GROWING DEFICITS

Evening Post, Volume CXII, Issue 116, 12 November 1931, Page 13

GROWING DEFICITS

AMERICA'S LOAN POLICY

CONDEMNED BY BANKERS

(Received 12th November, 11 a.m.) NEW YORK, 11th November.

At White Sulphur Springs, West Virginia, the Investment Bankers' Association of America, estimating that the Treasury deficit would reach two billion dollars by 30th June, urged increased taxes. They asserted that the situation was too serious to justify continued borrowing.

The United.States at present is pursuing the very dubious course of shifting the burden of taxation to the future. The 1930-31 revenue fell by 611,000,000 dollars, which cost more than usual to collect, and included in this was an income tax drop of 550,000,000. The present position may be measured by the fact that in September alono this year, income taxes showed a drop of 231,000,000 dollars on the figures for that month last year. Total Government receipts amounted to 588,000,000 in September, a decrease of 244,000,000 dollars. Thus the immediate circumstances are that income taxation is falling off more than any other source of revenue. Yet the Government stands by the pronouncement of Mr. Mellon in May that higher income taxes % are not desirable, and it is not too much to say that it takes this stand for political reasons, and that in this course it probably has the agreement of the Democratic Party. Both parties hope for a return of prosperity before the Presidential election. The deficit for the first quarter of this year was 388,000,000 dollars, compared with a surplus of 48,000;000 dollars a year ago. Since July, public debt issues of 1,988,000,000 dollars have been made by.the Treasury, and next month a further issue of 995,000,000 dollars will be made. Possibly this will be increased. Much of the new issues has been devoted to renewals of existing loans, but the September issue exceeded maturities by 480,000,000 dollars, and by the end of the fiscal year terminating in June next the Treasury Department . will have made new issues and retirements totalling the enormous sum of 16,000,000,000 and giving a net increase in the debt of 1,000,000,000, most of which increase will be devoted to paying for works that should be performed from revenue. No wonder the bankers are uneasy.