Evening star., 1939-01-05

employees, and because of expansion
of the normal functions of the Gov
ernment with the growth of the
country.
Among the new governmental
functions which have added to the
costs of the ordinary budget, the
farm program is outstanding. Soil
conservation expenditures and other
outlays for the crop adjustment pro-
gram which are of continuing ma
ture and produce no direct return
to the Federal Government have
been only partially covered by new
revenues.
A new, and partly self financing,
addition was made to the ordinary
expenditures when the Social Sc
curity Act was passed to safeguard
the economic security of a large
portion of our population. However,
no provision was made for revenues
which would pay for grants to States
for old-age assistance, for maternal
and child welfare, for public health
work and for aid to dependent chill
dren and the blind, which expendi-
lures in 1910 will approximate $780,
100000. Furthermore, consideration
is now being given to plans for
spreading the coverage of, and for
revising the benefits under, the So
cial Security Act, and for improving
public health facilities. These plans
present major questions of future
national policy and directly affect
the budget.
Extraordinary Expenditures.
Beyond these questions of ordinary
expenditures are those which relate
to the incorporating or unusual
costs of government and involve
extraordinary expenditures that deal
more particularly with the relation
ship between fiscal policy and the
economic welfare of the country.
These questions concern Govern
ment loans, capital outlays and re-
lief of need. Expenditures made
under these heads are of such a
flexible character as to provide,
through their contraction or expan-
sion, a partial Offset for the rise or
fall in the national income.
The public has been showing an
increased interest In the adoption
by the Government of a form of
budget which would conform more
nearly to the practice followed In
commercial business. There has
been some criticism of the Govern
ment's practice of including in its
budgetary expenditures, amounts
disbursed for loans, or for self
liquidating projects, or for other
extraordinary capital outlays which
increase the wealth of the Nation.
I recognized the merit of construc-
tive suggestions of this nature by
recommending in my last budget
message change in the method of
financing the requirements of the
Commodity Credit Corp. This rec
ommendation provided for an an
nual appraisal of the assets and
liabilities of the corporation, and
contemplated that any surplus from
operations or any impairment of
capital resulting from losses be re-
flected as receipts or expenditures
in the annual budget. Under this
method the budget would be affect
ed, not when the investment or
loan is made, but in the fiscal year
when the surplus or loss occurs.
Congress approved this recommen-
dation in the act of March 8, 1898,
and it might we'll give considera-
ton to an extension of this principle
to other governmental corporations
and credit agencies, such as:
Agencies under the Farm Credit
Administration, Electric Home and
Farm Authority, Export . Import
Bank Of Washington, Farm Security
Administration, Federal Crop In
surance Corp, Federal Savings g.
Loan Insurance Corp, Home Own
ers' Loan Corp, Inland Waterways
Corp, Panama Railroad Reconstruc-
ton Finance Corp, Rural Electri-
fication Administration and United
States Maritime Commission.
Public projects of a self-liquidat-
ing character represent another
class of expenditures appearing in
the annual budget as current out
lays, to which this principle might
also be applied. For example, out
lays for the Boulder Canyon prof.
ect amounting to more than $780,
OOO, 900 have been included in annual
budgetary expenditures of the Gov
ernment, Notwithstanding that the
total cost of the project, including
capitalized interest during the period
Of construction, will be returned to
the Government within so years,
with interest.
While do not advocate that the
Government capitalize all of It's
expenditures for physical improve
ments, 1t seems to me that such
portions Of the cost Of public prof..
ects as are clearly self-nqudating