SURPLUS IN U.S. BUDGET

Press, Volume LXXXIII, Issue 25081, 13 January 1947, Page 7

SURPLUS IN U.S. BUDGET

STATEMENT SENT TO CONGRESS TAX REDUCTION NOT HELD JUSTIFIED (N.Z. Press Association—Copyright) WASHINGTON, January 10. Mr Truman, after his economic report, sent his Budget statement to Congress to-day for the financial year beginning on July 1, showing estimated expenditure at 37,500,000,006 dollars and revenue at 37,700,000,060 dollars, leaving a surplus of 200,000,000 dollars. Mr Truman strongly recommended Congress to continue the war excise taxes, which would otherwise cease on June 30, and recommended an increase in postal rates sufficient to extinguish the postal deficit, which threatens to be the largest in the country’s history. If such recommendations were adopted, the total expenditure would be reduced to 37,100,000.000 dollars, and revenue increased to 38,900.000.000 dollars, yielding a surplus of 1,800.000.000 dollars.

Mr Truman reiterated that a tax reduction was now not justified, and pointed out that revenue on the next financial year would be lower. Revised estimates for the current year, ending on June 30. 1947, show receipts totalling 40,200,000.000 dollars, and expenditure 42,500,000,000 dollars, which will exceed the previous estimate because the servicemen’s programme is increased by 1,000,000,000 dollars, but the chief cause of the deficit was the Post Office.

Summarising expenditure in the year beginning on July 1, Mr Truman estimated that interest on the national debt will be 5.000.000.000 dollars, taxation refunds 2,100,000,000 dollars, and the defence bill 11,200.000,000 dollars. Mr Truman said that this represented the proper balance between security and economy. “Although we expect the United Nations to move successfully towards world security, any cut in the present estimate would immediately weaken our international position,” he said.' Expenditure on international Affairs and finance is estimated to total 3,500,000.000 dollars, compared with 6,400,000.000 dollars in the current year. The United States still has contractual commitments in the loan to the United Kingdom and the Export and Import Bank, and occupation responsibilities in Europe and the Far East. War damage restoration in the Philippines must be provided and continued relief given to some other countries in urgent need, he stated. The United States must not fail to support the United Nations. To reduce international affairs expenditure would delay the restoration of a peaceful, prosperous world. Benefits for Servicemen Servicemen’s services and benefits will cost 7,400,000,000 dollar* These five items—interest, tax refunds, defence, international affairs, anc. servicemen—require 29.200,000.000 dollars or four-fifths of the total Budget. The programme for the legulatlon and improvement of the transport and communications systems and the development of natural resources, 'Will total 2,600,000.000 dollars. The largest single item of the latter is 443,000,000 dollars for the Atomic Energy Commission. “Our major effort now must be to exploit the peace-time uses of this great discovery,” Mr Truman said. The merchant marine and other aids to transportation will absorb nearly 1,000,000.000 dollars. The Government’s policy is to withdraw from ship operation as rapidly as possible, and dispose of its vessels to promote a large, effective merchant fleet under the United States flag, but as private shipping operators see little prospect of profit in the coastwise trade, and much overseas traffic is regarded as temporary. Government operations have continued. The agricultural programme will cost 1,400,000,000 dollars, social welfare, health, security, and education 1,700.000.000 dollars, and Federal housing 539,000,000 dollars. The Public Debt The public debt reached its peak in February, 1946, at 279,000.000,000 dollars. “Our best management policy is designed to hold interest rates at their present low level, and prevent undue fluctuations in the bond market,” stated Mr Truman. The return of war dead from overseas, which is now beginning, is estimated to cost altogether 234,000,000 dollars. The number of Federal civilian employees was reduced from its peak of 3,770,000 in June, 1945, to 2.300,000. The Budget allows for further personnel reductions. Three departments —the Post Office, Treasury, and servicemen’s administration —now have almost as many employees as were employed by the whole Federal Government in 1939. Mr Truman, discussing the Budget proposals with reporters, said that if estimates are realised, the Budget will be balanced for the first time since 1930. He described it as a tight Budget, in which no department felt that its needs were fully met. Mr Truman obviously does not expect the selective service draft law to be continued after its expiry date—March 31—because no. estimate for it is included in the Budget.

TREASON TRIAL IN WARSAW ALLEGATION AGAINST AMBASSADOR

DEAUNG WITH ILLEGAL ORGANISATION

(Rec. 7 p.m.) WARSAW, Jan. 10. Count Ksawery-Grocholski, the key figure in a sensational high treason trial, told a military tribunal that an ambassador, who in later evidence was identified as the British Ambassador to Poland (Mr Victor CavendishBentinck) contacted and received State and military secrets from an outlawed underground organisation, which is alleged to have attempted a coup d’etat against the Polish Government. Count Ksawery-Grocholski is charged with three others with conspiracy to overthrow the Government. The judges, after Waldmir Baczak, the first defendant to give evidence, identified the sfinbassador as “the English Ambassador,” went into closed session. Later they admonished the defendants to refer to the ambassador involved as “the ambassador,” or “a certain gentleman.” Count Ksawery-Grocholski said that he had known the ambassador of the embassy concerned since the latter was Second Secretary in the Embassy in 1920. The ambassador apparently wanted information about the coming elections. The prosecution alleged that the ambassador visited Count KsaweryGrocholski’s home three times while the residence was under police surveillance. The British Embassy at Warsaw announced that Mr Cavendish-Bentinck was being recalled to London for consultations regarding the forthcoming Polish elections. The Foreign Office announced that it had authorised Mr CavendishBentinck to answer in writing any questions in connexion with the Ksawery-Grocholski case which may be sent to him by the Polish Minister of Foreign Affairs. The Foreign Office said: “We have read news agency reports of the opening of the trial of Count Ksawery-Grocholski in Warsaw but have not received the comments of the Ambassador on the allegations made. We are. however, satisfied that Mr Cavendish-Bentinck has not engaged in any improper activities, still less in activities directed against the Polish State.” Soldiers’ Dependants Reach Japan.— The first party of ives and children !of men in the British Occuoation Force have landed in Kure, including ifour women teachers who will open schools for the dependants of mem|bers of the force.—Tokyo, January 11.