U.S. WAR COSTS

Grey River Argus, 15 January 1944, Page 5

U.S. WAR COSTS

90,000 MILLION DOLLARS For Coming Year 59,000 MILLION DOLLARS DEFICIT RUGBY, Jan. 13. Mr Roosevelt, in a Budget statement to Congress, estimated the United States war expenditure' in the coming financial year at 90,000,000,000 dollars, contrasting with the current year’s estimate of 92,000,000,000. “Total expenditure for the fiscal year 1945 is estimated to exceed the net receipts of 59,000,000,000 dollars. The President explained that the Budget covered the year ending June 30, 1945. “This is the period which 1 am certain will be crucial in the history of the United States and mankind. a period which will see decivise action in this global war. While we move toward 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 the war programme promptly to the changing strategic necessities. I shall use all the authority available to prevent needless expenditures. As we win the battle of production, of instruments of modern war, we enter the period of decisive action on many battlefields throughout the world. We have attained superiority of war production. Production alone, however, does not assure victory. We must fight and fight hard.” Mr Roosevelt said the military expenditure in 1940-41 w.as only onetenth of the current annual estimate. The rapid increase in 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. The situation was now reached in which there was excess of supplies of some types of munitions and deficiencies in others. These excesses and deficiences depended on . the changing strategic conditions. Every effort would be made to adapt production to changing conditions as rapidly as possible. A special committee under the joint Chiefs of Staff was scrutinising the military requirements, item by item, cutting out or cutting back the programme in the light of strategic developments. Lend-lease requirements for the Allies were subject to similar scrutiny. The construction of many escort vessels had been cancelled to push construction of landing vessels. In a number of cases labour and material had also been released for urgent (needs of lindirect war importance. “The estimate of 90,000,000,000 dollars was based on the assumption that the war will continue throughout the fiscal year of 1945. In our military planning, in our production, and financial planning, we cannot rely safely on hopes of an earlier victory. If the war should continue on all fronts through the year or longer, we shall be prepared. If an unfavourable turn of military events should result in an increased. demand for munitions, we shall, with the available facilities. pour out even more munitions than scheduled,, and the expenditure will be larger.” Mr Roosevelt then gave figures showing that he now recommended specific appropriations of seventeen thousand million dollars, of which seven thousand million were for war purposes. In the spring, appropriations would be asked for for the Armed Forces totalling fifty-three thousand million dollars, . including Army twenty thousand million, and Navy thirty-three thousand million. In 1945, appropriations were estimated at seven thousand millions plus thirty-eight thousand millions re-appropriations, making a total ol 108,000 million for 1945.. This compares with 115,000 million for the 1944 fiscal year. By the end of the fiscal year 1945, the United States will have appropriated about 397,000 million dollars, but of that 105,000 millions will be unexpended, so the total cost of the war to that tune will be about 292,000 million. The total war programme from June, 1940, to December. 1943, totals 344,000 millions. By adding to this forty-two thousand million in new appropriations, ten thousand million in new contracts, one and a-half thousand million for the Army and Navy between now and May 1, the total oi about 397,000 millions is reached. Without further legislation the deficit will amount to 59 per cent, of the total expenditures, approximately the same .as the comparable ration in the current fiscal year. In October, 1943, a revenue programme was presented calling for additional wartime taxes of 10,500,000 dollars. Those recommendations are still under consideration by Congress, and I wish to stress the need for additional wartime taxes —at least the amount requested in October increases in income should be limiten to reasonable amounts for additonai effort. A 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 scarce. If we do not now pay in taxes all we can, we shall be treating unfairly those who 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 oi all taxes, Federal and local.