COLOSSAL COST OF WAR

Timaru Herald, Volume CLV, Issue 22791, 15 January 1944, Page 5

COLOSSAL COST OF WAR

American Outlay

Budget Presented To Congress Crucial Year Ahead British Official Wireless RUGBY, January 13. President Roosevelt, in his Budget statement to Congress, estimated United States war expediture in the coming financial year at 90,009,000,000 dollars, contrasting with the current year’s estimate of 92,000,000,000 dollars. The President explained that the Budget covered the year ending 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 states. “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 oentinue to adjust the war programme promptly to changing strategic necessities. I shall use all the authority available to prevent needless expenditure. As we win the battle of production of instruments of modern war we enter a period of decisive action on many battlefields throughout the world. We have attained superiority in war production. Production alone does not assure victory. We must fight and fight hard.” Mr Roosevelt said that the military expenditure in 1940-41 was only a tenth 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. A situation had now been reached in which there were excess supplies of some types of munitions and deficiencies in others. These excesses and deficiencies depended on the rapidly changing strategic conditions. Scrutiny of Requirements . Every, effort was being made to adapt, production to 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 a 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.

The estimate of 90,000,000,000 dollars was based on the assumption that the war would continue throughout the fiscal year 1945. “In our military planning, in our production, and in our financial planning we cannot rely safely on hopes of an earlier victory,” he' states... “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 our even more munitions than scheduled, and the expenditure will be larger.”

Allocations For Forces Mr Roosevelt then gave figures showing that he now recommended specific appropriations of 17,000,000,000 dollars, of which 7,000,000,000 dollars was for war purposes. In the spring appropriations would be asked for the armed forces totalling 53,000,000,000 dollars, Including Army 20.000,000,000 dollars and Navy 33,000,000,000 . dollars. In 1945 appropriations were estimated at 70,000,000,000 dollars, plus 38,000,000,000 dollars in reappropriations, making a total of 108,000,000,000 dollars for 1945. This compares with 115,000,000,000 dollars in the 1944 fiscal year. By the end' of the fiscal year 1945 the United States will have appropriated about 297,000,000,000 dollars, but, of that, 105,000,000,000 dollars will be. unexpended so that, the total cost of the war to that time will be about 292,000,000,000 dollars. The total war programme for June, 1940, to December, 1943, totals 344,000,000,000 dollars. By adding to this 42,000,000,000 dollars in new appropriations, 10,000,000,000 dollars in new contracts, and 1,500,000,000 dollars for the Army and Navy between now and May 1 a total of about 397,000,000,000 dollars will have been reached.

The total expenditure for the fiscal year, 1945, is estimated to exceed the net receipts by 59,000,000,000 dollars. Without further legislation the deficit will amount to 59 per cent of the total expenditure, 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 10,500,000,000 dollars. “Those recommendations are still under consideration by Congress,” President Roosevelt said, “and I wish to emphasise the need for additional wartime taxes of at least the amount requested in October. Increases in income should be limited to reasonable amounts for additional efforts. A wartime tax policy directed to that objective is necessary support to wage and price stabilisation. The time to impose high taxes is now, when incomes are hisrh 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 of all taxes, Federal and local.”