Evening star. [volume] (Washington, D.C.) 1854-1972, 1936-01-26
Revised Draft With A. A. A.
and Bonus Changes Is
Declared Necessary.
MORE Definite DATA
ON RELIEF ALSO ASKED
Government Bond Market Re-
mains Firm, but Financiers Are
Disturbed by Uncertainty.
BY CHARLES F. SPEARE.
Special Dispatch to The Star.

NEW YORK, January 25.-The
Government budget. presented to Con-
gress on January 6 by President
Roosevelt, has today about the same
practical value as that Of an indi-
vidual who, after preparing personal
budget, went out into the street, was
knocked down by an automobile, lost
his income for three months and was
faced by unexpected and extraordinary
expenses for doctors bills and hos
pitalization.
Because of the United States ST.
preme Courts decision in the A. A. A.
case, its subsequent order compelling
release Of 5000, 000. 900 in favor of the
rice millers. and the passage Of the
bonus bill, involving . demand on the
Treasury Of about $2,500,000, 900 not
taken into account when the original
budget figures were set up. it is use
less as guide to even an approxima-
ton Of the Federal income and outgo
for the remainder Of this fiscal year:
certainly not for that ending June 80,
1887.
Realistic Basis Urged.
Therefore, it should be Immediately
scrapped and revised budget pre-
pared on a realistic basis. The origi-
nal defects of the present document,
with its indeterminate item for relief.
were sufficient to condemn it, though
they might have been modified by
the proposed supplementary account
ing. Now there is nothing to justify
keeping 1t alive.
It Is more the fact Of absence Of a
pattern by which future Federal
financing can be determined than that
this financing will strain Government
credit that disturbs those who will be
expected to support the loans. They
hesitate to enter a dark alley. The
Government bond market remains re-
markedly firm.
How Is the Government to meet the
new conditions that have been inn
posed on it by the courts and the
war veterans? In the January 6
budget, under the heading of esti-
mated revenues, was an item of
$547, 100000 from processing taxes.
This is now obsolete. On the best
bargain that the Treasury can make
with investors, the bonus bonds will
add between $55,000,000 and $780,
600, 900 per annum to debt charges.
Unsupported by Facts.
The optimism of the administra-
ton. expressed in the moderate re-
covery and relief figure of $1,103.-
100000 for the next fiscal year, is
not supported by the facts as to UNI
employment.
Production In business Is rising
steadily. Employment and pay rolls
are not by any means keeping a
normal pace with it.
There is no better promise for en-
ployment at the end of February
tthe date set for fixing the relief
item in the budget than there was
three weeks ago.
So the method by which Secretary
Morgenthau proposes to clear up the
Treasury situation shortly must be
one Of drawing on balances or profits
from devaluation that have not yet
been resorted to, for there is per-
sistent refusal to impose general taxes,
as should be done under existing
circumstances.
Situation Unchanged.
The veto Of the bonus bill by Presi-
debt Roosevelt does not change the
situation Is to its payment, but it
greatly increases the respect Of the
country for his courage in maintaining
q policy to which he committed him
self q year ago and which numerous
members of Congress, who then sup
ported him, have since abandoned
under political pressure.
The currency imitation threat in
the earlier form of the bonus bill
has been removed, but speculative
Wall Street and foreign markets have
discovered in it credit imitation i'm
plications, out Of which have de.
veloped another strong market for
equities" and softness In the dollar.
Instead Of authorizing the sale of
Government bonds or the raising Of
the reserve requirements Of the men,
Der banks to counterfeit the inflation-
airy effect Of excess bank reserves, the
Federal Reserve Board has lifted the
margin requirements on stocks in q
market that for months has been
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