The Abbeville Press And Banner

NEW SECRETARY
'URGES ECONOMY
Mellon Issues First Statement From
Treasury--For Budget System
Washington, March 10.-Secretary Mellon of the treasury in his first official statement, made public tonight in the form of a letter to bankers, appeal 'to the people generally' to stand for rigid economy governmental expenditures and urged the immediate establishment of a national budget system.

The new treasury secretary in his letter discussed at length the national financial condition declaring the showing made in the last eight months had been 'particularly encouraging.'

There are, however, heavy drains to come on the treasury this month and next he said and these require the floatation of more short term certificates of indebtedness announcement of which he made coincident with the letter to the bankers.

'The nation can not afford extravagence,' Mr. Mellon asserted 'and so far as possible it must avoid entering new fields of expenditures.

Figures on current operations of the government show that the country's finances are sound but that the situation calls for the utmost economy.

'The heavy requirements of the government on account of necessary expenditures including interest and sinking fund of the public debt and the maturity of $7,500,000 in short dates debits in the next two years make imperative that the greatest care and economy be exercised in matters affecting government expenditures.

'The people generally must become more interested in saving the government's money than in spending it. A thoroughgoing national budget system must be established and the government's expenses brought into relation to its income.'

The belief was expressed by the new secretary, however, that the first nine months of the fiscal year or to March 31 would show the treasury had made ends meet with a slight surplus to use against the great war debt. Payments on the war debt must necessarily be slow, he said, explaining that the heavy payments to the railroads would seriously hamper previous plans to lower the debt.

The issues of certificates announced will aggregate $400,000,000, and will bear interest at 5 1-2 per cent. half having a maturity date of one year and the remainder for six months. Both issues will be accepted in payment of income and profits taxes.

In notifying the bankers of the issues. Mr. Mellon said he felt it his duty to inform them at the outset of his administration of the probable requirements of the government in the coming months and to say something concerning its financial program. He said that $500,000,000 in certificates must be paid off March 15, and additional $118,000,000 a month later. Besides these needs, there is to be paid the semi-annual interest on Liberty bonds on March 15, a payment of about $75,000,000. The treasury also must make payments to the railroad during March which Mr. Mellon estimated at $200,000,000.

To partially offset the heavy outgo the regular quarterly payment of income and profits taxes is due March 15, from which the treasury hoped to realize approximately $500,000,000. This tax payment, therefore, will be used up in retiring the certificates due on the same date. Funds obtained from the new issues of certificates then will become available for caring for other debts.