FINANCING U.S. DEFENCE

Press, Volume LXXVII, Issue 23319, 3 May 1941, Page 3

FINANCING U.S. DEFENCE

LESS PRIVATE SPENDING URGED

(Received May % 9 p.m.) ’ ' WASHINGTON. 5 May 1. The chairman of the United States Federal ReseVve (Mr M. S. Eccles) declared that defence' financing made it desira’ that the public cut down purchases l of automobiles, houses, and othbr consumer goods. This would not only help to meet the cost of defence, but would put the brake on inflationary tendencies. Mr Eccles strongly urged a method of controlling the volume of forward buying on instalment credits, which, he' said, .tended to ..have an unstabilising influence. He opposed a general sales tax, because it would fall most heavily on those'least able, to pay, but supported a selective sales tax, which would reduce the demands for luxury "goods, '■ i. 'H e urged that the first source of defence revenue should, be a corporation tax and. an excess profits tax, betaUße Corporations were the greatest 'beneficiaries from defence . expenditures. Heavy corporate income and excess profits taxation would reduce the 'amount required from personal incomes. , Nevertheless, normal and surtax rates on personal income could be /and. must be substantially increased. Exemptions should be reduced, thus spreading the number of ’payefrs^