| Show s Debt Reaches Record High i M C C. C UTLEY tIme when the ther a had ft a r g States Stales i nut But of exactly I years eus t for each of ot otI And irA debt has hIlS multi the I times tiDIes exist exist- i began bega n ering tor those u- u udie die debt c of ot tor for the rya at tel to pat par present to the ud up If fir national debt rt i in the riles of ot wars acone ac- ac yes vs th the ot of one school of ot Ib the spend spend- hick ch a arils ds l t enor enor- Li present the total la laau au II by a de de- the direct rethe re re- was ryes oe oa World war the the debt up upI 1812 sent gent ot In In 1800 Jett I d a new hi high gb of 2 the Civil war c vt v t at t the comfortable It but the therl 01 1 It to the rum l-i-rum rl dl car Ir rout Of ot 2 te ll liter later Dy By 1 conscientious f 1 w during the next cases be laid Inid to the total Inability of the Treasury department the banks and the people In general It to estimate the duration of ot the depres i lion sion When Incomes slum slumped lied so GO I did revenues And when the primIng prim Ing failed to get the pump working work ing as quickly as had be been n predicted pre pre- dieted tax revenues failed tailed to grow to expected proportions From rom Wallstreet Wall Vail WallStreet Street money monel marts have rumbled accusations of deliberate overs overstatement overstatement overstate overstate- late late-I ment In la the more recent budget es es- In January 1934 1034 President President dent Roosevelt estimated that the deficit six lib months later would be It turned out to be An Ao estimated for the first halt half of ot 1035 proved to be an actual Wall Street says the treasury treas trens ury Is too smart to make such mistakes mistakes mistakes mis- mis takes unwittingly The Real National Debt For Tor other rea reasons suns It Is difficult to estimate the real national debt The gross debt of more than at nt the end of ot 1935 1035 actually represented the proceeds of December Decem Decem- ber bee borrowing added to the exis Ing lag debt But Dut though the money I too 1 E Iff Y 1 o oI t I 1 tt t. t o zu z I g II en CD C u q o m N III E o m CD C 9 col u ell le bO H CIt CIto C C X CD A Y t l 1 R co III K C a 1 a c to 0 c 0 s bOi ell CO e 2 11 ct c U U Us u CO 0 U 11 III u I s CD U 0 f u Is co U V VV v 0 0 a 1 A V C 3 w 1 Do 4 E 2 0 s i Q c 1 0 pp m ca M I 1 WHERE HERE THE GOVERNMENTS GOVERNMENT'S DOLLAR COMES FROM Recent it decisions would cancel the column labeled Processing Taxes and taxes will have to be returned by the by-the the government Both the charts charta dm are based on 1936 1935 budget estimates fie Je the Ibe debt reached Its post kv kif of ot In 1030 1930 lID es a resident President Roosevelt dell dolly dolly- vIII v- v la III budget message to congress nutty 6 he national debt was than plan It bad ever been belt be be- II lt was well over Oe Re predicted that cm on June 30 I it it II the end eod of ot the 1637 fis fis- far ar It would woold be or w more than 1000 for every Olio to the land Be present record national debt ke the direct result of the hat p policy Polley of ot priming the sip 10 toil aid business In effecting iwo the throes of dolt deIt de- de toa It lt Is not as 88 large as dent Roosevelt had predicted be he sir mouths ago ngo Two ft dm iso ego be he said The debt would pt to on June Junet f IW I At t the lie President also said sald then III w dot Brat annual budget message I egress My estimates for tor the III fiscal year ending June 30 I Show to au I excess of or e a ww Ofer oven I receipts of ot 77 We Ie lJ nl J Plan to io have a Wj k balanced lanced budget for tor the Jw lear of recovery the present 71 fEU ud IDd from that time on t reduction of the debt d bl v E Balance c Not In Sight II a balance has not been land I er even eveD forecast 11 for tor the thee lie Be e estimated that t t feat the Ibe government would In revenues o ii I Ian tor Spend work relief s still 1 ii t to determIne The then d have been beeD at t least 1098 1008 whatever is Ie amount had Il added for tor relief Immediate ite pend pend- estimate would throw the out of or whack to y r day ot of his his message the court Urt M Id Sad IDd deClared the AAA I later I rUling decreed the th e ba back t would have bave to the be ii Processing taxes virtually certaIn that Id 4 Pu Soldiers Soldiers' b bonus I congress The e situation Ie T enough M for tor Secretary astir 1 hat the e u to pr pre l country might face tace a lIhr debt 1 or f 35 15 by the 1937 1137 k 11 fiscal lIeal year ear ball ot of the budget has bas tonJ lu In lilt he recent years OYe QI bUd budget cha character raCier or of et deficit as i table reveals three The estimates were pa Of dollars All are given In III 1 Predicted 31 3 Actual II 1151 1131 1124 I I aUG II i l iu 21 am 1623 m Ua ul I- I hA ot of Jan 1 n IUt vt I ea the actual were iiI so far away totals may In most had iad been borrowed It had not yet I been jeen een spent With the sum thus held In n the general fund rund deducted the debt in December was actually only a little over u But Dut there are also complications not so rosy in nature During the thelast thelast thelast last half dozen years the government government govern govern- ment has embarked on some extraordinary extraordinary ex financial ventures Many critics of ot the government financial policy would add to the I debt the contingent liabilities taken on by the treasury How flow the Treasury y dep departments department's financial financial finan finan- cial ventures stood on October 31 31 1035 1935 Is shown In the following Combined Statement of ot Assets and Liabilities of Governmental Corporations and Credit Agencies of the United States Figures are In millions of dollars AB- AB Lla seta Beh ty Recon Fin Corp 2340 Ion US Public Admin Ship Board Mer F P. P 83 Federal Land 2403 1403 Fed Cr Fed Farm Mort Nort C C. C 1612 1623 1397 1391 Bank Banka for Co Home dome Loan Banks Danka 39 Home Horn Own LC 2582 2982 2213 2842 60 Fed Sav Iu C Fed Dep Ins Ina Corp no noAll All others othera Grand Orand Total Like so much of the New Deals Deal's financing the value or the danger of ot these liabilities depend entirely upon recovery It If business returns to over o er and above e the national debt of more lore than thun Further Moral Obligations Moral obligations of the tr treasury are outstanding liabilities of or the Federal eral Land Dd hanks Banks home flome Loan Banks Janks discount functions Federal Deposit Insurance corporation Federal Fed Fed- eral Savings and Life Ite Insurance corporation and tile the real reul estate loans to the Federal Housing dousing Ad Ad- ministration These Implied Ha- Ha total another or so so Painting the blackest side of ot the picture it Is seen leen that If It times go utterly bad If these actual and Implied liabilities have to be met and it If Mr Jr worst tears fears are realized the national debt EiX mIght reach Ch X or U 45 or even more There are some Intangibles on the asset side too tuo There Is about which the government govern govern- ment meat may realize from equities if all the debtors to UFO IWO and HOLU pay up There Is not an Intangible but a real asset of gold pro profit t now being held In the stabilization fund Secretary bloc Hor- a year and a half haIr ago n nn jounced flounced that this sum w would eventually even even- be turn turned d Into revenues and would contribute toward reducing the national debt It Is barely possible possible pos pOSt sible that will be col from the of ot war debts At some time In the fu fu- lure ture ure revenues from the Social Security Se Se- act passed In August 1033 1935 may be reckoned on the asset side No administration In history has borrowed so much money y as the present one No administration has borrowed It so cheaply either The cost of ot carrying currying a debt of ot today Is little more than the cost of ot carrying the of ot 1033 1933 and Is actually less than carrying the war debt of ot 1919 While the debt has risen 70 per cent since the 1031 fiscal year the cost of carrying It has risen only 34 per percent cent This Is what the President was referring to In his budget message message message mes mes- sage when he said that the governments government's governments government's govern govern- overn ments ment's credit was never higher Refunding Debt Cheaply If the low rates for money continue con and economists right now can see little reason that they shouldn't the government will find Itself getting out from under the great part of the debt dirt cheap since about one-half one of It matures within the Ule next Live five years Refunding Ito Re- funding should be possible at low cost One evil eU of cheap money Is the temptation to spend more It encourages encourages encourages en en- Irresponsibility The world holds plenty of ot precedent to show that It Is budgetary Irresponsibility that leads to In Inflation atlon The estimated In revenues revenues for tor the 1937 1037 fiscal year II It It proves accurate would mean the largest federal tax receipts In history his his- tory with the exception of the year 1920 1020 when wartime taxes were altheir at al their height but Incomes were up too too How low some of the tax rates have been increased to make up for forthe forthe forthe the difference In la income today Is readily seen Maximum surtax on personal Incomes has grown Irown from 20 per cent In 30 1920 to 7 75 per percent percent percent cent the maximum rate on estate taxes from 20 per cent to 70 per percent percent cent and the maximum corporate Income tax from 11 per cent to 1517 per cent There has actually been a decline In the amount of ot fed federal ral tax taken from the citizens citizen's dollar doUar however In n 1932 1332 It was per cent In 1933 1333 per cent and in 1934 1034 per cent The 20 cents out o of every dollar that the citizen pays into the federal treasury Is reflected reflect ct ed cd In almost every article he buys food gasoline telephone service tobacco to bacco theater tickets electric pow er et etc But ut It lt It Is admitted that the new financing depends entirely upon recovery recovery recovery re re- covery for tor revenues to Increase If times get worse Instead of better better- 1 u U It I v U e 4 d f d CD co u o 0 Q O a a 0 v vU U U I con s U C 1 a en a a CIt c s c W s c g eft to Rt v p 9 Go o 2 j v CI A a aY L IG 10 u a. a Q Y c- c c I G 0 Ye u. Il 4 0 o 0 AI 1 C 0 10 C Q c 3 Q U CIt CD 0 p co F j u 1 J i E c t d dst i Q t st ax c R co U I Q I A 10 i a s z u U. U Z 07 U d. d b c I Is 1 ro It 1 W i WHERE THE GOVERNMENTS GOVERNMENT'S DOLLAR CaLLAri GOES The Th shaded columns col col- columns and relief Although the Su Suo represent expenditures for recovery will administration unconstitutional the preme premo court declared the AAA farm subsidy of this na na- nature seek some somo other means mean of payment and regards ture Aft as a a permanent r p r normal or prosperous times the assets as sets will be gradually realized as were those of ot the lire War Finance cor cor- Hut But If times do not get better belter and stay tny better hetter the assets assels will be virtually Impossible of ot col lection In a continued continue depression they might become an extremely embarrassing embarrassing em fm burden The liabilities of ot are not only a s claim on the taxpayer er but they are well the Wall Street Journal has hassold said sold The question how bow much debt the country CAN carry Is Incorrectly posed It should be how much debt WILL the country carry IF spending continues and IF federal receipts do not swing awing up only two courses tie He ahead More and aud hIher taxes or Inflation C e Wt t rn nalL |
