Evening star., 1930-06-23


annun) by SlS.000.000 for the first
year. increasing annually until 1t
reaches a possible additional sum Of
S400 100000 a year. This bill, as
amended by the Senate committee, will
add directly s1o2, ,O00,oo0 the first year,
ultimately rising to the addition of a
sum Of s22S ,o0o, 900 per annun. Even
these estimates are far from including
the whole of the potential obligations
created by the principles embraced in
this legislation and the uncertain added
expense by certain amendments 70
previous legislation.
Mr.. Mellon states that the passage
Of this legislation implies positive In
crease of taxation at the next session OF
Congress.
TT does not appear that these bills
even represent the real views of the
various veterans organizations. The
American Legion, after careful study as
to what they considered the needs of
their fellow veterans, proposed legisla-
ton which would require an additional
expenditure Of $35,0oo.000 per annum.
Thus these measures which are before
Congress represent an implied increase
In expenditure of from three to ten
times what these veterans themselves
consider would be just. The Veterans
Of Foreign Wars and other organizations
have contended for measures differing
entirely from those now proposed.
Quotes Hines on Inequalities.
Seen. Hines has pointed out that this
legislation goes far beyond immediate
necessities. and that, of even more inn
portance, it creates grave inequalities,
tnjustices and determinations among
veterans resulting from the methods
adopted or extended in these bills, and
creates further dangers to both the
public and the veterans. The very fact
that the committees of Congress and
the various veterans associations have
themselves been, during the past six
months, of many minds upon these
questions indicates their extreme dim
Guilty. There certainly comes from 1t
all the conclusion that he should either
have a sound plan now or should have
more time for determination Of national
policy upon established principles in
dealing with these questions for the
future. We must arrive at such basis
as will discharge our manifest national
obligation with equity among veterans
and TO the public.
st do not wish to be misunderstood.
There are cases of veterans who are In
need of help today, who are suffering
and to whom I earnestly wish to see
generous treatment given. But these
situations do not reach anything like
the dimensions of these measures.
I'VE have stretched Government ex-
penditures in the budget beginning July
! to the utmost limit of our possible
receipts and have even incurred prob
able deficit, principally for the relief
of unemployment through expansion of
public construction. Every additional
dollar of expenditure means an addi-
tional dollar in taxes. This is no time
to increase the tax burden of the coun-
try. recognize that such considera-
tions would carry but little weight with
our people were the needs of our vet
erans the issue and were we dealing
with sound measures, but. as Gen. Hines
presents, there are conclusive reasons
for opposing an unsound measure which
Is against the best interests of the vet
erans themselves and places an unjusti-
ned load upon the taxpayers at a time
when every effort should be made to
tighten 1t.
"I do not believe that just criticism
or opposition should arise to such sug-
gestions upon full understanding of the
situation. for I know that the great
body of patriotic men who served in
the World War themselves recognize
that there are limits to expenditure
and there are principles that should be
ahered to If We are not to prejudice
their interest, both as veterans and
citizens"
Secretary Mellon said a deficit of
over $100,000,000 was In prospect for
July /, 1918, and that If the reduced
income tax rate is to be continued,
present estimates forecast a deficit of
e1S0.0o,000 These figures. he added,
do not take into consideration expendi-
lures necessitated by the veterans
measure or other additional legislation.
Mellon Letter Quoted.
His letter follows:
II have your memorandum stating
that the director of the Veterans Bu-
reau estimates the cost in the fiscal
year 1881 of H. r. 103Sl, as amended
and reported by the Senate finance
committee, to be S102, 900, 900 and the
ultimate cost to be $225 900, 900 an
nually. You ask me to give you my
best judgment as to whether receipts
for the fiscal year 1881 will be ade-
quate to support this additional bur-
den. regret to say that they will not.
You appreciate, of course, the very
great difhculty of estimating revenue IL
months IN advance, particularly when
as under our system, the Government
depends so largely on one form of tax
the income taX-which is directly slls-
ceptible to fluctuations in business con-
oittons. An absolutely accurate esti-
mate would presuppose our ability to
forecast general business conditions
over the period of the next IL months,
and this Is absolutely impossible.
Based on estimates Of expenditures
furnished by the director of the budget
and on this departments estimates Of
receipts, which, I may add, are predi-
Gated on not unhopeful attitude in
respect of future business DEVELOPMENTS.
the present indica ations are that the
Government will close the fiscal year
1881 with deficit of over 500 900 900.
II the reduced income tax rate is to
be maintained and made applicable to
1880 incomes, present estimates fore
cast deficit of approximately $780,
oOO,O These figures are, of course,
exclusive of any additional burdens to
be imposed by new legislation
I think I should call your attention
to the fact that these figures are based
on the assumption that interest pay
ments TO be made by foreign govern
nents in accordance with existing debt
settlement agreements will be paid in
United States Government securities, as
they have almost universally been paid
In the past, rather than in cash. thus
constituting an automatic reduction of
our national debt. but not making these
payments available for current expendi-
tures. Even when foreign interest pay
ments have been made in cash, the
Treasury up to the present time has
been in a position to apply them to
the reduction of our national debt
This policy has been so we'll estab-
fshed over the course of years, and is
n1anifestly so sound, that foreign re-
payments, both principal and interest
have come to be looked upon as definite
ly earmarked for the reduction of ouY
war debt. Moreover, whether these in
terest payments are to be made ir