Evening star., 1939-10-17

Increases in tax
rates are expect David Lawrence.
ed not only for the persons Of rela-
lively low income, but in the brack-
cts between $1,000 and 100000 a
year.
Likewise, the problem of taking
care of the w. p. A. and the P. w. A.
has by no means been erased. 1t
will be recalled that the spending
lending program which was de-
feated last summer was to have af-
forded a transition from public
spending to private spending. The
bill was laid aside, but it is still on
the legislative calendar and may be
expected to be revived just as soon
as it becomes apparent that the
losses in American trade due to
pending cash-and-carry measures
are substantial.
At this time, Government officials
are working on the Federal budget
which goes into effect July l, 1910.
The estimates are being examined
in the various governmental depart
ments and agencies, and President
Roosevelt will have to get ready by
the end of December a measure
forecasting the amount of money he
thinks should be appropriated for
disbursement beginning July l, 1910.
Drop in Customs Duties.
It is almost certain that the re-
cent increase in business volume
will be reflected in increased tax
receipts in certain lines and divi-
sions but will be more than Offset
by heavy losses in other directions.
Customs duties will show heavy de-
creases due to the generalization
Of foreign trade. Likewise, trade
with Canada may undergo a serious
diminution, especially when new re-
strictions requiring that articles sold
to Canada be put on q cash basis
are introduced into law.
There is always the possibility that
other countries will benefit by these
changes, especially in articles which
are on a competitive basis and
which are not at all related to war
supplies. The administration bill
is to provide that everything ex-
ported to Canada and other coun-
tries shall be bought for cash only,
and this Is bound to inject new
complications In the operations Of
the trade structure.
The preparations Of Canada to
build plants for war purposes have
been noted IN press dispatches, and
It is expected that this will draw
some skilled labor from the United
States, possibly forcing shortages
on this side Of the border which will
affect wage rates. As wage scales
rise, social security taxes increase,
too, and the total amount extracted
by the Government tax collectors
becomes q bigger factor than be-
fore in forcing increased prices,
which in turn tend to cut down con-
sumption and precipitate memploy-
ment.
Government officials, incidentally
are plainly worried by the recent
upward surge in prices for consumer
goods, because they fear it will
mean curtailment of consumption
and in turn cause unemployment.
What America faces as q conse-
quence of these various factors
growing out of the war is a rear
rangement of trade channels and
an increase for the time being Of
unemployment in certain indus
tries producing for export.
Another Large Deficit.
The big question is whether these
economic convulsions, when all add
ed, will not cause the administra-
ton to ask for a budget virtually
as large next year as is being spent
in the present fiscal year. This, Of
course, means another large deficit,
50 that the chances of a balanced
budget have been almost complete
" shattered by current events.
The whole Republican argument
TOR the 1910 political campaign
which was to have been centered
on the waste of Government money
now will face new rebuttal from
the Democrats, namely, that the
war has necessarily cut down Ameri-
can trade, and that the American
people will gladly pay as the price
Of peace the extra billions required
to finance unemployment.
fRsnrod,,rtion Rivhts passrvsdN