Evening star., 1945-01-09

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Expenditures -
odldIlCe
'Prices in 1914 were between Ok and q
MAINLY Government expenditures for n
overtime pay law, the Congress
should re-examine the entire sub
Ject Of hours of work and pay. Re-
gardless Of the progress of the war
IN Europe, many Federal employees
will continue to be needed on a 49,
hour work schedule, and provision
must be made for their overtime
compensation. recommend that
the Congress enact permanent leg
islation which would authorize over
time compensation at true time
and one-haf rates.
When at some future date it be-
comes possible for most Federal
employees to go on a 40-hour work.
week, their earnings will be ma
terially reduced. A situation OF
hardship and unfairness will then
exist unless an increase in basic
salary rates has been granted In
recognition of the rise in the cost
Of living. I recommend a prompt
re-examination of Federal salary
rates with view to making ad-
justments consistent with the ma
tional stabilization policy.
The discussion of expenditures fol
the war and for all other purposes
lays the basis for presenting the
budget totals and for an analysis
of the impact of the Federal budget
on the national economy as whole
OF the total estimated expendi.
lures, including net outlays of Gov.
ernment corporations, of S83 ,000,.
100000 for the fiscal year 1916, 81
per cent are for direct war pur.
poses; IL per cent are for veterans
interest on the public debt and ia,
refunds. and only 4 per cent for al
other activities Of the Federal Gov.
ernment. Expenditures in this last
group of "other activities" are esti.
mated at $1,000, ,000, 900, somewhat
less than for the current fiscal year
they are only about one half o1
what they were in the years before
the start of the defense program
largely because of the reduction In
work relief, aids to youth and gen.
eral public works.
Net Receipts in Next Year
Under Present Legislation.
Net receipts in general and spe-
cial accounts under existing legisla-
tion are expected to decline from
$45, 700 10000 in the current fisca
year to SAL 300, ,000, 900 in the flscaI
year 1916. This development re-
fleets, in large part, the 1900 ,000,-
900 decrease in expenditures esti-
mated in this budget. Such de.
crease in expenditures before full
reconversion to civilian production
will mean smaller individual in
comes and corporate profits. This
in turn, will bring a decrease ir
receipts from individual income
taxes and from corporate taxes.
Because the present law will ex.
pire June 30. 1945, receipts from re-
covery of excessive profits from re-
negotiated war contracts will taper
off during the fiscal year 1916.
recommend that the Congress ex.
tend the authority to renegotiate
war contracts.
Receipts from excises and Gus
toms are expected to continue al
about the same level in the f1sca
year 1916 as in the current fisca
year. Sales of surplus Government.
owned war supplies and property are
beginning to yield substantial
amounts. These receipts will bt
still larger in later fiscal years.
Wartime taxes must be main.
tanned as long as large-scale wal
expenditures are necessary. There
is no justification for tax reduc.
tions as long as We are engaged ir
major war. When a favorable de-
velopment of the war allows major
decline in war expenditures, minol
tax adjustments will become possible
and desirable. I am pleased that
the Joint Committee on internal
Revenue Taxation is studying the
tax problems of the transition anc
postwar period.
Borrowing requirements during
the fiscal year 1916 will amount tt
an estimated 5000 ,O00, 900, com.
pared with $51, 1000 100000 in tn.
current fiscal year. Federal trust
funds will have $4,000, ,000, 900 avail
able for investment in Government
securities, thus leaving $4,000 600.
900 to be borrowed from individuals
and financial and other institutions
Predicts Foreign Debt Rise
To 292 Billion Dollars
These estimates assume that thu
Treasury general fund balance
which amounted to 20 billion dollars
at the end of the fiscal year 1914
will be reduced by billion dollars
during the current fiscal year, anc
by 2 billion sdollars during the fiscal
year 1916. They also assume that
retirement of guaranteed obligations
VI SOtCl lU4lC1lV SOA PVA duAOAAo AACA0
outside the Treasury will be almost
completed by June 80, 1945.
These large borrowing operations
will require q further rise in the
public debt to 292 billion dollars on
June 80, 1916. Before the debt
reaches this figure, a further In
crease in the billion dollar debt
limit will be necessary.
Management of the public debt
has become one Of the major flnan-
cial operations Of the Government
To assure effective discharge Of
these responsibilities and. in par.
ticular, to maintain the present low
rates Of interest, ample powers must
be available to the monetary au-
thorities. I shall later recommend
legislation reducing the present high
gold-reserve requirements Of the
Federal Reserve banks.
The management Of the public
debt Is bound to have a profound
influence on the economy for lonf
time to come. Retaining high take.
on the masses Of consumers for gen.