The Waterbury Democrat., 1934-03-31

the corresponding perF d in the preceding fiscal year With the ap- proach of spring 1t Is expected that the goVernmen spending pro- gram will be extended as the out door public construction projects get under way, especially since the severe winter has retarded much of this work and the general con- struction program has not progress ed as rapidly as the government had anticipated.
 After the receipt of the proceeds from the $800,000,000 of treasury bills offered during last month, the treasury balance on February 19 amounted to $5,004,170,653, which constitutes .an all-time high record. It must be remembered, however, that more than $2,OO0,000,0O0 of this sum represents the confiscated q gold following dollar devaluation. Nevertheless, the treasury through taxation and public borrowing is building up Q huge cash balance to meet the requirements of the recovery program. The specific use that will be made of this money has not been disclosed.
 Although there are evidences that the government is exerting economy in many of it's activities, these savings are inconsequential in relation to the huge expendi- lures being made on all sides for recovery projects. From the social point of view there can be no ob- jection to those outlays that go di- rectly toward relieving uneMploy- ment and distress growing out of the prolonged economic unsettle- ment. Likewise. there Is much to be said in favor of the expenditures intended to reduce unemploym ent indirectly through stimulating bus- mess activity. But the question is growing, especially in regard to the outlays for the purpose of aiding various branches of industry, whe- ther the results will justify the huge outlays, with all their impli- cations, from the point of view of economic situation both in the near and long-term future.
 It must be kept in mind that, as the tax burdens on industry be- come greater, the prospects for business improvement on a sound basis in the near future are lessen ed. The financial history of the world offers volumes of evidence to the effect that, while the exped- tent of public borrowing has often been favored by nations at times of financial stress, the process of bor- rowing has always been a great deal easier than meeting the obliga- tions as they mature. Regardless of what one may think of the new deal" program and regardless of how commendable the recovery ef- forts of the government may be, the fact must be faced that the constantly growing public debt will demand a day of reckoning. If our future governments prefer to pay off this obligation gradually over a period of many years out of pos sible surpluses, tax burdens must be increased or kept at a perm anently high level. At the best, de- creases that would greatly aid in- dustry and trade will have to be postponed.
 On the other hand, there is a limit above which the public debt may not go without reaching a to- tai where the tax capacity of the nations economic life is incapable of meeting the financial demands of the obligations. At that point the government may prolong the process of not meeting current in come by refunding. However, even this experient may reach the point where it becomes ineffective; for the carrying of an exorbitant pub- He debt by a nation that is making little headway in reducing the amount of obligations outstanding is bound to weaken government credit. During the Civil War, the governments credit was so under mined and it's bonds were selling on the market at such a large dis count that it was forced to meet its expenses by issuing greenbacks.