The Mason City Globe-Gazette from Mason City, Iowa on January 6, 1936 · Page 12
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January 6, 1936

The Mason City Globe-Gazette from Mason City, Iowa · Page 12

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TWELVE MASON CITY GLOBE-GAZETTE, JANUARY 6 1936 F. I^SAYS TREASURY DEFICIT TO EXCEED BILLION DOLLARS FIGURE DOES NOT INCLUDE FUTURE COSTS OF RELIEF V Budget Message Amounts to Raise Public Debt to New High. WASHINGTON, Jan. 6. UP--The text of President Roosevelt's message to congress transmitting the federal budget for the fiscal year ending June 30, 1937, follows: To the congress to the United States: Pursuant to provisions of law I transmit herewith the budget of the United States government for the fiscal year ending June 30, 1937, together with ty.g message, which is definitely a part thereof. The estimates have been developed after careful analysis of the revenues, obligations, and reasonable needs of the government, and I recommend appropriations for the purposes specifically detailed in the tables which follow. PART I No mortal is permitted unfailingly to predict the future. This is particularly true of estimates which relate to the money values of property and services in a world of nations torn by dissension, by violent price fluctuations, and by forebodings of the future. It is, therefore, a cause for congratulation within our own nation to realize that a consistent, broad national policy, adopted nearly three years ago by the congress and the president, has thus far moved steadily, effectively, and successfully toward its objective. In March, 1933, in spite of substantial increases in tax rates during the preceding administration, federal tax receipts had fallen to such a low level that even normal expenses of government could not be carried* on without creating a deficit. In addition to normal expenses the problem of millions of starving unemployed called for- a relief program which obviously would greatly increase that deficit. The national policy which we then adopted sought to stop the downward economic spiral by taking simultaneous action along a dozen fronts. The chief objectives were: To make bank deposits secure, to save farms and homes from fore- closeure, to start public works on a large scale, to encourage home ouilding, to increase farm crop values, to give useful work instead of a dole to the needy unemployed, to ~""~ reduce all interest rates, to increase foreign trade in both exports and imports, to extend government credit to railroads and other privately owned activities, to reduce unsound and generally disastrous speculation, to eliminate starvation wages, to seek a higher level of values, and -then to maintain those values. Based on 2. Beliefs. On the part of the federal govern, ment the many legislative acts creating the machinery for recovery were all predicated on two interdependent beliefs. First, the measures would immediately cause a great increase in the annual expenditures of the government--many of these expenditures, however, in the form of loans which would ultimately return to the treasury. Second, as a result of the simultaneous attack on the many fronts I have indicated, the receipts of t! * government would rise definitely and sharply during the following few years, while greatly increased forts put forth by the employers o the United Stales greatly to in crease the number of persons em ployed by them. The finances of th government are in better conditio than at any time in the past seve years. I say this because starttn with the autumn of 1929 tax re ceipts began a-steady and alarmin decline while at the same time, gov ernment' expenditures began steady rise; today, tax receipts ar continuing a steady climb -whic commenced in tie summer of 1933 whereas budget estimates for th next fiscal year will show a de creased need for appropriations. The credit of the government i at its highest. The average of th men of the nation stand ready t do their share. It is to be hopei that motives and attacks whicl" spring only from the desire for po litical or financial power on th' part of a few will not retard thi steady progress we are making. Our policy is succeeding. Th' figures prove it. Secure in tin knowledge that steadily decreasinj deficits will turn in time int( steadily increasing surpluses, anc that it is the deficit of today which is making possible the surplus o tomorrow, let us pursue the coursi that we have mapped. Balanced Except for Jobless. In my budget message of Jan uary, 1935, I said, "I am, .however submitting to the congress a bud get for the fiscal year 1936 which balances except for expenditures tc give work to the unemployed. I this budget receives approval o the congress, the country wil henceforth have the assurance tha with the single exception of this time, every current expenditure o" whatever nature will be fully cov ered by our estimates of current re ceipts. Such deficit as occurs wil be due solely to this cause, and i may be expected to decline as rap idly as private industry is able to re-employ those who are now with out work." In looking at the revised esti mates for the fiscal year 1936 : am more than pleased to find tha we have not only accomplishec what I said we would in my bud get message of a year ago but thai the results with respect to both expenditures and receipts have sur passed expectations. 1. My budget message of January, 1935, forecast that the expenditures for the fiscal year 1936 would be $8,520,000,000. Our most recent estimate shows that our expenditures will be $7,6*5,000/000, or 5875,000,000 " " - - -forecast. 2. Receipts less than originally were estimated in stated, coupled with rising values and the stopping of losses would, over a period of years, dimmish the reed for work relief and thereby reduce federal expenditures. The increase in revenues would ultimately meet and pass the declining cost of relief. This policy adopted in the spring of 1933 has been confirmed in actual practice by the treasury figures of 1934, of 1935, and by the estimates for the fiscal years of 1936 and 1937. 1933 Policy Souna. There is today no doubt of the fundamental soundness of the policy of 1933. If we proceed along the path we have followed and with the results attained up to the present time we shall continue our successful progress years. during the coming Stated even more concisely, we can look forward today to a continued reduction of deficits, to increased tax receipts, and to declining expenditures for the needy unemployed. Let it be remembered that the major part of the increase in tax receipts anticipated in 1937 over 1936 from comparable sources is coming from old tax schedules. The only changes made last year in the tax schedule were, first, the elimination of the tax on checks andj secondly, slight increases in taxes on large incomes, on large estates, and on large corporations and in captita! stock and excess profits taxes. By the elimination of the tax on checks we lost forty million dollars in revenue and the slight increases on estates and on personal and corporate incomes will add only about 222 million dollars to government receipts this coming year. I emphasize that the great bulk of increased government income referred to above results from Increased earning power and profits throughout the nation and not from the new- taxes imposed by the revenue act of 1935. Depends on Employers. Final success will depend, of course, on the strength of the cf- January, 1935, at 53,992,000,000. At the present time it appears that they will be $4,411,000,000, or an increase of $419,000,000. 3. The message of January, 1935, forecast a gross deficit of $4,528,000,000, and the most recent figures show that the deficit will be $3,234,000,000, or a, decrease of $1,294,000,000. This great improvement of the fiscal outlook during this present year has been brought about through policies which the congress and the president initiated in 1933 and which we have since maintained. Now let us look at the budget for the fiscal year 1937: To run all the regular activities of the government I will need total of $5,069,000,000. These regular activities include interest on the public debt; major public works, operations of the civilian conservation corps and agricultural benefit payments, but do not include strictly work relief items. I expect to pay for these regular activities with estimated receipts of $5,654,000,000, leaving an excess of receipts of $585,000,000. Out of this $585,000,000 I will need io80,000,00 for debt retirement, which will still leave $5,000,000 for excess receipts over expenditures after having paid for all of the regular expenditures of the government plus debt retirement. Item for Relief Remains. The item for relief remains. Without that item the budget is in balance. To make today a formal budget estimate of the amount necessary for work relief would be of necessity a difficult task. We have too recently reached our goal of putting three and one-half million people back at work; and the beneficial effects from this program and from increasing expenditures on public works cannot be foretold as accurately today as it can two months from now. Furthermore, employment by private industry continues to show substantial gains over the figures of a year ago. It is reasonably certain that the total appropriations for work relief during the fiscal year. 1937, will be far less than during the current fiscal year. It is estimated in this budget that expenditures for recovery and relief out of the unexpended balances of previous emergency appropriations will amount to $1,103.000,000. Including these expenditures the gross deficit for 1937, without an estimate for additional work relief, is less than the gross deficit for 1936 by $2,136,000,000.1 do not anticipate that the need for additional relief funds will be as great as that sum. Deficits Are Listed. To state the case even more precisely, the gross deficit of the government in 1934 was $3,989,000,000; in 1935, $3,575,000,000; in 1936 (estimated) $3,234,000,000; and in 1937 (estimated but not including any new appropriations for work relief) $1,098,000,000. Therefore it is clear: First, that since June 30, 1934, the gross deficit of the government shows a steady decrease during the fiscal years 1935 and 1936. Second, that if work relief appropriations by this session of the congress were made up to a total of $2,136,000.000, the total gross deficit for the fiscal year 1937 would not exceed that of 1936. which was the lowest gross deficit of the past three years. Therefore, it follows that by whatever amount the appropriation for work relief at this session is less than $2,136,000,000, the gross deficit for 1937 will be less than the deficit for 1936 by the same amount. With this limitation and this excellent prospect clearly in mind, 1 am not including in this budget estimates for additional relief appropriations. I shall transmit such estimates with far greater knowl- elge and therefore, with greater accuracy in sufficient time before the adjournment of this session to give the congress full opportunity to examine into the subject and to make the necessary appropriations. U. S. Credit Sound. The credit of the government is in sound condition. On Oct. 15, 1933. war-time issues of first and fourth Liberty bonds were oustanding in the aggregate amount of $8,200,000,000, bearing interest at an average rate of about 1% per cent. Today this entire amount has been refunded, of which about $5,000,300,000 was exchanged for long- term bonds bearing interest at rates ranging from 2% to 3 VI per cent per annum; $1,900,000,000 was ex- ihanged for treasury notes bearin interest from l ] /2 to 2 J ,« per cen per annum, a saving of approxima tely 1% per cent year, or an annua reduction in interest payments more than $100,000,000 on thes particular securities. The average rate on the interest bearing debt was on June 30, 1934 approximately 3.18 per cent, whereas on November 30, 1935, it ha been reduced to 2.575 per cent. If the congress enacts legislatio at the coming session which will im pose additional charges upon th treasury for which provision is no already made in this budget, strongly urge that additional taxe be provided to cover such charges [t is important as we emerge froi ;he depression that no new activi :ies be added to the government un ess provision is made for additiona revenue to meet their cost. Actual 1934 Receipts: Income taxes SIS Miscellaneous Internal revenue 1,470 Processing taxes 353 Customs 313 Miscellaneous 162 Taxes under the social security act, the act levying taxes upon carriers and their employes, and the bituminous coal and conservation act Total receipts -. 3,116 Expenditures: 1. Regular: Operation and maintenance of regular departments and establish ments .1.0R5 556 1935 Estimated 1936 193 1,099 1.434 1,94 1,657 521 343 180 1,873 529 353 183 2,10 54 35 16 3,800 39 4.411 54 5,65 1.0S3 605 821. 718 712 2,58 79' SO RECOMMENDATIONS PART 2. The following recommendation are offered: Appropriation transfer provisior The text accompanying a numbe the estimates of appropriation: has been drafted to · include provi ion for transfer between appropria Jons with the same department This provision will add a measure at administrative flexibility and wil end to promote economical execu- ion of the program as a whole, and pproval thereof "by the congress is ecommended. Repeal amendment to agriculture' .djustment act.--During the first session of the seventy-fourth con- Tess the agricultural adjustment ct was amended so as to appropri- te a sum equal to 30 per cent of ustoms receipts to the secretary of griculture to encourage exporta- ion and domestic consumption of gricultural commodities. No estimate of expenditure for account of his legislation is included herein and repeal of the amendment is rec- mmended for the following reaons: By appropriating directly instead f authorizing an appropriation the mendment denies to the presidenl the opportunity to consider the need and include appropriate estimates in he budget; and it denies to the con- ress the opportunity to review such stimates in their relation to the vhole program of the government. The amendment violates the prin- iples of the permanent appropriation repeal act of 1934, and of the udget and accounting act of June 0, 1921. It is in conflict with sound dministration in that it provides in dvance for large annual expendi- ures without any attempt to co-or- inate income and expense. The amendment was passed in the last ays of the session as a result of onference agreement and without he debate and consideration by the ongress which the import of the leasure clearly justifies. Subject to Adjustments. Apportionments of appropriations --Within the last few months con- ol of the administrative expense 20 emergency agencies has been ested in the bureau of the budget hich after a general survey of all f them has effected substantial re- uctions in proposed expenditures for administrative purposes. Allowances for administrative expenses are subject to such adjustment as the status of the agency warrants. The 20 agencies brought under the budget are the agricultural adjustment administration; commodity credit corporation; electric home and farm authority; export-import banks (2); farm credit administration; federal co-ordinator of transportation; federal deposit insurance corporation; federal emergency administration of public works; federal emergency relief administration; federal board; federal .housing administration; federal savings and loan system; federal sevings and loan insurance corporation; federal surplus relief corporation; home owners' loan corporation; national recovery administration; reconstruction finance corporation and Tennessee valley authority. It is remommended that section 3679 of the revised statutes be amended so as to bring all agencies of the government, including government-owned and government- controlled corporations, within the authority of the director of the budget with respect to apportionments of appropriations aud of other funds available to them. (*) Veterans pensions and benefits . . . . Interest on national debt Tax refunds (exclusive of processing taxes] ". 63 .MT 47 4: Agricultural, act 290 713 621 61: Civilian conservation corps 332 436 528 22i Statutory debt Retirements 360 573 552 5gi Total regular 3,444 4,306 4.776 5,64! Excess of receipts over regular expenditures 1 Excess of regular expenditures over receipts 328 506 365 2. Recovery and relief 3,661 3,069 2.S69 (*)1.10C Gross deficit 3,989 3.575 3,234 1,098 Gross public debt 27.053 28,701 30,933 31,351 Represents estimated expenditures from unexpended balances o: previous emergency appropriations. * The' above table gives a cleai picture of the main figures propose in this budget and shows how they compare with similar - figures fo: previous years. (In millions of dollars.) cash actually received and paid ou by the treasury in the fiscal yea 1935; and with estimates of receipt, appropriations, and expenditures fo the fiscal years 1936 and 1937. A elsewhere stated herein the program of regular activities for ' 1937 in eludes activities under the agricu tural adjustment act and the civi lian conservatioin corps (emergenc conservation work), heretofor classed as emergency. Therefore th figures used herein for 1934, 193 and 1936, hav= been adjusted to comparable basis. Fiscal Year 1935. Receipts -- Treasury receipts fo the year ended June 30, 1935, wer in excess of estimates prepared year ago. Considering all source except postal revenues, total re ceipts amounted to $3,800,467,202 or $89,000,000 above the estimate Internal revenue, including process taxes on farm products produce: $3,277,690,028 exceeding the esti mate by 580,000,000. Customs re ceipts amounted to 5343,333,033 an increase over the estimate o. $56,000,000. Miscellaneous receipts ncluding realization by $48,000,000 the amount actually received under this item was $179,424,140. Expenditures--While actual re- :eipts for the year were greater than anticipated, actual expendi- :ures were less than the amoun estimated by $1,205,000,000. The ag fregate for all expenditures was 17,375,825,166, against an estimate of $8,581,069,026. Approximately a million dollars of this difference re- ated to recovery and relief and the regular agencies accounted for the remainder. The total spent for recovery and relief was the 1936 $3,068,803,053, whereas budget estimate was REVIEW OF 35-37 PART THREE. Review of fiscal years of 1935 and 1936 and the fiscal program of 1937. This review concerns itself with 4,068,541,852, exclusive cf expend! .ures made under the agriculture, adjustment act and made by the civilian conservation corps. This difference is party due to this fact: Explanation Is Given. When the budge for 1936 was jrepared it seemed probable tha' he Reconstruction Finance corpor ation, in all accounts except relief would close the year with an excess if loans over repayments; and the amount of the net expenditures was estimated at $556,000,000. However because of improved business condi- ions, the demands for corporation assistance were so much less than estimated and the repayments of oans so much greater, that the cor- toration actually closed the year with net receipts of $107,000,000 Therefore, the net difference be- ween the estimated expenditure .nd the actual result amounted to 663,000,000. Other agencies spent or recovery and relief $337,000,000 ess than estimated. For the operation and mainten- .nce of regular departments and stablishments of the government, ncluding the Agricultural. Adjustment act and the Civilian Conserva- ion corps, actual expenditures were 2,912,537,509, against the estimate f $3,104,961,174. Deficit Under Expectation. For statutory debt retirements here was expended $573,558,250, nd for interest on the public debt 820,926,353, whereas the amounts udgeted for these items were, re- pectively, $572,566,000 and $835,00,000. Deficit and Public Debt -- The ear closed with a gross deficit of 3,575,357,964 instead of the esti- late of $4,869,418,338. After deducing the amount paid out for statu- ory debt retirement the net deficit ras $3,001,799,714. The increase in he total outstanding gross public ebt was $1,647,751,210, which fig- re is properly obtained by subjecting from the net deficit the de- rease.in the general funds balance, »e excess of recipts from trust unds, increment on gold, et cetera, ver expenditures from the same accounts, and the amount of retirement of national bank notes from the gold increment. As of June 30, 1935, the total outstanding gross public debt was $28,700,892,624, while on June 29, 1934, it was $27,053,141,414. Drawing upon the experience of the first six months of the current year it is possible to forecast with a fair degree of accuracy the results of financial operations for the whole 1936 period. Receipts.--The same sources of income (excluding postal revenues) which a year ago were expected to produce receipts aggregating $3.991,90'!,639 are now expected to produce a total of $4,410,793,946, (CHECK TAUI.E A B O V E ) Of the items comprising the whole income taxes will develop $1,434, 112,000, or $246,000,000 more than the 1936 budget estimate. Miscellaneous internal revenue ex elusive of processing taxes is now estimated at $1,873,091,000, an in crease of $187,000,000. Receipts from customs are expected to reach a total of $353,191,000, exceeding thi original estimate by $55,000,000 Other changes, some upward and some downward, result in the new estimate of total receipts at a figure of $419,000,000 higher than shown in the budget for 1936 which was presented a year ago. On Processing Taxes. The present estimate for processing taxes in 1936, included in above total, is in round figures $529,000,000, as against the original estimate of $570,000,000. Actual receipts for ie five months ended Nov. 30, 1935, totaled $56,000,000, while up to that date approximately $148,000,000 of due payments had been impounded as the result of preliminary court action. It is pertinent to repeat here a statement appearing in the summation of the 1936 budget: "Estimates of receipts contemplate continued collection of processing taxes. If the attack which has been made upon this act is sustained we will have to face the problem of financing existing contracts for benefit payments out of some form of new taxes." Two new taxes, namely, the bituminous coal tax and the taxes upon carriers and their employes, both representing recent legislation, will contribute $39,000,000 not included ,n the original estimate of receipts for 1936. New taxes imposed by the social security act and the revenue act of 1935 will not produce any income until the fiscal year of 1937. Under Original Budget. Expenditures--Indications are that expenditures including debt retirement during the present fiscal year will not reach the amount budgeted approximately $875,000,000; the total now foreseen is $7,645,301,338, against the original estimate of $S,520,413,609. Exclusive of debt re- irement the total of expenditures is now estimated at $7,093,276,338, while the original comparable figure was $7,883,979,609. For recovery and relief the re- "ised estimate and expenditures for he fiscal year, 1936, is less than he original budget estimate by 1738,000,000 and expenditures for all regular purposes, including agri- ultural adjustment act and civilian onservation corps, will be less by 137,000,000. Debt retirement will equire $84,000,000 less than was urgeted and interest payments will be $133,000,000. All regular ex- enditures, excluding service on the ublic debt, will be greater than the riginai budget estimate by about 80,000,000. The reduction in interest pay- ents from the amount budgeted ! referred to above, was due argely to the refunding of first and ourth liberty loan bonds aggregating $8,200,000,000, at substantially ower rates of interest. Revision Set Out. Deficit and public debt--The re- insed estimates as set out herein how a gross deficit for the current seal year of approximately $2,234,00,000, instead of the original bud- et forecast of $4,529,000,000. After educting the amount of statutory ebt retirement the net deficit will e, in round figures, $2,682,000,000; he gross public debt as of June 30, 936 should not be greater than 31,000,000,000. This estimates as- umes that the working balance in he treasury on June 30, 1936, will e approximately the same as it was June 30, 1935, namely, $1,001,42,951. Obviously if the working alance is less the gross debt will e less; and if it is greater, the ross debt will be greater. COMPARISONS GIVEN The foregoing figures are sot out i the following table for rearly com- arison between budget estimates ot year ago and what are now con- dered probable. Comparison of original and revised estimates, fiscal year 1936, adjusted to classification of expenditures in 1937 budget: Budget estimate January 1935 1. Receipts (including postal)-Income tax $1,188,000,000 Miscellaneous- Internal revenue 1,685,900,000 Processing taxes on farm products . 570,000,000 Customs 298,000,000 All others 250,004,639 Revised Estimate $ 1,434,112,000 1,873,091,000 529,042.000 353,191,000 221,357,946 Total receipts $ 3,991,904,639 2. Expenditures- Regular, including AAA and CCC $ 3,402,351,134 Interest on the public debt 875,000,000 Recovery and relief 3,606,628,475 $ 4,410,793,946 $ 3,482,208,151 742,000,000 2,869,068,187 $ 7,093,276,338 $ 552.025,000 3.234,007.392 $30.933,375.017 Total expenditures $ 7,883,979,609 3. Net deficit- Statutory debt retirements $ 636,434,000 Gross deficit 4.528,008.970 4. Gross public debt $34,233,823,656 Postal revenues for the fiscal year 1936 are now estimated at $670,000,000, which is $25,000,000 over the original estimate. The Fiscal Program of 1937. There is presented here a brief factual resume of the principal features of the budget for the fiscal year 1937, the details of which appear in subsequent "text and tables. A few high points stand out and justify emphasis. Without impairing the ability o the government to carry on its nor mal functions and to -prosecute those activities essential to contin ued recovery, the budget reflects a substantial decrease in the spread between income and outgo. This is consistent with the prediction made in the budget message of a year ag and is possible because of progres sive improvement in the economi status of the people. The state o national recovery is such that re ceipts from prevailing tax source^ on the basis of present rates appea adequate for financing the originarj operations of the government in 1937, including service on the publii debt; and no new or additional taxeo are proposed. Legislation enacted by the firs: session of the seventy-fourth con gress makes it necessary to providf in the 1937 estimates new appropriation items aggregating $667,000,000. This total will become approxi mately $767,000,000 should the con- jress reject the recommendation Hereinbefore offered, for repeal of that part of the agricultural adjustment act which appropriates a sum equal to 30 per cent of customs receipts to the secretary of agricul- jre. Can Be Included. Legislation enacted by the first session also permits including in hese estimates a total of $769,000,000 of additional receipts, of which about 70 per cent will accrue under the bituminous coal conservation act, the act levying taxes up- n carriers and their employes, and he social security act. It is worthy of note that but slightly less than 30 per cent of this increase will be derived under the revenue act of 1935. This act. it will be recalled, slight- y increased taxes on individuals A-hose net incomes exceed $50,000 er year; slightly increased estate axes on larger fortunes with a corresponding increase in gift taxes; and in respect of corporations, decreased taxes on net earnings of mall corporations while increasing n relative ratio the taxes on net Income of larger corporations. Tl'.e act also provided for an increase in axes on capital stock and on excess jrofits of corporations. The effect 3f the excess-profits tax was to increase taxes on corporations which :arned in excess of certain percentages of their adjusted declared ·alue of capital stock. The total revenue expected to be produced by these taxes in the fis- ,al year 1937 will be only $222,000,)00, or 11 per cent over the income, iState, gift, capital stock, and ex- :ess profits taxes under the old law. Since collections in the fiscal year 937 from income taxes and the es- ate tax only partially reflect the evenue act of 1935. the above amount will be somewhat larger on a full year basis. FEDERAL WORKS A federal public works program f $405,000,000 is recommended to meet in part the development ana mprovement requirements of the ·overnment, and as a proper feder- 1 contribution to work opportunity. tVhile this program represents an ncrease of about $187,000,000 over he amount for similar purposes for ·hich the congress made specific ppropriations for the current fiscal ear, it is $333,000,000 less than ths otal amount made available for ;deral public works in 1936, eon- idering allotments made from mergency funds. The success attending the opera- ons of the civilian conservation orps and the agricultural adjust- icnt administration under emer- cncy status justifies taking them itn the budget and program for 937 as regular activities, and ths stimates of appropriations and ex- enditures have been prepared ac- ordingly. The appropriation recom- lended for CCC is for the period larch 31, 1936 to March. 31, 1937, nd amounts to $246,000,000, while he appropriation for the AAA is or the full year and amounts to 199,054,985. Directing- attention to a compari- on between fiscal operations pro- osed for 1937 and now estimated or 1936, as set forth in the table, he following comment is pertinent: Receipts.--Receipts in 1937 (ex- usive of postal revenues and' pro- essing taxes and also, for purposes comparison, exclusive of taxes mposed under the social security ct, the bituminous coal conserva- on act. and the act levying taxes pon carriers and their employes) ·e expected to reach a total of $4.- i9.S17,650. an increase of $716,665,04 over similar receipts for 1936 ow es-timated at $3.843.151.946. and 1,280,730,319 over 1935. It should be pointed out fiere that this increase is due largely to increased collections anticipated under the old schedules. As has been stated, only about $222,000,000 will be collected in 1937 as a result of new schedules in the revenue act of 1935. Receipts Above Estimates. From processing taxes the sum ·anticipated is $547,300,000, against the estimate of $529,042,000 for the current year, an increase of $18,25S,- 000. Other taxes recently authorized by the congress under the social security act, the bituminous coal conservation act, and the act levying taxes upon carriers and their em- ployes will produce $547,000,000 in 1937 and $38,600,000 this year, an increase of $508,500,000. Thus 1937 receipts from all sources, except postal revenues, are estimated at $5.654,217,650, against the revised estimate of $4,410,793,946 for the current fiscal year. The increase in total receipts from state sources is, therefore, $1,243,423,704. Postal receipts for the coming year are estimated at $705,000,000; an increase of $35,000,000 over $670,000,000 anticipated in 1936. This is further evidence of the upward trend in economic conditions. An examination of the detailed estimates of receipts for 1937 indicates a gain over 1936 in income tax of $508,488,000, the figures for the two years being respectively $1,942,600,000 and $1,434,112,000. Similarly, estimated receipts from miscellaneous internal revenue, exclusive of processing taxes, are up from $1,873,091,000 to $2,103,114,000, a gain of $230,023,000. Customs receipts are forecast at $354,000,000 substantially the same as anticipated for 1936. The reduction of $22,654,296 in probable miscellaneous receipts, from $182,757,946 to $160,103,650, brings the net increase in the estimates of these four classes of receipts to $716,665,704, as stated. Will Show Increases. The provisions of the social security act, the bituminous coal conservation act. and the act levying taxes upon carriers and their employes are such that, receipts during the fiscal year 1936 will be comparatively small while revenues from these sources in the next fiscal year will show substantial increases. The amounts estimated for 1937 from such new taxes in the order named are $433,200,000, $12,300,000 and 5101,600,000. Expenditures--The expenditures for 1937 contemplated under this budget will total $6,752,606,370. or approximately $893,000,000 less than is now estimated for 1936. Of the two major categories of expenditure, namely, regular and recovery and relief, allowances for regular activities, including the agricultural adjustment act and CCC, amount to $5,649,781,738, as compared with $4,776,233,151 for 1936, an increase of $873,548,587. For re- overy and relief, expenditures listed herein 'are those which will be made from unexpended balances, practically all of which have been obligated prior to June 30, 1936, and practically all of which have been allotted. The total of such expenditures in 1937 is estimated at $1,102,824,632, which is a decrease of $1,766,243,555 from the figure of $2,869,068,187 for 1936. In regular expenditures there is included $805,000,000 for interest on ;he public debt, an increase of $63,000,000 over the same,item for the current year; and $580,125,000 for statutory debt retirements, an in- rease of $28,100,000. The cost of service on the public debt in 1937, ;herefore. will exceed that for 1936 by $91,100,000. REASONS PRESENTED Excepting debt retirement and in- erest. the net increase in expendi- ures for regular activities is $782,448,587 as compared with 1936. The major part of this increase is accounted for as follows: (A) For financing activities under the social security act, the act levying taxes upon carriers and their employes, and the bituminous coal conserva- :ion act, 5485,000,000; (B) For oth- ;r new legislation, $125,000,000; C) For increased public works, .ransferred from emergency appropriations, $228,000,000; (D) For the eterans' adjusted service certificates fund in order to bring the an- ual contribution of the government nearer its actual liability under ex- sting law, $60,000,000; and (F) For lational defense, to meet the policy )f the congress and the executive in making up for the delay by the United States in bringing the navy ,p to the strength contemplated by he naval treaties of 1922 and 1930, nd to provide replacement and im- iroved equipment and additional icrsonnel for the army. $193,000,000. In the war department appropria- tion act for the fiscal year 1935 the congress adopted a policy of increasing the average enlisted strength of the army from 118,750 to 165,000 men and toward accomplishing such purpose appropriated an. additional $20,000,000 for expenditures during that year. These funds are sufficient to maintain an average e n l i s t e d strength during 1936 of approximately 147,000 men. The estimates of expenditure included in this budget are sufficient in amount to maintain this average during the fiscal year 1937, with the purpose in view of providing in the 1938 budget the funds necessary to recruit the army to such strength by the close of that year as will produce an average enlisted strength of 165,000 throughout the fiscal year 1939, the maximum indicated by the congress. It is felt that this is as fast as the government should proceed in this matter in the light of the present forecast of fiscal affairs. CCC Cost to Drop. The contemplated expenditures for the civilian conservation corps show a decrease of $308,383,000 as against estimated comparable expenditures for 1936. Deficit and public debt--The gross deficit for the fiscal year 1937 is estimated at $1,098,388,720, including $580,125,000 for the statutory debt retirement, or a net deficit of $518,263,710. It is estimated that the gross public debt on June 30, 1937; will amount to $31,351,638,737, as compared with an estimated debt on June 30,1936, of $30,933,375,017. The figure for 1937 does not include such amounts for work relief during the coming year as may be determined upon by congress. Appropriations -- Appropriations recommended in this budget aggregate $6,400,000,000, including probable supplemental items estimated at $600,000,000, while the appropriations already made and prospective supplemental items for the fiscal year 1936, exclusive of the appropriation of $4,000,000,000 for recovery and relief, amount to $5,146,000,000, an increase of $1,254,000,000 required for the fiscal year 1937 over the fiscal year 1936. Increases Are Explained. This increase is due to (1) additional appropriations amounting to approximately $610,000,000, including supplemental to be submitted ater, required to finance new legislation enacted at the last session of congress; (2) an appropriation of $246,000,000 to continue the operations of the civilian conservation corps from March 31,1936. to March 31, 1937; (3) an increase in specific appropriations of $187,000,000 on account of general public works; and (4) increases in the general departmental requirements aggregating approximately $211,000,000, d u e largely to the increases in the army, navy, and the department of agri- " culture. Existing authorizations for the federal aid highway system provide for appropriations of $125,000,000 :or each of the fiscal years 1936 and 1937. Under these authorizations 540,000,000 has previously been appropriated for the fiscal year 1936. Toward the balance of $85,000,000 authorized for that year there is provided under the item "general rmblic works program" an estimate of $60,000,000, which it is believed will be sufficient to meet commitments maturing during 1937. Appears Fully Justified. As to the authorization of $125,000,000 for the fiscal year 1937, language is included in this budget having as its purpose the cancellation of this authorization for 1937 and making it applicable to the fiscal year 1938. This course appears fully justified in view of the fact that during the fiscal years 1933 and to 1936, inclusive, there has been made available from emergency funds a total of approximately $1,192,000,000 for construction of highways and the · elimination of grade crossings, and that from these funds there will be available for expenditure during the fiscal year 1937 a total of more than $250,000,000 in addition to the $60.000.000 provided for in the general public works program, previously referred to. Moreover, roads of secondary classification and farm to market roads are being constructed under allotments of emergency funds in amounts approximating $115,000,000. The following table shows the approximate estimate of appropriations required to administer new legislation enacted during the last session of congress, and also shows the amount of receipts anticipated in 1937 from new general tax provisions. (Continued on Market Page) C O A L GREAT EAGLE L u m p . . . LONG BURNING--LOW ASH Great Eagle makes an intense hot fire that lasts for hours, is easy to control and burns cleanly and steadily. FARMERS ELEVATOR, Inc. PHONE 370 Our 6 Volt Battery Radios Special Price Central Auto Electric Co. New Location Next to Firo Station PHONE 494

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