Evening star., 1947-01-10
"$330,927,0ooI
69e,223,
power and provide incentives for a
high level of production.

power and provide incentives for a
high level of production.
Urges Charges for Services.
I also recommend that the Con-
gress reconsider the extent to which
fees should be charged for services
rendered by the Federal Govern
ment. While it is not sound public
policy to charge for all services OF
the Federal Government on a full
cost basis, and many services should
be provided free, the Government
should receive adequate compensa-
tion for certain services primarily
of direct benefit to limited groups.
For example, I believe that a
reasonable share of the cost to the
Federal Government for providing
specialized transportation facilities,
such as airways. should be recov-
cred.
Receipts from direct taxes on in
dividuals are estimated to- decrease
from the fiscal year 1946 to le47
because Of the lower effective indi-
vidual income tax rates In the Rev.
enue Act of 1945, and to increase
from the fiscal year 1947 to 1948
because Of higher incomes. Direct
taxes on corporations decline in the
fiscal year 1947 and further in 1948
largely because of repeal Of the ex-
cess-profits tax.
The excise-tax estimates increase
in 1947 because Of increased con-
sumer demand and increased pro-
duction, and decline under present
law in 1948 because of the expira-
tion of the war tax rates of the
Revenue Act of 1943.
The employment-tax estimates
show increases in both fiscal years,
due in 1947 mostly to larger pay
rolls, and in 1913 mostly to increases
in rates as provided by law. Miscel-
laneous receipts increase in 1947
over 1916 largely because of in
creased receipts from disposition of
surplus property and decline in 1948
largely because of decline in sur
plus-property receipts.
Public Debt Peak Passed.
The public debt reached peak
last February at 279 billion dollars.
During the remainder of the calen-
dar year, the debt was reduced by
over 20 billion dollars and stood near
259 billion dollars at the end of De-
cember. Most of the securities re-
tired were held by banks. This re-
duction was accomplished by draw
ing down the Treasury cash balance
to a level more in line with peace
time requirements. "'*
The annual interest charge of
about 5 billion dollars is less than 8
per cent Of our current national in
come. It is well within our capacity
to pay, particularly if we keep up a
high volume of national production
The best method OF keeping down
the burden of the debt is to main-
tain prosperity. A single year of de-
preston can lay more burdens on
the people than many years Of grad
ual debt reduction can relieve.
Our debt-management policy l.
designed to hold interest rates at the
present low level and to prevent un-
due influctions in the bond market
The present policy has eased the
financial problems of reconversion
for both business and Government.
The stability of the Government
bond market has been a major fac
tor in the business confidence which
hes been of such value in achieving
full production. Low interest rates
have also relieved the burden on the
taxpayer. The Treasury and the
Federal Reserve System will con-
tinue their effective control of in
terest rates.
Defense Costs Remain High.
Expenditures for national defense
remain by far the largest category
In the budget. The cost of main
tanning the military, air, and naval
forces necessary In the fiscal year
1948 will be high. The present de-
fense establishment requires larger
forces, more complex mechanical
equipment, more intensive use Of
equipment, and more extensive de-
velopmenta1 activity than before the
war.
However. in the fiscal year 194s
these expenditures will be but one
eighth of the outlays in the peak
wartime fiscal year, 1945. We
still have large responsibilities aris-
ing out of the war. Military occu-
patton of Europe and the Far East
must continue. The lines of COM
munication and supporting installa-
tions for the occupation forces must
be maintained. Recruits must be
retained as requirements.
In my state of the Union message
II have again urged establishment
|of q single department of national
defense. This Is an important ster
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