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Show I . HOW BIO PANIC f WAS AVERTED Secretary McAdoo Outlines Step. Taken by Treasury department to Restore Confidence. SOUNDNESS OF COUNTRY Outastrophe of Calamitous rroportions Narrowly Averted Avert-ed at Opening of Euro-pean Euro-pean War. Washington, Dec. 9-Socretary Mc- Adoo in his annual report to congress 'today outlined at length the steps taken by the treasury department to 7,HZL0nfidCC aDd supnort American Ameri-can business, shaken and weakened by the European war A catastrophe of calamitous pro-L pro-L portions.' said the report, "was nar rowly averted. I i9 a tribute to th economic strength and soundness of the country and to the patriotism of Its people in every Has nnf walk of life that the shock has been so admirably withstood. A panic of cataclysmic cat-aclysmic proportions might easilv 'have resulted and if It had, the injury to the country would have been incalculable in-calculable and many years would hare been required to overcome its ef fects. How Situation Was Relieved. By formation of the SlOO.noo.OftO j gold pool, the $135,000,000 cotton loan I fund. iBsues of emergency currency ' and the deposits of crop moving mon- ! 63 in national banks, the situation I was relieved, and confident was revived, re-vived, the report says "Through the prompt and effective action of the treasury depnrtment and with the cordial and intelligent cooperation co-operation of the banking and business interests of the country, the danger has been averted." says the report "Confidence lias been restored ;inl specie payments have been maintained maintain-ed In the face of the world At no time since the war broke out has there been, to the knowledge of thlfl department, with the exception of o few Isolated ease,, a failure on the part of any solvent national bank to honor its checks in currency or mon-i mon-i ev or to meet its obligations. The general revival of business throughout through-out the country is the best evidence that confidence has been restored There is every reason why the country coun-try should look forward to the future with confidence so far as its trade, commerce and industry are con cerned." Treasury Gold Holdings. In spite of drains from Europe, where the nation owed about $450,-000,000 $450,-000,000 at the outbreak or the war. Secretary McAdoo says that the treasury's treas-ury's cold holdings show a reduction of only 656.279 on October 31. 1911. compared with holdings of $1,258,218,-357 $1,258,218,-357 on June 30, 1913 Secretary McAdoo referred in some detail to his action against hank?, which, he publicly announced, were hoarding up money, piling up reserves and charging high interest rates without with-out good cause It was a disnrr-able disnrr-able duty, he said, but one which resulted re-sulted in a determination on his own part to withdraw government deposits depos-its from banks not using such fun. Is for the benefit of their communities Drastic Action Takes Effect. "This action." he said, "had n s;ilu tory Influence, because it was followed by a general loosening up of credits; and while it is not for a moment contended that the improvement la attributable whoUj to the action of the department it Is. nevertheless, be-t be-t lieved to have had a beneficial effect upon the situation." Mr McAdoo's report is derott I l largely to a review of the activities of his department for the fiscal year ending on June 30, bei'orc the war be-gnn, be-gnn, but he included detailed state ments of the treasury's participation n various post-war problems. Recommendations t0 Congress. The secretary makes soveral recommendations. recom-mendations. He suggests to congress con-gress that the war revenue tax law should not expire December 31. 1915. but that Us operation should be extended ex-tended until the end of the European war. by proclamation of the president. Discussing the income tax law the secretary- advocated a change in the law so that persons having a gross Income of $3000 be required to make a return instead of those persons with a net income of that amount or over "Such an amendment," he saya. would simplify the administration of the law, assure more complete returns and materially increaao the income tax revenue, and save an immense amount of expense to which the government gov-ernment is now subjected in maintaining maintain-ing a sufficient corps of inspectors and Investigators to hunt out the people peo-ple who have failed to make returns ' Fie recommends also the repeal of the provision by which taxes do not accrue ac-crue until ten days after the close of the fiscal year and would make them accrue July 1 each year Although (he law did not produce the revenue expected, the secretary says, It has proved satisfactory and explains that the administration of a law of that character has many obstacles ob-stacles to overcome at the outset and that folk are n n neensf rem eH xnA must be educated to it. Many Fall to Pay Tax. Taking the tables of returns Mr. RicAdoo infers that there must be many who failed to pay the tax. "It is clear." says he. "that there were thousands of persons who failed altogether to make a return as required re-quired by law. The remedy for tnis. of course, is to have the collectors of Internal revenue In each district make an assessment upon those, who, in the opinion of the collector are liahlr tn the tav anil In addition to make such investigations as may be necessary to determine who in each district have failed to make proper .e-turns. .e-turns. The experience of the depa-t-l "cnt shows that many erroneous and faulty returns have been made." The work of discovering such cases, he ;.dds is being pushed forward with all possible rapidity. Tariff Act a Success. "The collection of revenue for the fiscal year ended June 30, 1914." says Mr. McAdoo, ' show the success of the tariti aet of October 3, 1913. as a revenue measure" He goes on to show that this act was estimated as the producer of $270,000,000 in its liist 'car and that there was BCtuall) collected $292,320,614. That, however, included nine months under the new law and three months ut.der the Pr.yne-Aldrich law. He show? that l he total raised under the new law with its corporation and income tax features was $363.701, 2R9 or $9.8ti3.-593 $9.8ti3.-593 in excess of the previous year's receipts under the preceding revenue measure. War Affects Revenues. "The Kuropean war." said the secre-icrv, secre-icrv, seriously affected the revenues ot the government from imports. 1 he revenue from customs for October, 1914: was $16,271,829 and for October. 1913. it was $30,138,0411, a decrease ;.f $12,866,220, The reduction Is solely sole-ly due to the falling off in impcrta-tlons impcrta-tlons The estimate made by ihe department indicated b yearly decrease de-crease of between $60,000,000 and $100,000,000. It is obvious that these estimates cannot be accurate as no one CSC forecast the course of events T. hile the titanic struggle in Euroie ;s in progress To keep the treasury in strong condition in these abnormal times was obviously the first duty of the hour. Upon It largely depended the safety of business and finance In this country." Would Consolidate Services. Mr McAdoo again recommends to rongress the consolidation of the revenue rev-enue cutter and life saying services, to hear the name 'Toast Guard serv Ice." He urged the building of two r.'ore revenue cutters and the appropriation appro-priation for a leprosarium for the use .if the public health service. He announced that the treasury department de-partment Is making a study of the facilities of the parcels post in the transportation of money and securities securi-ties between the treasury, sub trras-' uries and hanks. He points out that 1 the total payments for such service to J express companies during the Inst ! three years have averaged Z.Z."M and expresses the hope that a plan . cr,r the use of Dip mails of their use! lu conjunction with the express :om-! panles can be worked out to effect a 'urge saving and aJso to tnsure a much faster delivery service. He' asks congress once more to giw him a contingent fund of $20,000 to make effective investigations, eradicating abuses, ete. Summaries of reports of his bureau chiefs are included In the report.! Assistant United State? Treasurer John Durke advises the authorization of a $5 gold certificate. The revenue cutter service asks for a cutter for use near the Pannma canal zone. Secretary McAdoo points out that the federal reserve board will make a separate report. Receipts of Government. Secretary McAdoo estimates the receipts of the government lor tlv fiscal year 1915. ending June SO, al $728,000,000 Including $220 000.000 from customs, and $54,000,000 from the emergency war tax Exclusive of the Panama canal he places disbursements disburse-ments at $710,000,000 for the current i year. Counting upon 128.000,000 for the canal out of the treasury's general fund, he places the excess of disbursements disburse-ments at $10,000,000. For the fiscal year which ends June 10 lOlfi. Mr McAdoo says he expects ex-pects receipts amounting to $735,000 000 with customs bringing $240,OOH fjOO and the emergency war tax $44 000,-000. 000,-000. The secretary places ordinary expenditures for that 3jear at $713,-765,105 $713,-765,105 with $19,000,000 additional for the Panama canal, leaing a slight surplus sur-plus In his estimates, Mr. McAdoo puts the return from the income tax for the current fiscal year at $80,000,000; $40,000,000 each from Individuals and corporations For 1916 he expects the same tax to produce $85,000,000. I half to be paid by individuals, half by corporations. |