Evening star., 1932-05-31
Continued From First Page.)

(C0ntlnued From F1lSI fagel
get of last December provided for a
reduction Of expenditures IN the next
fiscal year over the then estimated
expenditures of the current year by
about 1870, 100000. have recon-
mended to the Congress from time to
legislation which would give au-
thority for further important redue-
, tions In expenditures not possible
ecutive or the committees OF Con-
gress without such legislation.
An earnest non-partiSan effort
was made to secure these purposes
in a national economy bill in the
House, but it largely failed. That
subject Is under review by the BIZ
partisan committee appointed from
the members of the Senate Appro-
priations Committee and I am in
formed it has tentatively agreed
upon recommendation which would
aggregate savings of $250,0O0, 900 to-
gether with number of undeter-
mined further possibilities. I am
not Informed as to details of these
recommendations, although I learn
that my own suggestions in many
instances have not been accepted.
But l do know that the committee
has made honest and earnest effort
to reach just reduction in expendi-
lures, and I trust, therefore, that
despite any OF our individual views
or the sacrifice of any group, that
we can unite in support and expedi-
tious adoption OF the committees
conclusions.
In addition. to the economies
which may be brought about through
the economy bill, the direct reduce
tlons OF the appropriations commit
tees should increase this figure to at
least $400, ,000,0 900. not including Ger
tain postponements to later deficiency
bills. As this sum forms the basis
OF calculations as to increased taxes
necessary, 1t is essential that no mat
ter what the details may be, that
amount Of reduction must be OBJ
tanned or taxes must he Increased
to compensate. II this minimum Of
$400, 100000 is attained by congress
Slonal action. together eth the $685.
100000 effected throdgh executive
budget. except for amounts already
budgeted for public works in aid to
unemployment and increased costs
OF veterans, We will have reduced
expenditures of this Government to
the lowest point since 1916.
Face Additional Taxes.
In the matter of tax legislation,
We must face the plain and unpal-
atable fact that due to the degen-
Grafton in the economic situation
during the past month the estimates
OF fertility of taxes which have been
made from time to time based upon
the then current prospects of busi-
ness must be readjusted to take ac-
count of the decreasing business ac-
tivlty and shrinking values The
Finance Committee has been ad-
vised that the setbacks of the past
month now make it evident that II
We are to have absolute assurance
of the needed income with breadth
of base which would make a cer-
tainty of the collections we must
face additional taxes to those now
proposed by the Senate Finance
Committee
! recognize the complaint that
estimates of the taxes required and
reductions of expenses needed have
been repeatedly increased, but on
the other hand it should be borne
in mind that II tax and economy
legislation recommended from time
to time since last December had been
promptly enacted there would have
been less degeneration and stagna-
tion in the country. But it is un-
profitable to argue any such ques-
tions. We must face the situation
as it exists today.
In the course of the six months
during which the revenue bill has
been considered In the House and
Senate, practically every form OF tax
has been suggested at one time or
another; many have found their way
into the bill, later to be rejected.
The total amount Congress ofigi-
nally set out to obtain has been
gradually whitfield down, either by
actual reductions or degeneration OF
the situation, while needs have in
creased;
May Avoid Income Taxes.
If we examine the major sources
of possible increases in taxes now
proposed and the nature of taxes
already voted, it may well be that
the income taxes have already been
raised to the point of diminishing
returns through avoidance which
will ensue by the use of taX-eXempt
securities and are already so high
as to approach the danger point in
retardation Of enterprise. It Is ad-
visable that more relief should be
given to earned incomes. Nor will
further increase in income tax,
even including the proposals of Sen
ator Connally, cover the gap in CUR
revenues or provide against any fail
ure to reduce expenses to the full
amount have stated. The Senate
has already imposed multitude Of
specific manufacturers excise taxes
on special industries. Some of them
appear discriminatory and uncer-
tain in their productivity. I have
not and do not favor general sales
tax It has not been proposed by
the Treasury.
A sales tax Is not, however, to be
confused with an extension of the
special manufacturers excise taxes to
a general manufacturers excise tax
with exemptions of food and cloth
ing. This is an entirely different
tax from so-called sales tax and
cannot be pyramided Even this
general manufacturers excise tax
has not been proposed by the Treas
ury, although at the time such tax
was unanimously recommended by
the Ways and Means Committee Of
the House, representing both politi-
cal parties and their leaders in the
House Of Representatives, the Secre-
tary of the Treasury accepted it In
the hope that immediate passage Of
the bill would result. In order, how
ever, to solve cur problem and give
assurance to the country and assure
the impregnability Of the American