In replying to inquiries from the press the following information in round numbers has been furnished by the Director of the Budget as to the economies made during the past year and the probable fiscal situation upon July first.
Present indications are that the financial transactions of the Government for the fiscal year ending June 30, 1931, will show an increase of about $500,000,000 in the national debt. The deficit is from about $900,000,000 to $950,000,000, of which about $440,000,000 will be due to the statutory redemption of the debt.
The deficit is principally due to a falling off in receipts of the Treasury, from taxes and other sources caused by the depression which will apparently be about $840,000,000 below the fiscal year ended June 30, 1930. Added to this is the additional burden of about $50,000,000 fall in postal receipts.
There have also been large increases in expenditures for construction work and agricultural relief and for veterans' services amounting to about $540,000,000 above that of the last fiscal year.
These figures alone—a reduction of $890,000,000 in receipts and an increase of nearly $540,000,000 in expenditures in the above items—would indicate that the government would be over $1,430,000,000 worse off this year than last.
However, deferments and reduction in these expenditures in other parts of the government largely due to the economy drive last summer amount to about $180,000,000. During the fiscal year ended last June the debt was reduced by $305,000,000 in excess of statutory amount while this year it is held to the legal requirements. These two sums make a difference in the situation of about $485,000,000 and result in a final deficit of about $900,000,000 or $950,000,000.
As stated, of this deficit of $900,000,000 or $950,000,000, about $440,000,000 will be expended in the statutory redemption of public debt so that the net increase in the debt for the fiscal year will probably be about $500,000,000
The Administrator of Veterans' Affairs reports that the loans so far made upon bonus certificates now total $1,098,947,000 to 1,971,966 individuals of which $284,481,000 has been furnished from insurance and other funds, about $60,000,000 from the banks, and $754,466,000 from sale of Treasury obligations.