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

WASHINGTON, Aug. 81. R1-An-
nouncement OF Sec. Mellon OF q
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.
1t 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. 1t appears now TO be
very much a two-sided problem.
Mr.. Mellon. despite his resort at
this time TO another huge bond issue,
IL known to favor a revision OF taxes
TO raise the necessary funds to meet
a prospective billion dollar deficit
next year. The fisca! year ending
June 80 incurred q s903. 900, 900 off
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. 00O, 900. Income taxes
have continued downward this year,
yielding Sill 900 200 less than in this
period a year ago. "A drop Of Sl3,-
000,0 0 in miscellaneous tax receipts
has added 70 the Administrators
worries.
Next year Is a campaign year,
however, and on Capitol Hill the
political leaders are holding up their
hands against any immediate raise
in taxes ~contending ii 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; d
the president that If congress once
starts TO raising taxes next session
there Is apt 10 be no limit on ID.
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,
nj. Hoover Is withholding immediate
decision on what recommendation
he will make for balancing the fed
eral budget.
Democratic leaders are lust as
wary OF any tax increase move is
the republicans. They have express
ed the hope that the depression de-
felt could be tided over 5y a bond
issue as was done this year.
But the republican Independents,
who will WELD the balance OF powef
next session are on record fo- tax
revision. They want to increase the
rates or 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 leyieS.
The treaSury's September financ-
ing plans include a $500. 100000 bond
issue carrying three per cent inter-
est TO u for 20 to "a years. and a
short term issue Of $500. 000. 900 in
certificates az indebtedness at / Ill
per cent. The latter issue runs for
one year. The issues are expected
to be overSubscribed because OF the
demand by banks for securities not
subject 10 violent price fluctuations. !
Because the treasury Is now able
10 get money at low rates, some
congressional leaders have urged
Pres. Hoover to meet the deficit by
bond issues.
The treasury had hoped, however.
10 begin retinancing next year the
s8, 1000. Ou0 600 outstanding In first and
fourth liberty loans. These bonds
are now costing the government 3
IL and 4 1-2 per cent.