CRUCIAL WAR YEAR

Evening Post, Volume CXXXVII, Issue 11, 14 January 1944, Page 5

CRUCIAL WAR YEAR

AMERICAN BUDGET

COLOSSAL EXPENDITURE Rec. 11.10 a.m. RUGBY, Jan. 13. President Rocsevelt, in his Budget statement to Congress, estimated the United States war expenditure in the coming financial year at 90,000 million dollars (equivalent to about £35,000,000,000), in contrast with the current year's estimate of 92,000 million dollars.

The President explained that the Budget covered the year ending on June 30, 1945. "This is a period which I am certain will be crucial in the history of the United States and mankind—a period which will see decisive action in this global war," he said. "While we move towards the complete defeat of our enemies, we must lay the groundwork for the return of the nation to peaceful pursuits. We shall continue to adjust our war programme promptly to changing strategic necessities. I shall use all the authority available to prevent need-, less expenditures. "As we win the battle .of the production of instruments of modern war we enter a period of decisive action on many battlefields throughout the world," he said.- "We have attained superiority in war production. Production alone, however, does not assure victory. We must fight, and fight hard." NATION'S GIGANTIC EFFORT. Mr. Roosevelt said that the military expenditure in 1940-41 was only onetenth of the current annual estimate. The rapid increase of war expenditures mirrored the gigantic effort in which the country had converted and diverted half of its resources to war purposes. In the production of munitions the United States now almost equalled the rest of the world. A situation had now been reached in which there was an excess of supplies of some types of munitions and deficiencies in others. These excesses and deficiencies depended on the rapidly changing strategic conditions. Every effort was being made to adapt production to the changing conditions as rapidly as possible. A special committee under the joint chiefs of staff ;was scrutinising military requirements item by item and cutting out or cutting back the programme in the light of strategic developments. The lend-lease requirements of the Allies were subject to similar scrutiny. The construction of many escort vessels had been cancelled to push the construction of landing vessels. In a number of cases labour and material had also been released for urgent domestic needs of indirect war importance. LENGTH OF THE WAR. The estimate of 90,000 million dollars was based on the assumption that the war would continue throughout the fiscal year 1945, he said. "In our military planning and in our production and financial planning," said the President, "we canont rely safely on hopes of earlier victory. "If the war should continue on all fronts through the year or longer we shall be prepared. If an unfavourable turn in military events should result in an increased demand for munitions, we shall, with the available facilities, pour out even more munitions than are scheduled, and the expenditure will be larger." Mr. Roosevelt then gave figures showing that he had now recommended specific appropriations of 17,000 million dollars, of which 7000 millions was for war purposes. In the spring appropriations.would be asked for the armed forces totalling 53,000 million dollars—2o,ooo millions for the army and 33,000 millions for the navy. The 1945 appropriations were estimated at 70,000 millions, plus 38,000 millions for reappropriations, making a total of 108,000 millions for that year. This compared with 115,000 millions for the 1944 fiscal year. By the end of the fiscal year 1945 the United States would have appropriated about 397,000 million dollars, but of that 105,000 millions would be unexpended, so that the total cost of the war to that time would be about 292,000 million dollars. The total war programme from June, 1940, to December, 1943, totalled 344,000 million dollars. By adding to this 42,000 millions in new appropriations, 10,000 millions in new contracts, and 1500 millions for the army and the navy between now and May 1, a total of about 397,000 million dollars was reached. TIME FOR HIGH TAXES. "The total expenditure for the fiscal year 1945 is estimated to exceed net receipts by 59,000 million dollars," said the President. "Without further legislation the deficit will amount to 59 per cent, of the total expenditures, approximately the same as the comparable ratio for the current fiscal year. In October, 1943, a revenue programme was presented calling .for additional wartime taxes of 10,500 million dollars. Those recommendations are still under consideration by Congress, and I wish to stress the need for additional wartime taxes at least to the amount requested in October. Increases in income should be limited to reasonable amounts for additional effort. The wartime tax policy directed to that objective is a necessary support to wage and price stabilisation. "The time to impose high taxes is now, when incomes are high and goods are scarce. If we do not pay in taxes all we can we shall be treating unfairly those whp must face the accumulated bill after the war. Industrial income will be approximately 40 per cent, higher in 1944 than in 1941 after the payment of all taxes, Federal and local."—E.O.W.