AMERICAN FINANCES.

New Zealand Herald, Volume LXIII, Issue 19390, 27 July 1926, Page 11

AMERICAN FINANCES.

RIGID ECONOMY SYSTEM. BIG ESTIMATED SURPLUS. NO LESS THAN £76,000.000. [from our own correspondent.] SAN FRANCISCO, July 1. Can the brain and eye of a Britisher conceive and visualise the United States half a century hence ? The question is suggested after reading the full official text of a remarkable address by President Coolidge on the finances of the country, delivered to an official body known as the Business Organisation of the Government, a corporation that, working under the Director of the Bureau of the Budget, formulates and reviews the items of revenue and expenditure of the great republic. Here, in the year of grace 1926, at the half-way post, when the United States have practically got the rest of the world, on the debit side of the ledger, for at least the next sixty years, the period of debt-funding, she is acting in an extraordinary manner. Instead of, as one might imagine, reflecting this superprosperity, America is actually economising. And economising with results that would be an example to any man unfortunate enough to be about to file his schedule in bankruptcy. President Coolidge's Statement. Let the President himself stats the case:—"Since June 30, 1921, the public debt has been reduced from £4,795,000,000 to £3,950,000,000. Taxation has been reduced from £ll 3s 3d to £5 12s 6d per head. Since the commencement of the fiscal year, 1921, there have been three substantial reductions in taxation. " In 1921, the income-tax of a married man with a net income of £6OO a year was £l2; in 1923, it was £1 10s; now it is nothing. For a single man, in the same period, and on the same salary, it has fallen from £24 to £3 7s 6d. The estimated surplus for the current fiscal year is £76,000,000. From 1921 to 1925, the Federal Government reduced expenditure from 60 per cent, of all Government in the country to 27 per cent." This wonderful result, according to the president, is due to constructive economy during the period in which the Bureau of tho Budget has been operating. "It is not an economy of a mean and sordid nature," he says, " it is not narrow and selfish but broad and ennobling, undertaking to deal justly with the whole situation by raising such revenues as the people can pay and fairly bear, and meet such expenditures as are fairly required. The result is America to-day. We use money as we use any other utility—to advance the welfare of the human raco. Money is not endowed with any secret quality. Man was not made for money, but money for man." " An Orgy ol Spending." Tho President gravely warns the United States that side by side with the great economy the Federal Government is practising, there is an orgy of spending by city, county, municipal and other governmental enterprises. He states that he regards the situation as fraught with grave consequences. Consider the position of the United States, aside from President Coolidge's warning, sixty years hence. To-day. when all its debtor nations have funded their debts, the initial payment, with perhaps the exception of Great Britain—although the point is not emphasised--is small- Some pay nothing for a period of five years. In thirty years and sixty years from now, when the second and third generations from the date- of the funding pacts take up the burden, the payments will be colossal.

When the bulk of the £2,400,000,000 owing by the rest of the world—nearly three-fourths of which by Great Britain and France—has been paid, what will be the position of the United States ? Instead of the necessity for taxation, it looks safe to prophesy that a bonus in cash will bo paid by the United States Treasury each year to Americans, as their profits from mere citizenship.