EFFORT TO BALANCE AMERICAN BUDGET

Bay of Plenty Times, Volume LX, Issue 10830, 31 March 1932, Page 3

EFFORT TO BALANCE AMERICAN BUDGET

Compromise in House. NEW TAXES APPROVED. Washington, March 29. The members of the House of Representatives and the leaders of the Democrat. Republican and Independent groups alike pledged themselves to-day to the passage of a non-par-tisan Tax Bill in order to balance the Budget.

In response to a call from the Speaker, Mr John N. Garner, for those members to stand who would support such a policy virtually all the members cose amid a vigorous outburst of applause. New proposals brought in by the Ways and Means Committee of the House provide for nn increase in postage rates, numerous special taxes, and levies on sales of stocks, bonds'" and real estate. These are to replace the £110.000,000 cut out of the Revenue Bill by (he defeat of the sales lax- chmse.

The members apparently felt the pressure of foreign reaction against the delay in balancing the Budget. A warning was voiced by Mr Garner in an impassioned address declaring that the Budget must be balanced. The insurgents immediately disbanded, and the House hurriedly passed a series of amendments to the Tax Bill imposing excise taxes calculated to raise £31,1100,000 as a start toward the replacement of the loss of the £110,000,000 through the defeat of the stiles tax. There are indications that, the bill to balance the Budget may be passed within a week.

Forsaking the Speaker’s stand for the first time Mr Garner, who was enthusiastically applauded throughout, declared; “1 believe that the House must adopt increases in taxes which will maintain the credit of the United States in the eyes of the world.” It is generally believed that the attack on the dollar, also the widespread feeling abroad that the country might forsake the gold standard, and other obvious indications of fear for the country’s financial situation, promoted Mr Garner’s speech and was largely responsible for the favourable action of the House.

The excise duties passe! place a 10 per cent, tax on furs, jewellery and other luxuries, a 3 per cent. ta.x on motor-cars and a 2 per cent, taxon trucks.

Despatches from New York state that although the new taxes are not altogether favourable to industrial and financial interests, their passage resulted in a rally in the New York markets particularly in the foreign exchange market, where the dollar regained practically all the ground lost in the recent foreign selling. The Stock Exchange also was fractionally higher with trading dull.