New-York tribune., 1908-07-04
DEFICIT IMAGINARY
MR.. CORTELYOU EXPLAINS
Infatuated Bookkeeping RESPONSE
Bile for Poor Treasury Sho1ang.
From The Tribune Bureau-1

Washington July 3.-There was an actual surplus
In the ordinary receipts and expenditures OF the
government in the fiscal year ended last
Tuesday. instead of the apparent deficit of about
s6o,OO0Oo0 shown by the official Treasury state
ments issued on July !, the misleading difference
being due TO antiquated system of bookkeeping,
which Secretary Corteyou is having overhauieo
and moderrized. The amount Of new debt created
in the year only 100000 in excess OF the
amount of the old debt redeemed and ss5Oooc 600 was
expended public works of which less than
half was paid for by the creation OF tuhdeo
debt According to a statement issued from sec
retary Corteyous office to-day. two of the fun
damental errors in the present system OF making
up the Treasury statements that the proceeds
of bonds sold not counted in the receipts, but
all the money which is paid out for the purposes
for which the bonds issued is included in ex-
penditures In this respect the practice OF the
United States Treasury departs from that OF all
other important governments. The latter take
care to distinguish between ordinary receipts
which devoted the actual running expenses
of the government and extraordinary receipts
which are set aside for permanent public works or
other special purposes The total amount expended
for the canal in the last fiscal year was $s4s25SS
Under proper method of bookkeeping this amount
would be chargeabie to extraordinary expenditures
to be met by loans. Putting the budget on this basis
for the last fiscal year. the account would stand
as follows:
ORDINARY RECEIPTS AND EXPENDITURES
ReGeipts s sss sss 4s5 .s5
Surplus receipts. s25 16s s3s
EXTRAORDINARY RECEIPTS AND EXPENDITURES
RECEIPTS
Sale Sale Of S Tfeasrz fsass Certificates e9nds
From premiums l'o"'oV'
EXPENDITURES
For public buildings under Treasury Depart -,
ment go go 3s 9ss
For oT riWers rTr.rsi and s9nb barbors - 20 e3e274
s117s25a2s
from surplus of ordinary receipts and from the
free balance in the Treasury s75.Sao7ss
The items included under extraordinary ex-
penditures such might properly be covered
by the issue of bonds instead of paid out OF
current revenues. That thev could be paid. even
in part out of current revenues is an exhibition
of financial strength which shows that there Is
no deficit except an imaginary one Inc reduc-
tion of the debt of course. only made De-
cause it was justified by the large free balance
in the Treasury. In most European governments
the maturity of old debt would be met by re-
funding, leaving the principal undimnished or only
slightly reduced
How much more careful other governments are
to charge extraordinary expenditures TO special
accounts Is indicated by glance at their budgets
! In Great Britain. according to THE Statesmans
Year Book there issued in the fiscal year
1907, to meet expenses under the telegraph act.
buildings act, f194oOo, and other similar items TO
a IS 974 $50. In France. outside the ordi-
nary budgets complies speciaux, or budgets
for special purposes. such as the expedition 10
China in 1900 The extra budgetary expenditures
on railways in the twenty-five years ended 1888
amounted to 1,S15O 900 francs. an average OF
so 600 francs q year. In Germany the oudser
is regularly divided into ordinary and extraordl-
nary expenditures the latter for the year ended
March 81 1907 being 2t3,97o,0o marks 9oS,VDV"o.
Russia also divides her budget regularly into or
binary and extraordinary, the latter including ne"
railway construction, which is usually covered by
loans Moreover in most european governments
some control is exercised by the finance depart
ment over the budget through the system OF
responsible ministry. 1t is rare that an appro-
nriation is made which does not originate in or
is not at least approved by the finance department
Secretary Cortelyou has had under consideration
for some time thorough revision OF the treasury
statements, with q view to making them repre-
sent accurately and in easily understood form the
exact condition of the governments finances