Evening star., 1932-12-11
LONGTIME BONDS
HELD BUDGET AID
Senator Byrnes Would Lift
$4OO, 900, 900 Out of Cur
rent Expenses.
BY ]. A. OIEARY.

The lifting of approximately $780,
100000 of permanent improvement
projects out of the current expenses of
the Government and financing them
through bonds over period of years
was advocated yesterday by Senator
Byrnes Of South Carolina as major
step toward balancing the Federal
budget.
AS one Of the Democratic members
OF the special Senate Economy Com
mittee, Senator Byrnes will be in the
thick of the budget-balancing activ
tiles at this session, and he has a bill
ready for consideration to carry out
his plan Of longtime financing OF
permanent projects.
Byrnes said the object of the bill
is to have the Federal Government fol-
low the practice of most business cor
porstions of capitaliZing such projects
rather than meet them out of current
expenses. Few concerns, he said, at
tempt to do permanent work out of cur
rent expenditures.
Held Lessening of Deficit.
While the measure contemplates a
permanent improvement construction
fund Of not to exceed $500,000,000 at
any one time, he said its immediate
effect on the Treasury would be to
take nearer to s400,000000 out of the
list of current expenses. If that could
be done, he said, it would lessen the
deficit to that extent and make un-
necessary additional taxation.
IF beer bill should raise $3.50, ,000,-
000," he continued, land reductions of
Government expenditures should result
in anything approximating S500,000,
900, we would have more than bill
lion dollars
The same general idea Of funding
public improvements so as to spread
the cost over a long period was dis
cussed to some extent by Senate men,
bers at the last session while they were
graphing with the budget balancing
problem.
Senator Byrnes said yesterday that If
the steps he outlined could be taken,
land thereby present a balanced
budget, 1t would be possible for the
Treasury to sell longtime bonds and
get rid of short-time obligations, and
result in banks having more capital
for industry instead of investing in
Government short-time obligations"
Segregation Of Work.
The classes of work that would be
segregated from current requirements
and handled through the permanent
improvement fund under the Byrnes
bill. are:
Federal highway construction; river
and harbor works heretofore or here
after authorized; the construction of
public buildings Of every description,
and the building of dams and reservoirs
and other works incident to flood con-
troll and reclamation.
The Secretary of the Treasury would
be authorized under this plan to borrow
from time to time such sums as may
be necessary for the permanent i'm
provement fund, not to exceed $780,
100000 in any one year. or to refund
any obligations previously issued. and
to issue bonds therefor, to be known
as permanent improvement bonds.
There would be set up in the Treasury
special sinking fund for the retire
ment of the bonds issued. For each
fiscal year, beginning with 1884, until
all bonds issued under the act are re-
tired, there would be appropriated to-
ward the sinking fund %. an amount
equal to 2la per cent of the total ex-
penditures made out of the permanent
improvement construction fund, on or
after the date of the enactment Of the
law and on or before the last day of the
fiscal year for which the appropriation
would have been payable during the
fiscal year for which the appropriation
is made on the bonds issued under this
act purchased. redeemed. or paid out of
the sinking fund during such year or
previous years.
At the last session Of Congress Sena-
tor Vandenberg. Republican of Michi-
gan, gave considerable thought to the
question Of funding the cost of perma-
nent improvements. At that time, he
pointed out that some cities had been
encouraged to go too far in incurring
Indebtedness during the past decade be-
cause of the ease with which they could
fund their public improvements and
spread the cost into future years
Vandenberg cited this as a possible
danger that might grow up in the Fed
eral Government and as one factor to
be weighed. The position he took at
the last session was that, in the present
tax emergency, the funding idea was en-
titled to serious study in providing for
certain projects which would have to be
proceeded with at this time.
Senator Copeland. Democrat of New
York, also discussed at the last session
the proposal to Segregate permanent i'm
provements and finance them separately