JThe Frontier
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Economic Highlights
Ask a dozen economists this
question: “How great a debt can
the federal credit stand?’’ The
chances are that you will get a
dozen different and opposed answ
ers.
Not so many years ago financial
authorities fearfully forecast that
the national debt would soon reach
the $10,000,000,000 mark, said that
this w'ould mean the beginning of
a collapse in the nation's credit.
Today the debt has passed $.‘10,000,
000,000, and some authorities be
lieve that it will reach $50,000,
» 000,000 before many more years
have passed. Yet little fear is now
expressed as to solvency of our
government. Treasury officials say
that $50,000,000,000 would not be
an excessive debt for so rich a
country.
The President’s budget message
was predicted upon the theory that
it will be possible to achieve a
smaller deficit in the 1936 fiscal
year than in the 1935. Federal
bookkeeping is done under a sort
of dual system. One set of books
takes care of the regular budget.
Another involves emergency ex
penditures which, in the view of
the Administration, are much like
wrar expenses and so cannot be
carried, on the books as normal
spending. This system has led to
considerable confusion of the public
which has been told, on the one
hand, that the government is cut
ting costs, while on the other hand,
it sees the deficit and taxes con
stantly rising.
Estimated receipts for the 1936
fiscal year regular budget total $3,
42.000. 000—an advance of $299,
000,000 over 1935. Estimated ex
penses are $3,302,000,000, a rise of
$554,000,000. This leaves an en
couraging estimated surplus, so far
as regular income and spending is
concerned, of $120,000,000.
The next step, however, concerns
the emergency budget. The Admin
istration plans to spend sonic $4,
582.000. 000 for extraoj,diuai;j» pur
poses, as opposedto An income of
$570,000,000 whicTTVill come from
various AAA activities. This leaves
a deficit of $4,012,000,000.
As a result, total expenditures
for regular und extraordinary bud
gets will be $7,884,000,000, a drop
of $124,000,000 from 1935. Total
receipts from all sources will be
$3,992,000,000, u rise of $280,000,
000 from the preceding fiscal year.
The total net deficit will thus be
$3,892,000,000 ($404,000,000 less
than the 1935 deficit) which must
be added to the soaring national
debt, bringing it close to the $35,
000,000,000 mark.
There is the budget situation in
a nut shell. Great as the deficit is,
the President and many financial
experts say it is “well within the
nation’s resources.’’ It remains a
fact, however, that the national
debt must eventually be paid—and
that in the meantime hundreds of
millions a year must be spent for
interest. All of this money has
to be raised by taxation, and the
greater the debt, the greater the
>-urden on industry—and the less
money it has for other purposes.
Nineteen-thirty-six interest ex
penditures, for example, will come
to the neat sum of $875,000,000, a
jump of $40,000,000 over the 1935
fiscal term.
To get away from the economic
aspects of the budget, one of its
most interesting phases is the pro
posed expenditure of $900,000,000
for national defense. If Congress
authorizes this expenditure, as it
probably will, 1936 will witness
the greatest “peace-time war ex
penses” in the nation’s history. The
President announced these figures
without comment—it is' obvious,
however, that they are principally
made necessary by Japan’s abroga
tion of the naval treaty. Two years
from now, when the treaty expires,
Japan will start to build naval
craft on a grand scale, and the
United States must keep up with
her. At the present time, our nav
al strength is well below our treaty
limit. This tonnage deficit will be
made up. for the most part, withir
the next two years.
Business is quiet since the holi
day spurt and reports are neither
encouraging nor discouraging
There have been a few small ad
vances in various lines, while no
industry has fallen back. STEEL
output recently registered, a gain,
with the outlook good for increased
demand. TRADE has been improv
ing, and a late week showed a 10
per cent advance in bank debits
outside of New York City. ELEC
TRIC POWER shows a slight gain
and tends steadily upward. BUSI
NESS ACTIVITY as a whole is
getting better.
Big industries, in company with
government, are anxiously await
ing the Supreme Court’s decision
on the gold forfeiture cases, which
will be handed down early in Feb
ruary. If the court decides that
holders of gold bonds and gold
certificates must be paid on the
basis of the old 100-cent dollar, as
specified in the bonds held by in
dividuals who loaned their money
to the government and many in
dustries, instead of the present
59.4 dollar, the nation’s public and
private debts will show a paper
rise of more than $00,000,000,000.
Attitude of the Justices, during the
argument of the cases, frankly
worried Administration officials.
NEBRASKA NEWS
OF STATE AFFAIRS
(Continued from page 1.)
Another liquor bill calling for
state liquor stores and providing
for sale by the drink under certain
conditions was introduced last week
by democrats, Representative John
Havekost of Hooper and J. Frank
Summers of Beatrice. This bill
makes no provision for local option,
however, while Wachtler’s bill does.
The hill by Wachtler would re
turn license fees collected by the
state, back to the county or city
where the license was issued, while
placing a 25 per cent gross profits
tax on liquor for the benefit of the
state general fund, and would cre
ate a state monopoly for regulat
ing distribution and sale of liquor
of all types. The other bill would
give 50 per cent of net profits from
licenses and state store sales to
the state general fund., 20 per cent
to county old age pension funds and
30 per cent to city and county gen
eral funds.
A system of state distilleries is
proposed in a third bill introduced
by Representative Joe Steele (R) of
Kimball. Steel, who is a dry, would
place the distilleries under the con
trol and management of the state
department of agriculture and in
spection. All manner of alcoholic
beverages would be manufactured
for sale both wholesale und retail.
The wholesale feuture would per
tain also to sale to other states and
warehouses would be established
both in Nebraska and in large cen
ters of population over the country.
R. P. Hutton, state superintend
ent of the Nebrasku anti-saloon
league, declares that the drys will
concentrate their strength on secur
ing county option. The state ad
ministration is advocating local
option.' The drys also want an
enabling law providing for an an
nual election in November to allow
counties to decide each year on the
matter of issuing licenses, while
they desire a certain portion of
liquor license fees set aside for a
publicity campaign against the
evils of drink, while liquor ads
would be prohibited by law.
Governor Cochran has caused to
be introduced in the legislature five
bills calculated to solve the prob
lem of bonding the state treasurer.
These bills meet demands of bond
ing companies by raising the prem
ium rate on the treasurer’s bond
from one-fourth to one-half of one
per cent per year, providing burg
larly insurance on all securities in
the state vaults, requiring a $10,000
surety bond on the treasurer’s bond
clerk and $1,000 to $10,000 on other
treasurery employees, an annual
audit of the treasurer’s office and
removal of the treasurer’s liability
if banks holding state deposits
refuse payment of interest required
by law (2 per cent less one per
cent service charge.) Meanwhile
there was still contention as to
whether George Hall was the state
treasurer in actuality when the leg
islature convened this week.
Other highlights of the legisla
ture include the introduction and
progress of a measure by Governor
Cochran to knock out the gold
clause in contracts in Nebraska; a
bill by Senator Neeland of Heming
ford to lessen the responsibilities
of the office of state land commis
sioner by making all five members
of the board of educational lands
and funds equally responsible for
its acts and policies, and creating
the office of a paid secretary to act
as the board’s executive agent; an
enabling act introduced in the sen
ate to allow Nebraska cities and
j towns to build new electric light
plants by pledging future earnings
of the plant; a bill imposing a stiff
graduated occupation tax on chain
stores; a bill introduced by Repre
sentative John Washington Porter
(D) of Albion, designating the song
“Nebraska” as the state’s official
song; a resolution adopted by the
senate calling for immediate pay
ment of the soldier bonus by con
gress; the reporting out by the
house privileges and elections com
mittee of Representative Charles
R. Herrick’s bill for non-partisan
election of all elective county and
township officials; a house resolu
tion menioralizing congress to co
operate 100 per cent in opening
free bridges across the Missouri
river at South Sioux City, Omaha,
Blair, Plattsmouth and Nebraska
City.
Frank B. O’Connell has been re
appointed by Governor Cochran as
chief game warden and secretary
of the state game and park com
mission. O’Connell is a republican.
. . . The governor also ap
pointed a state planning commis
sion similar to one which had prev
iously existed in the state. The
board is to co-ordinate public works
in Nebraska in the future.
Gasoline tax collections in Ne
braska last year totaled $8,501,845,
or $900,000 more than in 1933.
Recent claims totaling $40,680
have been filed with the state audi
tor and are being called to th at
tention of the legislature. The
largest claim is $26,250 brought by
a Dawes county man and based on
an alleged collision last fall of his
truck with a vehicle owned by the
state highway department.
The railway commission has pre
sented to the governor its budget
for the next biennium, toaling $11,
080 or $8,000 higher than the ap
propriation two years ago. Com
missioner Bollen caused a furore
last week when he suggested that
the legislature pass a bill requiring
all members of the railway commis
sion to be lawyers.
Who's who in the legislature
(continued from last week:) Sen
ator Green, Sidney, chairman of
the accounts and expenditures com
mittee; Senator Brodecky, Howells,
chairman agriculture, livestock and
grazing committee; Senator Nee
land, Hemingford, chairman edu
cation committee; Senator Peder
son, Guide Rock, chairman employ
ees committee; senator fallen,
Odell, chairman finance committee;
Senator Bullard, McCook, chairman
insurance committee; Senator Mc
Mahon, Omaha, chairman labor
committee; Senator Dafo, Teeum
seh, chairman judiciary committee;
Senator O’Brion, Grand Island,
chairman railroads committee; Sen
ator Regan, Columbus, chairman
revenue and. taxation committtee;
Senator Warner (R), Waverly,
dean of the legislature and leader
of senate republicans. Unless
otherwise designated these legis
lators are democrats and besides
chairmanships named, they occupy
other important committee posi
tions.
Representative Dugan, Omaha,
chairman judiciary committee;
Representative Lusienski, Platte
Center, democratic floor leader and
important committeeman; Repre
sentative Cushing (R), Ord, minor
ity floor leader; Representative
Nickles, Murray, chairman finance
committee; Representative Webber,
Hildreth, chairman employes com
mittee; Representative Burr, Juni
ata, chairman labor committee;
Representative Stringfellow, Oak
dale, chairman roads committee;
Representative Osterman, Central
City, chairman revenue and tax
ation committee.
WINTER ITEMS!
I solved my winter starting
troubles at Gambles—Installed a
Super-Active Batery and put in
Tiger Winter Oil—A Pennsylvania
Base Oil that pours at 25 degrees
below—And. do those 51 plates have
zip, $6.79 exchange.
NATIONAL AFFAIRS
By Frank P. Litschert
Congress is now in session and
the nation still survives—without
inflation or any of the dire things
which have been predicted. At least
it survives up to this time, altho
there is still plenty of opportunity
for mischief, if anybody has it in
mind.
In spite of the overwhelming
New Deal victory in the last con
gressional election there are many
wise political investigators who be
lieve that this is going to be a
fairly conservative Congress, one
much more conservative than could
have been expected a few weeks
ago. They point to the fact that the
Republicans, altho hopelessly in the
minority, form a pretty conserva
tive bloc of their own. It has been
a long time since the Republican
representation in Congress has
been as conservative as it is today.
Only a few of the members labelled
Republicans were elected on radical
platforms. The so-called radicals
either joined the New Deal party
or went in on third party labels.
There are a few exceptions of
course, but they are pretty few this
year. Of course, the New Dealers
are greatly in the majority and
here we must look for a lot of
political irregularity if we are to
find it at all. Still some of those
who have analyzed the situation
say that a great many conserva
tive Democrats were elected and
that the President, with his great
prestige, will be able to block a lot
of so-called radical legislation if
he chooses to do so.
It would seem that a great many
battles are to be fought between
the spenders and those who are
said to be thinking about a bal
anced budget. This is not surpris
ing. In nearly every state and
congressional district, one of the
big issues raised by the majority
was the ability of the majority
statesmen to get things bigger and
more expeditiously for the dear
people than could be secured by
the minority candidates. A great
many statesmen therefore are
pledged to the old idea of “spend
ing 'til it hurts.” When these is
sues come up it ^ed that
President Roosevelt himself will be
in charge of those who want to
tighten the strings on the public
purse. It has generally been the
chief executives who have demand
ed care in the spending of public
money. If this be true, then it
immediately becomes evident that
Mr. Roosevelt wdth his personal
popularity and all his hold on Con
gress has T!is work cut out for him.
It will require all his political skill
and statesmanlike qualities to come
out successful. This last campaign
was one in which spending was well
advertised.
There are many programs for
spending money which will be pre
sented in one form or other in the
present Congress. Among those
which are outside the ordinary run
of relief and government expendi
ture, the following nine have been
localized and present to view by
Oliver McKee, Jr., the well known
Washington correspondent of the
Boston Evening Transcript:
1. The soldier’s bonus represent
ing an immediate outlay of two
billion dollars or more. This de
mand comes to a head as a direct
I
result of the lavish spending pol
icies of the federal government.
2. The gigantic planning pro
gram of the National Resources
Board, calling for an ultimate ex
penditure several times the amount
of the existing public debt.
3. A farm mortgage inflation
scheme, to the tune of three billions
or so.
4. An additional billion, perhaps
more, for the Home Owners Loan
Corporation so that it may con
tinue to save home owners in dis
tress—at the expense of the Tres
ury.
5. Appropriations for public
works and relief that are almost
certain to go beyond the recom
mendations contained in the budget.
6. Increases in the army and
navy, with substantial appropria
tions for modernization.
7. Utopian schemes, like those of
the Townsend $200 a month plan,
under which the doors of the Treas
ury would be opened wide to sub
sidize leisure.
8. Proposals to spend a couple of
billion dollars to eliminate grade
crossings on railroads.
9. Old age and unemployment in
surance, to be largely financed by
the federal government, as a sub
stitute for the minimum federal
cost involved in the plans which the
President is believed to have under
consideration.
Mr. McKee continues: “This by
no means exhausts the list of
spending projects which will be de
posited in House and Senate once
the members of the Seventy-fourth
Congress have unpacked their bag
gage. Most of the items on the
above list will have substantial
support, enough at many points to
transcend the loyalty of individual
Democrats to the legislative pro
gram of the administration.’’
We are certainly going to see
the battle of the century between
those who wish to spend and those
who wish either to save or to em
ploy the money differently. The
victory is still dQubtful but it is to
be remembered that spending was
(Continued on page 5, column 4.)
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