Evening star., 1937-04-20

believe that it is %$ $
danger to
spend more than
you have, the mere slashing of ex-
penditures, especially the relief items,
affords no way out of the dilemma.
There will be a howl, and there
ought to be, when relief expenses are
cut. 1t is easy enough for "Well-fed
persons in their comfortable clubs"
to talk about cutting relief expenses,
but where are the people going to go
who are deprived of jobs? When the
Government stops feeding them and
furnishing relief work, will they find
Immediately jobs somewhere else?
Numerous Hardships Ahead.
The coming economy wave is going
to produce innumerable hardships,
and, oddly enough, it will conceal the
true nature of the mistakes that have
been made in governmental policy for
the last four years or more.
Mr. Roosevelt's difficulties today are
due to one thing: The receipts are not
what they were estimated to be. 1t is
like a business which has fixed its
expenses and projected its anticipated
revenue and then finds, to its embar-
rassment, that sales aren't what they
were supposed to be.
To the Federal Government, tax
money is the same as sales. Sales
are down. Tax receipts aren't COM
ing, in for the simple reason that
businesses aren't as profitable as they
must be if the Government is to get
a big enough share so as to be able
to balance budget
And why. are business profits not
big enough to furnish the needed tax
money? Because the administration,
unWittingly perhaps, has gradually
been killing the goose that lays the
golden eggs.
Business and industry furnish the
golden eggs that bring in the tax
money When business doesn't make
large profits, the Government doesn't
take in enough to meet its budgets.
Some of Business Troubles.
Why is business unable to pile up
the tax money? The reasons are
numerous, but some of them may be
cited here.
First, because the Government has
q lopsided tax method which keeps
on piling taxes on the costs to the
consumers. AS costs go up and prices
rise, people curtail their buying. Re-
suit, less taxes, more unemployment.
Second, because Government car
ries on relief projects that actually
compete with private business or force
q shortage in certain classes Of labor.
This results in higher costs, curtailed
buying and unemployment.
Third, because Government restricts
the opportunities for new capital to
be made available for new enter
prises This is done through the
securities and exchange act, which,
While commendable in its prosecu-
ton of fraud and dishonesty, is, on
the other hand, not bringing about
the necessary encouragement for the
f1otation of new capital issues. Re
suit, opportunities diminished for new
businesses to be started so as to add
to profits and hence to increase tax
receipts.
Fourth, because Government insists
on burying or sterilizing all the gold
1t has instead of using it to support
world trade so commerce with other
nations may be increased, production
at home stimulated and more tax
receipts brought into the Treasury.
Fifth, because business, even when
well financed, doesn't know where it
is going. On the one hand, private
property is menaced by laws that
amount virtually to confiscation, and,
on the other hand, strikes are en-
couraged by the administration in
an effort to bring about a redistribu-
ton of wealth. Result, a redistribu-
ton of poverty as Government itself
starts to economic and cut down
subsidies, and consumer goods indus
tries begin to feel the pinch because
unsound economy has never been
replaced by sound economy.
States Fear Curtailment.
Much of the Government money
has been pouring into States which
cannot, when the flow of Federal aid
Is cut off, find new employment or
new enterprises to absorb the idle
or those made idle. The governors
and mayors who have been clamor-
ing for continuance of relief ap-
propriations are absolutely logical.
They know nothing has been pro-
vided to take the place of Govern
ment relief spending.
Mr.. Roosevelt will struggle with
those who will insist on keeping ex-
penses up. He will point to the need
for a balanced budget. The con-
servatives will cheer the President.
The liberals will look askance, and
the real blunders of the last four years
OF deficit financing will be obscured
and concealed.
The change now going on is from
deficit spending to old-fashioned rules
Of making income and outgo match
This is all right II the curve of tax
receipts doesn't go down still further
as the dehation is begun. To balance
budget requires something more
than cutting expenses 1t involves a
removal Of the empediments to the
growth Of profits and tax receipts
These impediments are to be found