Evening star., 1944-02-29


and the rate of spending at present
suggests that possibly the level ulti-
mately will have to be pared down
another two billions. The result is
that war expenditures are to be
5000 ,000, 900 less in this fiscal year
than originally estimated by the
Treasury.
But the Treasury asked for the
full amount just the same. Congress
balked. There is good reason to be-
lieve that the Treasury representa-
tives who went to Capitol Hill to
testify confessed in informal hear
ings that of the SIC, SOC, ,000, 900 asked
for about 5000, 900, 900 was really
wanted for additional revenues and
IS, 600, 600, 900 was sought as a curb
on imitation.
Imitation Being Curbed.
Subflation Being Curbed.
Leaders in Congress, however, felt
that a sufficient curb on imitation
was being applied. Thus the public
may not realize it, but Judging by
the way in which individuals and
corporations are buying War Loan
Bonds, approximately $4,000, 600, 200
or more will be raised from sources
outside of the commercial banks.
This is considered a very effective
brake against inflationary trends.
1t will then be asked how Congress
reasoned that it was meeting the
Treasury viewpoint on the need for
about IS ,000, 900 900 in taxes. The an
swer is that Congress expects at least
$4,000, ,000, 900 In additional revenues
to be returned to the Treasury
through the new provisions govern
ing renegotiation of war contracts,
and this sum, together with the
81, 300, 900 900 of taxes, brings the
total up close to the desired amount.
Actually, of course, the revenues
from taxes may exceed the esti-
mates, but for all practical purposes
Congress figured that it was raising
about the sum needed from taxes.
The gap of $7O0, 900 900 may turn out
to be much less than that in the end.
There is no question, of course,
that 1t would be better il more
revenues could come from taxes,
especially during the war. because
after the war the Treasury would
then have less of problem when
War Bonds are converted into cash.
But so far as curbing imitation, the
men in Congress feel that their
viewpoint is entitled to as much
weight as that of the Treasury in
this rather indefinable realm Of
anti-inf1ation activity. The vast
amounts of money being invested in
Savings Bonds by individuals and in
War Loan Bonds by companies are
unparalleled in all history.
Congress Supported.
1t Is not accurate, therefore, to
accuse Congress of refusing to grant
the Executive $1O,6O0, 900 900 needed
to finance the budget in 1914. Con-
gress furnished almost the amount
needed and conservative experts
figure that the Nation is doing q
splendid job in financing the war
1t may not be generally realized
but approximately 40 per cent OF
the moneys needed each year are
being derived from taxation and the
remainder is being borrowed. This
Is considered by many experts to be
safe division. But the Treasury's
tactics were considered by critics to
be dangerous because if the tax load
were too abruptly stepped up it
might topple the economic struc-
ture and impair the productive eff
cheney of the Nation at time when
that efficiency is so much needed to
build the tools and weapons and
supplies for the whole war program
So long as the American economic
system Is based on individual in
itiative and incentives. with the profit
and loss system as the backbone OF
business, it becomes necessary for
Congress to exercise common sense
and reject the theorists. who are moi