Imperial Valley Press

CONGRESS RECEIVES MESSAGE
President Urges Higher Taxation For Next Two Year Period.

URGES CONFIDENCE
Advocates Emergency Aid To Agriculture And Business World.

By RAYMOND CLAPPER
United Press Staff Correspondent

WASHINGTON, Dec. 8. (U.P.)-

President Hoover today asked the people to accept a two-year increase in taxes and urged congress to form a national reconstruction finance corporation to aid in rehabilitation of business.

Those two proposals were the cornerstones of the President's program given to congress today in the most momentous message a chief executive has delivered since the war.

The time has come for aggressive, forward action, the President maintained. He expressed confidence in the country's ability largely to overcome the depression regardless of conditions in other parts of the world.

All that is needed is to revive confidence, he said, summon courage and determination, loosen credit and put to work the country's huge resources and stores of money.

He emphasized that aid to the railroads must form a part of reconstruction program as they affect the vitals of the country's economic life.

He proposed a temporary tax increase to end July 1, 1934 which it is unofficially estimated, would amount to almost $1,000,000 a year. Details were reserved for a latter time, but Mr. Hoover gave a general warning that the country must prepare to take on an increased emergency burden due to the sharp declines in tax revenues.

The outstanding credit proposal in the message was for creation of a reconstruction finance corporation to extend emergency help to business and agriculture. It's capital would be raised jointly by the government and private subscription.

Would Create Confidence

"Its purpose is that by strengthening the weak spots to thus liberate the full strength of the nation's resources"

Such a corporation, backed by possibly a billion dollars, would be expected to have a strong psychological effect on the country such as was felt from the launching of the recent national credit corporation.

This proposal, coupled with the tax increase recommendation, forms the cornerstone of the President's attempt to inspire confidence and build a sound private and public fiscal foundation for economic recovery.

"The first requirement of confidence and of economic recovery is financial stability of the United States government," he said. "I must at this time call attention to the magnitude of the deficits which have developed and the resulting necessity for determined and courageous policies"

He said there must be insistent and determined reduction in government expenses and that the deficit must be partially met by borrowing, for an attempt to cover them by increased taxes "would retard recovery."

He would fix the tax increase so as to balance the budget for the year beginning next July 1 except for statutory debt retirement. This would require about $921,000,000. A net increase in the national debt of $1,711,000,000 exclusive of debt retirement is indicated for the current fiscal year, now almost half over so that the proposed tax increase is not expected to cover that amount in full

Mr Hoover declared he was opposed to general tariff revision.

"Such action would disturb industry, business and agriculture," he said. "It would prolong depression."

He also registered unqualified opposition to any "direct or indirect government dole." there were no specific unemployment relief recommendations though Mr. Hoover said that through the government construction program, the federal payroll and veterans aid the federal taxpayer is contributing directly to the livelihood of 10,000,000 citizens. The President's unemployment committee, he said, "gives assurance against suffering during the coming winter."

Prohibition was not mentioned in the message.

The Hoover program included the following additional recommendations.

1. Railroads, whose stability was described as necessary to economic recovery, should be enabled to reduce costs by proper consolidation, and competing services should be subjected to rate regulation.

2. Authorization by congress for further government advances to federal land banks to make possible greater aid to agriculture.

3. Legislation to enable federal re- (Continued On Page
HOOVER'S MESSAGE URGES
TWO YEAR TAXATION RAISE

(Continued From Page I)

moralization in the coal, oil and lumber industries.

reserve banks to make quickly available to depositors some portion of funds tied up in closed banks.

4. Establishment of a system of home-loan discount banks as outlined in a recent presidential statement.

5. Extension during emergencies of rediscount eligibility provisions of the Federal Reserve act. without lowering the safeguards of the system, as approved in the White House conference with congressional leaders October 6.

6. Prompt improvement of banking laws further to safeguard deposits and credit flow and congressional investigation of the need for separation of different kinds of banking, enlargement of branch banking, and ways of expending membership in the federal reserve system.

7. Consideration of practical questions relating to deposits and investments of postal savings banks which have more than double deposits in the last year.

8. Anti-trust laws should not be repealed, Mr. Hoover said. but he urged congress to consider whether changes should be made to end double