Evening star., 1938-07-10
NEW YORK FUNDS
BALANCE ED|SPUTED
6. o. P. Declares Deficit
Still Exists as Lehman
Claims Surplus.
BY IRA WOLFERT.

BY IRA WOLFERT.
NEW YORK, July 9 (N.ANA)-
The campaign to fill the United
States Senate seat left vacant by
Royal S. Copeland's death-a cam
paign which has such imperious
adornments as whether a New Dealer,
q middle-of-the-roader or an out
and-out anti Roosevelt candidate will
win and show which way the political
winds are blowing in the numerically
most important State in the Union
has started of with a 100000, 900
mystery.
On the surface, 1t doesn't look like
q mystery at all. Gov. Herbert H.
Lehman, who has declared his willing
ness to be promoted to the Senate,
has announced this week with a great
deal of pride that he has wiped out
the $100.0O0,000 deficit left him by
his predecessor in Office, Franklin D.
Roosevelt. and has put in its place
q cash surplus and a balanced budget.
It has all the earmarks of a simple
statement of fact, but there were i'm
mediate protests from the Republic
ans According to them, the deficit
still exists.
The controversy is substantially
more complicated than row between
opposing political camps. 1t includes
trace Of underground intramural
warfare. Although Gov. Lehman was
picked by Roosevelt in 1882 for State
Office and consented to run again for
Governor in 1896 only after extra
ordinary pressure from the President
himself and the National Democratic
Convention, he fired a heavy shot
against Mr. Roosevelt in the Supreme
Court night and the whole financial
policy of his administration has been
in direct opposition to that of the
New Deal.
However. it is felt that somewhere
between the cries Of yes" and mo-
q truth must exist. A reporter seek
ing with innocent confidence to track
down the truth starts of with some
thing easy. A balanced budget in a
continuing enterprise. he understands
can be metaphysical subject, but
500, 900 900 is solid
Yes and No Answer.
Buttressing him in this belief Is
the fact that it will take the fleet Of
twelve lotion trucks. now rattling glee-
fully between downtown banks and the
new Federal vaults at West Point. ex-
actly 23.8 days to carry 100000. 900
in tidy and easily transported silver
bars. This seems to rule out the pos
sibility that such sum could disap-
pear up a vagrant sleeve in the course
Of q snap of magician's fingers.
Question: Did the 500, ,o00O 900 def
cit ever exist? Answer Qrom Gov.
Lehman himself: Yes and no. He
says yes" now with as much GER
tainty as he said mo- in 1888.
Mr.. Roosevelt's term as Governor Of
New York extended from 1929 to 1888.
1t was marked by steadily shrinking
revenues from increased taxes, by in
creased expenditures for such social
welfare as old-age pensions, by ex-
pensive development Of State-owned
hydroelectric power plants. by about
$4,000, 900 more aid to local school
systems, by program Of 1,O0c miles
of new highway in three years, by
construction of new State hospitals
and prisons and, finally, by rise in
the States public debt from $254.-
s4l, ATT in 1929 to s488 1913, $50 in
1888, or nearly 100 per cent.
It would seem reasonable to suppose
that the figure minus 100000 900"
belonged on the States books. Yet. in
his first budget message, Gov. Lehman
said this was not a true" deficit.
1oat it was arrived at by treating
only Treasury cash as an asset ard by
ignoring bills receivable. mo corpora
ton or other business enterprise" he
declared, would compute its surplus
or deficit according to this method" :"
Since the Governor had come fresh
from an impressive career as a banker,
his words carried weight. IF proper
weight had been given to such bills
receivable" he concluded. and If
they had been reflected in a statement
of current assets and liabilities pre-
pared according to approved account
ing practice, I have no hesitancy in
saying that no deficit would have
been shown"
Ffve-P Pronged Finance Program.
The administration of Gov. Lehman,
according to the record, has been
marked by five-pronged financial
program. He advocated, and the
legislature adopted, several emerg-
ency taxes. including gasoline levy
and a State retail sales tax, and in
creased the stock transfer and per-
sonal income taxes. Thus the revenue
available to the State was increased
During two Of the deepest depres-
sion years, he cut down expenditures
by the State with temporary pay cuts
and other economies, but since then
they have risen steadily until they
are now at $372, 900 900, the highest
in history. A majority regard the
increase in the cost of Government as
unavoidable. To take obvious ex-
amples. the crime bill, the bill for
care of the insane and for care Of the
III have risen steeply in the course of
the depression.
He instituted reforms in the method
Of bookkeeping and changes in the
dates on which taxes were collectible.
These combined to change the appear
anna of the eoch v,oc{fiov, of tho Cfofo a