Evening star., 1932-04-08

ices for the transfer of money, and the
transportation, within certain limits, OF
merchandise. AS part of its war ef-
fort, it entered upon the construction
and operation of merchant vessels on
huge scale. 1t has built and now
operates under a toll system the Panama
Canal and in connection Herewith owns
and operates various industrial enter
priseS. 1t has constructed and now
operates a railroad in Alaska. 1t has
more recently undertaken the operation
of large system for the transportation
of freight on the Mississippi River and
certain of its tributaries. In a number
Of other instances 1t has undertaken
activities Of like character. ...-
THE operation of these enterprises
involves the receipt and expenditure OF
many hundreds of millions of dollars
annually. 1t is manifest that the state
I lures Of the Government is vitally az
fected according to the manner in
which these receipts and payments are
handled in starting the account"
Mr. Willoughby declares that there
has been no uniform system OF &C
counting because some Of the enter
prises have retained their surpluses and
have not asked for additional capital
outlay Thus surpluses have been con-
fused with capital outlay and the tax
payer cannot tell whether these enter
prises have been profitable from busi-
ness basis or merely desirable from the
point of view Of the political group that
seeks their maintenance.
surrenders of Income.
Then there are certain surrenders of
income to States and dependencies.
Thus, for example, all excise taxes on
tobacco, cigars, etc, collected on the
products of Porto Rico and the Philip
pines are turned over to those de-
Tendencies as are all customs dues. The
Forest Service turns over a certain pro-
portion Of its receipts to the States in
which the forests are located, while the
Federal Power Commission returns to
States receipts from licenses issued by
it on a certain condition. Certain sums
from the sale of public lands are re-
mitted to the States,
These illustrations show the difficulty
of getting at the actual governmental
costs Mr. Willoughby, in his recent
work, Financial Condition and Opera
tionS of the National Government 1921
1890" has endeavored to put all the
business enterprises on net basis. /. e.
to compute how much money is needed
annually in the way of capital outlay to
meet deficits resulting from their opera
ton or how much more is taken in than
is spent.
Taking a 10-year survey of these spe-
cial business enterprises we find that
the postal service has been a constant
loser ranging from $4,000 900 in 1921
to a prospective deficit of sl53,000, 900
in 1888, though to be sure there have
been years like 1924 when the deficit
was only S2l 100000 and 1928 when 1t
was s3200o,000.
The Shipping Board has been gradu-
ally reducing its cost to the Government
from about S92 900, 900 in 1921 prac-
tically to zero in the next fiscal year.
The reclamation service has been cost
ing in the neighborhood Of SIS, ,00o. 900 a
year and the Alaska Railroad about
$500 900.
Business Deficits Reduced.
Thus most Of the business enterprises
which have been showing deficits have
been gradually reducing them so that
In the year 1880 the total was approxi-
mately S120000. 900, out of which the
Post once Department took about
100000, 900.
In looking over those business en-
terpriSes which are showing surplus OF
receipts over expenditures this cannot
be called profit because there is no
way to figure the capital outlay or in
terest on the investment-we f1nd that
the Panama Canal takes in about Sl7,-
100000 more than is spent for it. Like
wise the Railroad Administration of the
war has been gradually liquidating as
have the Housing Corporation and the
War Finance Corporation. The net re-
suits OF the total of business operations
for the 10 years has been gradually
showing a better and a better picture,
so that taking all those enterprises
which show a surplus and balancing
them against all the other enterprises
which show a deficit, we find that the
total cost to the Government in the
latest figures available, namely 1880,
was only sos. 1000 900. And out of this
the postal deficit was about SOL 900 900.
Neither the Farm Boards operations
nor the Federal Reserve Board Is in
cluded in these figures. In the latter
case. all the expenses Of the Federal
Reserve Board which amount to only
about 81 500, 900 year, are paid for by
the member banks. which have con-
siderable surplus. AS for the Farm
Board, the expenditure in the next
fiscal year is to be less than 81 900, 900.
The expenditures In past years are con-
sidered as assets of the Government
until they are liquidated. In other
words, the loans as well es the COM
modities purchased must be realized
upon before there can be final COM
putation. It Is estimated that out Of
the $500 100000 spent by the Farm
! Board at least half that sum will be
a.. urw. 10. ktaA