The midland journal. (Rising Sun, Md.) 1885-1947, 1933-06-16

gigantic set OF
Business books and accounts,
F,,nroy;ro and thus will mark
the end Of another
fiscal year for our government. This
event will transpire at the close of
business, June 30, and on the succeed
Ing day fresh accounts will be opened
and new appropriations will be avail
able out of which the government
will be run in the next twelve months.
1t seems, therefore, that a review
may well be undertaken to show, as
believe to be true, that the low point
of the depression was reached some
time last winter and that now slow
but steady improvement is taking
place Some years will have to elapse,
however, before the full effect Of this
greatest of economic breakdowns can
be thoroughly appraised and the les
sons learned. This review then must
be confined as closely as may be to
an analysis Of what has happened to
the government, how it has sustained
itself under conditions Of the kind and
consideration of what is scheduled to
be or is being accomplished.
That any statement as to when the
bottom Of the depression was hit will
be questioned is quite obvious. base
my statement, however, on the best
barometer that is available, namely,
tax payments under levies applied to
sales of certain merchandise. The re-
suit is definite These taxes have been
Increasing through the last four
months. Experience has developed the
fact that the receipts do not start
reaching the treasury in any volume
until three to four months after the
business itself has begun to increase.
know that the government authOri-
ties who read all of the signs and read
them accurately consider the picture
most heartening.
But let us get down to cold figures
and let them tell the story. For ex-
ample, we may first look at the con-
dition of the treasury's books as the
end of the fiscal year passes. They
show total receipts for the year to
have been around 950,000,O00, and
expenditures to have aggregated about
So, 100000. So there is a deficit
of around one and three-Quarter bill
lions. That is, Ihe government spent
that much more than it received in
taxes and other revenue. It has bor-
rowed just that much money in the
year, over and above the refinancing
that it had to do in meeting bonds
and notes that matured.
Such vast deficit would seem hope
lessly insurmountable were it not for
the consolation of comparison. When
we look back to the fiscal year that
ended June 80, 1882, we are astounded
to find that the deficit approached
three billion dollars, so that reduc-
ton of more than one billion dollars
has been achieved.
At the start of the current fiscal
year last July /, there was every in
dication that the cost of government
for the twelve months would be at
least two and half billions greater
than it's revenues. Expenditures have
been cut, however, so that the outgo
during the last eight months of the
Hoover administration and the first
four months of the Roosevelt admins
tration was materially reduced. Yet
that alone could not have brought the
deficit down as much as has hap
pened. The answer to the question
concerning the source Of the other fac
tor lies, as I said before, in growing
tax receipts
The reference to income taxes
brings to mind a point about federal
revenue that has
Clearing Up proved puzzling to
a Puzzle many persons. 1t
might be supposed
that If business is better there would
be more income taxes paid. That is
correct superstition. The error lies
in the thought that these taxes are
helpful Immediately. They cannot be.
They are always year late insofar
as the government Is concerned, since
the income taxes paid in 1888 are
on incomes earned or received in 1882,
which happened to be the worst of
the series of hard years. In addition,
there is the condition existing that re-
suits in income taxes being paid in
two fiscal years on incomes received
in one calendar year. The first and
second quarterly payments are made
in March and in June, which months
are in the last half of one fiscal year,
and the payments in September and De
cember are in the first half of the sue
ceeding fiscal year. While that fact &C.
tually makes no difference since the
government gets the money anyway, it
happens to make difference in the to.
tails that is of consequence when the
treasury is SO far behind on receipts as
now occurs The point is mentioned
in order to contrast the Importance at
this time of receipts from those taxes
that have to be paid monthly, such as
the manufacturers sales tax on ra-
d;oc ci0orntfac and hoer IN mantion