Evening star., 1944-01-13
ity.
The Public Debt

been carried out with fairness and
equity.
The Public Debt
Wartime spending leaves its legacy
of postwar debt BY June 30, 1914,
the public debt is expected to reach
s198, ,000, ,000,O 900, and a year later,
$258, 600, ,0000 900. Even higher totals
will be reached if advance financing
builds up cash balances. In any
case it will soon be necessary to re-
quest legislation authorizing fur
ther increase in the debt limit from
the present level Of $4,000 900 900.
In view of these huge totals, ad-
ministration of the public debt aand
OF related fiscal policies must receive
double care and scrutiny.
The primary achievement Of our
debt policy has been the MAIN
tenance of low and stable rates Of
interest. Average interest rates
payable on the public debt now are
less than 2 per cent. Interest re-
ceived from all new issues Is fully
taxable. AS result the net cost
per dollar borrowed since Pearl
Harbor has been about a third the
cost Of borrowing in the First World
War.
A debt of s258 900, 900 900 will re-
quire gross interest payments Of
$4,000, ,0o0, 900 annually at the present
average rate. With a national in.
come of S125 900 900 900 or more.
these payments need not prove OPP
pressive. 1 am confident that we
can devise tax structure and other
appropriate economic policies which
will permit both payment of interest
and gradual repayment of principal
during years of prosperity without
impsiring the stability and growth
of the national income.
We have sought to secure the
broadest possible distribution of our
debt. not only to fight against in
f1ation. but also to assure a wide
distribution of income from the debt.
For these two reasons it has been
our deliberate policy to offer the
highest rates of interest on those
bonds which are sold to individual
purchasers limited amounts.
Over 10000 900 subscribers to War
Bonds now own a direct financial
stake in the United States. More
than third of all the resources Of
life insurance companies and mutual
savings banks and half of all the
assets of commercial banks consist
of Government bonds. These indi-
vidual investors, as we'll as bank
depositors and insurance policy
holders. can count upon the sound
ness of these assets.
Every dollar accumulated by indi-
viduals, corporations or other nom
financial institutions adds to rainy
day reserves of these bondholders.
Businesses with heavy costs of re-
conversion will be able to defray
such costs in part through liQui-
dation of bonds. State and local
governments will be able to finance
some public works programs without
levying additional taxes or borrow
ing additional funds. Individuals
who are temporarily unemployed
will be able to redeem War Bonds,
besides relving upon unemployment
compensation ard other provisions
/ An increase in wartime debt Is
unavoidable. War expenditures must
continue at high levels until our
er"'''i"7 ere defeated, bare mini
mum IF rc~ulor Government activity
must be preserved. interest must be
reid REGULARLY on the outstanding
debt. The executive departments
are using their best efforts to hold
down all these outlays. wherever
reductions are consistent with max
imum war effort. The only effective
way now to control the volume Of
the debt and to minimize postwar
adjustments is to adopt a truly stifY
fiscal program.
This war was inevitable because
peaceful nations cannot live in the
same world with nations that have
become tools in the hands of ire
sponsible cliques bent on conquest.
That obstacle to peace will be re-
moved by destruction of the German
and japanese war machines and by
establishing lasting cooperation
among the nations united in the
fight for freedom. In this budget
have outlined the financial re-
quirements for victory. I have also
outlined some of the measures re-,
quired to aid in the reconversion Of
our war economy and to help dis
charged soldiers and dismissed war
workers find their way back into
civilian life and peacetime employ
ment.
Military victory is not enough.
We shall not have completed the
defense Of our way of life until we
also solve the second task, the re-
construction of an economy in which
every one willing to work can find
for himself place in productive
employment. The enemy. though
beaten on the battlefields. may still
arise in our midst if we fail in the
task of reconstruction.
| Victory will be not only a CAUSE
for joy over an accomplishment but
at the same time a challenge to
another great undertaking. You and
l have the responsibility to prepare
for victory and for peace. Let us
make sure that the budget, the
Governments work plan, serves both
ends.
FRANKLIN D. ROOSEVELT.
January 10, 1914.
lW e.:> r:lll PTR