Indianapolis Times, Volume 45, Number 204, Indianapolis, Marion County, 4 January 1934 — Page 4

PAGE 4

KEEPING UP WITH THE LATE NEWS OF CONGRESS |

SWEEPING IMPROVEMENT IN ECONOMIC CONDITIONS SEEN BY ROOSEVELT IN MESSAGE President Estimates Tax Revenues for 1934 on Basis of Increased Industrial Production. INDEX FIGURE IS PLACED AT 85 Mark This Year Is 76; Centralizes Emergency Funds Control in Hands of Controller-General. Dm I'niterl Fret* WASHINGTON, Jan. 4.—Following is the text of President Roosevelt’s budget message to congress outlining the government’s financial position: To the congress of the United States: I transmit herewith the budget for the year ending June 30, 1935. It contains also estimates of receipts and expenditures for the current year ending June 30, 1934, and includes statements of the financial operations or status of all governmental agencies, including the Reconstruction Finance Corporation.

The estimates herein given and included in the budget have to do with general and special funds the government's moneys. They do not relate to trust and contributed funds, which are not government moneys, except where expressly referred to as such.

General Financial Positio

In my annual message to the con- ; gress I already have summarized j the problems presented by the de- j flationary forces of, the depression, | the paralyzed condition which affected the banking system, business, agriculture, transportation, and indeed, the whole orderly continuation of the nation’s social and economic system. “I have outlined the steps taken since last March for the resumption of normal activities and the restoration of the credit of the govern-1 ment. ~ Os necessity these many measures j £ have caused spending by the gov- * ernment far in excess of the income I of the government. The results of expenditures already made show themselves in concrete form in better prices for farm commodities, in renewed business activity, in increased employI ment, in reopening of and restored i onfidence in banks, and in well>rganized relief.

The Current Fiscal Year

Exclusive of debt retirement of I $488,171,500 for this year, budget estimates of expenditures, including operating expenses of the regular government establishments and also all expenditures which may be broadly classed as caused by the necessity for recovery from the depression will amount this vear (end June 30. 1934) to $9,403,006,967. This total falls in broad terms into ' the following classifications: Expenditures for fiscal year ending June 30. 1934. GENERAL Departmental 82.899,116.300 j Legislative 11,'18.500 j Independent establishments . 616,85*,067 1 $3.533.691,'6? ! Less public debt retirements 488,1*1,500 Total, general .. . 53.015,520,261 j EMERGENCY Public works administration 51,611.190,800 Agricultural adjustment administration 103,250,000 | Farm credit administration 10,000,000 -- Emergency conservation work 341.105,600 Reconstruction Finance Corporation 3.969.140,300 Tennessee valley authority . 19.000.1K10 Federal Land Banks 52,350,000 Federal Deposit Insurance Corporation 150,000,000 | National industrial administration 4,250,000 j Total, emergency 86,351.486.100 j Total, general and emergency, less public debt retirements $9,403,006,961! As against these expenditures,! which have either been appropriated for. or for which appropriations are I asked, the estimated receipts for this fiscal year (ending June 30. 1934.' j are $3,259,938,756. On this basis, including, however, J Certain additional expenditures for j 1934 which are not included in the | budget estimates but which I believe to be necessary and amounting to $1,166,000,000. as shown in a subsequent table herein, the excess of! over receipts will be $7,309,068,211. Interest charges on . the borrowing in excess of budget j will slightly increase this Tfigure. On the basis of these estimates. | ?the public debt, in the strict sense sos the term, at the expiration of • this fiscal year will therefore amount to approximately $29,847,000 000. or an increase as shown above of $7,309,068,211. However, as against this increase ! in the total debt figure, it is right j to point out that the various gov- 1 ernmental agencies have loans out- j standing with a book value of $3.- \ 558.516,189 against which collateral j t or assets have been pledged. In order to make clear to the con- I gress what our borrowing problem is for the next six months, permit ; ! me to remind you that we shall ! have to borrow approximately six • billion dollars of new money, and in addition, four billion dollars to • meet maturities of a like amount.

The Fiscal Year, 1935

The budget estimates of expenditures. exclusive of debt retirement i of $525,763,800 and exclusive also of ‘ such sum as may be necessary for R epAlß]y9::; I* • PURSES • UMBRELLAS •LUGGAGE •TRUNKS & • ZIPPER FASTENERS GAUSEPOHL Trunk Store

new and extraordinary recovery purposes, for the fiscal year ending June 30, 1935 amount to $3,960,798,700. Again summarizing the main headings of these expenditures, they fall into the following items: Expenditures for fiscal year ending June 30, 1935: GENERAL Departmental $3,202,074,900 Legislative 18,734,500 Independent establishments . . 542,466,000 Less public debt retirements 525,163.800 Total, general $3,237,512,200 EMERGENCY Public works administration $1,089,883,100 Agricultural adjustment administration 3,000.000 Emergency conservation work 68,190,000 •Reconstruction Finance Corporation 480,436,600 Tennessee valley authority 31,000,000 Federal Land Banks 12,650,000 Total, emergency $ 723,286,500 Total, general and emergency, less public debt retirements $3,960,798,700 •Excess of credits—deduct. It will be noted that many of these Items, such as public works, fall under appropriations made in 1933, the actual expenditures not taking place until after June 30, 1934. The above figures do not include additional loans by the RFC. If its loaning authority is extended beyond June 30, 1934, it is contemplated that any additional loans by it would thereafter be taken from the new and additional recovery fund hereinafter referred to. The estimates of receipts for the next fiscal year (ending June 30, 1935) exclusive of foreign debt payments, of increased liquor taxes and of increased revenue flowing from amendments to the existing revenue law, amount to $3,974,665,479. Therefore, exclusive of debt retirement, these budget estimates for the next fiscal year show a small surplus of $13,866,779. But it must be borne in mind that this surplus does not include any additional expenditures for extraordinary recovery purposes. It is clear that the necessity for relief and recovery will still be with us during the year 1934-35. Additional relief funds will be necessary. Further needs of the country prohibit the abrupt termination of the recovery program. No person can on this date definitely predict the total amount that will be needed, nor the itemizing of such an amount. It is my best judgment at this time that a total appropriation of not to exceed $2,000,000,000 will, with the expenditures still to be made next year out of existing appropriations, be sufficient. I shall therefore ask the congress for appropriations approximating that amount. This amount is not included in the budget estimates. If appropriated and expended, therefore, it will change the small estimated surplus of $13,000,000 into a debt increase of nearly two billion dollars. It is only fair, of course, to say that such a debt increase would be partially offset by loans made against collateral and assets pledged. Therefore, the total debt, if increased by the sum of two billion dollars during the fiscal year 1935, would amount to approximately $31,834,000,000 on June 30, 1935. It is my belief that so far as we can make estimates with our present knowledge, the government should seek to hold the total debt within this amount. Furthermore, the government during the balance of this calender year should plan to bring its 1336 expenditures, including recovery and relief, within the revenues expected in the fiscal year 1936. Let me put it another way: The excess of expenditures over receipts during this fiscal year amounts to over seven billion dollars. My estimates for the coming fiscal year show an excess of expenditure over receipts of two billion dollars. We should plan to have a definitely balanced budget for the third year of recovery and from that time on seek a continuing reduction of the national debt. This excess of expenditures over revenues amounting to over nine j billion dollars during two fiscal years has been rendered necessary j to bring the country to a sound I condition after the unexampled crisis which we encountered last spring. It is a large amount, but the immeasurable benefits justify the cost.

Taxes

The estimates of receipts take no account of the additional revenue which may be obtained from an increase in liquor taxes and from the proposed changes in the income tax j law. Since neither of these tax measures has come before congress as yet. no accurate estimate can be made of their yield. However, if as proposed by the committee of ways and means, the tax on distilled spirits is increased from sl.lO a gallon to $2 a gallon,, and the rates of tax on wines are

v 0

The nation has traveled far along the road to national recovery and what is needed now is to consolidate gains, President Roosevelt told congress, assembled in joint session to his message. The

also increased, the estimated revenue would be increased by approximately $50,000,000, assuming that consumption is not affected by additional gallonage taxes imposed by the states. Considerable additional revenue can also be secured from administrative changes in the income tax law, which may amount to as much as $150,000,000 for a full year. The estimates for the postoffice department are predicted upon a continuation of the $-cent postal rate for non-local mail. It is highly important that this rate be continued. I recommend its continuance.

Appropriations

The budget estimates of appropriations for 1935, exclusive of agricultural adjustment administration benefit payments and refunds of processing taxes, but inclusive of all other appropriations for regular departments and independent establishments including interest on the debt and debt retirement are $2,980,293,833.60. When compared with budget estimates of appropriations transmitted in the budget for 1934 they show a reduction of $684,913,167.

Economy Legislation

The estimates of appropriations submitted in the budget are predicated on the continuation of certain economy legislative provisions which I ask to be enacted and which are appended hereto. The most important is that having to do with reduction of compensation of federal employes. It is eminently fair that, the cost of living having fallen as compared with 1928, the employes of the government sustain some reduction in compensation. This is not inconsistent with our policy of advocating an increase in wages in industry. For wages there had fallen far beyond any reduction contemplated for federal employes and in most grades are even now substantially below compensation paid federal employes under the maximum reduction of 15 per cent. Among the legislative provisions appended hereto is one prohibiting automatic increases in compensation except in the army, navy and marine corps. The personnel of these three services are engaged in a life service to their country. Some, by reason of the pay freezes, have sustained reduction in compensation of more than 25 per cent They are, therefore, in a different category from those in other governmental agencies. They should, in 1935, be released from the restrictions on automatic increases in compensation.

Control

Up to now there has been no coordinated control over emergency expenditures. Today, by executive order, I have imposed that necessary control in the bureau of the budget. Heretofore, emergericy expenditures have not been subject to audit by the controller general of the general accounting office. Today I am. by executive order, reposing in him the authority -to conduct such an audit and to continue to audit each such expenditure. Hereafter, therefore, just as in the departmental expenditures, there will be, in emergency expenditures, a prebudget and a post audit. By reason of the fact that the bureau of the budget has had no control in the past over the various expenditures, obligations and allotments made by the emergency organizations, the task of preparing the present budget has been the most difficult one since the budget and accounting act went into effect in 1921. These difficulties, in future years, will be substantially minimized by the control which I have established. It is evident to me. as I am sure it is evident to you, that powerful forces for recovery exist. It is by laying a foundation of confidence in the present and faith in the future that the upturn which we have so far seen will become cumulative. The corner stone of this foundation is the good credit of the government. It is, therefore, not strange, nor is it academic, that this credit has a profound effect upon the confidence so necessary to permit the new recovery to develop into maturity. If we maintain the course I have

THE INDIANAPOLIS TIMES

FAR ALONG RECOVERY ROAD, ROOSEVELT TELLS NATION

Securities Bill and New Food and Drug Measure Likely to Cause Clashes Former Would Check Flow of Capital and Retard Recovery, Financiers Say; Less Arbitrary Substitute Offered for Latter. BY MARSHALL M’NEIL Times Staff Writer WASHINGTON, Jan. 4.—Two major engagements of the new session of congress promise to revolve about the Roosevelt administration’s efforts to protect consumers. One concerns the securities act, the other the proposed amendment of the pure food and drugs act.

SPEECH WSNS PRESS FAVOR New York Herald-Tribune (Rep.) Among Papers Lauding Address. By United Press President Roosevelt’s speech to the reconvening congress was generally praised in the American press today. Some typical newspaper comment follows New York Herald Tribune (Rep.) —President Roosevelt’s message to the new congress is unmistakably a speech of good omen. ... In the present difficult situation he undoubtedly does well to approach congregs in heart-to-heart fashion, unburdened by facts *or figures. . . . What is far more important is the unmistakable encouragement given to sound money advocates. . . . While these indications are couched in general terms—are, indeed, rather hints than statements —there can hardly be a question of the general drift of the utterance. Kansas City Times (Independent) —The address was an inspiring call for co-operation in measures that will promote recovery and build solidity for the future. In thus outlining his purposes, Mr. Roosevelt properly voiced the public indignajtion over false industrial and finan[cial leaders who by their betrayal |of trust contributed so much to accentuate the depression. By coupling these men with other criminals like bandits and kidnapers, he made his condemnation the more dramatic. San Francisco Chronicle (Independent—From the emphasis the President lays (in his message to congress) on the reconstruction, from the social side of our business and industrial system, one judges I that he leans, for the present mojment at least, to that faction in its administration which would make recovery secondary to the permanent rebuilding of America. On this, which is the one biggest issue |in his administration, he is more | definite than on any other, yet he does not commit himself. Los Angeles Illustrated Daily News (Independent) The entire message reaffirms the position President Roosevelt has taken from the beginning, he proposes to lead the American people along the road the people want to travel. Los Angeles Times (Republican) It is evident from his statement x x that he will seek permanent legislation for the organization of industry on the general lines of the national recovery administration. In its overriding of state lines, tire NR A stands on very debatable j grounds. Ft. Wayne Woman Hangs Self By United Press FT. WAYNE. Ind., Jan. 4.—Mrs. | Sophia Fathauer, 50, committed ! suicide here yesterday by hanging herself. Her body was found danj gling from a water pipe in the basement of her home. ApparentI ly she had been dead several hours. ; ■ outlined, we can confidently look forward to cumulative beneficial forces represented by increased volume of business, more general profit, greater employment, a diminution of relief expenditures, larger governmental receipts and repayments, and greater human happiness,

I President is shown here as he delivered his address, with Speaker Rainey and Vice-President Garner seated back of him and James Roosevelt, his son, at the left.

Both are subjects of widespread publicity campaigns which have been in progress since the last session. Financiers, or many of them, have centered their efforts on a campaign to modify the securities act, claiming its provisions would stop the free flow of capital and delay recovery. Thus far the administration has resisted all attempts to weaken this law, although saying that certain portions of it may need clarification. Food and drug manufacturers have centered their fire on the socalled Tugwell bill, which would strengthen the twenty-year-old pure food'and drugs act. New Bill Permits Appeals Senator Royal D. Copeland (Dem., N. Y.), chairman of a commerce sub-committee, today said he will be prepared to recommend anew pure food and drugs bill to the full committee. It won’t, he said, be the Tugwell bill, but it “will be a dandy.” 1 It will be the Copeland bill, drawn by the doctor-senator after hearing both sides of the controversy over the proposal made by the assistant secretary of agriculture. “I didn’t like the bill as it came to us,” the senator said. This dislike was shared generally by food and drug manufacturers. He, and they, regarded it as too “arbitrary”; as giving too much power to one man, the secretary of agriculture. While unwilling yet to reveal the details of the compromise he has drafted, Senator Copeland said that it was “not so abritrary” as the original proposal, and that it provided for appeals from bureaucratic decisions. It will, he said, actually provide greater protection for consumers. Aligned Against Wall Street He has not discussed the compromise with Dr. Tugwell, but still regards the measure as an administration one. The senator hopes to make a report to the full committee late this w 7 eek, but has not conferred with party leaders as to when it will be | taken to the floor. Any attempt to modify the securities act will be strongly resisted by senate progressives, led by Senator George W. Norris (Rep.. Neb.). He is fearful that Wall Street pressure may weaken the measure, and wants to know 7 more about the complaints before he is willing to have it brought to the floor for debate on proposed amendments. DEMOCRATS CONCLUDE YEAR WITH DEFICIT National Committee’s Shortage Is $542,112. By United Press WASHINGTON, Jan. 4. The Democratic national committee concluded 1933 with a deficit of $542.112. a report to the clerk of the house of representatives revealed today. Stop Getting | Up Nights! TJIIS 25c TEST FREE If It Fails. Use this bladder laxative. Drive out the impurities and excess acids which i cause the irritation that wake* you i up. Get a regular 25c box of BUKETS, ; made from buchu leaves, Juniper oil. ; etc. After four days test, if not satisfied, go back and get your 25c. They work on the bladder similar to castor j oil on the bowels. Bladder irregularity is nature's danger signal and may j warn you of trouble. You are bound to feel better after this cleansing and you | get your regular sleep. Sold by Hook j Drug Storesi—Advertisement, I

EXPERTS 0. 1 BONDFLOATING $10,000,000,000 Plan Seen as Possible Opening to Inflation. BY ELMER C. WALZER United Press Financial Editor NEW YORK, Jan. 4.—Flotation of $10,000,009,000 of United States government bonds as outlined by President Roosevelt in his budget message can be accomplished without serious difficulty, bankers and bond experts agreed today. The gigantic operation by the government between now and July 1 would involve issuing $6,000,090,000 in new money and $4,000,000,000 to pay off maturing obligations. It would be the largest financing operation since the World war and one of the largest in financial history. Probably the course adopted would be a co-ordination of the treasury ana federal reserve system in selling the bonds, it was said here. The reserve probably would invest in a billion dollars of governments, swelling reserve credit by $10,009,000,000 and thus making easy absorption of the new bonds by member banks. Wall Street saw in the operation the possibility of inflation in two ways: 1. Inflation of credit by the federal reserve through purchase of government issues. 2. Inflation of currency through operation of the law passed in the bank holiday period of 1933 which permits the federal reserve to issue federal reserve bank notes dollar for dollar on United States government obligations.

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U. S. IS FACING PERMANENT SUPERVISION OF BUSINESS, INDUSTRY BY GOVERNMENT Congressional Approval Given Roosevelt’s Request for NRA Setup as Lasting Feature of Structure. FAIR PRICES. HONEST SALES URGED Organization of Consumers Is Encouraged by President; Senator Wagner Asks Full-Time Labor Board. BY HERBERT LITTLE Times Staff Writer WASHINGTON, Jan. 4.—Continued organization of business and industry under government supervision seemed assured today by general congressional approval of President Roosevelt’s message citing the NRA setup'as "a permanent feature of our modernized industrial structure.” The message’s proposal to encourage organization of consumers, coupled with the President’s recent action giving

consumer representation on the new national emergency council, was interpreted as assurance that the administration will not permit prices to skyrocket. “Fair prices and honest sales” were emphasized by the President in his address. Meanwhile at NRA executive offices. Alvin Brown said that his office order warning that consumer, labor and industrial advisory boards might be abolished if they did not conciliate their differences was “a bit pointed” and added that no thought was being given to a reorganization scheme to supplant these boards. At the same time, Senator Robert F. Wagner (Dem., N. Y.), co-author of the recovery act and chairman of the national labor board, began work on a comprehensive review of NRA's achievements, which he will present soon to the senate. Republicans Join Ranks His plan for strengthening the labor sections of the law, not yet ready, will be presented in a later speech. His proposals for making permanent the labor board, improving NRA's collective bargaining provisions and breaking up company control of unions will be sudmitted to President Roosevelt before they are introduced. Senator Wagner is more than ever convinced of the need for this action by recent growth of company unionism, he said. Support for a permanent labor board has been tendered Senator Wagner by some conservative Republicans, who have complimented him highly on his board’s achievements in settling strikes. May Need Readjustment The senator also is working on a project to safeguard small business men from possible injustice through activity of big business in their industries. But administration leaders are opposed to proposals of Senator William E. Borah and other western Republicans to put all provisions of the anti-trust laws back in operation, or to wholly exempt small business men from NRA. The President in his message emphasized his support of NRA by dealing with it in two separate sections. In one he spoke of NRA's

JAN. 4, 1934

abolition of child labor, compared “ruinous rivalries” of the old business world with gang warfare, and added: “Though the machinery, hurriedly devised, may need readjustment from time to time, nevertheless I think you will agree with me that we have created a permanent feature of our modernized industrial structure and that it will continue under the supervision but not the arbitrary dictation of government.” Later he said that the vicious and wasteful parts of society have chosen the way of self-destruction. He foresaw that the program would save useful invention, machine production, industrial efficiency, and other things, and would ecourage “the slowly growing impulse” of consumers to organize to be able to insist on “fair price sand honest sales.” But. he went on, “the unnecessary expansion of industrial plants, the waste of natural resources, the exploitation of the consumers of natural monopolies, the accumulatino of stagnant surpluses, child labor, and the ruthless exploitation of all labor, the encouragement of speculation with other people’s money, thes ewere consumed in the fires that they themselves kindled. Wo must make sure that as we reconstruct our life there shall be no soil in which such weeds can grow again.” HOUSE ‘SILVER MEN’ TO HOLD CONFERENCE Remonetization Advocate Calls Meeting “Preliminary.” Bij United Fret* WASHINGTON. Jan 4.—A conference of house “silver men” was called for today by Representative James G. Scrugham (Dem., Nev.), one of the leaders of the remonetization movement. Representative Scrugham said the meeting was of “preliminary’ nature, and designed solely to sound out views of proponents of silver remonetization. He introduced a companion measure to the senate Wheeler bill in the house yesterday. Burned in Stove Blast When a stove exploded in Jrer home yesterday, Edna Coleman, 25, Negro, 533 Hiawatha street, was burned about the face and hands.