BUDGET MESSAGE.

Auckland Star, Volume LXIX, Issue 4, 6 January 1938, Page 7

BUDGET MESSAGE.

AMERICAN FINANCES.

Mr. Roosevelt Sees Deficit of

950,000,000 Dollars.

PESSIMISTIC OUTLOOK,

WASHINGTON, January 5.

President Roosevelt, In His Budget message to Congress, estimated expenditure for the fiscal year 1938-39 at 6,869,000,000 dollars, representing a reduction of 539,000,000, compared with 1937-38.

However, he expressed the fear that the necessity for an increased outlay oil national defence or owing to no improvement in the economic situation might increase the expenditure.

Mr. Roosevelt estimated the revenue at 5,919,000,000 dollars, representing a diminution of 401,000,000, compared with 1937-38. This was due to the business recession. The estimated deficit thus was 950,000,000 dollars and the gross debt 38,528,000,000.

Expenditure on national defence would total 988,000,000 dollars, representing an increase of 54,000,000. Unemployment relief would cost 1,266,000,000 dollars, a decrease of 493,000,000.

The President also issued revised statements of the 1937-38 deficit and public debt, which were respectively 1,088,000,000 dollars and 37,603,000,000.

At yesterday's conference with journalists President Roosevelt said he hoped it would be possible for representatives of business and industry and of the Government to gather at the council table to determine upon production policies similar to the National Recovery Act codes, without fear of prosecution under the anti-trust laws.

He uttered a caution against the assumption that he was planning any immediate revival of the codes, and asserted that before the preparation of legislation to eliminate business, financing and labour abuses, each group would have ample opportunity of putting its house in order.

HALT SHARP DROP.

AMERICAN BANKER'S REMEDY.

WASHINGTON*, January 5. A banker, Mr. M. S. Eccles, testified before the Senate's committee which is

investigating unemployment, that only Government intervention could halt the sharp and continued drop in the consumer's purchasing power. He said the sharpest recorded rate of decline in the production indices was between August and November, and suggested that the Government should assist the lowest paid agricultural and industrial workers.

The voluntary lowering of wages and prices in the building industry to the 1»3« level would have the 'effect of increasing the purchasing power of the lowest paid groups. Mr. Eccles asserted that the payment of the soldiers' bonus in 1936 had touched off an inflationary psychology, resulting in the present business slump. He favoured balancing the Budget, but said this could only be attained by increasing taxes. 1