SENATE APPEAL

Hokitika Guardian, 2 June 1932, Page 5

SENATE APPEAL

FOR SALES TAX

RUN ON DOLLAR FEARED

(By Telegraph—Per Press Associationl

WASHINGTON, May 31. Within half an hour after Mr Hoover to-day, endorsed the special manufacturers’ sales tax before the Sen-

ate, its financial committee again rejected this disputed levy by 12 votes to

Earlier in the day, Mr Hoover adopted the unusual course of addressing the Senate in person. He declared that he did not favour the general sales tax system providing a levy on every sale, from wholesaler to retailer, to consumer. However, he endorsed the special manufacturers’ excise sales tax, along the lines recommended by the House Ways and Means Committee, twice rejected by the House. This tax is levied only once upon a commodity, when it is sold by the manufacturer.

The President also outlined a project of Federal aid, which would broaden greatly the leading powers of the Reconstruction Corporation j so that it Could ndvanco funds to the State and municipalities, and private industry to 4tart a business recovery. Tile protracted struggle in the United States 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 a sales tax on manufacturers, excluding food, clothing and other necessities. The President declared that an emergency existed which demanded quick action. He spoke at considerable length on the weakness of the do’lar on the foreign markets, and also on the recent steady depletion of United .States gold stocks. He listed three major duties, which, he. said, Congress must accomplish, namely: A drastic reduction in the expenditures; the passage of adequate revenue, legislator and unemployment relief. He gave reasons why he considered the Sales Tax Bill, in the present form was inadequate. He said: “The continued downward movement in the economic life t of the country has been particularly • accelerated during the past few days, . and it relates, in part, definitely to ( the financial programme of the Govern- | anent. There can be no doubt that, ; super-imposed upon other causes, the long-continued delays In the passage ( ©f legislation providing for such a j reduction in expenses and such addi- ; tional revenues as would balance the Budget, together yyitli the proposal of n project which would greatly increase Governmontat expenditures, have giv- ( rise to doubt and anxiety as to Wiie ability of the Government to meet its responsibilities. These fears, no doubt, have foolishly been exaggerated in foreign countries. They know from bitter experience, that the course of

an unbalanced budget is the road to ruin. They do not realise that, a,s i slow as our processes may be, we are determined, and have the resources, to place the finances of tlie 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 our 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 the confusion in the public mind, and the rising f-eling of doubt and fear confined to |foreign countries. It reflects ! "itself directly in diminished economic activity, and increased unemployment with-

in our own borders, and among our own people. There is? thus further ' stress on the already diminished and istrained economic life of the country/’

The President’s message, came at a mcH hectic time of taxation. The Treasury Secretary, Mr Mills, earlier had appeared before the, Senate Finance Committee and had said that pending the Bill, they still were some 285 million dollars short of balancing the budget, and he' again urged the passage of the Sales Tax Bill. The Senate Finance Committee latter defeated the, Sales Tax by 12 votes to 8. Meanwhile the Senate announced that it would not adjourn at the regular hour to-dav, thus indicating the BSassibility of attempting to pass the Unensure to-night, but without the Sales Tax although a record vote oh this issue is likely. Tt is estimated that the United States gold stocks have, been depleted by 254 million dol’nrs this year, of which 207 million went away in the month of May.

THE SENATE'S DECISIONS

W VSHTNOTON, June 1

After defe ting the sale* tax bv s?* votes to 27, the Senate, by 72 votes 11. passed the Tax. Bill at 12 25 o’clock on Wednesday morning. The Bill provides 115 mil'icfi dollars of revenue which is supplemented bv 9.T million cl oil a- s provided in the pending Economy Bill, to meet the GovorriWent’s requirements within the next lal year.

The Senate o'ti Tnc-diiy voted n 0110 hundred per rent. tax ou the incomes earned through the violations of tins State or Federal laws.