The Nespelem tribune. [volume] (Nespelem, Wash.) 1934-1936, 1936-02-06
Source For Tax
Puzzles Congress
Bonus Money Is Problem For
Solons AS Election
Nears
WASHINGTON. Jan. 30-P.

WASHINGTON, Jan. 30-P. A. S.
veterans bonus, congress is waking
up to a realization that some new
and additional taxes must be levied
if the government is going to come
anywhere near keeping it's normal
expenses within it's income.
There is nothing your average
congressman dislikes in an election
year more than to levy new taxes
What congress most enjoys doing,
as the time approaches for it's mem
bers to stand for reelection, is
spending money.
just how far the boys can go in
free spending along new lines is
puzzling them in view of the fact
that there is big additional deficit
to be made up, to fill the gap in
the estimated income which was
left when the supreme court de-
clared the AAA unconstitutional.
1t is not only that 100000 900 or
so of processing taxes, which had
been impounded in the lower courts
that must be returned to the manu-
features who deposited these
funds under protest. It is also the
processing taxes which the presi-
dent estimated in his budget for
the next fiscal year.
Now congress must find money
to pay the farmers, not only under
existing AAA contracts, which are
presumably valid and enforcible,
but also to do something else for
the farmers.
Sentiment Against Borrowing
How to raise, roughly, a billion
dollars more by taxation is what is
worrying congress. The public SEN
timent against further government
borrowing is being felt on Capitol
Hill and at the White House.
But borrowing is the easy way
out for the time being, and there
is no serious apprehension that the
governments credit would be great
ly impaired if it should borrow an
other few billions. That is, pro-
vided investors were willing to lend
the money.
Secretary Morgenthau, talking to
the senate finance committee few
days ago, sounded a warning note.
One of the senators asked him
bluntly how far government Dor
rowing could go. Mr.. Morgenthau
replied that he could not tell. He
was sure, however, of one thing, and
that was that whenever the banks
and big finance institutions refused
to buy government bonds except at
a heavy discount, the result might
prove alarming.
So the idea of further borrowing
is being kept in the background
while earnest consideration is being
given to the effort to find a painless
form of taxation that stands any
chance of being adopted. There is
still very strong belief that the
most effective method of raising
additional federal funds would be
a general manufacturers sales tax.
So much political opposition has
been eXerted against this plan in
the past, however, that it seems
doubtful that it will be adopted,
except as last resort.
Deadlock On Farm Bill
Seemingly little progress has been
made toward a solution of the farm
problem. Serious doubts have been
raised as to whether an effective
method of putting money into the
pockets of the farmers can be
worked out under the soil conser-
walton act of 1885. Also, the con-
stitutionality of that act is being
questioned in the congressional
cloak-rooms. In any event, it
would have to be amended in it's
bounty provisions, and nobody has
so far presented a specific list of
amendments which seem likely to
meet the approval either Of con-
gress or of the supreme court.
One thing is becoming increas-
ingly clear as the size of the deficit
and the growing volume of the ma
tional debt are considered by seri-
GUS minded statesmen on Capitol
Hill. That is that the long-talked-
of Initiation" is seemingly close at
hand.
The tremendous volume of un-
used bank credit, arising from the
increase OF bank deposits based on
government borrowing, is bound to
find an outlet before very long, or
so some of the financial experts of
the administration believe.
Secretary Morgenthau and Chair
man Eccles of the Federal Reserve
Board recognize this danger. They
are using all the influence they can
exert to block plans for initiation of
the currency. It has been pointed
out, however, that the effect of
credit initiation on huge scale
might easily be as serious as would
the printing of greenbacks
Money is cheaper now than it has
ever been in America. That is just
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