Evening star., 1933-11-24
thess estimates assume the restoration

these estimates assume the restoration
Of full pay to Federal employees.
''I say exclusive of sinking fund re-
quirement because in times like these,
when national income Is diminished,
the test of balanced budget Is whether
or not there is an increase in the ma
tional debt Under these circumstances
1t is merely an accounting procedure to
increase ones national debt so that one
may reduce it by corresponding
amount.
ut is for this reason that debt re-
tirement is not included In the figure
which have just given, but which will
be included in the budget statement;
nor are payments under the Agricul-
cluded, for the reason that processing
taxes are assumed to be adequate to
meet such payments. Interest on the
public debt, however, and all other ex-
penditures incident to the normal Op-
Grafton Of the Government, are included
in it.
Aim 10 Retire Public Debt.
"But the aim Of the Bureau of the
Budget is more than that of holding
the expenditures Of permanent operat-
ing agencies of the Government to the
figure which have just given you.
The aim also Is to begin to retire
public debt in the fiscal year 1885.
Even though but small retirement can
be effected, it will be the beginning
Of the end of the increase in the debt.
''It is now hoped that the revenues
for the fiscal year 1885, assuming q
moderate recovery-which stated In
more concrete figures assumes 10
per cent increase in industrial activity
900 900. including revenues flowing from
the repeal OF the eighteenth amendment.
May I interpolate that the recovery
here assumed depends upon an increase
in price incident to an increase in the
volume of business and upon a free
flow Of capital into legitimate business
enterprises. Both Of these are impor-
tant, the first, for obvious reasons; the
latter because the heavy industries, in
which approximately 81 per cent of our
unemployed is now concentrated, de-
pends upon capital market. make
this Interpolation so that there can be
no misunderstanding. that the bureau
of the budget is fully aware of all of
the implications and ramifications Of
the assumptions here made.
AS 1 IldFc SdlO, lOI VIC llSCdl year
1885 the normal operating eXpendi-
lures and the budget which the bureau
will recommend will be approximately
S2,600 100000. while the anticipated
revenues will be approximately So
$50 100000. Subtracting one from the
other. there remains approximately ST.
600 100000 with which obligations on
account of emergency operations incur
red this year. but which must be met
and paid for in the fiscal year 1885, can
be liquidated.
Objective Can Be Attained.
eff. therefore, the Reconstruction
Finance Corporation completes its task
this year. and If no additional emer
gency obligations are undertaken. our
objective can be attained. But if addi-
tional obligations are contracted, then
(this is a sad subject) additional taxes
must be imposed The gaps in the old
tax law must be closed so that the
wealthy may not escape And. in ad-
dition. and I say this in all sincerity
the great middle class of this country
which. after all. furnishes the vitality
and the vigor and the moral tone to
our body polite. for its own preserva- =
tion. must be willing to subject itself to
the taxes necessary to finance the ad-
ditional emergency obligations incurred
If they are incurred There are no
other alternatives. Either no additional
emergency expenditures can be made
or the middle class must willingly carry
the burden Of saving itself from de-
struction. for continuous and prolonged
budgetary imitation means its destruc-
ton.
I'm so far as I personally am con-
cerned it is may conviction that the
credit Of the Government must be un-
impaired as the foundation of our eco
nomic system. 1t must be preserved. ]
shall continue to this emo.
Mr.. President and members of the
New England Conference, 1t has al
ways been my belief, and is now, that a
public official. to the extent to which
the public welfare is not damaged. has
imposed upon him the responsibility of
disclosing the truth in so far as he
knows it. and within the limitations of
his ability. This have today at
tempted to do"