Evening star. [volume] (Washington, D.C.) 1854-1972, 1940-12-05
35-BiIIion Defense
Outlay in Five Years
Seen by Officials
Estimate Made in Report
On Effect of War
On Agriculture

An expenditure of S35 900, 000, 900
during the next five years would be
required, it was estimated today, to
carry out the national prepared
ness program as now formulated.
This sum is double the amount
of appropriations and authorize
lions made thus far by Congress for
military defense.
The S35,000,00O000 estimate, the
first from official sources project
ing defense plans that far into the
future, was made by committee
of Agriculture Department econ
omists in a report entitled The
Impact of the War and the Defense
Program on Agriculture.
The report stated that 1t was
possible to make only rough" esti-
mates of the probable magnitude OF
the defense program at this time.
It added, however, that additional
unfavorable developments in the
world political situation might re-
suit in the projection OF an even
more ambitious program"
During the five calendar years
beginning with 1941 it will require
probably about S35 ,0O0,000000 to care
for the defense program as now
projected, or around S25 100000 900
in excess of the 1939-40 rate of ex-
penditure (for all Government pur-
poses) before the defense program
was inaugurated," the report said.
The report was prepared for the
Agriculture Departments program
board for use in drafting future
farm-aid programs.
It estimated calendar year eX-
penditures for defense purposes for
the next five years, as follows:
194l, $500 100000; 1912, 50 00O,-
600: 1913, $500 900 900; 1914, S.
O0o,0Oo,0O, and 1945, $4,000, 100000
The report said the effect of the
defense expenditures on industrial
activity and prices depends to a
considerable extent on how the
program is financed.
The financing program, as it is
Developing. seems likely to permit
a speedy development of the defense
program in the next two years, with
the result that in those two years
the program will make a large net
contribution to national purchasing
power"
The economists predicted that the
defense spending together with en-
largement of military forces would
reduce the Nations unemployment
rolls by about one-half between
1910 and 1912.
Discussing its probable effects on
agriculture. they said the indicated
increase in purchasing power would
be reflected in higher prices for most
farm products, particularly meats,
some fruits, dairy products, poultry
products and truck crops. They
added, however, that probable ad-
vances in farm wages and in costs
of materials and equipment used
in production of farm products may
be so great as to offset most of the
rise in farm income.
Discussing the probable economic
contributions of defense spending,
the report said that if all the ex-
penditureS were to be cared for by
Increased taxation and decreased
spending for other purposes "the
effects on our domestic economy
would be relatively small"
Discussing the outlook for the
estimated $4,000 100000 program,
the report stated:
obviously. the rate of expenditure
in each of the next five years will
hot be the same. First will come a
period in which facilities for the
production of defense equipment will
be built up, and arrangements made
to handle larger numbers of men
under arms.
Wide Expansion Forecast.
During this time, the actual cash
expenditures of the Government for
defense will be relatively slow in get
ting under way, but expenditures by
private industry for expansion and
the construction Of new facilities
will be quite large.
1T is estimated that this building
up process will not be completed
until early in 1912. The second period
will consist of the operation of these
production facilities to build up our
supplies of airplanes, tanks, ammuni-
ton and other equipment to full
defense strength, tapering off grad
ually until the new normal level of
upkeep expenditures for an enlarged
Army and Navy is attained.
This level. the report said, prob
ably will be attained by the end of
this f1ve-year period, according to
the best possible present projection
OF the defense program as now con-
templated."
The economists were not optimistic
over the chances of substantial bet
terment in agriculture prospects.
Despite the increase in prices and
incomes received by farmers, the
situation as a whole does not promise
any great improvement in living
conditions on the farm" they said
Taken as a whole, it seems quite
evident that the prospective situa-
ton for agriculture during the next
five years, even with material in
creaSeS in consumer purchasing
power, farm prices and incomes, re-
mains rather critical"
The report said farm families en-
gagged primarily in producing cotton,
tobacco and some fruits-products
for which the war has restricted
foreign markets-may receive re-
duced incomes.