Evening star., 1935-10-01
king URGES PLAN
gU
= TO CUT j. S. DEBT
Balancing of Budget and
~
Amortization Program
Discussed in Forum.
{ Continued From Sixth Page)

within the category Of emergency de-
mands are beyond reasonable require
ments. The first step in budget bal
ancing calls for the reduction Of ex-
penditures regardless Of whether they
fall into the category of general ex-
penditures or emergency expenditures.
To impose a burden of from eight
to ten billions OF Federal taxes upon
the heavy burdens resulting from
State and local governments is not in
my opinion warranted by existing
conditions.
repeat the Federal Government is
weighted down with bureaus. organi-
cations and agencies and an army Of
Z. employees. More than 81 organizations
shave been created during the past two
cor three years with large personnel,
land the costs Of these additional agen-
scies tend to swell the appropriation Of
$40 900, ,000,0 for the fiscal year 1886.
If the Federal Government shall
.confine itself within its proper sphere
and reduce bureaus and Federal agen-
scies and the number of Federal en-
ployes, 1t may be that additional taxes
will not be required. If, however. the
Government maintains the enormous
machinery found in departments,
agencies and organizations, and under
takes the execution of projects and
the entrance into business activities
which are within the province of the
States, local governments or individ-
uals, then it is reasonably certain that
In n%
Certainly, If the Democratic platform
Of 1882 is regarded, there will be am
pie grounds for belief that additional
taxes will not be required to meet gov
ernmental expenses and to make con-
tributions to the reduction of the ma
tional debt.
Platform Pledge Cited.
The platform solemnly declared:
- We advocate the immediate and
drastic reduction Of governmental ex-
penditures by abolishing useless COM
missions and Offices, consolidating the
departments and bureaus and elimi-
mating extravaganza to accomplish a
saving of not less than Is per cent of
the cost of the Federal Government,
and we call upon the Democratic party
in the States to make Jealous effort
to achieve a proportionate re-
suit.
Secretary Morgenthau has recently
declared that:
-" The national welfare demands
that when the emergency has passed
sufficient income be raised to meet
current expenditures and to make sub
stantial reductions in the debt. The
! time has come to move in that direc-
ton. hope that is true. - =
Many persons believe that projects
now engaging the attention of the
Federal Government, among them the
Resettlement Administration, the Ru-
raj Rehabilitation Administration and
the Rural Identification Administra-
ton, will continue long after the ap-
propriations now made are exhausted
and that pressure will result in further
appropriations being made, the re-
suit of which will be further deficits
and additional taxes.
Experience has shown the impossi-
bility of getting rid of bureaus and
agencies and of organizations created
by the Government to engage in ac-
tivities of a public character or activ-
! tiles which fall within the sphere of
private endeavor. Bureaus and Fed
eral organizations are immortal and
excuses and pretexts are found to JUS
tify granting them immortality.
Guarantees Added to Liabilities.
In considering the question of bal
ancing the budget, there must be taken
into consideration contingent liabilities
which the Government may be COM
PEELED to meet, which aggregate more
than $4,300,000, 900. The Federal Gov
ernment has guaranteed the bonds
issued by certain agencies. Thus,
there are contingent liabilities which
may be incurred by the Federal Gov
ernment in case the agencies assuming
such liabilities are unable to meet their
obligations So far as the Federal
Government is concerned, these la
bilities might be termed secondary
liabilities" One Of these relates to the
bonds issued under the Federal farm
mortgage act. Under that act, the
Federal Farm Mortgage Corp. is
authorized to issue bonds up to billion
dollars. These bonds are guaranteed
both as to principal and interest by
the Federal Government in case the
50 Federal Farm Mortgage Corp. is I'M
able to meet its liabilities. As Of
August 81, 1885. the assets of this
corporation amounted to / billion 512
million and the bonds outstanding on
that date amounted to billion 282
million. There is possibility that the
Government will have to pay some Of
these bonds. This is a factor which
ought to be considered in connection
with budget balancing
Turning to the Federal Housing
Corp, we find situation somewhat
similar. The administrator of the
housing act is given authority upon
application of the mortgage to insure
both existing mortgages and new
mortgages to be issued up to the
amount Of billion dollars In addi-
tion, he is authorized to insure finan-
cial institutions against losses which
they may sustain as a result Of loans
and advances Of credit in connection
with such mortgages in an amount not
to exceed in the aggregate 200 million
dollars. There is, of course, a posi-
bility that the Government might have
to make up some of the liability in
CURED from this source. Then, too,
should be mentioned the Home Owners
Loan bonds, guaranteed as to principal
and interest. While these obligations
are fully protected by the assets of the
corporation at the present time, there
is q possibility that the Government
might be forced to meet some part Of
this obligation, aggregating s2.75s.-
100000.
T. v. A. Bonds Guaranteed.
Finally, the Tennessee Valley Au-
thority has been given the power to
issue bonds not to exceed in the aggre-
gate so million dollars outstanding at
anv one time These bonds also are