Show MEllON POINTS TO PRO PROSPERITY PERIT BORN Of REfORM Annual Treasury Report Stresses Prospect of Tax I Redu Reduction tion as Big Factor By LUDWELL DENNY DEtINY United Press Staff Correspondent i WASHINGTON Dec 10 United Press The Press The nation Is s enjoying a period of genuine and distributed prosperity which wai warrants rants optimism optimism op op- op- op for th the Secretary of the Mellon declared in his annual report leport to congress today This advance ha has been aided b by bythe bytho tho the tho prospect of ta tax 1 reduction and reform he said The p of or orl l public economy and public debt payments which has been len rigidly adhered to during tho the past five years has been a direct contributing In ing factor to the ement improvement in inthe inthe inthe the credit and m markets Referring to his departments department's administration administration ad d ministration of prohibition Mellon claimed that the coast guard has forced marl marked ed i reduction in smuggling and that under inder Assistant Assistant Assistant Assis Assis- tant Se Secretary Andrews' Andrews new or organization organization organization or- or vigorous action is be being being being be- be ing taken to make the law jv enforcement enforcement enforcement enforce enforce- ment agencies as effective as pos pos- sible The departments department's policy was de described described de- de scribed as a concentration of ef effort effort ef- ef fort the sources of supply of illegitimate alcoholic beverages beverages' and encouragement of local law enforcement by states and RAPS INSTALMENT CRAZE present ty rhe h expressed t tb e 1 hope lP ope tb that t theM public s grow Iiii ha lt of buying buying every conceivable commodity commodity com corn on time and the speculative speculative speculative specula specula- tive tendency In real leal estate in some communities would not undermine i business caution Mellon Menon warned congress against various vanous proposals to reduce taxes below the treasury estimates to I increase tax to I Incomes and to retard public debt payments Any interference with the present present present pres pres- ent paying debt-paying program would tend to offset the good effects which have already been accomplished accomplished accomplished he said The public debt Is toda today about Interest and sinking fund payments during the fiscal year ended June 30 1925 for which provision was made Inthe in inthe inthe the budget amounted to 1188 At the present rate of payment as provided by the sinking fund the so-called so domestic debt representing representing representing money spent by America In Inthe Inthe inthe the war and mounting amounting at the present time to will have been discharged by 1944 This was his argument against further exemption of small incomes from taxation LOOKS TO EMERGENCY It If taxation is to be successful as as a revenue producer in times of business depression as s well vell as in times of business prosperity it must have a broad base as a foun foun- dation If exemptions are raised too high the number of taxpayers taxpayers tax tax- tax tax-I payers Is so materially reduced that the remaining taxpayers in times of national emergency cannot furnish furnish furnish fur fur- nish the revenue required by the government Mellon warned against excessive i reductions which may be advocated This would result In an annual d deficit he said al 1 and arid might necessitate the raising of tax rates later with all the bad effects which a constant juggling of rates would entail Pointing out that federal exp have now nov been reduced to a a. minimum th the veteran veteran vet vet- eran cran financier said there Is no f fur fur- r- r her way bf of eliminating heavy tax burdens than by eradicating warThe warThe warThe war The expenditures x which are di directly directly directly di- di or 01 indirectly attributable to towar towar war wat- and the national defense compose compose compose com com- pose over 80 per cent of the total federal expenditures This will wiil be e the Inevitable situation us long as us war Is the method of settling settling set- set International disputes These facts should be faced sqUarely sqUare by those who clamor for i reduced educed government gov gOY expenditures and at the I same same time tune oppose the tho worlds world's ef efforts cf- cf i forts to devise rational methods for Ui I dealing with International ques ques- I |