Evening star., 1937-09-19
Cause for Alarm i'm
Federal Finances
BY OWEN L. SCOTT

President Roosevelt likes to make an
annual or semi-annual promise to the
country that the next few months will
find Federal finances on a sound basis.
He has followed that practice since 1888,
with results that finally are alarming
even to his left-wing advisers.
The reason for growing alarm is found
in official figures. Mr. Roosevelt has
emphasized this reason by his observa-
tion that liberal governments too often
come to grief in the quicksands of loose
finance New Dealers now are saying
that the President seems determined to
bulwark his observation with a practical
example of just how this grief is pro-
duced
A few figures help to tell the story.
They show that, following assurances
from the President about an early bal
ance OF the budget, the following, in
round numbers, has happened:
The national debt during four and one
half years has jumped from twenty y-one
and one-half billion to more than thirty
seven billion dollars.
What now can be classed as normal
Government expenditures have risen in
that time from under four billion dollars
a year to more than seven billion.
Government income has gone up from
two-and- billion to about six
billion dollars year, or still short of
enough to cover outgo after extended
recovery.
Two and one-half months of the new
treasury year that started July l have
turned up an excess of expenditures over
receipts amounting to $3.50 900 900, or
more than Mr. Roosevelt estimated for
the entire year.
Then there are many other complica-
tions as we'll
For example: Congress, just before
going home, voted to give s130, 900 O0O-
not figured in the budget-to cotton
farmers in order to make them happier
over the amount of their income. The
South is kicking because it didn't get
twice as much. But now farmers in the
Middle West ask why they are not to be
given handout like the one given to
Southern farmers. They, too, want a
bigger pipe line to the Treasury.
This pressure from the Midwest is ex-
pected by October to be strong enough
to produce price fixing loans on corn,
assuring another unexpected drain on
the Treasury. When tenant-aid plans
and housing programs and other un-
budgeted expenditures are added the
Treasury picture becomes anything but
bright And, to top it off, an unexpected
setback to business is raising some ques-
ton about the size Of income tax collec-
tions next March and June, when the
important payments are made.
Pi0h+ OF tlaie Dra- i
the original New Dealers are beginning
to part company.
Mr.. Roosevelt is understood to feel
that the budget picture is much brighter
than it looks from the figures
The reason for this feeling on his part
is that expenditures for relief of unem-
ployment are down about third, as
compared with year ago. AS a result
OF this one saving. the outgo from the
Treasury in the form of cash dollars
is about hundred million dollars under
last year. This means that general gov
ernmental expenditures and recovery and
relief expenditures have been cut in a
small amount.
But of1setting this small cut is the fact
that fewer dollars are flowing in from
former loans and a greatly increased
number OF dollars are having to be
entered up for future payment under the
social security system and the railroad
retirement act When this fact is taken
into consideration, the total Govern
ment expenditures actually are found to
be more than a quarter of a billion
dollars above the same period last year.
Mr.. Roosevelt is inclined to look only
at the cash income and cash outpo
side of the picture. He finds that i'm
proving greatly. But in taking that
view, he accepts the contributions from
25,O00,000 workers. who think that they
are saving against old age, as part Of the
operating revenues of the Government
without calculating that in few years
THESE accumulations will start to flow out.
The New Dealers, who have figured
on using the Governments budget as a
powerful arm of their national planning
machine, look at the situation in an
entirely different light
Where they urged an unbalanced
budget and huge Government expendi-
lures during the first years of the Roose-
velt administration they now are urging
with equal vehemence that there must
be balanced budget and either a de-
crease In expenditures or a sharp in
crease in taxes in order to start retire
ment OF debt. During recovery they
want to pay off depression obligations so
that. in the event OF another setback. the
Government will be in a strong position
TO step In again with pump printing"
program
The Presidents failure to show any
real ability to get the budget situation
hrmly under control is extremely exasp-
Grating to the planners
Their view is that Mr.. Roosevelt missed
great opportunity during the last ses-
sion of Congress when he failed to get
behind the plan of Senator Robert La
toilette to broaden the base of the
income tax system after that plan had
been approved by the Senate. Instead,
the White House used it's influence to
induce Senators to change their minds.
The decision at that time was in favor
OF continued deficit.
Here. too, is where the President and
the planners appear to be parting COM
pany.
Mr.. Roosevelt apparently will be salts
fled as soon as the number of tax dollars
entering the Treasury equals the number
OF dollars going out to pay for operating
expenses and for subsidies. But the
planners think that, in good times. a
mere balance of the budget is far from
enough. They want to be retiring at
nr+ y ~