Evening star., 1937-01-09

which means that the Federal Gov
ernment must in some way assure
the making of profits by business and
industry in a sufficiently large way 10
permit the Treasury to reap the hlgh-
est total Of revenues from income
taxes that it has ever derived in any
year. not excepting 1929.
II the Treasury is right in Its estl-
mates, then the budget may come
within $500 900 900 of being balanced
In the fiscal year ending June 81,
1888. Likewise, if the curve continues
to grow, then an actual balance may
be looked for in July, 1889.
Expenditure Big "1f.'
But the important "if" in the pre-
ceding paragraph is accompanied by
another "if" of far greater Importance,
namely. whether Congress will keep
the expenditures down to the levels
placed by the President for the coming
wears. and whether the executive
branch of the Government will find
a way of materially holding down ex-
penses in the regular establishment,
something which has not yet appeared
on the horizon.
The most disappointing feature OF
the Presidents budget measure Is that
as relief expenditures are cut down,
the expenses for the regular eStab-
lishment of the Government are
moved upward. Bureaucracy deeply
intrenched rarely is divested of its
hold on the Federal pay roll.
Thus the Presidents message dis
closes that general expenditures Tor
regular activities" for the fiscal year
1888 show an increase of S740 82l 900
over the year 1887. Even when debt
retirement and certain homecoming
soldier bonus payments are deducted,
the official figure of expenditures for
regular activities" shows net increase
of S718,83l 900 over 1887.
Out of this sum if one deducts the
social security expense of $436, 337 900.
the regular activities in 1888 still will
cost 1882 AGA 900, more than in 1887.
This does not augur we'll for balanced
budget in 1899 as hoped for by Mr..
Roosevelt because this trend Of grow
ing expenses must somehow and some
time turn downward.
In other words, expenses for the
regular establishment keep on grow
ing and the Treasury predicts bigger
and bigger revenues from taxes on the
assumption of bigger and bigger indi-
vidual and business profits.
Price Rise Factor.
There is another important factor
10 be taken into considera tion-the
added cost of commodities to the
public and to the Government itself
due to the way increased taxes are
;mbedded in the price structure.
Should there be a downward f1uctu-
alton in business after the next three
years. the Government which has
placed such great faith in income
taxes might find itself with a sudden
jump in the size of the deficits-an
event that would be psychologically OF
deep significance in considering Gov
ernment credit.
The question may also be raised as
to how rapidly the national income
can grow if prices rise to a point that
diminishes consumption. With a ST.
000,000,000 budget on the part of the
Federal Government and increases
due to social security taxes, the total
cost Of Federal, State and city govern
ments in America will soon reach the
100000 ,0OO,0 mark. The national
income is not yet rising at rate fast
enough to absorb any such rapid in
crease in the total cost of Government.
Even if the Federal Government does
not increase its total debt beyond
s35.000, 100000 as at present planned,
the size of the annual tax contribution
toward the cost of Government in
America may be so formidable as to
break down the process of employ
ment and cause a return of Federal
relief expense.
Unemployment Another "f."
Incidentally, all of Mr.. Roosevelt's
figures are predicated on another 'if"
which he has introduced in nearly
every one of his last few messages on
fiscal affairs; namely, the responsible
ity of business" to absorb the unem-
ployed.
II the budget isn't balanced in 1899,
It is to be industry's fault and not by
any remote chance is it to be due to
the bureaucrats In Washington who
have gradually increased the expenses
for the regular establishment, taking
over some of the emergency" agencies
as permanent institutions for the out
lay of Federal funds.
The President promises to hold the
relief expense to $1,537, ,123 900 for the
fiscal year 1898 ION the assumption
that industry will cooperate, in en-
ploying men and women from the
relief rolls in larger numbers than
during the last year."
Business Faces Dilemma.
Why do not the employers give jobs
TO all the people now on relief or with
out jobs 1t must be because they do not
feel that they can employ more people
and keep their own budgets in balance
or earn enough to pay the Government
the taxes it so sorely needs. Many
businesses would like to employ more
people, but the Government tells them
they must, in effect, increase their
costs by shortening hours and yet not
reduce the money in the envelopes.
Business is asked in effect to make a
definite increase in pay roll expense
for the same output and simultaneous
ly the President requests that more
persons actually be taken on the pay
roll. That's paradox of the situation
which is not readily understood by the
organized groups who want pay in
creases by means of shorter hours of
work.
From now on, however, the Federal
Government becomes vitality interested
In profits because it has become
much more important partner on .
percentage basis with American busi-
mess and individuals. The less busi-