Evening star., 1949-05-16
Misleading Of Public
By President Over
Debt Reduction Seen
Use OF Idle Balances
Stored for War Use
Held Cause OF Cuts
By David Laurence

President Truman is still the
politician in the White House-he
considers it proper to mislead the
public on certain facts in order TO
make a political boast.
Thus, Mr.. Truman told his press
conference that he had retired
more debt than any other Presi-
dent in the history of the United
States. He said he had retired
about $4,000 100000, which is
more than the total national debt
after World War I.
But the facts are that when the
war ended, the balances which
had been developed by war loan
drive that proved unnecessary
were almost Immediately paid
back to the borrowers. This
amounted to $4,000, 100000. In
the book issued last month by the
. Committee on Debt Policy-a
group Of eminent economists-the
following explanation is given
about debt retirement to date:
From the peak of $27s ,00O, ,00O.-
900 reached in February 1916, the
total debt by April l94S had been
reduced to $252,OOO, 900, 900, or a
decrease Of $27 1000, 100000 over a
period of 26 months. The debt
then remained almost the same
for the rest of 1948.
Reduced 20 Billion in '46.
"of this debt reduction, $20,-
o0OO00,O 900 occurred in 1946 and
represented largely the use OF ex-
cess Treasury balances built up by
the victory loan in late 1945.
"Contrasted with 1916. the debt
retirement in 1947 and the early
part of 1948, amounting to ST.
600 900 900, was financed by an
excess OF receipts over expendi-
lures in the Federal budget"
The Republican Congress was
in charge OF the purse strings in
1947 and 1948.
The President gave his listeners
the impression that he had done
something which no other Presl-
dent was able to accomplish. Ac-
tually, however, the use OF idle
balances stored up for war pur-
poses was not an excess OF receipts
over expenditures in the usual
sense. So it is amazing to find Mr..
Truman claiming credit for the
removal of these balances as a
political achievement.
The President might have gone
further and claimed credit for
having raised the money when. in
truth, patriotic citizens OF both
political parties participated in
the victory loan drive.
Questioned on Deficit.
In the same press conference at
which MFR. Truman boasted Of his
achievements in reducing the
debt, he was asked why he sup
posed that "those pepole who were
worried about a deficit 10 years
ago are the least worried about
1t now" He answered that he
didn't have any idea but it would
be an interesting psychological
study.
Now the facts are that the
people who worried about deficit
financing 10 years ago are still
worried about it today. All the
Democratic leaders of Congress
who have expressed themselves,
including Senator George of
Georgia and Represe tative
Doughton of North Carolina, have
said that, of all the alternatives
available, deficit financing would
be the worst.
Business men generally feel the
same way. What was misinter-
preted in the Presidents presence
was the attitude of most business
people toward increased taxes.
The question which should have
been asked was why those people
who were against deficit financ-
ing 10 years ago and are against
it now are opposed to an increase
in taxes.
The simple answer Is that there
is better alternative available
and that's reduction of expenses.
but this, of course, is unpalatable
to spending administration
which has requested from Con-
gress the highest Federal budget
in all peacetime history. 1t has
also asked for authorization of
projects that could conceivably
mean even bigger budgets annu-
ally hereafter. II expenses are
reduced, there will be no deficit
to finance, so the question could
be academic.
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