Evening Star Newspaper, January 7, 1935, Page 10

A—10 PRESIDENT'S BUDGET FIGURES RAISE PUBLIC DEBT TO 34 BILLION ASKS FOUR BILLION FORULS JOBRELIEF Year’s Deficit to Be $4,- 000,000,000, President | Reveals. (Continued From First Page.) of Government employes after July 1, 1935. I see no reason, however, for the restoration of this reduction prior to that date. The index figure for the cost of living, on the basis of which salary restorations are pro- vided by section 3, title II, of the| economy act of 1033, now indicates that such restorations in all proba- bility would not even be justified on next July 1, or for some time there- after.” This language was interpreted as meaning that if the Congress under- takes to make this pay restoration as of January 1 of this'year a presiden- tial veto will follow The budget submitted to Congress | today makes no Fprovision for the proposed system of social security in- surance, including old-age pensions and unemployment insurance. Esti- mates for necessary expenditures by the Federal Government to partici- pate in such insurance will be sub- mitted later. Nor is it expected that the outlay needed will be very large. 3-Cent Mail Rate Kept. In discussing the budget for the Post Office Department, the Presi- dent said it was based on the con- tinuation of the 3-cent postal rate for non-local first-class mail. Un- less this rate is maintained, the postal expenses will be increased by about $75,000,000. The President recom- mended the extension. HE full text of the President’s budget message to Congress follows: To the Congress of the | I United States: The budget of the United States Government for the fical year ending June 30, 1936, of which this message is definitely a part, is transmitted herewith for your consideration. It deals principally with the moneys carried in the general and special ac- counts of the Government, which constitute the great bulk of the gen- eral fund, as this fund is shown on the first page of the daily Treasury statement. The remainder of the general fund consists mainly of moneys carried in trust accounts, which are not strictly Government moneys, and therefore enter only incidentally into the financial pic- ture presented by the General Budget Summary. The total expenditures of the Gove erment for the fical year ended June 30, 1934, as shown in the General Budget Summary and supporting schedules, amounted to $7,105,000,000 in round figures. Of this amount, the sum of $1,086,000.000 was spent for the operation and maintenance of the regular departments and estab- lishments of the Government. $556,- 000,000 to meet veterans pensions and benefits, $757,000,000 for interest on the national debt, $360,000,000 for statutory debt retirements, and $63,- 000,000 for tax refunds, making in mainder of the total expenditures for that year, amounting to $4,283,- 000,000, was spent for recovery and relief. The general purposes to which this amount was applied are set forth in detail in Supporting Schedule No. 3. It will be seen that this amount T'“ expended approximately as fol- ows: In millions of dollars Agricultural aid ., Relefovyrs o works Putlic : Ald_to home owners 1t is clear from the budget figures R. F. C that the estimate ceficit for 1936 will be less than the estimated deficit for the fiscal vear 1935 by $341.109,368. The President, in his message, made no prediction regarding an ultimate balancing of the budget. The hope | exists, however. that with increasing | recovery of business the deficit may be reduced and finally wiped out. The President wrote. “In the budget message of last year I said, speaking of the fiscal year 1936, that we should plan to have a definitely balanced budget for the third year of the recovery and that from that time on to seek a con- tinued reduction of the national debt. Unemployment Still Large. “Despite the substantial measure of recovery achieved since that state- | ment was made, unemployment is still | large. The States and local units now provide a smaller proportionate share | of relief than,a year ago, and the Federal Government is, therefore, | called upon to continue to aid in this necessary work. | “For this reason it is evident that we have not yet reached a point at which a complete balancing of the budget can be obtained.” The President added, however, that he is submitting to Congress a bud- get for the fiscal year 1936 “which balances except for expenditures to give work to the unemployed.” Such deficit as occurs, therefore, will be expected to decline as rapidly as pri- vate industry is able to employ those who are now without work. Substantial offsets against the pub- lic debt are expected in the shape of repaid loans. In this connection the President said, reviewing the fiscal year 1934, that a part of the expendi- ture of $4.283,000,000 for recovery and relief is repayable. The attitude of the administration as revealed at the White House with respect to loans | made by the Government 's that they | must be repaid. No mino.ity group, | it was explained, may expect to have its debt cancel-d. This. it is under- stood, includes the veterans. $900,000,000 For Direct Aid. It is estimated that approximately $900,000.000 will be needed for direct relief until the administration’s new “work relief” program can be put into effect, The President asks that this sum, from unobligated portions of re- covery and relief appropriations be transferred to emergency relief needs during the remaining months of the current fiscal year. He asked that this be done without delay. The President showed in his mes- sage that recovery and relief appro- priations and authorizations from February 1, 1932 to November 30, 1934—nearly three years—reached a grand total of $14,412,400,000. Of this total there remained unexpended on November 30, $6,247,500,000. A | large part of this remainder has al- | ready been obligated. The budget estimates for national defense during the coming fiscal year are $792,484,255. This is an increase of approximately $180,000,000 over the current fiscal year and of more than $300,000,000 over the fiscal year 1934, This very considerable increase is due largely tothe determination of the Governntent to build the Navy up to treaty strength. The expendi- tures for the civil departments and agencies of the Government are esti- mated at $788,057,169, an increase of approximately $120,000,000 over the expenditures for the present fiscal year. This, it is explained by the President, is largely due to the fact that certain public works and other recovery expenditures have been transferred from recovery items to the estimates for permanent establish- ments. For example, the estimates for the Tennessee Valley Authority, amounting to about $50,000,000 a year, haye been so transferred, and also items forgthe rivers and har- bors, running around $60,000,000. Reviews Economic Situation. ‘The President reviewed briefly the economic situation of the country “because of its profound influence on the Federal budget.” He told Con- gress that business was substantially more active, that the average of in- dustrial employment had expanded, and that the total number of un- employed at the end of the fiscal year 1934, although still very large, had decreased by about 2,000,000, as compared with June, 1933, and 4,000, 000 as compared with the worst point of the depression, in March, 1933. He said that industrial pay rolls aver- age sharply higher over the year. The sharpest rise in price took place in farm products, and the farmers’ cash income, including governmental rental and benefit payments, was 34 per cent higher than in the fiscal year 1933. In conclusion, the President said that adherence to the budget would accomplish three major objectives: “1. The normal functions of the United States Government can be carried on with economy and a high standard of efficiency. “2. The broad obligation of the Government to use all proper efforts to prevent destitution ¢an be main- tained under more practical methods than we ere using at present. “3. The excellent credit of the Gov- ernment will be maintained for the comm Miscellaneous ... ‘Total .. Repays A part of this expenditure of $4,- 283,000,000 for recovery and relief is repayable; indeed, substantial repay- ments have already been made to the Government. Loans amounted to $732,000,000, and subscriptions to $826,000,000, making a total of $1.- 558,000,000 which may be regarded as repayable expenditures made during the fiscal year 1934. The part re- garded as non-repayable totals $2.725,- 000,000. This sum has been spent mainly for grants, aids, public works projects, and -.administrative ex- penses. The total receipts of the Govern- ment for the fiscal year 1934 reached in the aggregate $3.115,500,000. Of this amount $2,640,600,000 cane from customs, $152,600,000 from miscel- laneous revenues, and $8,900,000 from receipts due to realization upon as- sets. Income tax supplied $818.000,- 000 of internal revenues: miscei- laneous taxes (e. g., estate, capital stock, liquor, tobacco, stamp, and ex- cise taxes), $1469,600,000, and proc- essing taxes, $353,000,000. Since the processing taxes are appropriated for the use of the Agricultural Adjust- ment Administration, their total should be subtracted from the aggre- gate receipts shown above in order to arrive at the general receipts of the - Government. The general receipts of $2,762,500,- 000, excluding processing taxes, ap- proximately equaled the regular ex- penditures for the year, a fact which should be duly recognized. The deficit at the end of the fiscal year 1934, as shown in the General Budget Summary, was $3,989.500.000 in round figures. After deducting $359,900,000 for statutory debt retire- | ments during 1934, the resulting net | deficit financed from borrowings was | | $3,629,600,000. The gross increase in | the national debt amounted to $4.- 514,400,000, making a total debt of $27,053,000.000, as indicated in Sup- plortlng Schedule No. 6. This addi- tion to the debt during 1934 included the financing of the net deficit of $3,629.600,000 and an increase of | $884,800,000 in the cash balance of the general and special accounts, as shown in Supporting Schedule No. 4. Business More Active. Because of its profound influence on the Federal budget, the economic situation may be briefly summarized at this point. Business was sub- stantially more active during the fiscal year 1934 than in either of the two preceding fiscal years. At the open- ing of the year, in July, 1933, pro- ducers were increasing their opera- tions sharply, reflecting in part larger orders placed in anticipation of code regulations. There was a temporary decline in output in the Autumn and early Winter, in response to an over- accumulation of inventories during this period, but production again ad- vanced during the last half of the fiscal year. Industrial output for the period as a whole, when measured by the Federal Reserve Board index, was 25 per cent greater than in the fiscal year 1933, and only slightly below the level of the fiscal year 1931. The degree of recovery varied in the dif- ferent industries. Production of non- durable goods, which had declined only moderately during the depres- sion, approached within 1 per cent of its 1923-25 average, while output in the durable goods group, where prices showed relatively small declines since 1929, was 38 per cent below its average in those years. Construction activity financed by private indi- viduals continued to be restricted in amount, although public construction increased. This result was in no way surprising in view of the enor- mous sums spent on permanent s'}rucuéresf in many cases in excess of actual requirements, period 1925-2& e The average volume of industrial employment expanded in proportion to production, and the total number of unemployed at the end of the fiscal year 1934, although still very large, decreased by about two millions, as compared with June, 1933, and four millions, as compared with the worst point of the depression, which fell in March, 1933. Reflecting higher BUDGET CURTAILS R. F. C. ACTIVITIES Probable Expenditures for 1936 Fiscal Year Put at $712,145,000. By the Associated Press. A swift dwindling of the Recon- struction Finance Corp.'s activities 'was forecast today in President Roose- velt’s budget message to Congress. Estimates based on extension of the corporation’s lending powers beyond the present expiration date of Feb- on good.” “I believe that the Congress will sustain these objectives,” he said. A ruary 1—an extension desired by Mr. the aggregate $2,822,000,000. The re- | capital stock and preferred shares to | T internal revenue, $313,400,000 from | ; THE EVENING STAR, WASHINGTON, ‘wage rates and an expansion in total hours worked, industrial pay rolls averaged sharply higher over the year. Distribution of commodities at retail to consumers increased, but in smaller proportion than output, with the re- sult that inventories of manufactured goods showed a net growth over the year ended June 30, 1934. At the end of the fiscal year 1934 the Bureau of Labor Statistics index of wholesale commodity prices stood at 74.8 per cent of its 1926 average, as compared with 66.3 per cent on June 30, 1933, and 59.6 per cent early in March, 1933. The sharpest rise in prices took place in farm products, which were affected by anticipation of smaller crops during the Summer of 1934. The rise in agricultural prices more than offset the decrease in farm output, and farmers’ cash income, in- cluding governmental rental and benefit payments, was 34 per cent higher than in the fiscal year 1933. Corporate profits, aided by larger volume as well as by inventory ap- preciation, also increased consider- ably. Following the close of the fiscal year 1934, ouput in basic industries | Tell sharply through September, re- flecting particularly an overaccumu- lation of inventories in steel and tex- tile products and the delay in the placing of orders for Autumn mer- chandise because of uncertainty as to the effect of the drought. Indus- trial prices, however, remained re- latively stable and prices of farm products and foods moved into closer alignment with prices of nonagricul- tural commodities. In retail markets, goods continued to move in sustained volume with the result that inven- tories were reduced to lower levels and output was again increasing in ',254“"’1 quarter of the calendar year Condition of Fiscal Year 1935. The total expenditure requirements for the fiscal year ending June 30, 1935, are estimated at approximately $8,581,000,000, as shown in the Gen- eral Budget Summary. Of for regular exper.ditures and $5,260,- 1 000,000 for recovery and relief. The regular expenditures are for the fol- | lowing general purposes: | Operation of regular departments. , Veterans’ pensions and benefits. Interest on the national debt. ax refunds Subtotal .. Debt retirements. Total ... oies The amount of $1,235,000,000, men- tioned above, includes $20,000,000 for expenditures estimated to be made this year from an additional sum of approximately $125,000,000 which will be required for 1935 to make up de- ficiencies in the appropriations for the regular departments and estab- lishments, including the Veterans’ Administration. Of this additional sum, approximately $65,000,000 will be required to meet the needs of the Veterans’ Administration due to the application of new laws or revised rules pertaining to service-connected disabilities. Summary of Relief. Of the total expenditures for recov- ery and relief, $788,000,000 are for the Agrioultural Adjustment Admin- istration and the refunding of proc- devoted to other purposes in the re- covery and relief program. During the first five months of the current fiscal year the Government expended for recovery and relief $1,712,000,000, or at the rate of about $350,000,000 per month. A summary of the amounts expended for recovery and relief from February 1, 1932, to No- vember 30, 1934, shows a total figure of $8,164,900,000. This expenditure has been as follows: In millions of | Aericultural aid.. Relief . o Public Works. . Aid_to home owne! r'c 5 Miscellaneous . . B1649 From February 1, 1932, to Novem- ber 30, 1934—nearly three years— provision for recovery and relief through appropriations and author- izations reached a grand total of $14,- 412,400,000. Of this total there re- mained unexpended on November 30, $6,247,500,000, a large part of which had already been obligated though not yet actually paid out by the Treasury. The sum of approximately $900,000,000 from the unobligated portion must, however, be made available for transfer to emergency relief * needs during the remaining months of the current fiscal year. Recommendation is therefore made that the Congress provide for the im- mediate transfer of such unobligated portion for relief during the transi- tion period from direct relief to work relief as outlined in my annual mes- sage. Relief Funds Low. Appropriations for emergency re- lief purposes will be completely ex- hausted early in February. Hence it is vitally necessary that unobligated balances of moneys already appro- priated be made immediately avail- able to care for the unemployed dur- ing the remainder of the fiscal year 1935 and the transition period. Through such action no new appro- priation will be requiréd to carry our relief needs for the current fiscal ear. The total receipts for the fiscal year 1935 are estimated at $3,711,000,~ 000. After deducting from this amount the processing taxes, estimated at $589,000,000, there remains $3,122,- 000,000 to be applied against other expenditures of the Government. The income tax for 1935 is esti- mated to yield $234,000,000 more than in 1934, or a total of $1,051,- 000,000. The receipts from miscel- laneous internal revenue taxes, ex- clusive of processing taxes, are ex- pected to produce $60,000,000 more in 1935 than in 1934, thus bringing the total yield up to $1,543,000,000. It is estimated that customs will show a decrease for 1935 under 1934 of about $26,000,000, due to the Cuban sugar agreement and to the foreign trade situation in general. Miscel- laneous- revenues and other receipts from the realization of certain assets are expected to yield for 1935 about in the 1936 fiscal year beginning next July 1 at $712,145,000. This compared with an estimated expenditure of $2,236,086,000 in the current fiscal year ending June 30. But against these outlays, budget fig- ures counted on collections in 1936 of $327,000,000 and in the present year of $688,000,000, leaving net ex- penditures of $385,145,000 and $1,- 548,086, respectively. Should Congress decide to close the great bank for liquidation, its net ex- penditures were estimated by the budget at $400,000,000 for the fiscal year 1935 and nothing for 1936. Biggest items in next year's pro- jected outlays included $385,345,000 in loans of which $117,900,000 was allotted to banks and trust com- panies, $131,100,000 to loan companies, ,200,000 to railroads and $30,900,000 to drainage and levee districts. of preferred notes were given Roosevelt—put probable expenditures A stock and $103,800,000, this | amount, the sum of $3,321,000,000 is | In millions | f dollars D. C, MONDAY, JANUARY 7, 1935. Estimated Expenditures 1. Legislative, Judicial and Executive: 1. Legislative establishment 2. Judiciary 3. Execative O: II. Civil Departments and Agencies: 1. Department of Agriculture 2. Department of Commerce 3. Department of the Interior. 4. Department of Justice .. 5. Department of Labor . 6. Department of State . 7. Treasury Department . 8. War Department (non Panama Canal 9. Independent offices and ‘ments General program public works, and foreign service .... ‘Total III. National Defense: 1. Navy Department .. 2. War Department . Total IV. Veterans Pensions and Benefits. V. Debt Charges: 1. Interest . 2. Retirements ‘Total VI. Refunds: 1. Customs 2. Internal revenue .. Total .. VII. Recovery and Relief 1. Agricultural aid: (1) Agricultural ‘ministration Adju (4) Federal land banks... 8. Relief: ministration . Public works: essing taxes, while $4,472,000,000 are | aggregate | s | nicipalities, etc. . (4) Loans to railroads . (5) Public highways . (6) River and harbor work (7) Other public WOrks ....ess . Aid to home owners: (1) Home loan system ... (2) Emergency housing . 10. Retirement fuh.ds, civil, Canal Zone 11. Post Office Department, defi 12. District of Columbia, contribution. mont Refunds of processing taxe: (2) Commodity Credit Corp.... (3) Farm Credit Administration. (2) Civil Works Administr: (3) Emergency conservation worl (4) Drought-stricken areas . (5) Relief of unemployment.. Estimated. fiscal Estimated, fiscal year 1936. year 1635. . $19,545,000 16,613,000 437,000 * $20,224,900 15,810,600 1, $36,595,000 $36/477,400 $65,089,000 26,694,300 67,127,500 17,904,000 16,216,000 13,479,000 137,105,300 63,327,900 11,360,400 $64,198,900 22,574,300 53,415,400 16,461,200 15,146,600 14,876,500 144,912 400 75,036,900 10,469,900 43,083,800 200,000,000 41,198,170 annual 40,662,400 80,307,569 5,700,000 21.009,100 82,224,053 4,539,295 566,062,718 $343,053,756 269,732,000 $612,785,756 _$945.232000 $477,224,665 315,259,600 $792,484,265 . $704,885,500 P $875,000,000 636,434,000 $835,000,000 572,566,000 11,434,000 $1,407,566,000 $14,000,000 50,946,200 ceeeenes $64,946,200 $16,910,800 51,231,500 __$68.142.300 Ad- $412,000,000 60,000,000 197,700,000 193,200 $724,366,000 64,532,000 13,279,643 101,686,258 102,037,200 (1) Federal Emergency Relief Ad- 1,733,208,700 13,842,100 402,363,000 83,904,000 100,000,000 ation 3,900,000,000 (1) Administrative expenses, Public | Works Administration (2) Boulder Canyon project... (3 Loans and grants to States, mu: 10,000,000 30,124,200 10,000,000 50,107,000 15,000,000 19,580,000 59,839,250 186,273,900 166,300,000 104,000,000 428,600,000 185,447,800 373,895,529 39,500,0¢ 00 91,500.000 g s 15,000,000 (3) Emergency Housing Administra- ! (3) Federal Housing Administr: (4) Subsistence homesteads .. . Miscellaneous: (1) Export-Import Banks ington (2) Pederal Deposit Insurance Corp. on 23,559,898 7,627,500 of Wash- 37,553,624 497,800 (3) Administration for industrial re- ance Corp. 7. Tennessee Valley Authority. covery .. . Reconstruction Fin: VIII. Supplemental items ...cecescens ‘Total expenditures .... Total, recovery and relief... 11,477,600 400,000,000 35,000,000 $5,259,802,852 $85,000,000 $8,581,069,026 $40,000,000 sereness.$8,520,413,609 districuted appro<imately | 737,000,000, an increase of $66,000,- | 1% 000 over 1934. The deficit for the fiscal year 1935 estimated at $4.869,000,000. in- | cluding $573,000.000 for statutory debt retirements. On December 26, 1934, the gross national debt stood at $28,- 484,000,000. It is estimated that the gross debt on June 30, 1935, will amount to about $31,000,000,000. In the budget message of last year it was estimated that the national debt on June 30, 1935, would amount to $31,800,000,000. According to the latest estimates, the debt will not reach this amount by $800,000.000. The Fiscal Year 1936. In the budget message of last year I said, speaking of the fiscal year 1936, that we should plan to have a definitely balanced budget for the third year of recovery and from that time on to seek a continued reduc- tion of the national debt. Despite the substantial measure of recovery achieved since that state- ment was made, unemployment is still large. The States and local units now provide a smaller propor- tionate share of relief than a year 2go and the Federal Government is therefore called upon to continue to aid in this necessary work. For this reason it is evident that we have not yet reached a point at which a complete balance of the budget can be obtained. I am, how- ever, submitting to the Congress a budget for the fiscal year 1936 which balances except for expenditures to give work to the unemployed. If this budget receives the approval of the Congress, the country will hence- forth have the assurance that, with the single exception of this item, every current_expenditure of whatever na- ture will be fully covered by our esti~ mates of current receipts. Such deficit as occurs will be due solely to this cause, and it may be expected to decline as rapidly as private in- dustry is able to re-employ those who now are without work. Resume of Plan. A resume of the financial plan which the general budget summary shows for 1936, as compared with 1934 and 1935, is presented below. (In millions of dollars.) ¥ M 1934 1935 1936 " LReceints . 2. Expenditures: S ments 1.088 1238 Veterans 556 610 lonal debt.. (4) Tax refunds, T b aenditires, 2462 2.748 3.302 3-CENT POSTAGE WOULD CONTINUE Roosevelt Asks Increase of $28,- 000,000 in Post Office Estimates. e 1.822 740 875 65 By the Associated Press. Presenting estimates showing an increase in post office coss, President Roosevelt today asked Congress to continue the 3-cent rate on non-local He sald allowing the 3-cent figure to lapse next July 1 would cut $75,- 000,000 out of postal revenues. Recovery and relief: . A A A Processing taxes. . Expenditures Excess expendi- tures over taxe s 2 Other recovery and relief expendi- SuveN o L Total recovery and relief expendi- tures Total expenditures (exclusiveof debt retirements) ... . Net deficit Debt retirements Gross deficit..... 3.980 4,869 4.528 ‘The estimated expenditures for the fiscal year 1936, as shown in the general budget summary, total in round figures $8,520,000,000, includ- ing statutory debt retirements. Of this amount, $3,938,000,000 are for regular purposes, and the remainder for recovery and relief. The regular expenditures consist of $1,622,000,000 for the operation and maintenance of the regular departments and es- tablishments of the Government, which includes $200,000,000 to be expended from an annual appropria- | tion of $300,000,000 for public works, as requested in the budget and as explained below. The other items of regular expenditures are $740,000,000 for veterans’ pensions and benefits, $875,000,000 for interest on the na- tional debt, $636,000,000 for statutory debt retirements and $65,000,000 for tax refunds (excluding processing tax refunds). Reasons for Increases. Some of the principal increases in the major expenditure items for 1936 may be cited. The restoration of the final 5 per cent of the 15 per cent salary reduction amounts to about $40,000,000 for the regular depart- ments and establishments, exclusive of the Postal Service. The Ilatter service requires an additional sum of $25,000,000 for this purpose. Pro- vision has been made in 1936 for an increase in the civil service retirement and disability fund of $20,000,000 over 1935, making a total annual contri- bution to this fund of $40,000,000. This increase will enable the Govern- ment to meet more nearly its annual obligation with respect to this fund. It has been estimated that this obli- gation amounts to $52,000,000, but such estimate has not been sufficiently established to justify its inclusion in the budget. An effort will be made during the coming year, however, definitely to establish the Govern- ment’s annual liability, the amount of which will be included in the 1937 the Post Office Department at $697,- 224,053 for 1935 and $725,307,569 for the 1936 fiscal years. Postal revenues were estimated at $82,099,053 less than expenses in 1935 and $80,282,569 in 1936. The department asked $37,500,000 next year for foreign mail transporta- tion and $10,700,000 €or domestic air- mail transportation. It was estimated that $2,600,000 of the 1936 foreign mail budget was what the mail would cost on a poundage basis and that $26,250,000 was a subsidy to steamship lines. The department gave a $7,000,000 esti- mate for transportation of foreign by sircraft, in Budget cstimates fxed the cost of ) 00 | ment's_actval ‘iability under existing Text of President Roosevelt’s Budget Message to Congress budget. Likewise, an increase of $50,~ 000,000 is recommended in the vet- erans’ adjusted service certificate fund, thus bringing the total annual contribution to this fund up to $100,- 000,000. The actuarial requirement of the fund for 1936 Las been estimated at $155,000,000. An effort will also be made during the coming year to establish this fund on a wnore definite basis consistent with the Govern- law. The expenditures for national defense have been increased for 1936 over 1935 by $180,000,000. This in- crease is due to the current policy of the Congress and the Executive to make up for the delay by the United States in meeting the provisions of the naval treaties of 1922 and 1930, and to provide replacement and im- proved equipment for the Army. Vet- erans’ pensions and other require- ments have also been increased by about $130,000,000, after adding to the 1935 figure the estimated supple- mental amount previously mentioned, which is due to the application of new laws and revised rules pertaining to service-connected disabilities, Decrease in Interest Rate. Another increase in the estimated expenditures is $200,000,000 from an appropriation of $300,000,000 which I am requesting for public works. This appropriation is intended to take care of the normal public works require- | ments of the Government usually in- cluded in the annual supply bills, such as Federal highways, river and harbor improvements, and general public works, including the construc- tion program of the Tennessee Valley Authority. This requested appropria- tion may therefore be regarded as regular instead of emergency. The debt charges for interest and retire- ments have increased considerably due to the growth of the national debt, but the decres in the average an- nual interest rate has served to keep | these charges down. | The estimated expenditures for re- | covery and relief during 1936 are placed at $4,110,000,000, excluding | $472,000,000 for the Agricultural Ad- justment Admipistration. I recom- mend that $4,000,000,000 be appropri- ated by the Congress in one sum, subject to allocation by the Executive principally for giving work to those unemployed on the relief rolls. An | estimate of expenditures covering this | amount is included in the budget. The total receipts for the fical year 1936 are estimated at approximately $3.992,000,000. When $570,000,000 of estimated processing taxes are de- ducw;;. rrrom this cE there will rema; or general purposes, $3,422,- | 000,000. * Gain in Estimates. | The detailed estimates of revenues | and receipts for 1936, shown in | statement No. 1, indicate a gain of | $137,000,000 in the collections from income tax over those for 1935. This gain 1s due to anticipated improve- | ment in business and to the upward Tevision of rates-in the revenue act | | of 1934. The miscellaneous internal | | revenue taxes for 1936 are estimated | to increase some $143,000,000 over the | collections for 1935. This increase is | predicated on the assumption that the | taxes terminating on June 30 and July 31. 1935, will be extended by | the Congress, and also that the tax | rates which would be reduced on June 30, 1935, will be continued. | Otherwise there will be a reduction | in the total estimate of miscellaneous | internal revenue taxes of $378,000,000, | thus bringing the total estimate down | to $1,308,000,000, excluding processing taxes. Customs are estimated to yield $298.000,000 for 1936, representing a | small increase of $11,000,000 over | 1935. Miscellaneous revenues and Iolher receipts are estimated to pro- | duce $250000.000. & gain of about | $23.000,000 over 1935. While I do not consider it advisable at this time to propose any new or additional taxes for the fiscal year 1936, I do recommend that the Con- gress take steps by suitable legisla- tion to extend the miscellaneous in- ternal revenue taxes, which under ex- | | isting law will expire next June or | July, and also to maintain the | current rates of these taxes, which | will be reduced next June. sider that such taxes are necessary | :.osaéhe financing of the budget for | ‘Wants 3-Cent Postage. In this connection, may I say, too, that the postal revenues, as estimated in detail in the annexed budget of the Post Office Department. are based on the continuation of the 3-cent postage rate for non-local first-class mail. Unless this rate is continued, the postal expenses for 1936. which include steamship and aircraft sub- sidies and free carriage of Govern- ment mail, will be increased by about $75,000,000, all of which will become an added burden on the general revenues of the Treasury. I, there- | fore, recommend the extension of the | 3-cent rate. If the estimates submitted in this budget are approved, and if the ex- penditures for which authorization is asked are made in full the deficit, in- cluding statutory debt retirements, will amount to $4,528,000,000 for the fiscal year 1936. The national debt will be in- creased during this year by approxi- mately $3,152,000,000, thus bringing the total debt up to $34,239,000,000. But this increase, as I have pointed out, will be due solely to continued relief of unemployment. A number of the emergency agencies now authorized by law will terminate during the present fiscal year. Most of these agencies flll im- portant present needs and should be continued. As rapidly as seems prac- tical, I am bringing the ad- ministrative expenses of these agencies under the supervision of the director of the budget. Economy Legislation. Many of the estimates of appro- priations contained in the budget are based upon the continuation of cer- tain legislative provisions with refer- ence to economy which are now in force. They are appended hereto and should be re-enacted if the esti- mates are to be sustained. Among those continued is the provision for certain special salary reductions, the suspension of the re-enlistment bonus pre— L 4 SEEKS $50 44265 ARMYARYYEUNDS sppropriations, and_the Tvolmht:ry‘PreSident Lays Greatest T ere: service. Specinc provi-| Peace-Time Defense Bud- get Before Congress. to men of the military and naval ser- vices, the reduction in travel allow- ances of certain postal employes, per- mitting temporary re-assignment of duties of certain postal employes, re- duction in fees of jurors and wit- nesses, permitting transfers between sion is also made for service credits | to certain personnel affected by the | suspension of increases in pay dur- ing the fiscal years 1933 to 1935, in the determination of compensation accruing subsequent to June 30, 1935, but without authorizing the payment of the amount that would have been paid during these years. Among the economy provisions which now obtain and which it is not proposed to con- tinue is the 5 per cent reduction in compensation of Government em- ployes after July 1, 1935. I see no reason, however, for the restoration of this reduction prior to that date. The index figure of the cost of living, on the basis of which salary restorations are provided by section 3, title II of the economy act of 1933, now indi- cates that such restorations in all probability would not even be justi- fied on next July 1, or for some time thereafter. Improvements in Form of Budget. Several rtant changes have been made in the form of the budget document for 1936. The purpose of these changes Las been twofold: (1) To improve the usefulness of the document from the citizens' stand- point, and (2) to provide more ade- quate treatment of the financial re- quirements of certain governmental units, such as the Post Office De- partment and the District of Columbia. ‘The general budget summary, fol- lowing this message, is designed to present on one page a comprehensive picture of the financial requirements of the Government. It exhibits the | anticipated receipts from all sources and the estimated expenditures for all purposes. It also shows the deficit and indicates the proposed means of financing this deficit. Since the | figures presented in the summary are necessarily in aggregate amounts, the | | details of these amounts are shown in six supporting schedules. Both in | the summary and in these schedules | appropriate columns are carried to provide direct comparisons between the budget figures for 1936 and the estimated and actual figures for 1935 and 1934, The revenue estimates are empha- sized in this budget for the first time. These estimates are set forth in Statement No. 1 in sufficient detail | to show all the principal sources from | which the Government gets its in- come. Accompanying this statement is a supporting text, which analyzes | | and gives the reasons for the 1936 estimates, and compares them with those for 1935 and with the actual collections for 1934. Annexed Budgets Set Up. Annexed budgets are set up for the major self-supporting or self-con- tained units of the Government, namely, the Post Office Department, the Reconstruction Finance Corpora- tion, the Tennessee Valley Authority and the District of Columbia. The use of such budgets permits the re- ceipts and expenditures of each of these units to be clearly and com- pletely presented in gross figures and in balanced form, as has not hitherto been done. By following this method, the net figures for each unit, which may be either appropriation needs or surplus receipts, are calculated and | | then carried to the general budget | Thus the financial re- | quirements of these units are defi- | summary. nitely tied into the general budgetary plan. The annexed budgets are therefore not in any sense indepen- | dent or multiple budgets but simply integral parts of the Government's general budget. Better Methods Of Fiscal Control. In order to promote more satis- factory methods of budgetary control in the Government, I propose this year to inaugurate the policy of having I con-|a summation of the budget prepared | for publication immediately after Con- gress has acted on all financial mat- ters. on or before July 1, unless the Con- gress is still in session. It will be presented along the lines of the general budget summary and support- ing schedules, including statements Nos. 1 and 2, as shown in this budget. It will exhibit the revenue estimates, so revised by the Treasury, as to reflect any changes in the economic situation during the pre- ceding six or seven menths and also any revisions made by the Congress in the tax laws. It will provide a complete summary of all appropria- tions and expenditure authorizations made by the Congress and related esti- mates of expenditures. Lastly, it will indicate the need for executive or administrative measures in control- ling the execution of the budget dur- ing the fiscal year 1936. A substantial reduction in the number of appropriation items would facilitate the exercise of budgetary control over expenditures and at the same time make for departmental economy. I, therefore, recommend that the Congress establish a special joint committee to make a detailed study of the appropriation items in each regular appropriation bill with a view to greatly reducing the number of them, consistent with proper bud- getary and accounting requirements. It is my belief that substantial adherence to the general recommen- dations and total figures presented in this budget will accomplish three major objectives: (1) The normal functions of the United States Gov- ernment can be carried on with economy and a high standard of ef- ficiency, (2) the broad obligation of the Government to use all proper efforts to prevent destitution can be maintained under more practical methods than we are using at present, and (3) the excellent credit of the Government will be maintained for the common good. I believe that the Congress will sustain these objectives. FRANKLIN D. ROOSEVELT. ROOSEVELT WOULD CONTINUE TAXES Recommends Continuation Present Rates in Budget Message to Congress. of By the Associated Press. President Roosevelt’s budget mes- sage recommended continuation of taxes at present rates which other- wise would expire next June and July. ‘These taxes, with their estimated yield in the 1936 fiscal year follow: Excise taxes: Lubricating ofl, $22,- $154,700,000; electrical energy, $32,- 300,000; automobile trucks, $3,000,- 000; other automobiles and motor cycles, $26,600,000; parts or accessories for automobiles, $5,100,000; tires and inner tubes, $20,100,000; toilet prep- arations, etc, $11,000,000; articles made of fur, $2,700,000; jewelry, $1,- 600,000; radio sets, phonograph rec- ords, $3,600,000; mechanical refrig- erators, $5,000,000; sporting goods, cameras, lenses, $4,000,000; firearms, shells and ~ $2,400,000; chewing gum, $70,000. Telephone, telegraph, radio and cable, $18,500,000; transportation of oil by pipe line, $9,400,000; stamp taxes, bond transfers, $13,800,000. Total excise taxes, $344,400,000. Stamp taxes issues of securities, $5,- 400,000; stock transfers, $10,300,000; sales of produce for future delivery, $4,300,000; Grand total, $377,700,000. rs By the Associated Press. In America's greatest peace-time national defense budget, President Roosevelt today asked Congress to appropriate $792,484,265 for the Army and Navy in the next financial year. With this cash, Mr. Roosevelt proj- ected in his budget message to Con- gress new warships, new planes, and & better equipped Army and Navy. ‘The budget called for an increase of $180,000,000 over the current year’s $612,785,756 of outlays by June 30, and represented more than $300,000,- 000 increase over the amount actually expended on national defense in 1934, Makes Up for Delay. The President explained his request in these words: “This increase is due to the current policy of Congress and the Executive to make up for the delay by the United States in meeting the provis- ions of the naval treaties of 1922 and 1930, and to provide replacement and improved equipment for the Army.” Of the $489,871,347 granted the Navy for the fiscal year 1936 an in- crease of $164,695096 over the cur- rent year—$179,500,000 is earmarked for construction of 24 new destroyers and submarines to be laid down in 1926 at a cost of $32,000,000 and to cortinuing work on warships already under way at a cost of $108,000,000. ‘These increases will lift the Navy to the total tonnage strength permitted under the Washington treaty. It now is 78 vessels under the number au= | thorized. Providing airplanes for the new ships under copstruction will cost $12,500,000 and an additional $14.- 000,000 was necessary for replacement of planes now in commission. Channel and harbor improvement at the Navy's Pacific base at Pearl Herbor, Hawaii, was estimated to cost approximately $3.000,000. The budget also provided funds to permit an incgease in enlisted man- power for the new ships to total 93,500 at the end of 1936, and an in- crease in officers by having each member of Congress appoint four instead of three men to the Naval Academy at Annapolis. Recommendations for the War De- partment came to $315,259,600, an increase of $46,000,000 over the cur- rent year, with the greatest gain ear= marked for enlargement and improve= ment of the Air Corps. | ‘This branch was granted $48.383.- | 400, an increase of $19,011,910. There | was included provision for $22,138,000 for plane purchases, almost double the amount in the current budget. | Air Corps Expansion. | The budget estimated this sum would buy 547 planes, giving the Air | Corps a total of 1477 serviceable | planes at the end of 1936, The War lDepnrtmen!. because of high plane prices revealed in recent contracts, estimated it would buy only 469 new | planes, leaving the total 1,263. Other recommendations would per- mit all pilots to fly 300 hours yearly instead of 250; arm all planes with .30 and .50 caliber machine guns and equip all planes with radio. Among funds recommended was $1 000.000 for purchase of trucks. The budget recommended completion of mechanization of the 1st Cavalry at Fort Knox, Ky. The National Guard would be granted $30,812.798, including funds for 25 planes and anti-aircraft equip- | ment to begin a six-year moderniza- tion program. COMMERCE BUDGET IS $1.850,467 MORE | Most of Increase Contemplates | | | This summation will be ready | Restoration of Pay to 100 Per Cent. By the Assoclated Press. A net increase of only $1,850,467 was proposed by the Commerce today in its next fiscal year estimate of $34,- 736,715, Restoration of the remaining 5 per cent Federal employe salary cut ac- counted for $1275,748; the Bureau of | Foreign and Domestic Commerce es- | timate increased $170.294; the Ar Commerce Bureau, $186,521. The Bureau of the Census loses | $746,000 because of reduction in cer- tain activities, but its work may be | augmented for special recovery pur- | poses to be paid for out of other funds. | An increase of $122,215 goes to the Bureau of Navigation and Steamboat Inspection, which has been under extra duty because of ship disasters. The Bureau of Standards gets $233 - 277 more, a considerable portion of which is to be devoted to research work. SECURITIES BODY SEEKS $2,340,000 | Increased Budget Figure Would Raise Personnel to Curb " Frauds. By the Associated Press. A guadruple increase in the Gove ernment’s expenditures to regulate the Nation’s stock markets and to curb stock frauds is proposed for the next fiscal year for the Securities and Exchange Commission. The commission would expend $2,- 340,000, compared witn $583,159 in the present fiscal year, the budget, made public today, discloses. Total personnel would be increased from 153 to 655, and a substantial portion of the gain would include special investigators. Officials have indicated the drive against security swindles would be benefited by in- creased funds. ‘The commission’s work will be sub- stantially increased also as a result of the mass of registration statements to be filed this year. Abandoned Wives Item Out. Because abandoned wives are all on the relief rolls, the 1936 District bud- get which went to Congress today, failed to carry the usual $9,000 item for their support. ‘The budget also cut the usual $5,000 i ral ergency Re- | llef Administration is aiding this class. ¢ &