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No. 130 "New Deal Budget Policies: A Review of the Huge Expenditures under the Roosevelt Administration and the Alarming Increase in the National Debt Despite the Most Burdensome Peace-time Taxes Ever Levied," July 27, 1936.
No. 130 "New Deal Budget Policies: A Review of the Huge Expenditures under the Roosevelt Administration and the Alarming Increase in the National Debt Despite the Most Burdensome Peace-time Taxes Ever Levied," July 27, 1936. American Liberty League. 400dpi TIFF G4 page images Digital Library Services, University of Kentucky Libraries Lexington, Kentucky Am_Lib_Leag_130 These pages may freely searched and displayed. Permission must be received for subsequent distribution in print or electronically. No. 130 "New Deal Budget Policies: A Review of the Huge Expenditures under the Roosevelt Administration and the Alarming Increase in the National Debt Despite the Most Burdensome Peace-time Taxes Ever Levied," July 27, 1936. American Liberty League. American Liberty League. Washington, D.C. 1936. This electronic text file was created by Optical Character Recognition (OCR). No corrections have been made to the OCR-ed text and no editing has been done to the content of the original document. Encoding has been done through an automated process using the recommendations for Level 1 of the TEI in Libraries Guidelines. Digital page images are linked to the text file. JOIN THE AMERICAN LIBERTY LEAGUE The American Liberty League is organized to defend and uphold the Constitution of the United States and to gather and disseminate information that (1) will teach the necessity of respect for the rights of persons and property as fundamental to every successful form of government and (2) will teach the duty of government to encourage and protect individual and group initiative and enterprise, to foster the right to work, earn, save, and acquire property, and to preserve the ownership and lawful use of property when acquired. The League believes in the doctrine expressed by George Washington in his Farewell Address that while the people may amend the Constitution to meet conditions arising in a changing world, there must "be no change by usurpation; for this * * * is the customary weapon by which free governments are destroyed." Since the League is wholly dependent upon the contributions of its members for financial support it hopes that you will become a contributing member. However, if you cannot contribute it will welcome your support as a non-contributing member. ENROLLMENT BLANK American Liberty League National Press Building Washington, D. C. I desire to be enrolled as a member of the American Liberty League. Signature Name................................... Street ................................... Town................................... County .......................... State. Enclosed find my contribution of $...... to help support the activities of the League. NEW DEAL BUDGET POLICIES â˜… â˜… â˜… A Review of the Huge Expenditures under the Roosevelt Administration and the Alarming Increase in the National Debt Despite the Most Burdensome Peace-time Taxes Ever Levied AMERICAN LIBERTY LEAGUE T^ational Headquarters NATIONAL PRESS BUILDING WASHINGTON, DC. Document No. 130 July, 1936 New Deal Budget Policies you have finished with this pamphlet, please pass it on to some friend or acquaintance who might be interested, calling his attention to the membership blan\ on bac\page. â˜… The American Liberty League has dedicated itself to the preservation of the American form of government. Sound fiscal policies, a prime requisite, are inextricably interwoven with the constitutional system. If waste, extravagance, inflationary financing and profligate use of Federal funds to promote social and economic theories continue indefinitely, the inevitable collapse of Government credit will endanger American institutions. Financial chaos logically leads to dictatorship. â˜… Four years of New Deal budget policies may be appraised with the completion of the fiscal year 1936 and the approval of appropriations for the fiscal year 1937. The fiscal years 1934, 1935,1936 and 1937 are those for which the New Deal must assume responsibility. Expenditures of the few months of the Roosevelt administration prior to July 1, 1933, when the fiscal year 1934 commenced, were charted under the previous administration. Appropriations for the fiscal year 1937, extending some months beyond the term of the present administration, were sponsored by the New Deal and must be charged to it regardless of the outcome of the election. The spending orgy shows no sign of abatement. Indeed, it has constantly increased in scope. Balancing of the budget appears even more remote than when the New Deal first embraced the theory of spending our way back to prosperity. Examination of the facts with respect to revenues resulting from record-breaking tax rates together with wasteful expenditures shows that the budget can be balanced at an early date, provided New Deal theories are replaced by sound fiscal policies. Excessive expenditures not only are a threat to the financial foundations of the Government but necessitate an unwarranted and oppressive tax burden upon present and future generations. The status of the Treasury is a matter of vital importance to every citizen, as the cost of Government is reflected in the prices of commodities. No one escapes some measure of indirect taxation. High points of the budget situation are as follows: 1. Expenditures in the four years for which the New Deal is responsible will exceed by at least 27 per cent the direct cost to the United States in carrying on its operations in the World War. 2. Expenditures in the four years will be nearly as great as in the eight years prior to the fiscal year 1934. 3. Expenditures in the four years will be at least 33 per cent more than the total cost of the Government from 1789 to 1913, a period of 124 years. 4. For the entire four years expenditures will be at an average rate of about $2 for every $1 in receipts. 5. Aggregate deficits of the four years will be about equal to the total public debt at the beginning of the depression. 6. The public debt at the end of three full fiscal years of the New Deal was 32 per cent above the peak of the World War debt and 61 per cent greater than at the beginning of the Roosevelt administration. 7. The debt burden on each man, woman and child, only about $12 before the World War, has risen to $263 and may reach nearly $300 by the end of four years of the New Deal. 8. Expenditures in the fiscal year 1936 far exceeded those of any other peace-time year. 9. Expenditures in the fiscal year 1937 may be greater than in 1936, even though the bonus item helped to make the total of the fiscal year 1936 abnormally large. 10. - Another large deficit is in prospect for 1937 although with taxes now much greater than ever before in peace time revenues will be sufficient to cover expenditures 40 per cent greater than average expenditures before the depression. 11. Emergency as well as general expenditures have continued to increase, although Mr. Roosevelt says the emergency has passed, and although business improvement has been in progress and relief outlays should have declined. 12. If New Deal policies prevail, further large appropriations for emergency purposes and another large deficit appear inevitable in 1938. New Deal Totals The four-year budget record of the New Deal is shown in brief in the following tabulation: Fiscal Year Receipts Expenditures Deficits 1934..... $3,115,554,050 $7,105,050,085 $3,989,496,035 1935 ..... 3,800,467,202 7,375,825,166 3,575,357,964 1936 ..... 4,115,956,615 8,879,798,258 4,763,841,643 1937(est.) 5,596,917,650 9,308,465,977 3,711,548,327 Totals $16,628,895,517 $32,669,159,486 $16,040,243,969 The annual totals as given above include what are classified in "General" and "Recovery and Relief" funds. Trust accounts, which often show a deficit which properly should be added to ordinary deficits, are excluded. The totals for 1934, 1935 and 1936 are as given in the daily Treasury statement. The estimates for 1937, which are subject to revision, are based on information furnished by D. W. Bell, Acting Director of the Budget, to Senator Harry F. Byrd of Virginia, on May 23, 1936, and published in the Congressional Record. Mr. Bell informed Senator Byrd that he had adjusted his estimates in the light of developments since the submission of the annual budget in January, 1936, including probable changes in revenues and expenditures on account of court decisions and legislation then pending. In Mr. Bell's computation the entire cost of the immediate payment of the soldiers' bonus was allotted to the fiscal year 1936 instead of being divided between 1936 and 1937. His estimate of total expenditures in the fiscal year 1936 was in excess of $9,915,000,000 and for 1937 about $8,272,000,000. In the above table the estimate of expenditures for 1937 is increased over Mr. Bell's total by the amount that his 1936 total is carried over and made available for 1937. In all probability both expenditures and deficit in the fiscal year 1937 will be greater than estimated in the above table. It is admitted by New Deal spokesmen that if present work-relief policies are continued it may be necessary to appropriate, early in the 1937 session of Congress, as much as $500,000,000 to carry the program to June 30, the end of the fiscal year, in addition to the $1,425,000,000 appropriated in 1936. This would mean a deficit considerably in excess of $4,000,000,000. Only in the fiscal year 1936 has the deficit gone that high. Comparisons with Other Periods The four-year totals are of staggering proportions when compared with governmental outlays of other periods. The cost of the World War shrinks to a relatively modest sum beside the cost of four years of the New Deal. The annual report of the Secretary of the Treasury shows that the World War up to June 30, 1921, cost the United States $25,739,000,000. The burden of debt attributable to the War was in part responsible for economic difficulties of recent years. In four years of the New Deal the total expenditures of $32,700,000,000 or more will exceed the war cost by as much as 27 per cent. Three years of expenditures under the New Deal came close to equaling the total of expenditures in the 124-year period from 1789 to 1913, from Washington to Wilson. The total for the 124 years was $24,521,845,000. The four-year total under the New Deal is about one-third greater. Instead of the reduction of 25 per cent in Government expenditures pledged by the 1932 Democratic platform the average of more than $8,000,- 000,000 for each of the four years of the New Deal represents an increase of approximately 100 per cent over the normal total prior to the depression. Expenditures of more than $32,000,000,000 in four years as against receipts of only about $16,000,000,000 means that the New Deal has paid out $2 for every $1 taken in. This course has been followed despite constantly increasing revenues from heavier taxation than ever before levied on the American people. Nothing like the spending debauch of the New Deal ever has taken place either in the United States or elsewhere. Deficits The fiscal year 1937 will be the seventh successive year in which the budget has been out of balance. In the three years 1931, 1932 and 1933 the deficits, exclusive of trust accounts, were respectively $902,000,000, $3,148,000,000 and $3,063,000,000, a total of $7,113,000,000. The deficits of the New Deal years, $16,040,000,000, make the total since the beginning of the depression $23,153,000,000. The years 1931,1932 and 1933 were in a period of shrinking revenues. Expenditures in 1932 and 1933 were about 25 per cent greater than in 1931 and prior years, but in considerable part the deficits were due to the drying-up of the source of revenue as business fell off. At the low point in 1932, revenues were only slightly more than $2,000,000,000, or about half the normal previous total of expenditures. If revenues had been exacted in the volume of the current fiscal year, the years 1931, 1932 and 1933 would have shown an aggregate surplus far in excess of $2,000,000,000. The deficits under the New Deal continue despite additional revenue available from higher taxes under laws enacted in 1932, 1933, 1934, 1935 and 1936. 7 The Federal Debt The Federal debt on June 30, 1936, reached a total of $33,778,543,494, an increase of 32 percent above the peak of the World War debt, 111 per cent above the post-war debt at its low point and 61 per cent above the total at the beginning of the Roosevelt administration. Following are the totals of the Federal debt on various dates: Mar. 31, 1917 (pre-war debt)............. $1,282,044,345 Aug. 31, 1919 (highest post-war debt)..... 26,596,701,648 Mar. 3,1921 (end of Wilson administration) 24,045,136,550 Dec. 31, 1930 (lowest post-war debt)..... 16,026,087,087 June 30,1933 (end of last Hoover fiscal yr.) 22,538,672,560 June 30, 1934 (Roosevelt administration) 27,053,141,414 June 30, 1935 (Roosevelt administration) 28,700,892,625 June 30, 1936 (Roosevelt administration) 33,778,543,494 June 30, 1937 (est.)...................... 37,000,000,000 The increase in the public debt in the three fiscal years for which the New Deal is responsible, from July 1, 1933, to June 30, 1936, was $11,239,870,933. If the Treasury during the current fiscal year borrows the full amount of the prospective deficit, which will not necessarily have to be done due to the abnormally large balance in the general fund at the beginning of the year, the public debt will advance by June, 1937, to about $37,-000,000,000. The estimate allows for a reduction of $500,000,000 in bonus bonds which on July 1, 1936, were outstanding to a total of $945,000,000. The estimated total of June 30, 1937, would represent an increase of about $14,-500,000,000 in the debt during the four years of the New Deal. The public debt on June 30, 1936, had considerably more than doubled from the low point of the post-war debt. The increase in the debt during the depression period up to June 30, last, was $17,752,456,407. Recoverable Assets Spokesmen for the administration emphasize the possibility of the recovery of large sums in the liquidation of emergency credit agencies. An official Treasury statement gives the pro- prietary interest of the Government in corporations and credit agencies financed wholly from government funds as $3,117,062,299. In addition to this amount the government has a proprietary interest of $1,178,084,167 in agencies financed partly by the Treasury and partly from private funds. The two items total $4,295,146,466, all of which has been claimed by the administration as an offset against the debt. The amount invested in agencies partly financed by Government funds is represented for the most part by holdings of capital stock in the Federal Land Banks, the Intermediate Credit Banks, the Home Loan Banks, the Federal Deposit Insurance Corporation and other agencies of a permanent character. No liquidation of these investments ever is likely to take place. The amount, therefore, cannot properly be considered as applicable to a future reduction of the public debt. Of the $3,117,062,299 in agencies financed wholly from Government funds $1,877,182,577 is invested in the Reconstruction Finance Corporation. The liquidation of loans by the RFC and other credit agencies will be a very slow process. There is no assurance that the administration may not again, as twice heretofore to a total of $1,000,000,000, cause Congress to divert RFC loan repayments to relief and other nonrecover-able purposes. Competent economists who have dealt with the subject estimate that the amount which will be recovered from the $4,295,000,000 may be from $2,000,000,000 to $2,500,000,000. This sum represents all that will come back of about $13,000,000,000 which had been spent from the beginning of the depression to June 30, 1936, under the classification of "Recovery and Relief." The amount obtained from liquidation of emergency funds in future years may easily be offset by losses on securities guaranteed by the Government. Such obligations amounted on May 31, 1936, to $4,467,496,000. Of this total $3,045,- 313,600 represented bonds of the Home Owners Loan Corporation, $1,422,182,400 of the Federal Farm Mortgage Corporation and $251,614,667 of the Reconstruction Finance Corporation. These totals do not include interest which also is guaranteed by the Government. It is recognized that ultimately it will be necessary to write off a very considerable loss in the refinancing of homes and farms. The Treasury's contingent liabilities in this connection are not included in the public debt. Other Offsets to Debt Secretary Morgenthau, of the Treasury Department, in a radio address on July 1, 1936, cited three items which, he said, provided an offset of $8,750,000,000 to the public debt. The items included, besides more than $4,000,000,000 of so-called recoverable assets from loans and investments, $2,700,000,000 in the general fund and $2,000,000,000 in the gold stabilization fund. The general fund balance cannot be regarded as an offset to debt in view of the fact that it represents money borrowed to meet demands for cash payment of the bonus and other obligations incurred. It is perfectly true that by monetary manipulation the Government can reduce its debt as much as it pleases. The gold stabilization fund was created by devaluation of the dollar. The Secretary of the Treasury neglected to mention possible inflationary profits in connection with silver, which legally may be used to retire debt, nor did he refer to $3,000,000,000 of greenbacks which may be used for the same purpose under authority granted in the Thomas Inflation Amendment. The possibilities of monetary manipulation, with attendant inflationary dangers, offer scant comfort in connection with the future debt situation. Debt Policies No one can state with exactness the point at which the public debt will become greater than 10 can be safely carried. The present danger lies not so much in the total of the debt, huge though it is, as in the uncertainty with respect to future increases and the necessity of financing deficits by inflationary methods. The administration boasts that by reason of a reduction in interest rates, the carrying charges on the debt are not so great as when the total debt was somewhat smaller. This is true. It must also be taken into account that market conditions have been created wherein investors, particularly the banks, have had no alternative but to buy Government securities at the low rates fixed by the Treasury. By means of its control of the banking and monetary systems the Treasury has encountered no substantial difficulties in its financing program, which of course does not mean that abuse of this control will not eventually cause trouble. Five-sixths of all the Government securities issued have been absorbed by the banks. The process of financing Treasury deficits through bank credit is distinctly inflationary. The proportion of bank assets invested in Government securities is so large as to form an element of danger. Per Capita Debt The per capita debt burden has increased enormously during the past generation. Just prior to the World War the burden due to the debt of the Federal Government was equal to only about $12 for each man, woman and child in the United States. The per capita Federal debt rose to about $2Ifi at the end of the World War and declined to about $131 by the beginning of the depression. At the beginning of the first full fiscal year of the Roosevelt administration the per capita debt was about $180. At the conclusion of three years of the Roosevelt administration this burden, applicable to every man, woman and child in the country, had advanced to approximately $263 each. And during the present fiscal year it may 11 go to almost $300 each. In other words the New Deal will have cost in four years each of our people individually the sum of $120. Multiply this by 4.8, representing the average number of persons per family, and you have an increase of $576 per family in the Federal debt as a result of the Roosevelt administration. Appropriations for 1937 Figures on appropriations by Congress are always confusing and often misleading. The aggregate is usually considerably larger than that of actual expenditures. The appropriation totals usually include postal expenditures financed from postal receipts which do not ordinarily appear in totals of Treasury expenditures. Often appropriations are made in such a way as to make difficult their segregation by fiscal years. Reap-propriation of funds and diversion to other purposes of amounts previously appropriated arc further causes of confusion. Some of the statements on appropriations fail to distinguish between authorizations and appropriations with the result that the same funds are counted twice. The Seventy-fourth Congress unquestionably was the most extravagant in peace-time history, although the appropriation totals as announced give a somewhat exaggerated idea of contemplated expenditures. The appropriations of the two sessions of the Congress aggregated approximately $20,000,000,000. The totals as announced by Senator Carter Glass of Virginia, Chairman of the Senate Committee on Appropriations, were $9,579,756,510 for the first session and $9,716,430,863 for the second session, a total of $19,296,187,373. According to Representative John Taber of New York, ranking Republican member of the House Committee on Appropriations, the appropriations of the first session amounted to $10,459,756,227 and those of the second session to $10,129,710,522, a total of $20,-589,466,749. Different methods of computation are responsible for the discrepancies. Such figures on estimated total expenditures 12 for the fiscal year 1937 as appear in this document are based on the estimates of the Budget Director rather than on the bills as passed by Congress. The Budget Director's estimates purport to show the actual outlay in specified years. Revenues The following tabulation, which is exclusive of trust accounts except for 1930, shows changes in revenues in recent years: (All figures in millions of dollars) Fiscal years: 1930 1933 1934 1935 1936 Income taxes....... $2411 $746 $818 $1099 $1426 Miscellaneous internal revenue.. 628 858 1470 1657 2010 Customs ........... 587 251 313 343 387 Miscellaneous ...... 552 225 162 180 216 Processing taxes..... *** *** 353 521 77 Totals ........... $4178 $2080 $3116 $3800 $4116 The itemization of receipts shows the extent to which the Government has shifted from direct to indirect taxation. This course was forced by the depression, which wiped out a large part of the revenue from income taxes. Very low income tax rates prevailed in 1930, but the yield from them was in excess of $2,400,000,000. By 1933 the revenue from income taxes had shrunk to $746,000,000. Despite the imposition of higher rates, income tax revenue in 1936 amounted to only $1,426,000,000. In the fiscal year 1937, with rates in effect higher than those of war time, the revenue from income taxes is estimated at upwards of $2,000,000,000. The comparable war-time rates raised, immediately after the War, nearly twice that much. Excise and other miscellaneous taxes were yielding only $628,000,000 in the fiscal year 1930. The imposition of many new excise taxes enabled the Treasury to raise more than $2,000,-000,000 from this source in the fiscal year 1936. The total in the fiscal year 1937 is estimated at more than $2,100,000,000. Customs revenues shrank as imports fell off during the depression, but have been steadily gaining in recent years. 13 In the fiscal year 1930 income taxes accounted for 58 per cent of total revenues. They fell off to 36 per cent in 1933 and 26 per cent in 1934, increasing slowly to 29 per cent in 1935 and 35 per cent in 1936. Miscellaneous taxes contributed only 13 per cent of the total in 1930 but rose to 41 per cent in 1933, 47 per cent in 1934, 44 per cent in 1935 and 49 per cent in 1936. Revenues in the fiscal year 1937 were estimated in the annual budget in January, 1936, at $5,654,000,000, including $547,000,000 from taxes under the Social Security Act and other special acts which must be considered a trust fund and not income applicable to general treasury purposes. Acting Director of the Budget Bell, in revising the estimate in May, 1936, to take account of the loss of processing taxes and the increase in corporation income tax revenue under legislation then pending, placed the total for 1937 at $5,596,917,650. This total is subject to a further revision. Estimated revenues in the fiscal year 1937 will be greater than in any year since 1921. The total in the fiscal year 1936 was about equal to normal revenues before the depression. Under the very high income tax rates now prevailing, an improvement in business will inevitably result in a very substantial further increase in revenues in 1938 and subsequent years. It must be taken into account, however, that in the higher brackets present tax rates are practically confiscatory. If continued, the result will be the destruction of the sources of future income taxes. Expenditures Changes in classification make it very difficult to present an adequate comparison of expenditures for different purposes. After the advent of the New Deal, expenditures at first were classed as "General" and "Emergency" and, commencing July 1, 1935, as "General" and "Recovery and Relief." The totals of General expenditures, as given in the Treasury statement, are much smaller than totals which would 14 be more nearly comparable to regular expenditures prior to the New Deal. The appropriations for the permanent departments are now supplemented by allotments from emergency funds under the classification of Recovery and Relief. The result is that the item of departmental expenditures falls far short of showing what the departments actually are doing. One factor which makes a comparison confusing is the shifting of emergency expenditures to the General classification whenever it is determined that an activity has been given a permanent status. Agricultural benefits were thus shifted in the daily Treasury statement for 1936 and in the budget for 1937. The following tabulation, which is exclusive of trust accounts except for 1930, shows expenditures for five recent fiscal years, classified according to the various methods followed by the Treasury in the different years: (All figures in millions of dollars) Fiscal years: 1930 1933 1934 1935 1936 General ........... **** $3866 $3101 $3721 $5589 Emergency......... **** 1277 4004 3655 **** Recovery and Relief **** **** **** **** 3291 Totals ........... $3994 $5143 $7105 $7376 $8880 If trust accounts were added to totals as here given it would increase both revenues and expenditures of New Deal years by several hundred millions. The trust accounts were relatively small in 1930 and are included in the totals of revenues and receipts for that year, different bookkeeping methods making their segregation difficult. General Expenditures Study of budget figures leaves no uncertainty as to the absence of any policy of economy in regular as well as emergency agencies. The regular departments were forced to economize during the first year of the New Deal, because of provisions of the Economy Act of March, 1933, and because of the slashing of appropriations in the winter of 1932-1933. After a year of spend-15 ing by emergency agencies, limitations on the regular departments were loosened and extravagance on a huge scale became the rule. The upward trend in expenditures in regular departments in three fiscal years of the New Deal is shown in the following tabulation: Departments 1934 1935 1936 State Dept......... $11,121,103 $15,860,780 $16,816,350 Treasury Dept..... 108,538,057 121,863,249 132,289,403 War Dept......... 209,415,781 214,315,015 374,501,437 Navy Dept........ 274,388,386 321,410,530 391,424,149 Dept. of Justice... 31,598,525 32,278,678 37,842,352 Dept. of Interior.. 45,922,164 55,211,498 79,970,040 Dept. of Agriculture 58,362,572 62,036,812 76,748,809 Dept. of Commerce 27,452,420 32,315,737 35,133,687 Dept. of Labor.... 10,831,905 13,012,158 15,254,035 Postal Deficit...... 52,003,296 63,970,405 86,038,862 It will be noted that each of the ten Cabinet departments spent more money in 1935 than in 1934, and more in 1936 than in 1935. Appropriations for 1937 show that all departments will spend approximately as much or more than in 1936. The totals given above do not begin to tell the whole story as they represent only amounts expended from specific appropriations. Most of the departments also spent considerable amounts from allotted funds. The Treasury Department expenditures are exclusive of those for public buildings, whether from appropriated or allotted funds. The War Department expenditures are exclusive of river and harbor work. The Department of Agriculture expenditures are exclusive of outlays of the Agricultural Adjustment Administration and for highway construction. Emergency Expenditures In the fiscal year 1936 $1,263,661,490 was spent for work relief and $495,591,987 for direct relief, a total of $1,759,253,477, while in 1935 $1,814,477,331 was spent for direct relief and in 1934 a total of $1,145,865,041 for direct relief and civil works. For emergency conservation work $486,281,194 was spent in the fiscal year 1936, $435,508,643 in 1935 and $331,940,851 in 1934. Expenditures for public works amounted to $956,289,914 in 16 the fiscal year 1936, $720,411,837 in 1935 and $645,226,129 in 1934. Other classifications under Recovery and Relief include agricultural aid, exclusive of agricultural benefits which originally were listed in the Emergency column but were shifted to General in 1936, aids to home owners, and miscellaneous, which includes the Reconstruction Finance Corporation. Expenditures of the Agricultural Adjustment Administration, including both agricultural benefits and other items, totaled $396,748,877 in the fiscal year 1936, $711,819,103 in 1935 and $270,-391,096 in 1934. Substantial additional aid was given to agriculture through the Commodity Credit Corporation and through the land banks and other agencies under the Farm Credit Administration. Administrative Costs Administrative cost of emergency agencies has formed a very considerable item in recent budgets. The National Recovery Administration spent a grand total of $25,191,900 for administrative purposes. Of this amount $18,769,598 was spent prior to the decision of the Supreme Court in the NRA case and $6,422,302 after code-making was invalidated. Payrolls accounted for about $19,-500,000 of the aggregate cost. Administrative expenses of the Public Works Administration totaled $52,812,205 from its creation in 1933 up to June 30, 1936. Of this amount $27,138,263 was spent in the fiscal year 1936. The Works Progress Administration spent nearly $70,000,000 for administrative purposes during the fiscal year 1936, more than $50,000,-000 being for salaries of supervisory officials and employees. The Resettlement Administration spent upwards of $34,000,000 for administrative purposes in the fiscal year 1936. Salaries amounted to nearly $25,000,000. 17 The Home Owners Loan Corporation spent 836,000,000 for administrative purposes in the fiscal year 1936 and about $35,000,000 in 1935. The Reconstruction Finance Corporation spent $14,000,000 for administrative purposes in the fiscal year 1936 and about $10,600,000 in 1935. The Federal Housing Administration spent nearly $12,000,000 for administrative purposes in the fiscal year 1936 and about $7,000,000 in 1935. The Agricultural Adjustment Administration spent a total of $78,198,265 for administrative purposes from its organization in the summer of 1933 to December 31, 1935. The total administrative cost of the emergency agencies here listed had been about $375,000,000. The list is by no means complete. The Budget Outlook Even a casual survey of expenditures furnishes glaring evidences of waste of the taxpayers' money. The New Deal has countenanced a riot of extravagance. There is no sign of its termination at any early date. The preservation of the American system of government demands the substitution of a sound financial foundation for a condition of reckless irresponsibility. The primary needs are twofold. One is a thorough overhauling of the structure of government, including both the regular departments and emergency agencies, with a view to the elimination of unnecessary and wasteful activities and a coordination of such departments, bureaus and boards as serve a useful purpose. An opportunity along this line is offered by the important studies now in progress by special committees which will report to the next Congress. The second immediate need is a review of policies underlying large expenditures. This should involve a critical examination of the theory of promoting recovery by spending, the question of the extent of Federal responsibility for relief and the wisdom of work relief as against direct relief. Revenues in the fiscal year 1938 are likely to exceed $6,000,000,000. There is not the slightest doubt that expenditures could be held to that amount without adversely affecting the public interest. It would mean as much as $2,000,000,-000 for "Recovery and Relief" in addition to the $4,000,000,000 which represented normal expenditures before the depression. The issue is between an indefinite continuance of an unbalanced budget during experimentation with fanciful theories and an early readjustment of the finances of the Government in accord with sound economics and tested principles consistent with the American form of government. Continuance of the spending policies of the New Deal may offer temporary allurement but in the long run threatens disaster. To assure recovery of a permanent character, the Government must put its financial affairs in order. 19 PAMPHLETS AVAILABLE Â£OPIES of the following pamphlets and other League literature may be obtained upon application to the League's national headquarters. Statement of Principles and Purposes American Liberty League Its Platform Inflation The Holding Company Bill Expanding Bureauracy Dangerous Experimentation Economic Planning Mistaken But Not New Work Relief The AAA and Our Form of Government Alternatives to the American Form of Government A Program for Congress The 1937 Budget Professors and the New Deal Wealth and Income The Townsend Plan The Story of an Honest Man (The Hagood Case) The New AAA The President's 1936 Tax Proposals New Work Relief Funds The American Form of Government, The Supreme Court and The New Deal Socialization of the Electric Power Industry Social and Economic Experiments Under the Guise of Taxation The President Wants More Power (leaflet) The Townsend Nightmare (leaflet) A Farmer Speaks (leaflet) Will It Be Ave Caesar? (leaflet) Our New Spoils System (leaflet) The Magi and the Showdown (leaflet) Government by Busybodies (leaflet) Gratitude in Politics (leaflet) 28 Facts About the New Deal (leaflet) New Labels for Old Poisons (leaflet) The New Deal Boondoggling Circus (leaflet) Government by Law Still Forced to Fight Against New Deal (leaflet) Who Are the Economic Royalists? (leaflet) The Duty of the Church to the Social Order Speech by S. Wells Utley The Duty of the Lawyer in the Present Crisis Speech by James M. Beck PAMPHLETS AVAILABLE (continued) The Constitution and the Supreme Court Speech by Borden Burr The Fallacies and Dangers of the Townsend Plan Speech by Dr. Walter E. Spahr What of 1936? Speech by James P. Warburg Americanism at the Crossroads Speech by R. E. Desvernine The Constitution and the New Deal Speech by James M. Carson Thq American Constitution Whose Heritage? Speech by Frederick H. Stinchfield The Redistribution of Power Speech by John W. Davis Time to Stop Speech by Dr. Neil Carothers The Facts In the Case Speech by Alfred E. Smith The Townsend Utopia Speech by Dr. Ray Bert Westerfield Inflation and Our Gold Reserve Speech by Dr. E. W. Kemmerer Entrenched Greed Speech by Dr. G. B. Cutten Should We Amend the Constitution to Grant the National Government General Welfare Powers? Speech by W. H. Rogers The New Inquisition Speech by Jouett Shouse It Can Be Done Speech by Merrill E. Otis The Need for Constitutional Growth by Construction or Amendment Speech by R. E. Desvernine Shall We Have Constitutional Liberty, or" Dictatorship? Speech by James A. Reed An American Philosophy Speech by Jouett Shouse The Liberty League Old Friendships Destroyed Speech by Daniel 0. Hastings A Federal Union National and State Responsibilities Speech by Fitzgerald Hall Constitutional Heresy Speech by li. E. Desvernine You Owe Thirty-one Billion Dollars Speech by Jouett Shouse The New Deal vs. Democracy Speech by Jouett Shouse