FINANCE IN AMERICA.

New Zealand Herald, Volume LXIX, Issue 21161, 19 April 1932, Page 5

FINANCE IN AMERICA.

UNITED STATES' BUDGET. REMARKABLE FIGURES. ORGY OF BORROWED MONEY. [from our own correspondent.] NEW YORK. March 30. Uncle Sam, making frantic efforts to balance his Budget, has, in his dilemma, 'given hi; family some provoking revelations. For the present debilitated condition of public finances he blames, first, the municipalities; second, the individual States; third, and least culpable cf the three, the Federal authority. His fiat has gone forth; retrenchment, commencing from the bottom, rather than from the; top, holds the key of the return of prosperity. It will be an unpalatable pill for the towns and cities to swallow, but Swallow it they must. Here are some of the revelations, for the benefit of spendthrifts:— (1) The gross expenditure, Federal, State and municipal, has increased since 1913 from £600,000,000 to £2,6C0,0C0,C00. Of this the Federal share is £800,003,000; tho State, £200,000,000; the municipal, £1,600,000,000. This represents an advance in per capita cost from £6 to £lB. Yet tho Federal per capita expenditure ha;? been reduced by 10s in the past six years, while the national debt has been reduced by £2,000,000,000 in the same period.

(2) State and municipal expenditures have increased from £450,000,000 to £1,800,000,000 —an average annual growth of 20 per cent. (3) Taxation, in the aggregate, has grown from £400,000,000 to £2,000 v OOO,OOO —from 6.4 per cent, to 14.4 per cent, of the national income, or from £4 5s to £l6 12s 6d. The ordinary family of five persons, directly or indirectly, is therefore called on to contribute £B3 2s 6d yearly on the 1930 basis.

(4) The total national, State and local government debt has grown. from £840,000,000 to ' £6,000,000,000. .While, during the past six years, the national debt has been reduced by £1,000,000,000, the State and municipal debt has increased N by a similar amount.

(5) The position is summed up thus: — Debt, £6,000,000,000; yearly taxes, £2,000,000,000; yearly expenditure, £2,600,000,000. The saturation point ia each has been reached, in his, judgment. Living on borrowed money and expenditure by public bodies without provision for revenue have produced the natural result —penury. Whatever readjustments in taxation are made, retrenchment must' be first. On that course Uncle Sam is determined.