Evening star., 1939-03-12
Concrete Program Offered
For Balancing u. S. Budget
Economy League Hits Spending, but Suggests Relief
for 100000 Families Under Old Setup With
Big Saving to Government
By John H. Cline.

If a master diagnostician should De
asked to look over the ailing American
economic system he would probably find
that the rapidly mounting national debt
is one of the great deterrents to re-
sumption Of long-term investments in
private enterprise, the only real basis
for lasting recovery.
For nearly nine years the Govern
ment's balance sheet has been 'in the
red" and the national debt, which stood
at $16O0O,OOOO0O in 1880, will have
climbed to $41,O0O 100000 by the end of
this June. Despite that S25,000000,000
debt increase there is no convincing evil
dence that any of our fundamental eco
nomic problems has been solved.
1t is only natural, therefore, that the
state of the national finances should
have become one of the major, if not
the most important, problem confront
ing Congress and the country today.
Roughly speaking, national thinking
with respect to this problem may pe
divided into three classes. First there
IS the pump printing" school among
the New Dealers, a group whose prin-
clpal spokesman is Gov. Mariner Eccles
of the Federal Reserve Board. These
"liberal" thinkers, who must accept re-
sponsibility for substantial portion OF
the accumulated debt, believe that the
Government should continue to borrow
and spend large sums of money on pub
lie works and allied pump-priming ven-
lures indefinitely, or until such a time
as the country is safely out of the eco
nomic doldrums. Their principal argu-
ment is that spending of this type
brought about the recovery of 1887 and
that second depression followed its
too rapid curtailment.
Majority in Second Group.
In the second class is found perhaps
the majority of the American people,
both Congressman and private citizens.
This group is disturbed by the ever
increasing expenditures and the annual
inability of the Government to balance
its budget. 1t pays lip service to econ
omy, but has no clear idea when or
how the budget should be balanced
Then there is the third group-those
who have vigorously opposed the debt
increases in the firm belief that the poll
cies which caused them were intensity
ing rather than relieving the Nations
economic distress. In this class, among
others. must be placed Vice President
Garner, Senator Byrd, Senator Harrison,
and the majority of businessmen who
have capital to invest. AS the latter,
whose reactions are of the greatest i'm
portance, survey the economic scene
they see an unwillingness, amounting
almost to an inability on the part OF
the administration to balance its budget,
or even to make start in that dlrec-
ton. 1t is true that these potential pri-
vate investors have been deferred from
risking their capital by some OF the
New Deals reform policies, such as the
fight with the utilities, and that unWls2
tax laws have added to their reluctance
to make long-term investments. Each
of these factors has played its part IN
retarding the hoped-for business reVlvat,
but neither has been as important as
the succession of unbalanced budgets.
continued spending in excess OF income
must inevitably lead to disastrous in
dation or excessive taxation, or both
This third group found some very
convincing support for their arguments
last week in report issued by the
National Economy League of New York,
q non-partisan group which has been
studying national fiscal policies for the
past six years.
Two Significant Factors.
The report starts with survey Of
Federal expenditures, exclusive OF the
bonus and debt retirement, from 1922
through 1899. The figures show that
during what is called the pre-deflclt
wears. 1922-193O, expenditures averaged
s3,1l4oOo,oOo per year Since 1888 they
have averaged twice that figure, and In
the current year expenditures (estl-
mated will be three times the pre-
deficit figure, or $9,492 100000.
There are two significant factors in
that picture. One is that despite an in
crease in revenues from $2000,000,-
600 in 1882 to $6,250000,0000 in
1938-an increase of 212 per cent-the
books were closed In 1888 with a net
deficit of $500 100000 For the cur
rent fiscal year, with revenues declining
and spending on the increase, the net
deficit will be $4,000 900, 900. The second
factor concerns the change in the nature
OF expenditures. To illustrate these
changes, the report submitted the fol-
lowing table, which contrasts the lead
ing types of expenditures in 1881 with
those for the current fiscal year.
Federal Expenditures Exclusive of Bonus and
Debt Retirement-Fscal Years 1931-1939.
(Figures in MilNons.)
Increase
1881. 1889. Decrease.
Relief Of all kinds none S21S5 --S2,7S5