Mellon Report

As has been his wont, Secretary Mellon, reporting to Congress on Federal finances for another fiscal year (1928, ended June 30), reviewed the progress of private business and finance in the U. S. during the same period.

Mr. Mellon noted a decline of 3% in the physical volume of all business transacted but an increase of 7.7% in dollar-volume. The Hoover report had showed that just the opposite was true of the country's foreign trade, taken separately. U. S. exports & imports increased in physical volume, decreased in dollar-volume.

In the financial world, the outstanding 1928 developments reviewed by Mr. Mellon were 1) the movement of 500 millions in gold out of the U. S.;* 2) the consequent extension of credit by the Federal Reserve system; 3) the increase of speculation by "powerful groups" and the general public, which "believed and acted as if the price of securities would indefinitely advance"; 4) the reversal of Federal Reserve policy, sending money rates aloft.

In his own official domain, Secretary Mellon reported that the public debt had been cut by $905,883,703 in fiscal 1928. The movement of gold from the U. S. was reflected in a decline of 108.8 millions in the Treasury's bullion & coin, and a decrease of 324.3 millions in the bullion & coin held by the Treasury for the Federal Reserve Board.

The Government's main sources of revenue are Customs, Internal Revenue and such miscellaneous income as payments by foreign debtors and tolls from the Panama Canal. In his estimates of the country's income for fiscal 1929 and 1930, Secretary Mellon figured that Customs would increase 14 millions over 1928, to an annual total of 582 millions. Internal Revenue is figured for a drop of 52 millions in 1929 and eight more millions in 1930. The income tax provides the bulk of Internal Revenue. Income tax figures:

1928 $2,173,952,556.73 (collected)

1929 $2,165,000,000.00 (estimated)

1930 $2,175,000,000.00 (estimated) The tax reductions voted by Congress last spring will be felt at the Treasury next spring, chiefly in smaller returns from corporation incomes. Other factors will be the reduction of the estate tax and the repeal of the automobile sales tax.

Next to the Income Tax, the biggest source of Internal Revenue is the tax on tobacco. These collections, steadily increasing, were 64% of all miscellaneous Internal Revenue. Another increasingly productive source of Internal Revenue is documentary stamps. Stock market activity last year boosted sales of stock-transfer stamps to 24 millions, a 41% increase over 1927.

* The U. S. still has more gold than at any time prior to September 1923. It has 40% of the world's gold supply, almost four times as much as any other country.