The Wilmington morning star., 1940-01-24
Morgenthau Recommends
Raising Of Debt Limit

WASHINGTON, Jan. 23.-(P-
Secretary Morgenthau contends that
the limit on the federal debt should
be raised to $4,000, 600, 900 and that
the budget should be balanced by
reducing expenditures and increas.
ed taxes.
Answering a barrage of questions,
the treasury secretary told mem
bers Of the house appropriations
committee during hearing on his de-
partment's 1941 supply bill:
To Fifty Billions
II think it (the debt limit should
be raised to $4,000, 600, 900.
do I think the budget should be
balanced: Yes. Do I think eXpendi-
lures should be cut down? Yes. Do
[ think taxes should be increased?
Yes. But if you say, Morgenthau,
what kind of taxes should there
be?' I can not answer that because
I do not know"
The report of the hearings was
made public today.
Morgenthau said that if it was up
to him he would recommend rails
ing the debt limit from the present
s45s 900 600, 900 and that he would
take another look" at the situation
when the figure reached $40, O00,-
600, 900.
Il am willing to say now, gentle
men, that there is no particular dan
ger involved if congress would raise
the debt limit to $50, 0OO, OO0, 900"
Morgenthau told the committee.
Beyond that 1 would not venture
an opinion
Suggests Economies
He also expressed the opinion that
all federal expenditures such as
public works, public roads and rec
lamation projects should be trim
med or dispensed with temporarily
in view of prospective heavy eXpen-
ditures for defense.
Morgenthau said that his guess
was that business conditions should
be "at least as good in 1910" as
they were last year, although war
conditions in Europe and Asia made
the situation rather uncertain.
He also testified that the interest
on the public debt the Bext fiscal
year would be LOO, 600, 900, about
$50, 900, 900 more than in the current
year.
For the third time he recommend
ed that congress inquire into bank
h gliding companies - situations
where a bank holding company can
go in and buy up a bank and take
control away from the community"
Well Received
Morgenthau and his aides told
the committee that the treasury's
financing program had been well
received. They said that insured
banks now hold SIS, O38, 900 900 of
federal obligations.
Treasury procurement division of.
ficials disclosed that they would
like to store up $500, 900 900 worth
of strategic materials for use in a
future war emergency.
The present congressional autho-
rization for storage of such mate
rails as manganese and tin is $780,
600, 900. Congress already has ap-
propriated $40, 600. 900 for this pur-
pose and the government purchas-
ing agents asked SIS, 600, 900 for the
fiscal year starting next July L.
Reports from other departments
showed that:
l.. Smuggling increased last year.
customs bureau officials said that
seizures Of merchandise increased
from 5,726 in 1888 to 5,S77, but that
the Valne of the merchandise jump.
ed from $424.63 to $1,129, 4S3. Most
of the recovered material was orien-
tai rugs.
2. The internal revenue bureau
has recovered about SO, OOO, 900 in
excess profits from manufacturers
OF defense equipment. The law
limits profits on naval vessels to