Evening star. [volume] (Washington, D.C.) 1854-1972, 1932-01-14
Taxes. Not Bonds.

Yesterday in explicit terms the Sec
rotary and the Undersecretsry Of the
Treasury told the Ways and Means
Committee OF the House Of Represent
atives that an immediate increase OF
taxation is necessary TO balance the
Federal budget at the end Of the fiscal
year 1928. Secretary Mellon said:
Current receipts and expenditures Of
the Government should be brought into
balance for the next fiscal year, begin
ming with the coming July, so as to put
an end at that time to any further in
crease in the public debt. This is eS-
sential, not merely for maintaining I'M
impaired the credit Of the Government,
but also for reinforcing the entire
credit structure of the country.
Undersecretary Mills said:
We cannot have an unimpaired and
unsSsailable credit If we follow the
cowardly policy Of borrowing instead Of
raising funds to meet our obligations.
The courageous thing to do and the
right thing to do is for the Govern
ment to stop borrowing, balance its
budget and remain within its income.
Nothing will have a greater effect right
now than just that action on our part.
Almost coincidentally Speaker Gar
ner issued through the bureau Of pub
licity Of the National Democratic Com
rnittee a statement in which he said:
In the last analysis the solyency of
Government Is the basis Of prosperity.
There can be no general recovery OF
business until the Governments income
is brought to parity with its expendi-
lures. Obviously this cannot be done
without imposing additional burdens
on the taxpayers. That these additions
may be as light as possible, 1t is, of
course, absolutely necessary that appro-
priations be held to the lowest figure
that can be arrived at without Grip
pling the indispensable activities Of ad-
ministration.
These three statements Enthusiastically
point to a legislative program Of tax
increase, together with economies. They
do not point to the adoption Of the
remedy Of borrowing to meet the emer-
gency. The fact is sharply brought to
attention that the possibility of further
Federal loans, TO meet in part current
obligations, has caused sharp drop in
the last ninety days in United States
bonds. The fear that Congress intends
TO adopt series Of measures directly or
indirectly designed for the relief of
emergency distress by the issue of bonds
has caused this depreciation in what
were yesterday characterized before the
House committee as the prime securi-
ties OF the world"
Yet the possibility of such q course
IL indicated by Speaker Gamers state
ment:
To the end that none Of our people
shall starve or freeze during the Win
ter, we all recognize that there may be
further large borrowing by the Govern
ment. It really makes no difference
whether the relief takes the form Of a
direct appropriation to relieve distress,
OF vast building program to provide
employment, or advances to inStitu-
tons, public or private. calculated to
break the present log jam in the Sc
curity market. Any or all of these
things must put a drain upon the
Treasury, and the call is so immediate
that 1t cannot wait for the returns
penditures. However. we must always
keep in mind the relationship between
these expenditures and our definite de-
cision TO reconcile the Governments
outlay with It's income.
II there is this definite decision to
reconcile the Governments outlay with
its income" q practicable basis for pro-
cedure Is now before Congress. The
administration has made its proposal
for tax increases and has presented
budget OF estimates for appropriations
which in the Judgment of the Secre-
tsry OF the Treasury will, If accom-
panied by these changes in the tax
schedule, result in balance by the
end of the next fiscal year. But i'm
mediate results are not to be expected
Months must elapse before the appro-
priations are voted and the tax bill is
enacted. Despite the pledges given by
leaders In Congress that this task will
be performed with a minimum OF po-
hticsl maneuyerhg for the sake Of
possible advantage in the coming cam
p&ign, partsanship will have its way TO
some extent, but 1t Is to be hoped not
60 the point Of preventing the adoption
Of the wisest and soundest fiscal meas
ures for the benefit Of the whole coun-
try and not for the advantage of either
party.