Evening star., 1940-02-10
Editor Takes Issue
With Roosevelt
On Debt Picture
Annolist Writer Says
Totul Has Risen More
Than Somewhat
Special Dispatch to The Star.


NEW YORK, Feb. 10.-If there Is
anything rational left In the arith-
metic of our national finance, the
total Federal, State and local gov
ernment debt In this, country Ger
tainly has risen plenty in the last
seven years.
For the convenience of those still
bewildered by President Roosevelt's
recent revelation to the contrary
D. w. Ellsworth. editor of the An
nalist. tells about 1t In the current
issue of that weekly.
Indebtedness, Federal State and
local. he points out, has increased
in the seven years ended June 80.
1899, by $2l 20 900 .000-that Is, 1t
has risen from $38.8l7. 900 900 to more
than $50, ,000, 900 900.
The President did concede that
during his administration the Fed
eral debt had increased somewhat. !"
But, he explained, there has been
an. offsetting reduction In the debt
of the States, cities and smaller sub
divisions.
Points to Huge Rise.
In using that term somewhat"
some one, it seems. is showing heroic
restraint. For, according to Mr..
Ellsworth's analysis, the Federal
gross debt rose in the seven years
from $19,487 ,009, ,766 to $40, ,439, ,532,-
900. And that does not include five
and half billion il: debt that is Gov
ernment guaranteed.
Instead of shrinking, Mr.. Ellis
worth explained. the total indebed-
ness of the nom Federal governments
in this country increased from $l9,-
$50. .0O0. 900 to $19 ,626 600, 900.
IF the increase in the Federal
debt has been Offset by a decrease
in State and local debts, as the
President said it had" he remarks,
1.-The States, cities and towns Of the
United States today would be en-
tirely free and clear Of all indebted
ness and in addition, in the aggre-
gate, would have small surpluses in
their treasures"
There is nothing startling, 1t ap-
pears, in the failure of the local
government debt to decline while
the Federal debts was soaring. For
while Federal spending in the early
years of the New Deal did tend to
tighten State and city relief burden
and consequently to cut their spend
ing, the social dstic) programs Of
the dollar matching kind promoted
by Washington since 1888 has re-
suited in the expenditures of the
Federal and local governments ris-
ing together.
Highest in History.
Total State and local government
expenditures in 1898, the latest fiscal
year for which approximately ac-
curate figures are available. topped
those of all previous years.
A great deal of this is being re-
fected naturally in the tax burden.
True, Federal spending in the early
days of the New Deal did tend to
ease local taxes. then in critical
stage, as the mounting total of de-
linquent property taxes made clear.
Local tax collections, most of them
probably on real estate. did con-
tinue to shrink until 1884.
But thereafter the many Federal
programs for social betterment made
spending seem a virtue. Through
1897 the increase in local tax col
lections was gradual. but some State
governments, carried away by the
popular delusion, started extrava-
CANT programs of their own.
Result, as early as 1895 the State
tax burden had reached a new high
record, each succeeding year outdid
its predecessor, until in 1887 the
total burden of State taxation was
81 per cent higher than in 1929, the
record year up to that time.
BY 1888 the combined burden of
Federal, State and local taxation
had reached $4,000 000, 900. In the
fiscal year 1889 Federal tax receipts
were of half a billion, but State and
local tax receipts, it is safe to say.
Offset much of this decline Since
the national income last year was
about $68, 900 900 900, the tax load
it was burdened with amounted to
about 20 per cent.
1897 Was Best Year.
The year 1887 was Roosevelt's best
business year. Aggregate net income
of those who filed income tax re-
turns in that year was S2l .238 ,574, 900
The $4,000. .OO0, 900 in taxes collect
ed in the ensuing fiscal year was
therefore nearly two-thirds Of the
net income of all those who paid
income taxes.
Net income less net losses of all
active corporations in 1887 was ST.
354 ,0O3, 900. So the country's total
tax burden was nearly twice the
amount that all corporations were
able to earn before paying Federal
taxes in that most prosperous OF the
Roosevelt years.
Combined net income of all cor
porations and all income-taxpaying
individuals was $28.592 SIT 900, and
the country's total tax burden was
therefore, nearly so per cent of what
must be close to the ultimate tax
able earning power of the country.
Mr.. Roosevelt has again ex-
pressed the belief" says Mr. Els
worth, that the budget cannot be
balanced until the national income
reaches $4,000, 100000. The above
figures, however, strongly suggest
that the national income will never
reach $50, 900, 900 900 until the budget
is balanced.
Fortunately Congress seems to be
veering toward the second of these
two views, which is also probably
becoming the viewpoint of the
public"
Rubber Futures
NEW YORK. Feb 10 0P.-Crude rubber
futures closed 1 3 lower Sales No