Evening star., 1936-02-18
BYRNES SCORES
BUDGET CRITICS
Forum Speaker Claims Bal
ancing UnWise in Ab-
normal Times.

: Senator James F. Byrnes of South
Carolina, regarded as one of the lead
ing administration spokesmen in the
Senate, defended New Deal expendi-
lures last night with the declaration
they have been necessary to prevent
suffering. Despite them, he said, the
Governments credit is and will re-
main sound.
Senator Byrnes spoke ON the Ma
tional Radio Forum, arranged by The
Star and broadcast over Station WRC
and a nationwide network Of the
National Broadcasting Co.
He concluded his address with the
assurance that there is no question
about the soundness of the Govern
ment of the United States"
Credit to Be Preserved.
"The credit of this Government"
he declared, ''is superior to the credit
of any other government in the world.
That credit will be maintained"
Expenditures will be reduced cor
respondingly with the return of nor
NAL conditions, he said. The outlays
of the New Deal have been justified,
he said, by the emergency.
In abnormal times. balancing the
budget is an unwise policy" Senator
Byrnes asserted.
Persons with whom budget bal
ancing has become an obseSsion"
we're criticized by the speaker for al
legedly Subordinating human welfare
to economy.
"As business recovers," he said, ere
lief expenditures can be reduced and
will be reduced. Gradually the bur-
den must be returned to local gov
ernments."
Text of Address.
The text of Senator Byrnes' address
follows:
Confidence is essential to progress.
Doubt as to the credit of the Govern
ment lessons confidence. and retards
progress. Daily there is printed in the
newspapers and heralded over the
radio statements of individuals ex-
pressing doubt as to the credit Of the
Government. OF course, there is a
presidential election this year, and
some Of these statements may be due
solely to political partisanship. In
some instances, however the indi-
viduals making such statements are
not inspired by partisanship, but are
misled as to facts.
Informed persons abroad seem to
have none of the fear entertained by
some of our politicians. Nearly year
ago the Royal Bank of Canada, in
one of its monthly statements re-
ferring to conditions existing in this
country. said: In the United States
the depression became more acute
than in other countries. If capacity
to survive unprecedented shocks con-
stitutes basis for confidence in the
future, the future of the United States
IL assured The Government has
spent and is spending money freely,
but alarm concerning such expendi-
lures would seem to be somewhat ex-
aggerated when 1t is considered that
if the United States and individual
States were to maintain the recent
scale of expenditure for 20 years, the
resultant debt load would bear no
heavier proportion to normal pre-
depression national income than does
the present debt load in Great Britain
Further, If the Government, State,
county and municipal debts are COM
bined, the total amounts to less than
$4,000, 10000 as compared with q
normal income that amounted to be-
tween s75,000, ZOO, 900 and $50, ,0O0,-
100000 per year at the price level
which prevailed under the old gold
standard. With depreciation of 40
per cent, 1t seems probable that ma
tional income may easily exceed $780,
000,000,o00. The public debt of
Great Britain Is sum equal to twice
the national annual income, and when
the debt of local government bodies Is
added it comes to sum more than
two and ore-third times as large as
the (British) national income"
Sprague Is Quoted.
The economic advisers of the Cana
dian bank predicted at that time that
the business barometer in the United
States would continue to rise. It is a
matter Of common knowledge that
that prophecy has been fulfilled. Only
few days ago, DR.. Q. M. w. Sprague,
former economic adviser to the Bank
Of England and a frequent critic Of
administration policies, declared that
the national debt could reach forty
billion dollars without weakening the
Government credit, provided there
was tapering off in annual deficits"
Last November one of the leading
journals Of Japan quoted the minister
Of finance Of that government as cit
ing the financing by the United States
Treasury as o splendid example Of
successful government financing. Con-
fdence in the credit of this Govern
ment, however, does not exist only
among the financiers and economic
experts Of other nations.
Last December the United States
Treasury engaged In O refunding of
some obligations. They offered $780,
000, 600 Of 10-year bonds, bearing az
per cent interest, and $450, 600, 900 OF
5-year notes, bearing only IA per cent
interest. Notwithstanding the low
rate of interest, so anxious were the
banks and investors of the Nation to
purchase the obligations of this Gov
ernment, that in one day there was
subscribed four and one-half times
the amount of these two issues. Re-
gardless Of what pessimistic politicians
may say about the credit Of your Gov
ernment, the banks and the investors
have such confidence in the Govern
ment that whenever the Treasury has
issued its obligations it has been able
to sell them at such reduced rates of
interest that there has been a reduc-
tion in the amount of interest to be
paid annually by the taxpayers upon
outstanding obligations Of approx
mately 100000, 900.
We can best appreciate the strength
OF our Treasury position by compare
son with Great Britain and France.
On January 81, 1896. according to
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