The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1931-09-03
old GUARD OF
G. 0. P. SPLITS
ON BOND ISSUE
StaIWartS Oppose Hoover
Plan for Long.T Term
Financing.
WILL WOOD SAYS mo-
Most Regular of Regulars,
HOLSTERS Stand AmazeS
Washington.

BIZ Scripps -Hoicord Newspaper Alliance
WASHINGTON. Sept 3.-The
administration plan to finance the
government through the depression,
if possible, with a 24-year $500 000,-
900 bond issue bearing 3 per cent
interest had aroused opposition in
surprising quarters today, including
groups usually friendly to the
White House.
Such a stalwart Republican as
Representative Will r. Wood of In
diana. chairman of the house ap-
preparations committee, declared
following a conference with Presi-
dent Hoover that he favored financ-
ing through short rather than long
term issues.
He said that exceptionally low
money rates could be taken adj
vantage of until the depression
lifts, especially as the one-year GER
tiflcates carrying only Is per cent
interest have been oversubscribed
four times.
This depression is not going to
last forever" said Wood, as he told
of steel orders pouring into plants
at Gary. 1T ought to lift compare
lively soon, and the financial burden
it imposes can be carried better by
short-term financing. The low rates
we are getting on the $500 100000
worth of certificates prove this"
Wants Balanced Budget
Wood, virtually dictator of federal
finances on Capitol Hill, also called
for a return to the system of bal
ancing budgets and eliminating con-
tinued borrowing to pay current OPP
Grating costs.
Others pointed out that every
Republican campaign book since
1924 had praised Mellon for avoid
ing the methods he is using now,
and for reducing public debt. Mel
lon and Hoover frequently have de-
clared that the best way to ease the
burden of taxation was to lower the
permanent charge on the taxpayers.
Refunding operations of recent
years, it is pointed out, tend to
weaken the treasury's argument
that the twenty four-year issue at
only 3 per cent is good business.
From 1924 to 1923, when money was
high, the treasury refunded $685.
100000 worth of old debts, including
the third and second Liberty bond
issues, at rates from 3as to 3% per
cent.
Those who advocate short-term
financing now insist that 8 per cent,
in view of changed conditions In
the money market, is not such an
excellent piece of work as treasury
officials claim it to be.
Criticism Is Widespread
widespread criticism of the Mel
Ion proposal. which he himself is
believed to dislike, has had its effect
on administration opinion regarding
future finances. 1t was largely be-
cause of an adverse reaction that
high but unnamed officials let 1t be
known that the prospect OF an IN
crease in taxation was not so re-
mote as had been thought.
The $500, 900 900 bond issue, they
insisted. can not be taken as evil
dence that all future financing Will
be handled in that way.
Financial experts not swayed by
political considerations do not see
how a general revision of the tax
alton scheme can be avoided. With
q s1.5o0,0 100000 deficit piling up for
the current year to add to last
wears deficit of s9SO,OOO, 900, it is be-
lieved that drastic measures soon
viii be necessary.
Deficit Is Growing
Even in White House and treas
urv circles, it is conceded that only
a sharp upturn in business, with
a lump in individual and corpora
tion tax receipts, will prevent 1t.
The governments plight was en-
phasized further by publication OF
figures showing that the deficit for
the current fiscal year. now only
two months old. is 1896, 365 900, or
s155. 634.9l9 more than at the same
period last year.
IF this rate is continued, the end
of the 1882 fiscal year will show the
government in the red by about
60 000 400 600.