Aberdeen herald. [volume] (Aberdeen, Chehalis County, W.T.) 1886-1917, 1904-06-27
THE NATIONAL TREASURY BAL.
ANCE ON WRONG SIDE.
Varying Constructions Placed Upon The may
Report. Expenditures Leave $4,000. 900
On the Wrong Side Of the Ledger. With
More to Follow.

The government statement OF receipts
and expenditures for the month OF May
show deficit OF $54. 500 900, all of which
and more is accounted for by the fact
that the treasury during that month paid
fifty millions on account Of the Panama
cannal purchase and loaned the Louis
lana Purchase exposition $4,000, 900. In
other words, ordinary receipts and ex.
penditures just about balanced. But the
report has, nevertht less, set going dis
cussion as to the treasury's prospects for
this ana the next two or three years.
The New York Times's forecast ia that
big deficit will replace the pre-
sent surplus in about three years.
COntending that the 1905 deficit will be
thirty millions instead OF twenty-,hree
millions estimated by Secretary Shaw
last December, the Times asserts that by
July 1, 1905, there will have been a
change for the worse in the condition oil
the treasury amounting to $1O6, O00, 900.
The Times adds:
"We are bound to remember that the
payment for the purchase money of the
Panama canal and to the Republic OF
Panama must lie followed by very heavy
expenditure for the construction of the
canal. This is an element in the calcula-
tons of the treasury for years to come
that cannot safely be regarded as extra
ordinary at all it is definite and inevi-
table, and must he considered. 1t il now
absolutely certain that we have passed
from a period OF large SURPRISES in the
treasury to a period Of deficits. The net
available balance is now set down at
$163, 100000. This is MT inexhaustible.
The current balance needed in ordinary
times is not less than $60,000.0O0 The
remainder would not last three years at
the present rate Of spending, and we
have no security that this rate will not
grow, or that revenue will not fall off.
"Unfortunately, the Tribune says, in
reference to the Times figure and argu.
ments, "there are several serious flaws
here"
Excluding the ordinary expenses oil
May, the present fiscal year will show a
surplus OF 100000. Including these,
the loss to the treasury on the year will
be only $46, $780, 900. For next year Sec.
retarv Shaw did estimate net deficit OF
$23, 900 600; but he estimated also net
appropriations Of 1927 ,474 ,2O6, increased
by supplementary estimates to $780,
OO0,000 Congress, however, at the last
session made appropriations aggregating
only $598, 600, 900 less than the estimates
and $6,0O0,U0 less than the expected re.
venues. There should be no deficit at al
in the fiscal year 1904 05; and the actual
loss to the treasury from July l, 1908, to
July l, 1904. should not exceed $5O,0OO,-
600. Certainly no deficit need be caused
by expenditures on the Panama canal.
The Spooner act provided for an issue
of bonds to meet the cost OF constructing
the canal, and there IS no thought OF
paying the day-to-day expense of the
canal project out of the current revenues
of the treasury. There still will be a
comfortable surplus in the treasury
in 1907-probably large enough to war;
rant little further trial of the protective
system. We scarcely think that that
system will be discarded on tn 10 showing
of failure and famine" which some Of
its industrious critics are struggling tC
make"
The Philadelphia Press, after remark
ing that no other country in the world
could have made the Panama canal pay
ments out of surplus cash, takes up the
subject OF deficit in the light of the
Ordin,ry expenditures and recei pts OF the
government
"For thecurrent fiscal year expenditures
are running close to revenue. There NAV
even be deficit. The cause is simple.
The revenue from customs has fallen
off, to June 7, $24,374,O41. The expen-
ditures on the navy have gone up$l8, 1907 )
$40 and running expenditures "civil
and miscellaneous" has increased
IS, 705,1S3. The other expenditures are
substantially unchanged. The army
costs a little less and pensions and
Indians little more. These nearly
balance. The real change is customs,
less $24, 374 ,041, and navy and civil out
lay, more by $27 ,603,023. These two
items make q change on balance OF
So, O00, 900 for the year. Customs re-
venue has fallen off because prices are
low and We are exporting instead Of
importing. No one can regret that. The
navy costs more because we need q
stronger navy than we had. All admit
that. This is all the deficit ls: More
navy needed and less foreign luxuries
used, while the surplus of past years pays
for $50 900, 900 on account OF the Panama
canal"
The New York evening Post sees an
opportunity to point out the shortcom'
ings of a protective tariff as revenue
PiSNuSCtS oLA hdhCS ttlO Lloot VI WI
opportunity in an editorial from which
we take the following:
1.-THE probability is that we shall have tc
face deficit-how large, depends mainly
on the volume of import trade in the
next twelve months. The difficulty now
upon the treasury is.in fact, the same one
that has confronted it on numerous past
ccasions-namely, our governments
reliance. for its principal source OF in.
come, upon protective tariff duties
whose yield is subject to collapse in the
shifting vicissitudes OF trade. This phase
ofthe matter deserves attention. A nearly
equal revenue and expenditure for the
year would usually be accepted as 6
J gratifying evidence of normal govern
menf finance. Unfortunately, it hal
almost invariably signified in our OWL
country the simple passing OF the line II
movement from swollen yearly sur
pluses to yearly deficit, or vice-versa.