Evening star. [volume] (Washington, D.C.) 1854-1972, 1930-12-04
S180,ODO,O0O DEFICIT
IN. TREASURY SEEN.
Secretary Mellon Says Pros
poets Indicate Income Tax
Cut Can't Be Continued.

By the Associated Press.
Secretary Mellon in his annual re-
port, addressed today to Congress, pre-.
dicted $3.50, 100000 deficit when the
fiscal year ends next June.
While making no recommendation.
the Treasury head recalled pointing
out a year ago that continuance of the
l per cent reduction then made would
depend on the revenue prospects this
month. These now indicate that The
temporary decrease cannot be con-
tinued during the current year"
Contrasting with the deficit forecast.
the 1880 fiscal year surplus was $1s3,-
1925. Every bit went toward retire
ment Of the public debt, which stood
at $l6,lS5, 308,299 when the year closed.
Recommends Refunding.
Calculations on the future led to a
request for legislation making possible
refunding operations, which would aim
at putting all or part of the rational
debt on lower interest rate basis If
money conditions justify. Mellon asked
that the new loan law be amended
with the object of granting the Treas
ury complete freedom in determining
the character of securities to be is
sued" in any refunding, and to allow
eight billion dollars in new bond issues
to be put out as refunding operation,
which would retire like amounts of
older debt.
Further, his report repeated a recon.
mendation that Congress free income
taxpayers who buy Federal securities
from liability for the payment Of in
come tax on the realization from such
investments. That would give national
paper the same exemption status as
that now held by State and municipal
ooILoWu1Bs' BNisfl
The Secretary foresaw SOM charges
In the form of payment hitherto re-
celved from foreign COVER nmentS nv tle
United States as result of war loans.
saying:
1T is reasonably certain that the
December interest payments on ac-
count OF foreign debts will be paid in
cash, and it Is quite possible that this
may be equally true in June. It is i'm
possible to forecast what method of
payment foreign debtors may elect.
though it is entirely possible that part
OF the interest payments will be made
in securities"
First Deficit Since 1919.
II the deficit materializes, it will be
the first time surplus has been missed
since 1919. Mellon looks to 1882 to
bring back a favorable balance, to the
extent of $50, 100000. The estimates
set the income tax revenue then at
$2,260 ,O00, 900, or $4,000, 900 more than
expected this year.
As another evidence Of expecting bet
ter business in the year starting
next July LIST, the Treasury Secre
tary estimated customs receipts for
that time would be Sl1O. 600 600
greater than the $500 600, 900 expected
this year. The latter estimate rep
resents a drop of SIS, 900 900 under
the 1880 figure. Miscellaneous taxes
are expected to bring 1923, 600 900 this
year and to increase by $53, 1000 600 in
the next.
The estimate that $3,834 1855. 243
would be collected by the government
this year was $400, 00O, 900 smaller than
the estimate submitted to Congress a
year ago.
Didn't Include Reduction.
"The earlier estimate did not take
into consideration the per cent income
tax reduction and was made at a time