Evening star. [volume], May 04, 1937, Page A-11, Image 11

About Evening star. [volume] (Washington, D.C.) 1854-1972

Image provided by: Library of Congress, Washington, DC

                
I
Senator Urges Nation to
“Put House in Order” by
10 Per Cent Slash.
Urging all Americans to lend their
support to the movement to put the
Government's “house" in order, Sen
ator James F. Byrnes, Democrat, of
South Carolina last night reiterated
his intention of fighting in Congress
for a 10 per cent reduction in de
partmental appropriations to balance
the budget.
The Senator spoke during the Na
tional Radio Forum, heard over a
ooas:-to-coast network of the Na
tional Broadcasting Co. through WRC.
The Forum is arranged by The Eve
ning Star.
With the increased wealth of the
Nation and the increased tax-paying
capacity of the people, the credit of
the Government Is beyond question,
the speaker declared, but the Gov
ernment's credit must be maintained.
Urges Balanced Budget.
“The only certain way to main
tain it," he continued, "is to balance
the budget. It can be balanced in
one of two ways—by increasing taxes
or reducing expenditures."
Pointing out that taxes already
have been increased or. larger incomes
and estates. Senator Byrnes reminded
that it has been proposed to raise
additional revenue by either lowering
the income tax exemptions or impos
ing a sales tax.
"If I had to choose, I would lower
the exemption,” he said. “But I am
opposed to both proposals. The budget
should be balanced by reducing ex
penditures, not by levying more
taxes.”
Senator Byrnes’ speech in full fol
lows :
In the life of the average citizen
there often arises an emergency due
to illness or other unavoidable mis
fortune when it is not only imprac
ticable but unwise to attempt to bal
ance the family budget. The emer
gency must be met. Extraordinary
expenses must be incurred. If nec
essary money must be borrowed. When
the emergency has passed the prudent
Individual realizes that he must not
only reduce his expenditure within
his income, but from that income he
must save some amount to pay upon
the debts incurred during the emer
gency.
Necessities at Emergency.
This is true of a government. The
necessities of an emergency must be
met regardless of whether the budget
Is balanced. Four years ago an emer
gency confronted us and it was cou
rageously and humanely met by the
Government of the United States. The
homes and the farms of the people
were saved and the needy and the
Unemployed were assisted, even though
In order to do it the Government had
to borrow billions of dollars.
As a member of the United States
Senate I voted for every recovery
measure. As a member of the Ap
propriations Committee I actively sup
ported every relief appropriation. If
today the same conditions existed I
would vote for the same appropria
tions. But the same conditions do
rot exist. The recovery program of
this administration has accomplished
its purpose. The emergency has
passed. Now it Is easy to forget those
things we do not care to remember,
feut let me remind you that in 1932
and 1933 it was our opinion that we
should not seek a return of the boom
conditions of 1929 because we feared
such conditions would result in a re
currence of the unfortunate and dis
astrous conditions that followed 1929.
Today we approach 1929 conditions.
The Federal Reserve Board has an
nounced that industrial production in
March reached 119 per cent as com
pared with an average of 119 per
rent in March, 1929. It is unneces
sary to read the charts of the econo
mists. By every yardstick we have
heretofore usee to measure prosperity,
the people of the Nation are pros
perous.
It is true that we have the problem
of the unemployed. We have always
had that problem. Today because of
technological improvements, the great
Increase in the number of women who
have gone into business and other
factors, there is an increase in the
army of unemployed. As to the size
of that army, no two men agree. But
regardless of the number, we know
that business conditions are today as
good as we could reasonably expect
to maintain over any period of years.
Therefore, I assert the emergency has
passed, and it is time for us to put our
house in order.
Debts of Emergency Period.
First of all we must consider the
debts we have incurred during the
emergency. The indebtedness of your
Government as of April 28. 1937, was
$34,941,507,897.91. The interest you
will have to pay next year on this in
debtedness is $860,000,000. Now w-hat
chance is there of reducing this debt?
On April 20, 1937, the President
lubmitted to the Congress a revised
estimate of the Government's finan
cial needs for the next fiscal year
beginning July 1. He advised the
Congress that the amount of revenue
the Government would receive would
be $604,000,000, less than was antici
pated last January and. if the Gov
ernment spent the amount of money
heretofore requested, and, in addi
tion the sum of $1,500,000,000 he et
timated as necessary for work relief,
at the end of the year—July 1, 1938—
our expenditures would exceed our in
come by $418,000,000.
So it appears that after recovery
has taken place, instead of following
the policy of a prudent Individual—
paying our way and saving an amount
to reduce the debt incurred during
the emergency—we are going to add
to the debt which is now approxi
mately $35,000,000,000. If this year
we cannot meet our current expenses
and pay something upon the indebt
edness, what will we do should we
have a recession of business? Or,
without a business recession, what
chance is there of Congress reducing
appropriations next year, which is an
•lection year?
Government Indebtedness.
There is no question of greater im
portance to the people of this Na
tion. The securities representing the
$35,000,000,000 indebtedness' of your
Government are held by the banks,
Insurance companies and investors of
this Nation. On June 30, 1936, $17,
270.401,000 of the direct obligations
of the government—bonds, notes and
bills—were held by the banks of the
Nation. That is approximately 50
per cent of our debt. In addition,
the banks held obligations of the
H. O. L. C. and other Government
corporations, which bonds are guaran
teed by the Government, amounting
to a little more than a half billion
dollars.
If you had $1,000 to invest, would
you buy United States Government
Calls for U. S. Economy
SENATOR JAMES F. BYRNES.
_ —Star Staff Photo.
bonds, if you knew the Government
owed $35,000,000,000 and proposed to
spend each year more than its Income,
or would you buy the tax-free bonds
of a State, county or city which was
living within its income and reducing
its debt? It 1s not safe to rely upon
some other man making an invest
ment you would not be willing to
make.
If the time comes when banks and
investors fail to purchase the bonds
of the United States Government,
where will the Government secure the
funds with which to operate? When
there are less purchasers, will that
cause a decrease in the price of our
bonds? If so, what effect will that
decrease have upon the banks of the
Nation? As more than $17,000,000,000
of bonds are held by banks, a de
crease of 5 points would mean a loss
to the banks of $850,000,000. Bank
deposits are insured, but the Federal
Deposit Insurance Corp. which in
sures the deposits, has its funds in
vested in Government bonds and
notes.
Says Alarm Unnecessary.
Today there is no excuse for any
alarm. With the increased wealth of
the Nation and the increased tax
paying capacity of the people, the
credit of the United States Govern
ment is beyond question. But the
credit of the Government must be
maintained. The only certain way to
maintain it is to balance the budget.
It can be balanced in one of two
ways—by increasing taxes or reducing
expenditures.
We have increased taxes on the
larger incomes and on estates and we
now’ find a falling off in the revenue
expected from these sources. We must
conclude that we have gone the limit
—-if not too far. It is proposed that
additional revenue be secured by
either lowering the income tax ex
emptions or levying a sales tax. If
I had to choose, I would lower the
exemption. But I am opposed to both
proposals. The budget should be
balanced by reducing expenditures,
not by levying more taxes.
Today when an effort is made to
reduce any appropriation for the regu
lar departments of the Government,
or to prevent an appropriation for
some new activity, the argument is
made that even though the activity
requiring the increase may not be es
sential. that as long as we are spend
ing money for everything else, and
particularly for "relief,” we might
as well vote for the increased appro
priation. But there .s a general rec
ognition that we cannot go on forever
spending more than our income and
there is a willingness to stand for a
reduction if it is applied to all ac
tivities, and will result in balancing
our Income and expenditures.
Urges Appropriations Slash.
When the appropriation bills hare
been passed by Congress they will to
tal $7,000,000,000. I urge that the
Congress, by an amendment to the
last appropriation bill considered at
this session, provide for a reduction
of 10 per cent In the appropriations
for each department with the pro
vision that the 10 per cent cut should
not apply to the so-called fixed
charges. Those fixed charges should
be specified by the Congress. This
would exempt from the cut such items
as the interest on the public debt,
pensions for veterans, the permanent
annual appropriations and other items
which cannot be reduced. The head
of a department should be given the
power to transfer from one bureau
to another within the department,
funds not in excess of 10 per cent. He
knows the relative importance of ac
tivities in his department. If some
bureau or service cannot stand a re
duction, he can take a percentage
from some activity not so essential
and apply it to the more essential ac
tivity. I would require only that he
keep the expenditures for his depart
ment within the appropriation fixed
by the Congress, which would be 10
per cent less than what he expected
to receive for the next fiscal year.
There is not a successful business ex
ecutive who, faced with the necessity
of balancing his budget in order to
maintain his credit, could not absorb
a cut of 10 per cent out of an expendi
ture of several billion dollars.
The fixed charges, which must be
exempted from the cut, would prob
ably amount to one-half of the total
appropriations, leaving approximately
three and one-half billion dollars to
which the cut would be applied and
making possible a saving of $350,000,
000. It would not require a reduction
in compensation of employes. It
would require dispensing with the
services of some unnecessary employes.
It would require deferring the con
struction of some buildings and the
purchase of some land. It would in
convenience some officials and disap
point some persons Interested In ap
propriations, but it would help the
Government and help the people.
The budget would not be balanced
by a reduction of $350,000,000, or even
$418,000,000, the deficit estimatei by
the President. During the year de
ficiencies will occur, which will In
crease this amount and the total defi
cit will depend entirely upon the
amount of these deficiencies.
Asks Live Within Income.
The Congress, however, can make
oertain that the Government during
the next fiscal year will at least live
within Its Income if It cannot reduce
its debt, by providing for work rencf
*1,000,000,000 instead of $1,500,000,000
requested in the estimate submitted
to the Congress. If to you *1,000,000,
000 seems a small amount, It is only
because the expenditures In recent
years have caused us to lose our per
spective. It has not been so many
years since *1.000,000.000 would have
covered all expenditures of the Fed
eral Government. Next year It would
be one-sevnth.
But this *1,000,000,000 would not
be the only money granted to the
States for relief. Next year the Fed
eral Government will give to the
States through the Social Security
Board, for old age pensions, dependent
children and the blind, $214,000,000.
In addition to that, we will give to
the States $36,000,000 to administer
the unemployment compensation law.
Additional amounts will be appropri
ated to the States for relief through
the Public Health Service and the
Department of Labor, and many more
millions contributed to the States
through the various fifty-fifty laws,
for highway construction, vocational
education and other purposes. Not
withstanding these generous appro
priations, those who oppose any re
duction in the expenditures of the
Federal Government meet the argu
ment for a reduced relief appropria
tion with the statement that “we must
not permit people to go hungry.” No
one wants any human being In this
country to go hungry. I am unwilling
to admit that with the great improve
ment in business, and the great im
provement in the financial condition
of local governments, that our people
will go hungry unless the Federal
Government continues to make for
work relief the tremendous appropri
ations such as were made during the
depression.
If this year, when business condi
tions approach the greatest boom year
in our history—1929—the Federal
Government must, In addition to the
other grants to the States, appro
priate *1.500,000,000 for work relief,
how much will it be necessary to
appropriate should there be a reces
sion in business? And what will we
then use for money?
Work Relief Appropriations.
Prior to 1932 the Federal Govern
ment did not appropriate any money
for relief or work relief. Relief was
organized as a duty of the States,
counties and cities. The Federal Gov
ernment entered this field because the
revenue of the local governments had
decreased and they, were unable to
borrow the money with which to care
for their own. The first bill provided
that before the Federal Government
granted aid to a State its Governor
must certify that the State and its
subdivisions did not possess the reve
nue or the credit with which to se
cure funds to take oare of Its needy.
Governors filed suoh certificates. They
certified to the truth. Then the Fed
eral Government borrowed money and
made loans and grants to help the
States. Loans made to home owners
and farm owners included amounts
to pay back taxes to States, counties
and cities. We gave millions to build
roads, schools and all kinds of proj
ects normally and properly paid for
by the local governments. As a re
sult local governments as a rule are
operating within their Incomes. They
have reduced their debts and increased
their credit.
We have declared unemployment to
be a national problem, but we have
declared that work should be pro
vided for the unemployed In co-opera
tion with the States and local gov
ernments. I believe the States and
local governments are just as much
Interested in the welfare of their citi
zens as is the Federal Government.
Believing this, I urge that the appro
priation for work relief should pro
vide that the State, county or city
asking for Federal aid for a works
progress project should pay 50 per
cent of the cost of the project, unless
the officials of such State, county or
city certify that they cannot pay it
and cannot borrow the money. In
that case the administration should
require only such contribution as the
financially impaired State, county or
city could make. Should the Congress
adopt this proposal the entire billion
dollars will never be applied for. The
budget will be balanced. The credit
of the Government will be maintained.
Most of the projects are proposed
by cities and counties. They are often
proposed, not because the local offi
cials believe that it is essential to pro
vide relief work for the unemployed,
but because they believe that as long
as other counties and cities are get
ting money from the Federal Govern
ment, they might as well get their
share. If the mayor of a city does
not ask for funds to construct an air
port, his constituents will remind him
that a rival city is securing one with
the assistance of the Federal Gov
ernment and Insist that he get one.
An ambitious mayor will seek funds
to do some public work as a monu
ment to his administration. Of
course, he knows that it will not hurt
his chances for re-election. When
the mayor of a city seeks funds to
construct sewer systems, recreation
parks, sidewalks and streets, and
county officials ask for funds to build
schools and hospitals, they do so be
cause those things are desirable and
because they can be secured without
Increasing the taxes of the cities and
counties. Nobody blames them. But
if we continue this policy and sud
denly run into another depression
there will be no projects lef'. and cer
tainly there will be no money left.
The officials of the States, counties
and cities who have a real relief prob
lem will gladly put up the 50 per cent
In order to secure a grant of 50 per
cent from the Federal Government.
Few will certify that they have no
revenue and no credit. Few officials
could do It without misrepresenting
the facts. The bonds of the various
cities and counties of this country are
with few exceptions selling at par to
day, and In nearly every instance 25
per cent above what they were selling
for in 1933.
One reason why the States, counties
and cities have been able to reduce
their Indebtedness and Improve their
credit Is that the Federal Govern
ment has been giving them money
with which to do things they ordinarily
would have had to finance out of local
revenues. Today, as a rule, they are
living within their incomes and re
ducing their indebtedness, while the
Federal Government is living beyond
Its income and increasing its indebt
edness. Judging from the balance
sheets, the States, counties and cities,
Instead of asking relief from the Fed
eral Government, should be offering
relief to the Federal Government.
Reducing thus appropriation Involves
no criticism of Mr. Harry L. Hopkins,
the director of the Works Progress
Administration. No official of Gov
ernment has had a more difficult or
more disagreeable task. He had done
a fine Job. When he presents an esti
mate for funds based upon the number
of persons upon the relief rolls It
represents the best information that
can be secured by his organization.
But in determining whether or not it
Is necessary to retain so many people
on the relief rolls, we must consider
Mr. Hopkins' sources of information.
He must rely upon his directors In the
various States. They, In turn, must
rely upon State officials. It must be
remembered that the agency that cer
tifies the unemployed to W. P. A. Is a
State agency. State officials determine
who shall be placed upon the relief
rolls and how- many shall remain there.
In one State where the sentiment Is
in favor of retrenchment In Govern
ment expenditures the officials will co
operate with Mr. Hopkins in his efforts
to eliminate from the rolls those who,
under the law, are not entitled to
relief work. In another Slate, where
there Is a sentiment in favor of getting
all the money possible from the Federal
Government, the officials will not co
operate with him. In some communi
ties there will never be an end to the
emergency. It will get worse every !
election year.
If local governments are required to
contribute out of funds secured by '
levying taxes, 50 per cent of the cost I
of a project, there would be Jess induce
ment to local officials to retain ujxrn
the rolls those persons who could
secure employment elsewhere if they
really wanted to work.
Local Governments’ Share.
Now let us see If local governments
are contributing as much as they can
contribute. A statement prepared by
W. P. A. within the last few weeks
shows that through December 31, 1936,
three and one-half billion dollars was
| spent for projects in the United States, .
I and of this amount only $463,000,000,
or 13 per cent, was contributed by the
public agencies sponsoring the projects. [
Do you think that local governments
cannot contribute more than 13 per
cent?
We are accustomed to regard the
Empire State of New York as ihe
wealthiest State in the Union, and yet
only 7.2 per cent of the cost of projects
in New York State was contributed by
the sponsors of those projects, which
was the smallest percentage contrib
uted by any State. Idaho, certainly
not regarded as a wealthy State, con
tributed 28 per cent of the cost of its
projects, which was the highest per
cent contributed by any State. If New
York contributes the same percentage
as Idaho, and all States are forced to
contribute 50 per cent, there will be no
cause for dissatisfaction.
Having mentioned New York State,
it is but fair to say that similarly j
small contributions were made by !
Pennsylvania and other States of
the Union having large populations, j
It is also fair to state that it is argued '
by officials in those States that while |
they contribute but little to work proj
ects, they spend very large amounts
for direct relief. I contend, however,
that they are in position to contribute
50 per cent to these projects. They
have the tax-paying capacity and
they have the credit. For instance,
the State of New York, and the cities
and counties of that State, have un
questioned credit. In December, 1933,
its 3*4 per cent State bonds due in
1980 aold at *98. Today they are
selling at *120.25. New York City’s
4 per cent bonds, which in December,
1933, sold at $81, are today selling at
$125. Nassau County 4Vi per cent
bonds, which then sold at *82, are
today selling at *119. There has been
a similar improvement in the market
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prices for the bonds of all States,
counties and cities. The price people
with money to Invest will pay for the
bonds of a State, county or city is
the best evidence of the ability of
that State, county or city to borrow
money with which to care for Its un
employed.
Now if the estimate of $1,500,000,000
was based upon a continuance of the
policy of permitting the local gov
ernments to contribute only 13 per
cent, that 13 per cent would add to
the Federal Government’s contribu
tion only $195,000,000, making the
total amount available for work relief
only $1,695,000,000. If the Congress
will adopt my proposal to reduce the
Federal appropriation to $1,000,000,
000 and make the local governments
put up 50 per cent of the co6t of
each project, It will make available
$2,000,000,000. So Instead of having
less money for the hungry and the
unemployed, we will have more money,
provided the prosperous local govern
ments will do as much for their own
citizens as they ask to have done for
them by the Federal Government,
which is anything but prosperous.
When an individual’s income is not
sufficient to meet his expenditures or
permit him to make a payment upon
his debts, he Is forced to deny himself
many things that are desirable but
not essential. So it is with Govern
ment. In Congress today there are
pending many meritorious proposals
to improve social and economic condi
tions. They are desirable but not
essential. They should not be aban
doned but should be deferred.
President’s Budget Message,
The President in his budget mes
sage of April 20 stated:
"I regard it as extremely lmpor
tant that we should achieve a balance
of actual Income and outgo for the
fiscal year 1938, and I appeal to you
to join me In a determined effort to
bring about that result.”
The President does not recommend,
and the Congress does not want to
levy, additional taxes. The only way
to achieve a balance of actual income
and outgo is for the Congress to re
duce appropriations to the total in
come. I will join the President in
his effort. To assist In balancing the
budget, I will vote against any appro
priation not included in the budget
estimates. But restricting appropria
tions to estimates will not be suffi
cient. Therefore I will vote to reduce
by 10 per cent the appropriations
heretofore requested and vote to re
duce by $500,000,000 the amount re
quested for relief. This will be suffl
clent to accomplish the declared pur
pose.
While it is the duty of the President
to make recommendations, it is the
duty of the Congress to raise revenue
and to make appropriations. There -
fore It is the duty of the Congress to
balance the budget and this duty
should not be shifted by the Congress
to the President.
There is no excuse for the effort to
create the Impression that there is a
breach between the President and the
Congress in this matter. We have
the same objective and can settle any
differences as to methods. The im
portant thing 1s that the President
and the Congress are evidencing an
interest in economy. Now if the peo
ple will give their support to the
cause we should make some genuine
progress toward putting our house
in order.
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insures satisfaction and workmanship that is permanent.
Finished a lustrous Colonial red mahogany color. Large
plate mirrors. Plenty of deep, roomy drawers. Dresser,
chest, vanity and bed.
Colonial Dining Groun
J.
There is a quaint charm in Colonial designs that is particularly
appealing. Here is proof that they need not be expensive. Made
of fine mahogany or walnut veneer construction combined with
sturdy gumwood. Correctly proportioned in every detail. The
group includes large buffet, china cabinet, Duncan Phyfe exten
sion table, serving table, one arm and five side chairs.
Convenient Terms
House&HERKV \n
"Furniture of Merit” Since 1885
7th and Ey« Sts. N.W. 8433-35 Georgia Ave.
Exclusive OSTERMOOR MATTRESS Dealer