The Republican. [volume] (Oakland, Md.) 1877-current, 1942-07-02
Two Hundred Billion
Washington, June 27

AS, without pausing for thought,
we slide - on Wednesday-into an
other fiscal year, the unconcern of
some of our public officials as we'll
as the people generally about the vital
business of Federal finance is not
easy to explain except on the theory
that on this subject we have become
nationally numb. This could not be
better attested than by the almost
complete lack Of public interest shown
in the Presidents recent request for
an additional appropriation of $42,-
O00,000,0O0. Neither newspaper nor
radio commentators treated it as big
news. 1t created no sensation.
###
Yet, in the history of the world no
such appropriation has ever been
asked by an executive or appropria-
ted by legislative body This single
appropriation is far greater than the
whole cost of the last war. That so
stupendous a sum could be asked and
given almost as a routine matter is
an astounding thing. With the last
request, it is now clear that the Amer
lean war effort will be made on a
scale of more than two hundred billion
dollars. That is where we are now.
That is roughly equal to al 1.-THE wealth
in Observation-Disclosures, farms and in
dustrial equipment. That is a debt
which imposes an Open-end mortgage
upon the American people-a mort
gage without a maturity date a
mortgage the payment of which will
weigh upon generations unborn and
the ultimate discharge of which no
man can forsee. How this debt, which
exceeds all records, is to be serviced
and borne is, perhaps, as vital prob
lem as has confronted the nation.
There are pessimists who say it
cannot be done. Viewing the present
lopsided state Of the Federal finances
and foreseeing a terrific postwar
strain on the Treasury, these think
the sheer size of a two-hundred- bill
lion-dollar debt means national bank
ruptcy. But, that is not true. Such
counsels tend to weaken the national
spirit and should be disregarded. Vast
as it is, the country can and will
swing this debt. Nevertheless, it would
be foolish not to face the realities.
###
First, it ought to be understood that
in order to stand up under so tremen-
dous load, the American people for
many years to come will have to sub
nit to really terrific taxation. There
is no prospect that the burden will be
lightened in the postwar period On
the contrary, soon or late, it will have
to be increased and distributed until
no wage-earning man or woman is
exempt until every loophole is
closed and there is no such thing as a
taX-empt security At present there
are millions of the smaller income
class who pay no taxes and there are
literally billions of county, State and
city bonds which escape taxation. In
our situation both these things are
intolerable. If they are not corrected
by this Congress they must be by the
next
Second, it is clear there has never
been a time when as much response
bility rested upon the financial officers
of the Government There is no ques-
ton that Secretary Morgenthau COM
prehends the gravity of the facts and
knows what ought to be done. At this
session, it is true, his taxation pro-
gram was not adequate to start with
and what we will get in the new bill
will be even less so.' But, with the
President opposing the inevitable
sales tax and Congress refusing to
plug the tax-free loopholes, Mr. Nor
genthau is not to be wholly blamed
Perhaps, after the election, he will
renew battle along these lines and
also will give stronger support to the
economy forces to whose program he
is largely committed. He must know.
that these things have got to be
done. He must know, too, that the
longer they are postponed the greater
the peril. In the meantime, it would
help lot if within the Administration
various notions which tend to weaken
the confidence of those to whom the
Government must look to buy its Sc
curities, should be abandoned.
One of the most pemicious of these
is that the size of the Federal debt is
unimportant because eve owe it 70
each other" This is equivalent to say
ing that we are going to use the debt
as an instrument for the redstribu-
ton of wealth. If this were true, who
knowingly, would invest in repudia-
ton? Another is the silly idea that
when we are spending billions a few
more millions make no real differ
ence. Another is the effort to discount
the worth of money and credit and to
disparage those who deal with them.
This has been one of the favorite ac-
Invites of a certain Administration