Evening star., 1942-01-07

struction I am restricting e.,pendi-
lures to those active projects which
cannot be discontinued without en-
dangering the structural work row
in progress.
Ciuil departments and agencies
The work of the civil departments
and agencies Is undergoing thorough
reorientation. Established agencies
will be used to the greatest possible
extent for defense services. Many
agencies have already made such
readjustment. AL civil activities of
the Government are being focused
on the war program.
Federal grants and debt serrice-
A few categories of civil expendi-
lures show an increase. Under
existing legislation Federal grants
to match the appropriations for
public assistance made by the indi-
vidual States will increase by 10
million dollars. I favor an amend
ment to the Social Security Act
which would modify matching grants
to accord with the needs of the va
rious States. Such legislation would
probably not affect expenditures sub
stantially during the next fiscal year.
Because of heavy Federal borrow
ing. interest charges are expected
to increase by 1879 million dollars in
the current fiscal year. and by an
other 500 million dollars in the fiscal
year 1943. Debt service is, of course,
affected by war spending.
Local Fiscal Policies
Will Be CO. -ordinated.
The fiscal policy Of the Federal
Government, especially with respect
to public works, is being reinforced
by that of State and local govern
ments. Executive committees of the
Council Of State Governments and
the Governors Conference have is
sued excellent suggestions for har-
monizing various aspects of State
and local fiscal policy with national
objectives. These governments are
readjuSting many Of their services
so as to expedite the war program.
Many are making flexible plans for
the postwar readjustment and some
are accumulating financial reserves
for that purpose. The larger the
scale of our war effort, the more
important 1t becomes to provide a
reservoir Of postwar work by busi-
ness and by Federal, State and local
governments.
Determination, skill and materiel
are three great necessities for VIC
tory. Methods OF financing may i'm
pair or strengthen these essentials.
Sound fiscal policies are those which
will help win the war. A fair dis
tribution Of the war burden is neces-
sary for national unity. A balanced
financial program will stimulate the
productivity OF the Nation and as
sure maximum output OF war equip
ment.
With total war expenditures. in
Guiding net outlays of Government
corporations, estimated at s26,OOO.-
100000 for the current fiscal year
and almost $56,0O0, 900. 900 for the
fiscal year 1943. war finance is a
task of tremendous magnitude re-
quiring a concerted program Of
action.
Receipts on Present Taxes
To Triple Under War.
Total receipts from existing tax
legislation will triple under the de-
fense and war programs. They are
expected to increase from 5000 OOO,-
600 in the fiscal year 1910 to $18, ,000.-
100000 in the fiscal year 1943. This
increase is due partly to the ex-
pansion of economic activities and
partly to tax legislation enacted
during the last two years. AS we
approach full use of our resources,
further increases in revenue next
year must come predominantly from
new tax measures rather than from
greater tempo of economic activity.
Taxes on incomes, estates and corpo-
rate profits are showing the greatest
increase. Yields from employment
taxes are increasing half as fast;
and the yields from excise taxes are
increasing more slowly; customs are
falling of. On the whole, our tax
system has become more progressive
since the defense effort started.
DeyeLOr7nent of u1djor sources of