Evening star., 1936-05-31
LOAN PAYMENTS
ASSIST TREASURY
Collections Help to Offset
Processing Tax Loss, but
Bonus Looms.
BY the Associated Press.

BY the Associated PreSS.
Repayments on loans have helped
check the growth Of the Federal deficit
as the Treasury heads into the home
stretch of its current fiscal year.
Collections by the Reconstruction
Corp, Commodity Credit Corp, Farm
Credit Administration and proceeds Of
sales of railroad and municipal obliga-
tions obtained as security for P. w. A.
loans have gone far toward offsetting
loss of more than $400,000,000 in
processing taxes.
After maintaining lead over the
preceding fiscal year until few weeks
ago, the deficit has dropped behind
comparable figures a year ago. On
May 27, the Treasurys statement
shows, it was s2.93l 260,573, against
So, III ,407,744 year ago.
Bonus Threat Looms.
However, the trend toward smaller
deficits is destined to be Smothered
soon by prepayment of the soldiers
bonus.
An estimate by Daniel w. Bell. act
ing budget director, puts the deficit
when the fiscal year ends June 80 at
$5, ,966, ,O0O,0 900. the biggest since war
expenditures left the Government in
the red more than $4,000 10000 in
the fiscal year 1919 and $4,000, 100000
the year before.
| Budget estimates before the bonus
bill was passed and the A. A. A. rullng
looked to a deficit of S3,234,5O7, 900,
compared with $3575 100000 in the
1885 fiscal year. Latest Treasury ng-
ures indicated it had fair chance OF
reaching the budget objective, aside
from bonus expenditures, with tneshelp
of loan repayments and revenues IN
excess of estimates.
Officials pointed to the declining
trend of the deficit, before bonus pay
ments loomed, as a road toward event.
| ual budget balance
May End Year With Net.
From present indications, the Treas
| ury may end the fiscal year with net
return for the first time on huge loans
by Federal credit agencies the last lew
years for emergency aid to hnancial
1
| other recovery and relief" ventures.
For the fiscal year so far, repay
ments credited to six revolving funds
have topped outgo by several million
dollars. The total turnover foots up
to around $4,000, 100000 in the II
months, with repayments to the r. F.
c. alone more than 81 ,000, 10000 and
exceeding outlay by $165,0000 900. X.
F. C. figures do not include funds
turned over to other Government
agencies.
| Liquidation of cotton loans brought
in nearly $50 100000 of "excess
credits" in May to offset debts on
the Treasury's ledgerS. Sale of rail
obligations turned in about $l26, ,OOO,-
900 in credits since the fiscal year
began.
in more credits in June, partly from
repayment Of investments in bank
obligations and on rail loans.
After that officials look for the
pace Of r. F. C. repaymets to slow
down unless the movement to repay
| S60U,UUU,UUU SdPAOeA
obligations gains momentum.
With most of its emergency loans
to financial institutions, mainly banks,
repaid the big credit agency was said
to be getting down to long-term
strata in its loan and investment
portfolio.
As the emergency phase of New
Deal lending fades r. F. C. activity
has tended to shift into the longer
term field, such as bank capital issues
rail equipment loans, mortgages taken
over In refinancing and loans to other
Federal agencies for longtime pro-
grams