Seventh Deficit

The adding machines of the Treasury Department last week celebrated the Federal fiscal New Year's day by doing a simple subtraction:

Spent $8,001

Received 5,294

In the hole $2,707

Such was the net result (in millions of dollars) of the U. S. Government's operations for fiscal 1937. Each of the three figures in this calculation was a news item in itself:

Spending. The expenditure of $8,001,000,000 was more than twice the size of pre-Depression Government spending. It was, however, smaller than the $8,477,000,000 spent in fiscal 1936 and showed the first downtrend in spending since the New Deal took charge of the Treasury. But this trend was not to be taken too seriously, for in fiscal 1936, the chief expenditures for the Soldiers' Bonus took place. Eliminating this non-recurring factor the spending trend was still upward.

Revenues. Federal receipts of $5,294,000,000 were 23% larger than in fiscal 1936 and about the same amount larger than pre-Depression receipts. For the fifth year in succession they had grown and now, except for 1920 and 1921 when war taxes were still in force, are the largest in history. Previous all-time high: $6,695,000,000 in fiscal 1920.

Deficits. The fiscal 1937 deficit of $2,707,000,000 is only about 60% of fiscal 1936's deficit of $4,361,000,000. This is the smallest deficit since the New Deal began, but it is the seventh successive annual deficit of the U. S.

Sermon. Franklin Roosevelt at press conference before the fiscal year-end delivered a little sermon. He pointed out that this seventh annual deficit would bring the public debt to the all-time high of $36,400,000,000. He preached, however, no hellfire to inspire reformation, but dwelt on mitigating circumstances. One cause of the rising public debt was the sterilization of gold. The Federal Government has borrowed to buy no less than $1,050,000,000 in gold coming from abroad in order to prevent its exercising an inflationary effect on U. S. trade. Since the Government has this gold to sell when foreigners want it back, it has a billion-dollar asset. Subtracting this amount, the debt would stand at $35,350,000,000 or $324,000,000 more than he set last January for the top debt figure.

Hangover. Two little fiscal headaches remained over from fiscal 1937. Although Congress had been in session for six months prior to fiscal New Year's day, it had not succeeded in passing all the regular appropriation bills so that departments would have money to spend beginning July 1. With the War and Interior Departments supply bills still unpassed, the Senate quietly took a recess on fiscal New Year's eve. Result: on New Year's morning a "continuing resolution," allowing those Departments to continue spending for two weeks at the same rate as last year, was hurriedly adopted. Then in their own good time Senate and House went about the business of passing the permanent appropriation bills.

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