THE CABINET: Calculations

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J. P. Morgan standing in front of a Rolls-Royce show window might remove his silk hat, scratch his head and ask with perfect reason: "Shall I buy one? Shall I buy ten? Shall I buy twelve?" A beggar standing in the same place and seriously making the same inquiry might very properly be arrested for insanity. Yet the difference between the two would be a mere matter of purse.

It is the same way with Congress. It removes its black felt political hat, scratches its earnest political head and wonders: "Shall we have Mellon's tax reduction? Shall we have Garner's? Shall we have a bonus?" The sanity of the proceeding depends entirely on how much surplus revenue there is to play with. And the amount of surplus revenue depends on an estimate. Mr. Mellon of the Treasury Department offered the estimate. According to his estimate, Congress may sanely ask: "Shall we have one—or rather, shall we have the Mellon bill?" To speak of the Garner bill, or of the Longworth compromise (which was passed by the House) or of a soldier bonus would not be sense—pocketbook sense. But the opponents of the regular Republicans—Democrats and insurgents —do speak of these things and do claim to be sane. Last week they set out to prove their sanity by disproving Mr. Mellon's estimate of the Government's purse.

The Democrats' Argument: Heretofore the estimates of revenue compiled by Government Actuary Joseph S. McCoy have usually been accepted. This year, besides the Actuary, the Commissioner of Internal Revenue and the Director of Customs also made estimates. In every case but one, the Treasury accepted and published the lower figures.

Representative Garner, senior Democrat on the Ways and Means Committee, ejaculated: "I have never questioned a Treasury estimate before, but in view of the $1,000,000,000 mistake*, while the previous bonus was under consideration, in addition to the errors which have crept into recent estimates, I can place no further confidence in Treasury information. This is a form of immorality which, unfortunately, cannot be punished unless the man happens to be under oath."

These are the estimates of revenue for 1924 as prepared by the various calculators (figures represent millions of dollars):

FISCAL YEAR ENDING JUNE, 1924 McCoy Others Accepted Customs $540 $570 † $570

Income Tax 1,937 1,850†† 1,850

Miscellaneous 965 933†† 933

Total $3,442 $3,353 $3,353

FISCAL YEAR ENDING JUNE, 1925 McCoy Others Accepted

Customs $493 $575† $493

Income Tax 1,953 1,800† 1,800

Miscellaneous 941 927† 927

Total $3,387 $3,302 $3,220

Accordingly the Democrats set their own calculators to work to obtain independent figures.

Mr. Mellon's Reply. The three gentlemen whose figures were quoted above were each asked to submit estimates on probable revenue. They were then called into conference and the figures discussed.