U.S.A. BUDGET PROPOSALS

Greymouth Evening Star, 5 January 1934, Page 5

U.S.A. BUDGET PROPOSALS

HUGE GOVT. BORROWING NAVAL ARMAMENTS [BY CABLE —PBESS ASSN. —COPYBIGHT.] WASHINGTON, January 4. Mr Roosevelt reported to Congress, to-day, a prospective 9000 million dollars recovery campaign deficit for the next two years, and asked that the lid be clamped down to put the United States Government on a pay as you go basis by 1936. In a message transmitting the budget, the President estimated the expenditures chargeable entirely to the recovery effort at almost 7500 million dollars for the fiscal year ending June 30, and asked for' 2000 million dollars to continue and taper off the drive in the following year. Mr Roosevelt said the programme involves the Government borrowing 10,000 million dollars during the next six months. Mr Roosevelt asked Congress to appropriate 53,819,334 dollars for new navy vessels and continued work upon those authorised, and generally to permit the continuance of work on fifteen vessels and the laying down of the last of the planned Jen thousand ton eight-inch gun cruisers next January,' also the construction of thirty-three thousand tons of six-inch gun cruisers under the terms of the London Naval Treaty. ORGY OF SPENDING. (Received January 5, 1.30 p.m.) WASHINGTON, January 4. President Roosevelt definitely committed the Government to a policy of regaining prosperity through spending, when, to-day, he submitted to Congress the 1934-35 budget estimates, calling for expenditure of 10,569 million dollars in the current fiscal year, ending on June 30, and some six billion dollars in the following fiscal year, with the appended information that ten billions must be borrowed by the Government within the next six months, to meet unprecedented ex- • penses coincident "with the recovery programme. The balance-sheets, submitted with the message, envisage receipts during the two fiscal years of 7234 million dollars, compared with aggregate expenditures of 16,529 millions. The 1934 expenditures include 3045 1 millions for general expenses, and 6375 millions for emergency appropriations. The general expenses are con- i siderably less than the 4218 • estimated by Mr. Hoover in his 1932 i Budget message. The emergency ap- ■ propriations then, of .course, were not ’ anticipated. “BRUTALLY FRANK.” ( ! (Recd. January 5, 2.30 pan.) 1 WASHINGTON, January 4. In listing the extraordinary expen- - ditiire for 1934, Mr Roosevelt did not include the extra request for 1166 million, which made the total 10,569. The message, which the President regards as “brutally frank,” was clearly based on the most pessimistic possible estimates. The revenue makes no allowance for the almost certain to be increased tax on spirits from 1,10 dollars a gallon to two. The estimates regarded the payments due on war debts as a total loss, although by no means has the United States .of America abandoned hope of realising something on them. Likewise, they took no cognisance of the efforts of Congress to prevent wholesale income tax evasions. > . On the other hand, the estimated emergency expenditures are so large that some Congressmen doubt the Government’s ability to spend sq much. The President indicated he expects the relief needs to taper off during 1934-1935 through normal recoveries. “By 1936 we will have a truly balanced Budget,” said the President. “Powerful forces for recovery exist. By laying the foundation of confidence in the present and faith in the future, that up-turn, which we have so far seen, -will become a cumulative cornerstone. This foundation is the credit of the Government. If we maintain the course I have outlined, we can confidently look forward to cumulative beneficial forces represented by the increased volume of business, greater employment, diminution of relief expenditures, and larger Governmental receipts and repayments.” EFFECT ON MARKETS. NEW YORK, January 4. Exchange prices of Government bonds and the dollar all sank on the President’s Budget message. Commodities were moderately stronger, wheat gaining about, half a cent, on yesterday’s losses. The Government s gold price was unchanged. The Government bond market suffered a shaip break, when it was learned that the Government contemplated ten billion borrowing, Wall Street experts judging this as four billions to meet maturities of six billions “new money.” Bond experts are somewhat critical. The market is already saturated with Government issues, and is not able to absorb such heavy flotations. The dollar was gaining when the message was published. Immediately foreign exchanges started to rise, sterling jumping six points. CONGRESS SUPPORT. WASHINGTON, January 4. Regarding Mr Roosevelt’s message to Congress, the comments of the Republicans and the Democrats did not vary greatly, the reaction both being that the president’s message will be most effective in solidifying his strength and in increasing his hold on Congress when he makes his specific recommendations later on the currency, the tariff, and other problems. TREASURY DEFICIT. WASHINGTON,’ January 3. The Treasury announced that the vast increases in the emergency expenditures brought the Government’s deficit at the end of December to 1152 [ million dollars. The public debt at the ’ end of the calendar year was 23,813 [ million dollars, an increase of 3008 > million dollars in the year. This compares with the public debt wartime ’ peak of 26,596 million dollars on !, August.3l, 1919.