Evening star., 1931-12-13
HOOVER TAX PLAN
DEFENDEDBy MILLS
Borrowing for Sd, 400, 900 900
Deficit UnthinkabIe, He
Says in Forum.

The administrator tax plan was de-
Tended last night as sound financing by
Ogden L. Mills, Undersecretsry Of the
Treasury.
Speaking In the National Radio
Forum, arranged by The Washington
Star and broadcast over a Nationwide
hook-up of the Columbia Br- adcasting
System, Mr.. Mills described the pro-
poSal designed to cope with an esti-
mated deficit of $4,000, 600. 900 for the
three years ending with 1882, declar-
ing it "unthinkable" that this should
be taken care of entirely by borrowing.
The Treasury official also answered
those who have argued that we are
making terrible mistake" from a po-
htical standpoint, in reducing exemp-
tons in the new tax set-up.
Aside from the fact that under ex-
isting circumstances I cannot concede
that politics has anything to do with
the drafting of a revenue bill. I think
those gentlemen underestimate the in
telligence and patriotism of the
American people" he emphasized
ThreefoId Aim.
The financing program contemplated
has threefold aim, Mr.. Mills ex-
plained-reduction in the prospective
deficit for the current fiscal year, no
further increase in the public debt in
the fiscal year 1898 and a balanced
budget in 1884.
Existing conditions would not, in my
opinion, justify request for more, and
we should have failed in our duty had
we recommended less" the speaker as
serted.
He amplifed. too, that although the
proposal is made to cover the two com
ing fiscal years. it should not, of course,
be interpreted as implying an expected
continuation Of depression during that
period
Mr Mills recalled that the suggested
tax increases are in the main simply a
reinstatement of the levies that pre-
vailed under the act of 1924. which he
said, did not constitute an "unbearable
burden" or prevent increased pros
perity"
In defense of taxation as compared
20 borrowing, he said
Confidence Fixes Credit"
1T must not be forgotten that the
very ability of the Government to bor-
row depends not only upon the con-
vtction on the part OF purchasers and
holders of Government obligations that
the Government will maintain itself in
such position as to meet at all times
and under any circumstances its own
obligations, but that its finances will
be conducted with such regard for
sound principles that Government
securities will not suffer drastic depre-
citation.
III, in disregard of every dictate of
financial and business Judgment, we
should attempt to raise all of the addi-
tional sums required as a result of the
depression through the sale of Govern
nfent securities, we would, I am con-
fdent, encounter real resistance on the
part Of investors, not only because of
the immense volume of new securities
70 be marketed, which would necessarily
oepreciate the value of existing securi-
ties, but because of the apprehension
such a temporiztng policy would en-
gender.
In the midst OF our difficulties. let
us not forget that there is nothing more
important to the Nation than the main
tenance, unimpaired, Of the credit of
the United States Government"
CThe text Of Undersecretary Mills
speech is carried in the Editorial Sec
tion OF today's Starr