Evening Star Newspaper, May 31, 1940, Page 10

16 Pages Extra, Comics Three Complete Stories Four Brilliant Colors Special Sunday Section of The Sumday Star 3 THE EVENING -STAR, WASHINGTON, D. C, FRIDAY, MAY 31, 1940, U. S. Is Due fo Reach [ Billign Debt Limit Early Next Year Per Capita Share of Public Burden Now Above $300; Was $28.59 in 1917 By OLIVER McKEE. When the ¥nited States entered the World w.; the per capita share of the public:'debt was $2857.. As the country ks upon the emer- gency naf | Cefense program the gross debt per capita is well over $300, the highest in our history. Shall new taxes be levied to pay the Nation's defense bill, or sh the present debt Hmit of $45,000, 000,000 be lifted? Already admin- istration and congressional leaders have agreed to seek $3,000,000,000 in new taxes during the next five years and ask Congress to raise the debt limit to $48,000,000,000. On May 23 the Treasury had ob- ligations outstanding in the amount of $42,786,583,540.89. Including na- tional defense and other items not included in the January budget fig- ures congressional appropriations for the fiscal year beginning July 1 are expected to increase by a billion dollars or more the estimated deficit for the coming fiscal year. Accord- ing to the January budget this deficit will total nearly $3,000,000,000. It now seems virtually certain that the present debt limit will be reached early next year. For the fiscal year starting July 1, the Treasury has estimated receipts at approximately $5,550,000,000, with expenditures nearly $3,000,000,000 in excess of this total. Additional na- tional defense appropriations will push expenditures far beyond the original budget figures. Though a business pickup may boost Treasury intake above present estimates, no large gain in receipts seems likely. So the Treasury will face another uge deficit, unless new taxes are evied. Public Debt Widely Held. cludes Treasury bonds, notes, cer= and other Government obligations. It includes pre-war and war issues, as well as Treasury obligations issued to finance the.large deficits of the depression years, public debt of the United States was very small. In 1860, just before the outbreak of the Civil War, the debt ‘totalled less than $65,000,000, or the tost of building one modern battle- ship. In 18686, reflecting Civil War expenditures, the debt rose to $2,- 755,763,000, the highest point until the World War. From 1366, the debt tapered off. In 1892'it dropped to less than a bilion dollars. In 1894, it climbed slightly above the billion dollar mark. States fought the war with Spain without a large increase in the debt. Widely held, the public debt in- | tificates of indebtedness, baby bonds, | Until ‘the last few decades, the| The Umited | French Repairing U. S. Planes Said To Have It Easy By the Associated Press. * French mechanics assigned to keep American-built war- planes in order on Europe’s battle fronts have soft jobs, ac- cording to Dr. George Jackson Mead, engine expert and Gov- ernment adviser on aeronautics. He said the mechanics spend most o ftheir time playing cards because there is no need for repairs on the planes. In 1900 the debt stooa &tv $1,263,- 000,000. In 1017, when the United States entered the World War, the public debt was less than three billions. The peak of the war debt was reached in 1919 when the Govern- ment had obligations outstanding in the amount, of $25,482,000,000. From 1919 on, the debt was reduced by large annual chunks, reaching a post war low of $16,185,308,000 in 1930. Then came the great depression, and the debt curve moved upward again. In 1933, when President Roosevelt took office, the debt stood at $22,538,672,000. In the seven years since 1933, it has nearly doubled, and the end is not yet. In 1860 the gross debt per capita was $2.83. Per capita . figures for later years are as follows: 1866, $73.19; 1900, $16.56; 1917, $28.57; 1919, $240.09; . 1930, 131.49; 1033, $179.21, and 1939, $308.34. High Interest Rate in 1919, In 1919 the Treasury was paying interest rates averaging 4.178 per cent on the public debt then out- standing, the service charges that year totaled $1,154,000,000. In 1939, with a public debt of close to $40,- 000,000,000, the average interest rate was 2.6 per cent, and servicing the debt cost $1,037,107,000, less than in 1919. For the fiscal year 1940 the estimated service charges will amount to $1,050,000,000, and in 1941, $1,100,000,000. Reduction in interest rates have been a great help to the Treasury during the past seven years in meeting the service charges on the debt. Of the Government obligations | jeclined to make any comparison outstanding on June 30 last, 38 per cent were held by commercial and savings banks, according to Treasury estimates. Other principal holders of Government obligations, with their skare of the total, were as fol- lows: Individuale, 22 per cent; in- surance companies, 13 per cent; | other corporations, 4 per cent; tax | exempt organizations, 1 per cent; Federal Reserve Banks, 7 per cent; Federal agencies and trust funds, 14 per cent, and State and local government investment funds, 1 per cent. The 22 per cent held by individuals includes foreign holdings, estimated at less than $100,000,000. In the past two years, the percentage of the debt held by commercial and savings banks has slightly declined, while the amount ,held by Federal agencies and trust funds has sub- stantially increased. Rolls Royce Engine Pafent Rights Given To Unifed States British Take Step to . Facilitate Production Of Warplanes Here Patent rights for the production in the United States of the British Rolls Royce aircraft engines have been turned over to this country by England to facilitate production of engines for both American and Al- lied air forces, according to an an- nouncement by Dr. George Jackson Mead, aircraft adviser to Secretary of the Treasury Morgenthau. The British gave this country full rights to use the patents in any manner desired, including those to the famous “Merlin” 12-cylinder, liquid-cooled Rolls Royce engine, which is used in such British pur- suit airplanes as the Spitfires and Hurricanes. Two of the three leading American ajrcraft engine manufacturers also have signed blanket agreements turning -over to the Government their engine patents to permit pro- duction of their own engines by other manufacturers if desired, Mr. Mead annonuced. They are the Pratt & Whitney Co. and the Wright Aeronautical Corp. A third American aircraft engine manufacturer, the Allison division of General Motors Corp., also will turn over the use of its patents as soon as details of the arrangement can be completed, Dr. Mead said. Dr. Mead explained that the Brit- ish Rolls Royce engine will be manufactured in the United States only if found superior to existing American engines and that Secre- tary Morgenthau had asked for the patents only as an “insurance policy.” The Allison motor, the only Amers ican liquid-cooled engine in a power class comparable with the Rolls Royce, is being used in new Amer- ican pursuit airplanes. Dr. Mead of the two engines. Dr. Mead predicted that engines for the 50,000-airplane force sought by President Roosevelt will be ready “within a reasonable time.” DICKENS ROOM Leading Brands and all Mixed Drinks [H 4 pm. to 7 pm. BURLINGTON HOTEL 1122 VERMONT AVE. 1. DIAMOND BRIDAL SET—In KORAL GOLD color. CERTIFIED PERFECT cen- ter diamond and four smaller stones of graduated sizes. 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