Brownsville herald. [volume] (Brownsville, Tex.) 1910-current, 1931-08-31
MELLON AGAIN
RESORTS TO
BOND issue

WASHINGTON, Aug. 81. P-An-
nouncement OF Sec. Mellon OF a
billion dollar financing program for
the September quarter brought Pres.
Hoover today face to face with the
vexing problem Of how TO balance
next years budget.
IL Is q matter he must thresh out
with Mr.. Mellon and the republican
+, leaders OF the house and senate be-
fore the opening OF Congress IN
December. II appears now to be
very much a two-sided problem.
Mr.. Mellon, despite his resort at
this time 70 another huge bond issue,
is known to favor a revision Of taxes
TO raise the necessary funds 10 meet
a prospective billion dollar deficit
next year. The fiscal year ending
June 80 incurred q 5000, 600, 900 Cefi-
cit, largely met by a long term bond
issue.
In the first two months OF this
fiscal year, the treasury shows a de-
ficit OF 1887, 900 600. Income taxes
have continued downward this year,
yielding Sill .000, 600 less than in this
~ q NAAA 4hOs n AAOD u CA1t-
100000 In miscellaneous tax receipts
has added 20 the Administrations
worries.
Next year Is a campaign year.
however. and on Capitol Hill the
political leaders are holding I'D their
hands against any immediate raise
in taxes ~contending it is difficult
10 ask for votes after increasing the
taxpayers bills. Thus, Mr.. Hoover
is confronted by a none too easily
solved situation.
Moreover. Sen. Watson OF Indiana.
the republican leader. has war; q
the president that II congress once
starts 70 raising taxes next session
there Is apt to be no limit on u.
in other words, the republican lead
er fears taxes will be sought for
every manner Of project and the de-
ficit would not be materials reduc-
ed in the end.
Hopeful and confident that the
next few months Will show an up
ward trend in business and a result
ant increase in income tax returns.
Mr.. Hoover is Withholding immediate
decision on what recommendation
he will make for balancing the fed
eral budget.
Democratic leaders are Just as
wary Of any tax increase move IS
the republicans. They have express
ed the hope that the depression de-
ficit could be tided over BY a bond
issue as was done this year.
But the republican Independents,
who will WELD the balance Of power
next session are on record fo- tax
revision. They want 70 increase the
rates on incomes in the higher
brackets. boost the estate tax rates
and restore the gift tax.
Mr.. Mellon, however. in suggesting
q tax revision program last spring.
spoke Of broadening the base OF the
American taxation system by the
imposition Of new excise levies.
The treaSJiry's September financ-
ing plans include a $500. 900. 900 bond
issue carrying three per cent inter-
est TO run for 20 70 "a years. and a
short term issue Of $500. 0OO. 900 in
certificates OF Indebtedness at l Ill
per cent. The latter issue runs fo-
one year. The issues are expected
10 be oversubscribed because Of the
demand by banks for securities not
subject 10 violent price fluctuations
Because the treasury Is now able
TO get money at low rates, some
congressional leaders have urged
Hoover to meet the deficit BY
bond issues.
The treasury had hoped. however.
TO begin refinancing next year the
8,00O.O 600 900 outstanding in first and
liberty loans. These bonds
are o costing the government 3
l-2 and 4 l-2 per cent.