Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-06-29
YEAR ENDS W|THU.S.
DEBIT $863,786,SDO
Problem of Balancing Budget
Believed to Involve For
eign Stability.

The fiscal year ends at midnight to-
morrow, and as it goes, the Govern
ment, for the first time since 1919, will
vastly exceed receipts, the deficit as of
June 25 being 1868. 1850
This raises on this side of the At
lantic one financial problem, that of
balancing the budget, while abroad
this Government also is seeking a key
to economic stability, which President
Hoover deems essential to national
prosperity
Left behind is decade of mounting
tax collections, declining rates for the
taxpayer and Treasury SURPRISES. Also
in eclipse for the present is the steady
marshaling of European finances to
solve world money problems and fund
the United States foreign debt.
Hope in Moratorium.
To meet the foreign tangle, Presi-
dent Hoover has proposed a one year
moratorium on all governmental debts.
Officials are hopeful this will promote
general prosperity and aid in solving
the domestic budget puzzle by swelling
the tax flow
The Treasury deficit has brought the
enlarged financing operations foretelling
all increase in the public debt burden
this year probably exceeding $780,
100000. In the preceding 10 years
the Understanding debt was reduced
over $8000,00O,000
Administration action to date toward
balancing the budget has centered on
program for cutting departmental ex-
penditures.
On the other hand, however, a loss
of $246,566000 in foreign payments If
the moratorium plan is adopted must
be faced
Administrative officials have taken no
public stand yet on the usual means
of increasing reVenue-new tax levies
Both Secretary Mellon and Mills have
said more stable tax base is desirable
and have pointed to excise taxes as a
possible solution. President Hoover
also has indicated the need for a gen.
eral revenue overhauling, but has not
signifled an intention to recommend tax
revision to the next Congress.
Oppose Tax Legislation.
However, administration spokesman
at the Capitol, and some leading Demo-
Gratis have been practically unanimous
in opposing any tax legislation during
the depression or just before the 1882
presidential election.
II this policy is unchanged, the Gov
eminent enters the new fiscal year with
prospects Of another huge deficit, and
even larger financial operations to OBJ
tain operating funds.
Government borrowing is expected to
increase in the new fiscal year, but
lower interest rates afford a favorable
opportunity to reduce costs. Refund
ing requirements in the remainder Of
the calendar year alone exceed $4,000
600 and another long-term bond issue
before 1882 has been forecast.
President Hoover has directed atten-
ton TO tremendous imports of gold re-
Gently which have provided another
dlsquleting factor in world economic
conditions. Repeated reductions in Fed
eral Reserve rediscount rates have
failed to check this flow and the United
States now holds about $4,000 900 900
OF the worlds central reserves, or twice
the holdings of France, ranking second.
Besides lowering the credit stability
OF many foreign countries" Hoover said
the gold movement and other difficult
ties abroad diminish buying power for
our exports and in a measure are the
cause OF our continued unemployment
and continued lower prices to our farm
erS."
Five Tax Reductions.
In the last decade the United States
has had five tax reductions. The first.
, IN 1871, totaled 1868 100000. In 1924
there was cut of S519, 100000, in 1926
OF S422, 100000 and in 1923 of $222,-
900 600
On President Hoovers recommended
lions. Congress voted temporary $780,
100000 tax cut on 1929 incomes, an inno-
vation in Federal tax policies. Though
$50 100000 of this fell in the fiscal
year of 1880. the Treasury finished with
surplus of S183 100000. The remain
ing $50. 100000 has added to the cur
rent deficit
Taking into account the various tax
reductions, taxable incomes showed a
continuous growth up TO 1880. How
ever, 1890 showed a half billion dollar
drop, and business surveys of the Fed
| eral Reserve Board indicate 1881 in
come taxes will decline even further.
In the last decade income taxes have
supplied more than half the Treasury's
receipts