Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-05-03
DEFICIT MOUNTS
TO 10YEAR PEAK
Would Be Settled With Short
Term Debts by Pro-
posed Bonds.

By the Associated Press.
Completing 10 months Of the 1880
fiscal year on April 80 with a deficit
Of 1878, 971, 1923, the largest in a decade,
the Treasury entered the last two
months with indications that it would
be increased during that period.
The TreaSury's daily statement for
April 30, issued yesterday, showed the
Government in the 10 months had col
lected from all sources $2,679, 935,llI
and had spent $3.50, 9o6. 240.
In the same period of the previous
year it collected S3201 ,203,975 and
spent s3,346,355,84s. The deficit Of
sl45 900 900, however, was wiped out in
June when the second quarters income
tax payments were received and foreign
debtor nations paid their debt install
ments and interest in cash instead Of
securities, as had been the practice in
previous years.
Debt Payments Coming.
The amount Of the deficit this year
will depend to some extent upon the
debt payments to be received in June
II they are in cash some of the amount
can be applied 10 the general fund
thus reducing the deficit, but II II
securities all must go toward reduction
of the public debt.
AS the deficit mounted, indications
grew that the Treasury was preparing
to float a stable bond issue. though
no official word that such action was
contemplated has been announced.
Arthur A. Ballantine, Assistant Sec
[ rotary of the Treasury in a speech last
/ Wednesday at Atlantic City, said the
/ deficit this year would be met BY. IN
t creaSing the public debt, which disSl-
/ pated reports that tax mcTeaSf
/ might be recommended.
! He added the same procedure coulc
/ be followed next year, pointing out
/ that since the war debt retirement act
/ became effective in 1920 the Treasury
/ had reduced the debt by approximately
/ $4,000, 100000, or about $4,000, 100000
more than required by law.
Consolidation Is Urged.
In addition. the Treasury's action ir
4 issuing short-term securities for 60 o.
/ 90 days to raise funds 10 meet Gov
/ eminent needs indicated that an effor
was being made TO have IS much a.
possible Ct the short-term debt mature
late this Summer when IL could D.
retired through a bond issue.
At the present time the short-tern
debt amounts to about $4,000 1000
which is considered by financial ex
perts as being too unwieldy TO handli
with comfort
a bond issue permitting $looo,o00. oo'
OF the short-term debt TO be retired
and large enough to wipe out tn
deficit would leave the Government j
a position to take up the slack II
revenue ever a period Of years lnstea'
Of trying 10 meet ii at once.
Another factor in favor Of long tern
bond issue is the condition OF the none,
market whose rates are at the loves
point in years and the fact that muci
of the funds Of the large banking instl
tutions are being held in their vaults
Market Is Favorable.
Each Of the securities issues foate'
by the Treasury in the last month snt
a half has been oyersubscribed, indtcat
ing there is an awaiting market for
long-term bond issue.
In the last year the Treasury ha
issued securities totaling S5,l35 ,857,79l
while it has retired 1865, 788, SOP. Il
the same period Of the 1880 fiscal yea
it issued S3.062 ,923.l07 in securities an
retired $500 ,277,421.
Between March 81 and April 30 tn
, gross public debt increased from SIS,
, 5S2 1858, 436 TO sic, 1855, 379,ll9. On Apr
30, $780, the gross debt was $l6,393,
734170.