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Show WILL INCREASE THE l TREASURY DEFICIT One of the Effects of the Five Per Cent Dscount Blunder In the Underwood Tariff I 'Washington, D. C, Juno 3. Ap proximately $15,000,000 in duties nl- ready collected must bo refunded it "jT tho Supremo Court upholds the decision de-cision recently handed down by tho Customs Court suspending tho no called 5 per cent clauso of tho Underwood Un-derwood Simmons Tariff law, granting grant-ing a reduction of duties to that amount on goods imported In Amcrl-tan Amcrl-tan bottoms. This is tho jlauso which the Attorney General held was In conflict with certain treaties of tho United States and therotoro In-volld. In-volld. Tho diatoms Court, hoivover holds that tho clauso Is valid, and that tlie 5 per cent rehato must be granted on nil goods imported in ships of countries with which tho United States has "favored nanon' treaties. As such treaties exist with tho principal countries of tho world tho effect of tho decision practically is to reduce the amount elicited through customs by C per cent. With tho balance In the troasmy reduced to $13,000,000, the refund 'f it has to bo paid now, would completely com-pletely wipe out the working balance. bal-ance. Tho Postmaster General recently re-cently announced that tho lncrc.-.sed expenditures of the Post OITloo Department De-partment amounteJ to moro than J9,-000,000 J9,-000,000 nnd thero la plainly another deficit on tho score of postal rao-nues. rao-nues. Deficit Will Be Large It la now absolutely certain that even after tho income and torpora-tlon torpora-tlon taxes aro paid Into the treasury thero 'will bo a very largo deficit. Tho treasury is counting on $80,000,-000 $80,000,-000 through tho collection of these taxes, but oven if this flguro should bo reached, it is wholly probablo that tho deficit will ho moro than $100,-000,000 $100,-000,000 at tho end of tho fiscal year. It is significant that Senator Jas. Hamilton Lewis, of Illinois, after a visit to the Whlto IIouso, announced that ho favored tho Issuance of $300,-000,000 $300,-000,000 in Federal government bonds as n "prosperity assurance" Following Follow-ing tho Lowls interview, a statement .- was telegraphed to Washington from Xi- Scotland Neck, N. C... where- Roprc-Ecntativo Roprc-Ecntativo Claudo Kltchln, Democratic leador of the IIouso Is spending a va-atlon. va-atlon. Sir. Kltchln was quoted as saying ho "would not bo surprised if Congress Is called In extra session In tho fall to tako caro of tho rovenuo problem." Not Due to European War No longer will It avail tho Freo Trade administration to arguo that this ominous financial situation Is duo to tho Kuropean war. It Is a1 favorito statoment of Mr. Itcdflold, our Secretary of Commorcc, that tho European war has virtually Btoppcd all Importations Into tho United States. Hut In a report which ho read to tho Cabinet meeting recently, ho admitted that desplto tho war thb Underwood Simmons Tariff law has permitted Importations greatly In excess of thoso under tho Protective Tnrlff. If an ndvocato of Protection made the deflnlto stntemont that importations importa-tions at this time, despite the war, greatly in excess of tho Importations under tho Payno Aldrlch law, tho administration would probably characterize char-acterize such an assertion as a false hood, but Sir. Uedllcld makes that very assertion himself. Ho carefully careful-ly glosses over this parti Hilar feature, fea-ture, but his figures bIiow that tho imports In April, 1915, totaled 1160,-B7C,10C 1160,-B7C,10C as against $173,702,114 In April of last year, when thero was no war. Imports Are Greater In drawing attention to this decline de-cline in Imports, which ho says Is duo to tho European war, ho falls to call attention to tho fact that the reason the Imports wcro so high in April of last year was because the Underwood law was in full swing nt that time. Ho pays no attention at all to tho facf that In April, 1913, when tho Protective Tariff was In tp-eratlon, tp-eratlon, tho Imports only amounted to $146,194,461, or moro than $14,-000,000 $14,-000,000 less than at tho present time when the administration attempts to show that practically all Importations have stopped. Though the Euiopcan war is necessarily a great lestrlotlon on Imports, nevertheless tho Imports under tho present Tariff nro moro than 11 per cent higher than under tho Protective Tariff. Tho Protectionists of tho country have frequently labeled tho Underwood Under-wood Simmons law a Freo Trado measure This has been denied by Democratic leaders. Tlioy tall tho;r law n Tariff for rovenuo only, nut falling utterly to rnlso sufficient rev-entio, rev-entio, It can no longer bo Justly call-by call-by that name nnd Sir. Itedflold by guardedly admitting that C3.G tor cent of nil Imports Into tho United States now enter freo of duty, makes It clear that tho country Is now op-I op-I orating a Freo Trado policy. Is a Free Trade Measure Tho present lnw is proved by Sir. Itedfleld himself to bo a Free Trado measure pure and simple, falling in every respect to rnlso tho revonuo necessary for tho maintenance of the I government and having inly 37 per cent of Tariff for revenue purposes and none for Protection. Sir. Itedfleld told tho President at the Cabinet meotlng that already tiio trado balanco for tho fiscal year 1? well in excess of $900,000,000 nnd with tho ontry of Italy into tho war, and the almost ertaln Increase in the demands of that country for war supplies he predicted that beforo July 1 the net bnlance of trade would exceed tho unprecedented totul of a billion dollars. Indicating tho part which tho war has played In building up this towering tower-ing total, Mr. Itedfleld showed tho President that for tho ten months botween August 1, t!io dato of tho outbreak of war, nnd April 30, tho net balanco of exports over 'mpurts amounted to $8."1.35S,319. For the ! month of April alono tho balanco vna $133,894,093. What Will Happen to Business? This statement of Sir. RcdiloH'a, showing tho part that tho war Is playing in building up oxportj. indicates in-dicates clearly what will happen to our "prosperity" after tho war Is over. When tho export trado falls off and Europo throws its full weight of cheap labor products Into tho United Uni-ted States what will happen to Am- erlcan business? Tho Underwood-Simmons Underwood-Simmons law provided that: For tho purpose of readjusting tl'c present duties on Importations Into tho United States, and at tho iamo tlmo to encourago the export trade of this country, tho President of the United States is authorized and empowered em-powered to negotiate trado agreements agree-ments with foreign nations wherein mutual couics8lons are made 'ooki.ii; toward freer trade relations and further fur-ther reciprocal expansion of trado and commerce; Provided, however, that said trado agreements, before becoming operative, shall bo submitted submit-ted to tho Congress of tho United States for ratification or rejection. No Room for Concessions No agreements hnvo been negotiated. negotiat-ed. So far as Is known no attempt has been niado to negotiate ijvue-nieiits. ijvue-nieiits. Tho reason for this is that the near Freo Trado Tariff loft no basis for further concessions on tho part of tho United States. With 'ii per cent of all Imports freo of iluty what could the United States titer to any foreign country In return for lower duties? Tho United States has opened its ricli markets to tho cheap labor of tho world and can offer nothing no-thing moro In return for reciprocal concessions. Tho failure of the Tariff law Is bo conipleto that tho Freo Trado leaders aro in confusion. All their Tariff Ideas havo been upset. An example of tho way In which the administration administra-tion is now considering tho Tariff Is given by Senator Lewis, who now talks In this manner: H'gher Tariff Foreshadowed The effects on tho United States "f the European war, together with 'he changes In tho forms of production, will cause a complete transformation of tho present Tariff schedule. To ralso revenue to meet the needs of tho government and nlso meet Increasing In-creasing demands of tho now machinery machin-ery of government and the now policy of increased army and navy, which will now be Inaugurated, tones a resort to moro different forms of taxation tax-ation than this government ever experienced. ex-perienced. There will never bo a Fre'o Trado party opposing any taxes on Imports which can bo successful in this coun try. A moderato form of tax must bo undertaken to cooperato with tho Income tax on citizens and a franchise fran-chise tax on corporations. The next domestic Issuo before the, people will bo a proposal of a form of direct tax, cither based on land or gross output of manufactures, or both. As jho Income tax has failed to reallzo tho amount of incomo it should, Tariff taxes will havo to be put on Imports to make up tho do-licit do-licit of tho liuome tax until that now form of tax to meet tho now needs has been devised. The Stubborn Schoolmaster All tho difficulties of tho Freo Trado party might bo adjusted if President Wilson himself would nd-nilt nd-nilt frankly that tho present Tariff policy has failed nnd that a completo restoration of Protection Is necessary. neces-sary. Ho will not admit this, however. how-ever. Norman Slack and other leaders lead-ers have suggested that tho Democrats Demo-crats thomselves rovlso the Tariff, but tho President receives such wig-gestlons wig-gestlons coldly. Thero aro many Democrats who feel that a restoration of Protection will remove one nt the big lssuo8 of tho next campaign with which they will havo to contend, but tho President will not oven eonsidor such a suggestion and tho issuo re-pains. re-pains. Thomns V. Logan. In American Am-erican Economist, |