Military Expenditure Still Largest Item in Budget:
Cuts Impossible: Miscellaneous Taxes Abolished H. H, Kung's Report on the 2ist and 22nd Fiscal Years ending June 30, 1934, has been submitted to the Political Council of the Central Executive Committee.
The Report covers the period of the last three months of Dr. T. V. Soong's long term of office and Dr. H. H. Kung's Ministry from October 29, 1932, onwards, The Report points out that the fact that the national revenues have not fallen off as much as might have been expected has been due to the compensating effects of the collection of Customs Duties on a gold basis, higher rates of taxation, and the increase in administr: ive efficiency. jut," remarks Dr. Kung, "there is obviously a limit to the effectiveness of these measures in increasing or maintaining revenues.'
From the beginning of 1933 became impossible to" maintain the curtailment of expenditures whicl during 1982) had" made possible balancing the budget without resort to borrowing, First came the fighting in North China, followed later the disastrous Yellow River foo' and the Fukien rebellion: while uring the entire period the ant Communist campaign has required Jarge outlays, Also the Customs Fevenue was reduced materially by the depression. During the two fiscal \years the net deficit was {$86,000,000 "and. $147,000,000 respec: tively, During these two years however, retirement of loans amounting to about, $100,000,000 and {$115,000.00 respectively, wax not much short of the total deficit Heavy. military expenditures are still the crux of the financial problem, and a severe drain upon the econo my of the country. During the fiscal years Just past, military expenditures Were. $21,000,000 and $973,000,000 respectively, The increase in these mounts" as compared with earlier ears results "in part from ube fact That payments (and also receipts) me clude figures for areas for which bud-glary statements were not previous available, and from transfer to the Accounts of the Ministry of Finance of certain military expenses of an Inter-departmental" character. Also the statements for the last two fiscal years include about $59,000,000 and 346,000,000, respectively, representing payments made in previous years. Furthermore, military outlay in the past two years has included payments for reconstruction, notably for road Vullding and rural rehabilitation. in areas recovered from the Com= munists, Nevertheless, even allowing for these facts, military expenditure uring the past two fiscal years were practically as large as in the preceding two years.
Text read from the printed page and cleaned; old type leaves the occasional error.