Three Years

The Secretary of the Treasury and the Director of the Bureau of the Budget are responsible for the figures, but the President of the U. S. is responsible for the finances of the U. S. He must answer to the stockholders of that great corporation, the Nation.

Last year President Hoover predicted surpluses for fiscal 1930 and 1931 (TIME, Dec. 16, 1929). Last week, on the heels of his message on the State of the Union, he sent to Congress an annual Budget Message in which he was forced to revise last year's figures downward, to caution Congress against rash appropriations. His points:

1930, which on the Government's calendar finished at midnight June 30 last, was still a good financial year. The Treasury's surplus for that year was $183,789,214.90. But ". . . as a matter of fact, the actual receipts during the fiscal year 1930 were about $71,000,000 less than the estimate contained in the 1931 budget. This was partially offset by a net reduction in expenditures of $29,500,000 below those estimated. . . ."

1931, which began July 1, has seen a great change in the financial situation. A surplus of $122,788,966 had been predicted, but its computation did not take into account the effect of the temporary 1% income tax reduction. The President's only mention of the stockmarket crash was backhanded: "Due to the depression it is now estimated that the income of the Government in taxes and postal receipts . . . will probably fall below the anticipation." Besides, "the measures taken to increase employment . . . represent a very material increase in Government expenditures of over $225,000,000. . . . These sums . . . reduce . . the financial situation to a present estimated deficit of approximately $180,000,000 for the current fiscal year. . . ." The tax reduction cannot be retained.

1932, beginning next July 1, will require an estimated expenditure from the Treasury of $3,932,842,411.07, totalling $221,000,000 more than what was appropriated for 1931. The excess is due to $100,000,000 asked for the Farm Board, and increases in the Veterans' administration costs, as well as large additions to the Shipping Board and roadbuilding program for unemployment relief.

The President said: "For the fiscal year 1932 the favorable margin between our estimated receipts and estimated expenditures is small. . . . This is not a time when we can afford to embark upon any new or enlarged ventures of government. . . . [but] in the absence of further legislation imposing any considerable burden upon our 1932 finances we can close that year with a balanced budget. . . .

"Our Government finances are in a sound condition."

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