Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-05-25
Tightening the Belt.

The Government OF the United
States, with an unbalanced budget, Is
tackling the problem from several differ
ent angles In an effort to get back to a
''pay-as-you-go" plan. President Hoover,
with the aid of the heads of the various
executive departments. is laying plans
to pare down expenditures in those de-
partments by many millions. Already,
following conferences at the camp of
the President on the Rapidan, have
come announcements that the eXpendi-
lures of the War Department, the
Interior Department and the postal
service will be reduced. While these
proposed economies are under con-
sideration by the Chief Executive and
his aides, Secretary Mellon of the
Treasury has prepared a borrowing
program to meet the deficit OF more
than s80o,o00.ooO which the Govern
ihent faces at the close of the fiscal
year. And at the same time from the
Secretary of the Treasury a clear
warning has come that borrowing alone
cannot solve the problem; that at best
it is only temporary expedient. There
must, in the opinion Of Mr.. Mellon, be
q revision of the tax system which will
make 1t possible for the Government to
continue to receive more even flow Of
revenue.
It is gratifying to realize that the
Government of the United States, in
the present emergency, is in a position
to borrow huge sums Of money at an
exceedingly low rate Of interest. It is
also gratifying to realize that this
money is to be found in plenty within
the country itself Such conditions In
dicate anything but an impoverished
and bankrupt America. The picture Of
the financial situation Of the Govern
ment and Of the people has been
painted SO darkly 30 often in recent
months that q real view Of the condi-
tions confronting the Government Is
selief.
But there Is something wrong in the
financial system Of the Government.
In the FIRST place the Government,
under the direction Of the Congress
and the executive departments, has been
spending money at great rate, a rate
that was not disturbing as long as bust
ness conditions In this country and the
rest Of the world were booming. The
President has acted wisely in calling In
the heads Of the executive departments
and In laying before them the fact that
expenditures must be curtailed. The
executive departments have by no
means been without their share Of
blame for the constantly growing gov
ernmental expenditures. Each depart
ment has sought to improve the serv-
ice and such improvement has meant
additional expense. The President has
been amply justified. IN his repeated
warnings to Congress that it should
not initiate new projects requiring
heavy governmental expenditures at
this time. No money may be expended
without the authority Of Congress, and
Congress cannot dodge the responsible
ity that rests upon it in this matter.
So far there has been no direct rec
ommendation from administration
sources for q change in the tax laws
which would bring into the Treasury
additional revenue. But the implication
Is quite clear. II the orgy Of apprcpria-
ton and of expenditure is to continue,
the taxes must be increased. Mr.. Mel
lon holds that the income tax, as at
present imposed, is no better than a
class tax, with the burden resting upon
Q small percentage Of the whole people.
It IL true that the burden rests upon
those best able to pay the taxes. But
IN times Of depression, when incomes Of
the wealthy are curtailed, this tax fails
10 bring the revenue that Is needed.
And therein lies the principal criticism
Of the tax.
More than anything else 1t appears
that this country needs to relesrn the
need Of economy in times OF stress.
The executive departments, the Con-
gress, the people themselves need to re-
learn this lesson. The Congress cannot
continue TO heap appropriation upon
appropriation, no matter how beneficial
the purpose. The threat Of added taxa
ton upon the people may have an effect
upon the National Legislature which
has been too prone in recent years TO
yisld TO the demands Of groups of citi-
Eens for money and more money. The
Congress, when it meets, will be faced
with a real problem in this financial
situation in which the Government finds
itself. And the eye Of the country viii
be upon 1t.