Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-06-30
The Deficit.

The United States Government closes
its books today for the fiscal year Vath
q deficit which exceeds In some measure
$500, 900, 900. The country has had adj
vance notice of the coming deficit at
the end of the business year. Indeed,
1t has been suggested that the deficit
might well run over billion dollars.
Americans, while regretting the deficit
of their Government, may take some
satisfaction in the thought that 1T
might have been worse" The Secre-
tary of the Treasury, Mr.. Mellon, for
several years has warned the country
of possible deficit, and now at last he
has one. But Mr.. Mellon has ever been
scrupulously careful not to rouse the
hopes of the country in matters finan-
cial. If he has given estimates Of the
probable surplus in the Treasury, they
have been found almost invariably be-
low the actual results at the close OF
the fiscal year. And so now before Mr..
Mellon left the United States to conduct
his negotiations with Great Britain and
France regarding the proposed inter-
governmental debt moratorium he in
dicated that the deficit might be larger
than it actually proves to be.
While the Government faces this def
icit, it still has a comfortable sum
of cash on hand, mere matter of
$500 900 900. 1t does not appear that
there is any danger at present CT the
Governments suspending any payments.
And only a short time ago, when Sec
rotary Mellon advertised a bond issue
of $500, 900, 900 paying the lowest rate
of interest since the Void War, ex-
cept some short time notes, the issue
was oversubscribed many times. Lit
orally an avalanche Of money was Of
fered, mostly through the banks, for
these notes, amounting to $6,o0o,-
600 ,oo0
The Treasury statement issued at the
close of business yesterday indicates
the causes of the deficit quite clearly.
These are the falling of in receipts
from income taxes, from other in.
ternal revenue taxes and from customs
duties, taken in connection with an in
crease In the governmental expendi-
lures over the previous year. The larg-
est single item Is the decrease Of $751;
100000 in the amount of the income
tax collections. The governmental ex-
penditures we're up some 100000, 600,
S,,ktn NR
$110,00o,o0
The efforts Of President Hoover to
pare down governmental expenditures
and to bring about material savings of
money actually appropriated are worthy
of consideration, under the condition
now confronting the Treasury. But
there is one branch of the Government
which should take due notice OF the
situation-the Congress. The reckless
manner in which new projects are some
times authorized by that body, infiu-
enced largely by politics, is peril to
the fiscal affairs Of the Government at
any time.
A return Of business and employ
ment, with corresponding increases IN
the earnings Of corporations and indi-
viduals, win mean return OF the
golden flow of taxes into the Treasury.
1t is the hoped-for solution Of the Gov
ernments financial situation today.
But whether that happens this year or
next or the year after, there remain
many things which may be done to
improve that situation, or certainly to
prevent its assuming q more serious
character. It is up to the executive
branch Of the Government as we'll as
the legislative to see that these things
are done.