Evening star., 1932-03-10
BALANCED BUDGET
HINGES ON ALLIES
All Estimates Include tx.
pected Debt Payments
of $3.50, 600, 900.
BY DAVID LAWRENCE.

AL estimates for balancing the budget
beginning with the fiscal year that be-
gins next July and ends June 80, 1898
include a $3.50 900 900 payment from
the allies on war debts.
If Europe doesn't pay, then the budget
will not have been balanced. The pres
ence in the estimates of the $3.50 900 ,00C
item, however, is notice to Europe thai
when the present moratorium ends ir
June it will not be renewed and the
United States Government is countine
on receipts from the allies as usual.
This state of affairs was revealed upon
inquiry at official sources in an effort
to clear up recent statements of admin
iStration leaders to the effect that no
increase in public debt was contem-
plated with the 1888 budget.
The usual provision for sinking fund,
amounting now close to $400,000,000,
will be wash-out transaction-that is,
the Treasury will borrow the money,
pay the sinking fund to cut down the
debt momentarily, and turn around and
put the public debt back to the total it
amounted to before.
Allied Payments Figure.
AS for the allied payments, however,
these have been regularly part OF gen.
eral receipts ever since the war and the
granting of a one-year moratorium in
terrupted payments for II months,
which has, of course, added to the gen.
eral Treasury deficit.
If the allies persist in the view that
they cannot pay unless Germany pays
them, then the United States will have
to make up the $3.50, 0,0000 900 either by
increased borrowing or by increased
revenue from taxation. One way might
be the new manufactures sales tax,
which is expected to bring In more
money than the present estimates
The economies thus far made are
matter of dispute. Mr.. Hoover'S state
ment indicating that some expenses
have been deferred is in line with COM
ment of Representative Howard of Ne
braska on the floor of the House last
week to the effect that deficiency bills
will be required after December, when,
as he remarked, the elections will be
over and Congress will be face to face
with the necessity of meeting the de-
ferred items.
So Congress to date has not been able
to make a material reduction in ex-
penses, and the most that is claimed Is
q cut of S125 100000 out of S4,000,-
100000 budget. Just how the $3.50 ,000,-
600 deficiency in allied payments will
be made up if the present outlook for
European payment is not changed is
not generally discussed either at the
Capitol or the executive end OF Penn
sylvania avenue.
Hopes Still Held
There has been hope, of course, that
the allies would pay something toward
their debt, and it has been suggested
that the Treasury cannot very well as
sumo even a part payment, but must
officially insist on full payment till an
agreement to the contrary is reached.
Meanwhile, moves in Europe to ad-
Just reparations and war debt payments
are expected this Summer, so that the
December session of Congress will be
confronted with the concrete problem
of accepting part payment or granting
another years moratorium. Sentiment
against another extension is strong in
Congress. but there Is no telling what
reception an adjustment of the pay
ments might receive. The tendency Is
not to regard the debts as in pool,
but; to treat with each debtor sepa-
rately
The fact remains that unless Europe
pays something during the fiscal year
beginning next July-in fact, the first
payments come due in December-there
will be a sizable item to disturb the
budget that is supposed to be in process
of being balanced by the present
Congress.
(Copyright, 1922