Evening star., 1938-07-10
To Spend Nine Billion
Dollars in a Year
BY OWEN L. SCOTT.

July /. These nine billions, II all are
spent, will represent pcacetime SPEND
ing record.
Added to other billions already spent
in five past years, they will bring to
forty-seven billions the total expendi-
lures Of the present administration.
Many of those billions-about seventeen
Of them-have been spent in the search
for an elusive recovery.
The country now Is riveting its atten-
ton on the ig-time spenders Spenders
are White House favorites, and in some
cases have become famous and even
politically ambitious. Popularity easily
attaches to the man with an endless
supply Of cash to hand out.
But many people finally are beginning
to wonder where all of these endless
billions come from and how long they
can keep on coming.
One man-Henry Morgenthau, tr.-as
Secretary OF the Treasury, is charged
with the responsibility of keeping the
money bags filled. Mr.. Morgenthau's
job is not spectacular, like that OF the
man who supplies jobs to three million
men or who primes the pump of heavy
industry with vast expenditures. All
the Treasury Secretary has to do is to
find the dollars for the Job creators and
the pump primers to spend
This task of raising huge amounts of
money Is hlled so quietly and so effec-
lively that 1t goes largely unnoticed. The
spenders never lack for cash.
With thirteen million individuals in
this country now drawing checks on the
Treasury, directly and indirectly, there
has to be plenty of money in the checking
account Mr.. Morgenthau keeps about
two billions on hand just to be sure that
there won't be any rubber checks.
Then there must be money for an end
less variety Of other functions in add.
ton to pay rolls. The Secretary of the
Treasury must be prepared to dig up
nine billion dollars during the next IL
months.
Only part OF the needed money comes
through tax collections. Yet those COL
lections gradually have been stepped up
under Mr.. Morgenthau from two billions
year to the six and one-quarter billions
collected in the fiscal year just closed.
The remainder Of the Governments
spending money must be borrowed. In
f1ve years Secretary Morgenthau has
borrowed about seventeen billion dollars
He will have to find three and one-half
billions additional in the present fiscal
year. Past borrowing has been carried
out so adroitly that interest rates paid
by the Government have declined at the
same time that the debt itself was grow
ing to It's present staggering proportions
Future borrowing appears to offer no
important problem.
Todays thirtyseven- billion dollar debt
costs only half again as much as the pre-
depression debt of less than seventeen
billion dollars. Interest charges are now
slightly more than nine hundred million
dollars year, where they had been six
hundred million. Mr.. Morgenthau pays,
on an average, only about 2la per cent
for all OF this money, where the smaller
debt had cost nearly per cent.
AT present, when the Treasury wants
money, there is regular stampede of
persons and institutions with money to
invest seeking chance to exchange their
cash for Government I. o. Us. This
shows two things. One is that the
country Is surfeited with dollars looking
Tor job at almost any wage The Gov
eminent itself has helped to build up
this huge supply of money. Then the
second point is that the credit of the
Federal Government remains high in
spite OF seemingly endless deficits.
The high standing of Government
credit is testimonial to Treasury
policies.
Secretary Morgenthau and his aides
have resisted every effort to perform
sleight-of-hand operations on Govern
ment bookkeeping. This resistance is in
the face of great temptation and even
greater pressure. A slight sacrifice of
principle could make much better look
ing budget and, in the past, could have
helped to disarm criticism.
For example:
Many of the Governments largest
expenditures have some of the charac-
terlstlcs OF investments rather than out
right expenditures. Money spent
through T. v. A. actually will bring
later cash return. The same is true of
much money spent on large scale public
works. Then the expenditures on pub
lie buildings. or on flood control, or
through w. P. A. All involve improve
ments in the Nations physical plant and
could serve as the basis for Classifying
expenditures, in part at least, as invest
ments.
The White House has become ereatlv
interested IN revision of bookkeeping
to put better face on spending Presi-
dent Roosevelt, only the other day. re-
ferred to the need for "a new kind Of
Government balance sheet-a long,
range sheet which shows survival values
Tor our population and for our demo-
cratic way OF living, balance against what
we have paid for them"
Yet Secretary Morgenthau has resisted
all attempts to show Government
finances on anything but strictly cash
basis.
Or. again. there is the experience with
the important pay roll taxes which all
workers are paying to finance old-age
annuities.
The Treasury is taking the cash that
comes IN from these taxes and is using
That cash to pay part of the current op-
Grating expenses Of the Government.
This particular item amounts to about
three-quarters Of one billion dollars a
year. 1t would be entirely possible to
sell the contributing taxpayers on the
IDEA that their money was being invested
In housing or in some other income
producing Government activity But Mr.,
Morgenthau insists upon showing every
dollar OF the money going into social
securities reserves as an outright expend-
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