Evening star., 1933-03-19
Continued From First Page.)

next fiscal year, in the absence Of
prompt remedial steps. With the beer
tax estimated to yield $50, ,000, 900 In
the first year and the gasoline tax an
additional $137. .000, 900. this would seem
to obviate the need Of further taxation.
except for several imponderables such
as the ultimate appropriations needed
to prevent hunger and suffering, the
March income tax returns and the de-
termination of the Roosevelt policy as
to loans from the Reconstruction
Finance Corporation.
The prevailing belief in the Roose-
welt administration Is that, barring un-
foreseen Developments, the President
will let the question Of additional taxes
60 over to the regular January session to
that he can observe meantime the trend
Of other sources Of revenue. There has
been no adequate opportunity. 1t is
banking crisis upon the Nations In
come, but an estimated $3.50, ,000, 900
drop In income tax returns since De-
cember Il considered not unlikely in
some informed quarters.
These, and various other factors, Will
affect the final balancing of the Fed
eral budget. Assuming there is only a
small gap to be bridged, 1t is pointed
out, this could be accomplished by
resort to the legislation introduced by
Senator James F. Byrnes, Democrat, Of
South Carolina, a close friend and ad-
wiser of the President, which would
permit the removal Of capital expendi-
lures to an account for bond issues not
exceeding $500.000,000.
Plan Opposed by Douglas.
This legislation has yet to become
law and Lewis w. Douglas, the Budget
director. was on record before he en-
tered the Roosevelt administration as
opposed to such segregation. Neverthe-
less, such an operation is not necess-
arily ruled out As to certain types Of
public works.
The Presidents determination Is to
reduce the Federal budget to a point be-
low $4,000, ,000. 900, even including the
statutory public debt retirement Of
about $535 ,000, 900. Should he succeed,
he would cut almost in half the peak
postwar budget figure Of s., 900, ,ooo. 900
reached in 1921 and again in the de-
preston period.
To bring the Federal budget down to
the pre-war level Of about 81 ,000, ,000,-
600 Is considered well beyond the i'm
mediate possibilities, and yet the cut
now contemplated would be, without
question, the most sweeping ever made
at one time In the Nations history. It
took until 1927, in the Coolidge era of
economy and easy revenue, to reduce
the postwar budget total Of 5000. .000,-
600 to a total Of about $500 ,000. 900.
BY 1929 it had risen again to about
So, 600, 900 900 and the requirements OF
the depression sent 1t upward again.
With approximately one-fourth Of the
Nations expenditures committed to the
veterans payments of various forms, the
difficulty about bringing down the
budget has lain in the hitherto impos-
sible task Of getting Congress to author
ize drastic cuts In veterans compensa-
ton. MT. Roosevelt with the extremely
favorable psychology due not only to
the acuteness Of the economic crisis as
he took ONCE but also to his newness
in ONCE and his patronage whip hand
over Congress, took that fortress and,
with 1t, the right to make reductions
almost at will in the veterans part of
the budget. He, personally, has not
promised to stay within any particular
limit.
Services Appeal TO President.
BY many students Of Government
economy it has been considered dificult
to 60 much farther in that direction
than indicated In the congressional de-
bates. Assuming that the reorganization
and consolidation powers conferred by
the TreaSury-Post ONCE bill limited
further economies to less than SIS, ,000,-
600, 1t has been felt that retrenchments
much in excess Of the total Of these pos
sibilities could not be made without
going into the Army and Navy.
The services have protested that It
would be unfair to apply to them the
same rules for reducing pay as will af-
feet Government employees generally,
this In view Of the pay inequality they
have protested for years. The current
issue Of the Army and Navy Journal
carries on its first page an open appeal
to the President to this effect. One of
his secretaries, Col. Marvin H. Nc
1ntyre, was for long time correspond
ent Of that journal and an energetic
protestant against cutting down the
strength Of. the naval establishment.
The heavy cuts In the veterans ad-
ministration will show In the inde-
pendent officers appropriation bill which
President Hoover pocket-vetoed on his
last day In Office because of the con-
gressional failure to make veterans cuts
he had urged. This and the District
OF Columbia appropriation bill failed Of
passage in the last Congress and must
be adopted in this session.
The Presidents determination to ball
ance the budget next year proceeds from
q realization, administration ofncials
say. that to fail to do 50 will encourage
uncontrolled imitation, starting the print