Evening star., 1940-01-04

lllcIIl. IL WILL dlSO ldClllIdGC CIIC ACe
turn to a normal defense program
when the current emergency has
passed"
In this connection it was observed
that his special tax recommendation
for $3.50 900 900 would cover only the
estimated emergency expenditures of
$500 900 900 next year and $3.50, ,000,-
900 this year.
Cites National Income Rise.
In offering a positive defense of
the New Deal practice of realistic
approach to a fiscal policy related
to economic need" Mr.. Roosevelt
pointed with particular pride to the
fact that from 1888 to 1887 the
national income rose by $50, 900, ,000,-
900, "the largest absolute rise for
any four-year period in our his
tory"
Il propose" he added, "in the
field of fiscal policy that we adopt
the following course: We should
count upon our natural increase in
receipts from current taxes and a
decrease in emergency expenditures,
and we should try to offset the
unavoidable increase in expendi-
lures for national defense by special
tax receipts, and thus hope to Sc
cure, for the overall picture, grad
ual tapering off, rather than an
abrupt cessation, of the deficit"
Later, in connection with esti-
mated tax receipts, the President
revealed a fear that there has been
IAN impairment of the productive
ness of the tax base arising from
the revisions in 1888 and 1889 of
corporate and individual income
and capital gains taxes"
Actually, the estimate of gross re-
ceipts totals $3.50, ,760, 900, but $6O2,-
100000 of this sum is earmarked on
collection for the Federal oldage
and survivors insurance fund, leav-
ing the $5,548,000 900 net of normal
receipts.
This social security sum, Incl
dentally, is larger than the COM
parable S537,355 900 estimated for
this year In addition, social Sc
curity expenditures-grants, admin
istrative funds, etc.-jump from an
estimated S378,378 900 this year to
$436 ,877 900 for 1941.
Down to Bedrock of Congress-"
On several occasions in his
message the President slapped di-
rectly at critics of New Deal fiscal
policies and those who have led the
cry for a balanced budget. One
instance occurred in his. comment
on the fact that for operating costs
of the regular Government depart
ments, the estimate of 1941 expendi-
lures is about ST 900 100000. At that
figure, he said, costs ARE down to
the bedrock of the activities and
functions ordered by the Congress
II further savings are to be made in
these operating costs. the Congress
will have to direct by statute the
elimination of many functions. And
even if they should do so, the
amount saved in this budget could
only be small percentage of the
total.
Therefore, those who call for
further cuts should have the courage
and the honesty to specify where
they should be made.
This item represents the basic
financial requirements of the Gov
ernment. Blue pencil inroads are
not easy to make. In the face of
large and appealing requests for in
creases 1 have held appropriations
and estimates of expenditures gen.
orally to the 1910 level or below
Where legislation has added new
activities I have offset the cost by
reductions in old activities"
Figures Net Debt at IS Billions.
And on the subject of the mount
ing public debt, he spoke out as
follows:
Those who state badly that the
Governments debt is AZ billion dol
lars-and stop there-are stating a
deceptive half-truth calculated to
make our people apprehensive. For
one thing, it would clarity the public
mind If it were pointed out that of
the 42-billion-d dollar figure the
amount incurred between June 30
1888, and December 81, 1899, is lust
over 10 billion dollars. For another
thing, it would be more honest and
more honorable for them to say that
while one line in the national budget
shows a national debt of AZ billion
dollars, other lines indicate that the
Government has billion dollars of
cash, gold available for debt re-
demption, and proprietary interest
IN Government corporations, which
reduces the net debt to IS billion
dollars"
Declaring emphatically that "the
credit OF the Federal Government
has never been higher" the Chief
Executive added:
THE debt accumulated since 1e33
represents a far more prudent and
productive use of the people s
savings than much of the enormous
private debts piled up in the 2Os
The billions that were borrowed fol-
speculation, for foreign loans, fol
second and third mortgages on
overproduced commercial construc-
ton, hardly represented the most
prudent use of our peoples savings.
In connection with the category OF
public works and investments-in
which were included useful public
works, commercial ship construction
and loans for agricultural aid-the
President took occasion to renew a
previous recommendation that Con-
gress authorize Government cap
italization of projects which have
proved themselves self -liquidating.
Boulder Dam Cited.
AS an example, a Government
spokesman pointed out that the
Boulder Dam project costing about
$lOO, 100000 is now paying its own
way. capitalization of this project
by sale of bonds would return to
the Treasury the original cost of the
venture.
II would confine this principle, 81
HR. seIL @Aake ~ "a :