
Senators Simmons of North Carolina,
and Harrison of Mississippi, committee
Democrats, who sought greater reduc-
tions than were proposed by the last
administration during consideration OF
the present tax law. pointed to the sur
plus as vindicating their stand and dis
closed their intention to press for fur
bQer IeuuCClOD.
Cites Treasury Opinion.
Senator Smoot cited the Treasury's
opinion that most of the surplus was
built up out of additions to individual
incomes from stock market profits. and
argued that a quite different result
might be shown a year from now, since
those who showed gains last year might
incur losses this year which would re-
duce their income tax payments.
Chairman Hawley of the House ways
and means committee, which originates
all tax legislation, wanted to know what
the Treasury situation would be in De-
cember before committing himself on
the question. He sees increased expendi-
lures ahead in farm relief, Boulder
Canyon Dam and Mississippi flood con-
troll work, but II these can be met with
out producing an unfavorable fiscal Sit
uation he felt, a reduction might be
possible.
SEES REDUCTION ASSURED.