Evening star., 1937-08-27
MELONS PUBLIC
CAREER NOTABLE
Term as Secretary of Treas
ury Marked by Postwar
Financing.

Andrew W. Mellon, who died last
night in the home of his daughter,
Mrs. David K. E. Bruce. at Southamp-
ton, N. Y. had a notable and stormy
career as Secretary of the Treasury.
His treasury career was notable for
Its handling of difficult postwar
financial problems, including refund
ing agreements with 13 debtor nations
of Europe, tax reductions, cut of
20 per cent in the American national
debt and the fact that under his
guidance the United States, of all
the countries engaged in the World
War was the first to attain a bal
anced budget after that conflict.
He assumed the secretaryship when
President Harding took Office March
1. 1921, and held it under President
Coolidge and Hoover until February
~. 1882. when he resigned as Secre-
tary of the Treasury and took oath
OF office as Ambassador to Great Brit
ain.
Only one other head of the depart
ment exceeded the length of this
service, Albert Gallatin holding the
post under Presidents jefferson and
Madison from 1901 until the Spring
OF 1919. Another secretary, William
Window held office under three Presi-
dents. but there was a lapse between
his brief service under Presidents
Garfield and Arthur in 1881 and his
two years under President Benjamin
Harrison starting in 1889
Faced BY 1921 Depression.
When Mr.. Mellon went to the
Treasury, the country was in the
midst of a severe deflation following
the war. Factories were shutting
down, unemployment was increasing.
wholesale prices of farm products and
values of farm lands had fallen,
Liberty bonds were selling as low as
81. and the Treasury was faced with
the problem of reducing expenditures
and at the same time meeting the
fast-approaching maturities of the
public debt. Conditions in Europe
were worse than in this country In
practically all countries their budgets
were out of balance. currencies were
50 unstable as to make foreign trade
almost lottery and revolution was
threatening many governments
One of Mr.. Melons first acts at
the Treasury was to issue statement
on March 8. 1921. to the banking
institutions of the country. After re-
viewing the governments financial
situation, he said: These figures as
i to the public debt and the current
operations Of the Treasury show that
the country's finances are sound but
that the situation calls for the utmost
economy =. The people generally
must become more interested in saving
the governments money than in
spending it. A thorough-eoing ma
ticnal budget system must be estab-
llshed and the governments expenses
brought into relation to its income
The message met with immediate
and widespread approval on the part
OF both press and public The budget
system was established June 10, 1921,
and was operating before the end of
the fiscal year. The result was that
expenditures. which were $3.50, ,209,-
600 for the year ending June 80, 1921.
were cut to $3,795, ,3O3 900 for the next
fiscal year, or more than 100000. 900
below the amount originally esti-
mated to be necessary. Each year
thereafter, until the depression year
OF 1881, expenditures were kept under
100000, 900.
Cuts Public Debt
Nv Nfel1op povt +,,r,,o., Ii. ,4+..
ton to the public debt, announcing
that the Treasury would finance all
maturltles on a straight investment
basis. During the ensuing fiscal year,
ending June 80, 1922, the debt was
reduced by almost a billion dollars
and large part of the early ma
turing debt was refunded into longer
maturities at lower rates of interest.
BY July. 1922, Liberty bonds and
Victory notes all had reached par,
as result of improvement in the
governments credit under budget
balancing and debt-paying policy.
During Mr.. Melons term of office
the debt was reduced by payments
from the surplus, together with sink
other sources, so that the govern
ment's interest bearing obligations
which were S23,737, O8O in 1921,
had been reduced to Sl7.82O.334,
in February. 1882, when Mr.. Mellon
left the Treasury
Along with the reduction of the
debt, there were four major reduc-
~ q fov
gram. involving a decrease of about
80 per cent in the maximum sur
taxes on incomes, was ,ssailed as
favoring the rich and his insistence
on settlement of the war debts bv
foreign nations was criticized at home
and abroad, but he saw most of his
plans adopted.
Under the revenue act of 1921. taxes
were reduced by 1868 900 900: in 1924
by s5le,oo0,0 900; in 1926 by 1922, ,O00,-
600, and in 1928 by 1922 900 900. At
the same time there was thorough
going revision of the Federal tax sys-
tenn, based on careful study. with the
result that fewer and relatively lighter
taxes were substituted for those in
herited from the war, and a Board
OF Tax Appeals was tablished in
1924 to adjust disputed taxes without
putting the taxpayer to the hardship
OF payment and suit to recover in
the courts.
Tried to Curb Exemptions.
Mr.. Mellon continually advocated
the fairness of taxing more lightly
income from wages. salaries and pro-
fessional services than from a busi-
ness or investments. As early as
April 30, 1921, he recommended to
Congress the submission to the States
Of a constitutional amendment to re-
strict further issues of tax-exempt
securities. His purpose was to dis
courage increase in public indebted
ness and at the same time to en-
courage accumulated capital to 90
into productive enterprise. rather than
10 take refuge in tax-exempt securi-
ties.