Real Deficit?

When Congress is about to sit and Washington fills up with legislators full of ideas on how to spend the Government's money, it is customary for the President to announce that there is not very much money on hand, that the Budget will show a greatly reduced surplus, perhaps even a deficit. Then, after all the appropriation bills are passed and Congress has adjourned in March, a smart Secretary of the Treasury discovers that the books will balance after all, that the Administration has been economical and wise.

Last week there was a note of honest realism, however, in President Hoover's voice as he announced a probable deficit for fiscal 1931 (ends June 30). For he added: "As we have had surpluses over many years we can probably stand a small deficit one year without disturbing the stability of the Government at all."

Utah's Senator Reed Smoot, chairman of the Senate Finance Committee and good Presidential supporter, growled: "With approximately $600,000,000 in appropriations outstanding and more likely to be made, I don't see how next year we are going to pay any more into the War debt sinking fund than the 3 1/2 % required by law. . . . We are going to pay our debts no matter who howls, and restoration of the 1 % [knocked last year off the income-tax] is imperative. . . . The country will be surprised at the small taxes that will be paid next March because of the deductions that will be made for stock speculation losses. . . . The amount of the deficit . . . will reach about the amount of last year's surplus. This was $184,000,000."

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