Evening star., 1934-03-15
"a DEFICIT SEEN
AS S4,3DO,0DO,00O
Figure Compares With Seven
Billion Predicted by
Roosevelt.
BY DAVID LAWRENCE.

The deficit for the fiscal year of
the Federal Government which ends
three and a half months from yes
terday Will be about $4,300000,000
instead Of the s70O0,000000 pre-
dlcted by President Roosevelt in his
message to Congress i'll January.
The reason is that, try as they may,
the spending agencies of the Govern
ment are not finding 1t possible to
dlsburse even the allocated funds.
Lots Of rcd tape surrounds the actual
expenditure Of funds and many of the
projects IN the Public Works Admin
istration, especially those that require
action by city councils and public
bodies. are taking more time than
was originally contemplated
There has been, so far as is notice
able no effort to slow down the
spending But the machinery itself
deficit cannot be as large as was
anticipated.
Sum Largest in History.
This means that III the fiscal year
beginning next July and ending June
80 1885 for which the President in
GICated a deficit of 1000 100000, we
may have a larger deficit than was
planned. Between now and that time,
however, increased tax receipts, and
possibly a business revival, may take
some of the load from the Govern
ment. SO that the important thing is
to focus attention on the deficit Of
this year.
A discrepancy of more than S43O0,-
100000 is the largest in all the history
of the United States. 1t is larger than
any deficit of the Hoover years. 1t
comes near being as much as all the
Hoover years OF depression put to-
gether. But the Roosevelt adminis-
tration feels that the spending was in
good purpose and that business re-
coyery justified the borrowing policy.
$1,000. GOO, 600 in Group
Some of the money being spent this
year is IN the form Of loans and will
come back to the Treasury. This is
especially true of the R. F. c. loans
as distinguished from the grants. To
cate the r. F. c, has disbursed about
$500 100000, dating from the time
the organization was set up under
the Hoover administration in 1882.
OF this amount about 81 600 900 600
constituted grants for relief and aid
Of goverpwnrtal establishments and
agencies ant Is. therefore not ek-
pected to be repaid. This leaves
about S4000,000 OF this sum
about a half billion has gone to buy
preferred stocks IN the banks and
will. Of course, come back in due time
Then there's about $1,000 900 600
which has already been repaid on
loans This leaves about So 400 OOo-
O0O in loans of various kinds and on
these high rate Of repayment is
expected.
The funds alloCated but not yet
loaned amount to more than billion
dollars. Much of this money does
not require any new appropriation, as
the r. F. C. is authorized to lend over
again any proceeds from repayment
Of loans.
95 Per Cent Payment Expected.
The R. F. c. has proved to be the
nlainstay of the financial side of
the Government The banks, insur-
ance companies, railroads and munich
pal and State governments that have
been helped may repay over a period
Of years. Excellent collateral has
been required. so that it is generally
F1rt lo 1Ao,c n
95 per cent on the dollar on an aver
age.
The R. F. c. may become an even
more important factor in the creation
of intermediate credit for business
generally if the present plans for the
banks to set up machinery to furnish
capital to industry do not work out
The Treasury is this week quite
happy over the way preliminary tax
receipts are coming in. There is
every evidence that receipts will come
up to the schedule marked out. But
of course there is no thought that
receipts will be sufficient to balance
the budget as a whole The carrying
Of a deficit of $4,000 900 600 is an
unprecedented task for Federal credit,
but the refinancing operations have
this fiscal year, unquestionably the
with the diminished amount needed
this frcal year, unquestionably the
flotation of longer issues to absorb the
maturing short term Indebtedness will
continue to be the objective of Fed
eral policy.
(Copyright. 1934)