NOT BALANCED

Southland Times, Issue 21718, 2 June 1932, Page 5

NOT BALANCED

AMERICAN BUDGET PRESIDENT’S DRAMATIC APPEAL SALES TAX ADVOCATED (United Press Assn.—Telegraph Copyright.) (Rec. 8.15 pan.) Washington, May 31. The protracted struggle in Congress to balance the Budget reached a dramatic climax to-day. President Hoover, almost without notification, appeared in the Senate and read a message urging the immediate balancing of the Budget and the adoption of the manufacturers’ sales tax, excluding food, clothing and other necessities. He declared that an emergency existed demanding quick action. He spoke at considerable length on the wealmess of the dollar on foreign markets and the recent steady depletion of gold stocks. He listed three major duties Congress must accomplish—namely, drastic reduction in expenditures, the passage of adequate revenue legislation, and unemployment relief—and gave reasons why he considered the Tax Bill in its present form was inadequate.

“The continued downward movement in the economic life of the country has been particularly accelerated during the past few days, and it relates in part definitely to the financial programme of the Government,” said Mr Hoover. “There can be no doubt that superimposed upon other causes long continued delays in the passage of legislation providing for such reduction in expenses and such additional revenues as would balance the Budget, together with the proposal of a project which would greatly increase governmental expenditures, have given rise to doubt and anxiety as to the ability of the Government to meet its responsibilities. These fears are no doubt foolishly exaggerated in foreign countries. - They know from bitter experience that the course of unbalanced budgets is the road to ruin. They do not realize that slow as our processes may be we are determined and have the resources to place the finances of the United States on an unassailable basis. The immediate result has been to create an entirely unjustified run on the American dollar in foreign countries within the past few days. “Despite our national wealth and resources and unparalleled gold reserve, the dollar stands at a serious discount in the markets of the world for the first time in half a century. This can and must be immediately corrected or the reaction on our economic situation will be such as to cause great losses to our people and will further retard recovery. Nor is confusion in the public mind and the. rising feeling of doubt and fear confined to foreign countries. It reflects itself directly in diminished economic activity and increased rmemployment within our own borders and among our own people. There is thus further stress on the already diminished and strained economic life of the country.” The President’s message came at a most hectic time. The Secretary of the Treasury, Mr Mills, earlier had appeared before the Senate Finance Committee and said the pending Bill was some 285,000,000 dollars short of balancing the Budget, and again urged the passage of the sales tax. The committee later defeated the sales tax by 12 votes to 8.

Meanwhile, the Senate announced that it would not adjourn at the regular hour to-day, indicating the possibility of attempting to pass the measure to-night without the sales tax. A record vote on this issue is likely. It is estimated that the United States’ gold stocks were depleted by 254,000,000 dollars this year, of which 207,000,000 dollars went in the month of May.

TAX BILL PASSED

(Rec. 7.40 p.m.) Washington, June 1. After defeating the sales tax by 53 votes to 27, the Senate by 72 votes to 11 passed the Tax Bill at 12.25 on Wednesday morning providing for 1,115,000,000 dollars revenue which will be supplemented by 250,000,000 dollars in the pending Economy Bill to meet Government requirements within the next fiscal year. The Senate on Tuesday voted in favour of 100 per cent tax on incomes earned through violations cf State or Federal laws.

SHARP REACTION

NEW YORK STOCK EXCHANGE. New York, May 31. The Stock Exchange suffered one of the sharpest reactions of the year on Tuesday while the Senate struggled to find additional taxes to throw into the Budget Bill hopper. The net losses ranged from one to four dollars in the principal issues.