xt7g7940sf5h_3 https://nyx.uky.edu/dips/xt7g7940sf5h/data/mets.xml https://nyx.uky.edu/dips/xt7g7940sf5h/data/57m2.dao.xml Des Cognets, Russell 19181957 1.35 Cubic Feet 3 boxes archival material 57m2 English University of Kentucky The physical rights to the materials in this collection are held by the University of Kentucky Special Collections Research Center.  Contact the Special Collections Research Center for information regarding rights and use of this collection. Russell Des Cognets papers Prohibition -- United States. World War, 1914-1918 -- France. Political letter writing Kentucky -- Lexington. New Deal, 1933-1939. American Liberty League pamphlets text American Liberty League pamphlets 2016 1935 1934-1935 section false xt7g7940sf5h_3 xt7g7940sf5h ‘k ‘k
W hy?
The American Liberty
League
By
. JOUETT SHOUSE '
President
‘k
* +z~
KENTUCKY BRANCH
AMERICAN LIBERTY LEAGUE
307 MARTIN BROWN BLDG.
LOUISVILLE, KY.
AMERICAN LIBERTY LEAGUE
National Headquarters
NATIONAL PRESS BUILDING
WASHINGTON, D. C.

 W by 7
I
The American Liberty League
*
FOR several thousand years some hundreds of
churches have been advocating respect for and
observance of the Ten Commandments. So far,
complete success has not been attained.

For more than one hundred and fifty years the
American people generally have assumed that the
Federal Constitution was so firmly established that
it needed no continuing advocacy for its protection.
Events of the past few years have indicated that
this was false optimism.

That explains why the American Liberty League
came into existence and why its founders intend
that it shall remain in existence for as long as may
be necessary.

The Edict of A constitution has been
- described as a restraint upon

the Amncan the powers of government.
People That is certainly true as ap-
plied to a government in ex—

istence at the time the constitution is adopted. But
the American Constitution is more than that. It is
the actual charter of the Federal Government; it
called that government into existence; it specified
what the government may do and what it may not
do; it is the edict of the people of the United States.

The Constitution of the United States amounts
to a contract between the people and the officers
of government; executive, legislative, and judicial.
That contract delegates to officials the power to do
certain things and it forbids them to do certain
other things.

Contracts may be modified or cancelled, but only
by mutual consent or by methods specified in the
contracts. The Federal Constitution contains ade-
quate provisions for its own modification through
the orderly processes of amendment. If the Ameri-
can people wish to change the form of their govern-
ment from a federal republic with limited powers to
an absolute dictatorship or to state socialism, they
can do so by appropriate amendments to the Con—
stitution. However, so far, they have done nothing
of the kind, and the existing contract is still bind-
ing, whether it is observed or not.

One basic purpose of the American Liberty
League is to see to it that this contract is complied
with—faithfully, honestly, completely, and without

 evasion under the camouflage of giving new names
to unconstitutional proposals.
A National By the very nature of its
Non—Partisan bi-partisan parentage and
membershlp the League 15
Movement not a partisan organization.
Neither is it an organization
devoted to the interests of any particular segment
of the population, geographic, social, racial, or
financial.

The League’s aims are very definite. They are
as public as it has been possible to make them.
They are embodied in its articles of incorporation
as follows:

“The particular business and objects of the
Society shall be to defend and uphold the Con-
stitution 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.”

It will be noted that the statement of principles
links the “rights of persons and property.” There
is a very good reason for that conjunction. In the
view of those who comprise the membership of the
League the superficially drawn distinction between
“human rights” and “property rights” is a catch-
phrase and nothing more. The two so—called cate-
gories of rights are inseparable in any society short
of Utopia or absolute communism. To protect a
man’s so-called human rights and strip him of his
property rights would be to issue him a fishing
license and then prohibit him from baiting his hook.
Bureaucracy Furthermore there is one

very clear lesson to be learned
Menace; from history—namely, that
All Rtghts governmental disregard for

property rights soon leads to
disregard for other rights. A bureaucracy or des-
potism that robs citizens of their property does not
like to be haunted by its victims.

The prevention of governmental encroachments
upon the rights of citizens was one of the principal
reasons for the division of the Federal Govern—
ment into the Legislative, Judicial and Executive

 branches. Where one man, or one bureau, is law-
maker, prosecuting attorney, judge, jury, and
sheriff, there is no protection for the citizen.

There is no justification, under the traditional
American system of government, for permitting an
executive bureau to issue orders having the force
of laws and subjecting citizens to criminal or civil
penalties; there is no justification for permitting an
executive official to take over the legislative pre-
rogative of levying taxes and specifying the pur-
poses and manner of disbursement of revenues.

The need for rigid observance of constitutional
restrictions is always greater in emergencies than in
more normal times because the emergencies pro—
duce constant pressure for disregard or evasion of
limitations.

Such pressure is dangerous enough when exerted ,
upon the Senate or the House, though in Congress
the interests of one group or section may be counter-
balanced by the confiict with other groups or sec-
tions and the net result is likely to be action in the
interest of the entire nation. However, a totally
different situation arises when Congress evades its
constitutional responsibilities and delegates legisla-
tive powers to one man or one bureau.

What the The American Liberty
Liberty League League believes that Con-
. hress, hav1ng been elected to
Believes represent the people, should
not shirk its task by delegat—V

ing authority to bureaus to promulgate arbitrary
regulations having the force of laws. Likewise, the
League believes that Congress should not attempt
to delegate judicial power to executive bureaus.
The Courts of the nation and not government
bureaus should pass upon questions of civil justice.

It is also the belief of the League that the right to
authorize the spending of public funds and to raise
revenue is solely the function of the legislative
branch of the government and that balanced bud—
gets and sound fiscal policies are possible only while
Congress retains its full responsibility for the nature
and manner of spending public money.

In its efforts to promote its beliefs before the
American people, the League will deal in facts and
not in visions. Its objective is to persuade the elec-
tive officials of the government to follow the prin-
ciples in which the League believes.

The methods which the League will utilize while
working for this objective will vary with the situa-
tions presented. However, they will be effective
methods and they will be unremitting.

@4

 i
. Message
<> <> <>
A factual analysis of President
Roosevelt’s recommendations
to the Congress for expendi-
tures by the Federal Govern-
ment for the fiscal year ending
June 30, 1936—3 general dis-
cussion of continuing deficits,
and increased public debt
1 <> <> <>
AMERICAN LIBERTY LEAGUE
National Headquarters
National Press Building
WASHINGTON. D. C.
Document No. 10

 l
l
The Budget Message I
Three features of the Federal budget for the fiscal l
year 1936 are of a highly disturbing character.
These are: .
I. A return to a level of regular expenditures as
high as that which early in the depression occasioned
a nationwide revolt.
II. A prospective increase in the public debt by
nearly two and a half billion dollars beyond the
point which the people were told a year ago should
mark the end of continued Treasury deficits.
III. A huge emergency fund which permits execu-
tive allotments without adequate legislative direction
for public works projects which may lack economic
justification and may not accomplish the purpose for
which they are intended.
1. REGULAR EXPENDITURES
The increase in the regular expenditures of the
government has escaped the attention which it de-
serves. The new budget for regular purposes pre-
sents a startling increase. In effect, it wipes out the
savings of upwards of a billion dollars in ordinary
governmental costs which were accomplished in the
attempted drive for economy which was commenced
during the final year of the last administration and
was carried forward with a marked degree of success
in the early months of the present administration.
Whatever may be claimed with respect to the senti-
ment of the people of the country regarding expendi-
tures for emergency purposes, it can not be asserted ;
that a mandate has been given for an expansion of i
regular expenditures. The two parties in the 1932
campaign sought to outdo each other in promises to '
reduce ordinary governmental expenditures. The
Republican Party, then in power, urged “prompt and
drastic reduction of public expenditure and resist— ,
ance to every appropriation not demonstrably neces-
sary to the performance of the essential functions of
government, national or local.” The Democratic ll
Party promised “an immediate and drastic reduction
of governmental expenditures by abolishing useless ‘
commissions and offices, consolidating departments
and bureaus, and eliminating extravagance, to ac- i
complish a saving of not less than twenty-five per i
cent in the cost of Federal government.” f
[2 1 4.
‘2
,

 l

4

Up to this time the policy of economy in regular
expenditures ostensibly has remained in effect. On
the basis of actual expenditures for regular purposes
of about $3,000,000,000 in the fiscal year 1934, it
has been possible for the party now in power to

' claim fulfillment of its pledge for a twenty-five

l per cent reduction from the former level of about
$4,000,000,000.

4 What has taken place in the preparation of the
new budget may be realized from a highly significant

. paragraph which does not appear in the President’s
budget message but is buried in the body of the re-
port in an analysis of appropriation and expenditure
estimates. This paragraph in summing up a tabula-
tion of regular expenditures says:

“The foregoing expenditures, totaling for
1936 approximately $3,898,000,000, may be
regarded as the regular requirements of the
government. These expenditures for 1936 are
$662,000,000 greater than the regular expendi-
tures estimated for 1935, and $1,077,000,000
greater than the actual expenditures for these
purposes in 1934.”

The total of $3,898,000,000 includes statutory
debt retirements but does not include agricultural
benefits, refunds of processing taxes and an item of
$40,000,000 to meet estimated deficits. The esti-
mate of expenditures for general purposes, which
contains all of these items on the basis of the classifi-
cation which has been used for the last year and a
half in the daily Treasury statement, totals $4,398,-
402,134. This total, which appears in the annual
report of the Secretary of the Treasury, represents
an increase of $1,297,487,600 over actual expendi-

E tures for the same purposes in the fiscal year 1934

l amounting to $3,100,914,534.

, In grouping separately so-called general and emer—
gency expenditures in its daily statement, the pur-
pose of the Treasury has been to show under one
heading the items that are properly a charge against

v the ordinary receipts of the government from taxa-
tion, customs duties and miscellaneous sources and
under a different heading the items which are a part

i of the emergency program and which it has been the
policy to finance with borrowed money.

The total of general expenditures as shown in the
daily Treasury statement furnishes a guide to the

, amount of money which must be raised at such time
as the entire budget is brought back into a real

f balance. It is proper to include the annual debt

1‘ [3]

I.

I.

 retirement item in general expenditures inasmuch as 2
this is a statutory charge against ordinary receipts.

In the daily Treasury statement processing tax 2
revenues have been included in general receipts, ‘
while agricultural payments and refunds of process- .
ing taxes have been included in general expendi-
tures. These payments are supposed to be financed
by processing tax receipts and are, therefore, not a
charge upon borrowed money. r

In segregating general expenditures of a perma—
nent character there is good reason to eliminate the 2
agricultural benefits which at present at least have
a temporary status. It does not make a great deal
of difference in a computation bearing on the balanc-
ing of the general budget as to whether or not the
self-financing agricultural emergency program is in-
cluded. The situation is different with statutory
debt retirements, which should be included in any
statement of general expenditures if a proper per—
spective as to future regular governmental costs is
to be maintained.

In the President’s budget message it was stated

that except for expenditures to give work to the
unemployed “every current expenditure of what-
ever nature will be fully covered by our estimates of
current receipts.” The President said that “such
deficit as occurs will be due solely to this cause.”
In his tabulation supporting this statement the Presi—
dent eliminated processing taxes from general re-
ceipts and both agricultural benefits and public debt
retirements from regular expenditures. Debt retire-
ments were omitted from the President’s tabulation
of regular expenditures despite the fact that in the
next paragraph he included them in an enumeration
of various “regular” expenditures which have shown
an increase.

As against the President’s assertion that regular
expenditures will be balanced by ordinary receipts,
the tabulation on the daily Treasury statement basis 2
in the annual report of the Secretary of the Treasury
tells a different story. The general budget was in 2
balance in the fiscal year 1934, receipts exceeding
general expenditures, including public debt retire— '
ments, by about $15,000,000. In the fiscal year of
1935 estimated general expenditures exceed receipts
by about $225,000,000. The estimates for the fiscal
year 1936 show an excess of general expenditures
over receipts amounting to about $407,000,000.

The deficit in the general budget is in prospect for
the fiscal year 1936 despite the fact that receipts are
estimated at a total about $876,000,000 greater than
for the fiscal year 1934.

l4 l

 , How the new level of regular expenditures for 1936
compares with that in the past may be seen from a

1 tabulation of totals for the fiscal years between 1916,

‘ the year before our entrance into the World War,

. and 1930, which marked the beginning of the de-
pression. To place the total for the fiscal year 1936
on a comparable basis with the figures as used in the
annual reports of the Secretary of the Treasury and

r to which the public is accustomed, it is necessary to
add $179,167,922 for trust funds which include such

1 items as the government life insurance fund, the
Civil Service retirement fund and District of Colum-
bia expenditures. There is omitted from the trust
fund total such items as are connected with the
gold profit and silver purchases. Agricultural bene-
fits are omitted. Statutory debt retirements are
included.

The following totals are for all expenditures for
years between 1916 and 1930, the 1936 estimate
being for only “regular” as distinguished from “emer—
gency” outlays:

1916................ $734,056,202
1917 1,977,681,751
1918 World War. . . .1 12,697,836,705
1919 18,522,894,705
1920...........,..., 6,482,090,191
1921....,...,...,... 5,538,209,189
1922.............,.. 3,795,302,500
1923........,...,.,. 3,697,478,020
1924,...,......_.... 3,506,677,715
1925......,......,.. 3,529,643,446
1926................ 3,584,987,874
1927......._.....,.. 3,493,584,519
1928.........,.__,., 3,643,519,875
1929......,....,.,.. 3,848,463,190
1930...._.,..,_..,,. 3,994,152,487
1936 (regular only), . . . 4,117,570,056
The estimated total of regular expenditures for
, 1936 is greater than the total of all expenditures for
any year between 1922 and 1930, inclusive. The
' 1931 fiscal year total of $4,219,950,339 was abnor~
mal to the extent of an outlay of about $190,000,000
for the Farm Board loan fund and a postal deficit of
about $145,000,000, due largely to the slackening of
business. The normal regular expenditures of that
year amounted to about $3,900,000,000. In the
fiscal year 1932 total expenditures soared to $5 ,2 74,-
000,000, of which all above about $4,000,000,000
represented emergency items, including funds for the
[5]

 Reconstruction Finance Corporation, the land banks,
the Farm Board and a huge postal deficit.

Expenditures in the fiscal year 1933, the last
year in which general and emergency items are not
segregated, amounted to $5,306,623,054. In the
fiscal year 1934 general and emergency expenditures i
amounted to $7,105,050,084. The estimate for the
present fiscal year of 1935 is $8,581,069,026, and ill
for 1936, $8,520,413,609. The totals for 1934, 1935 -
and 1936 are given as they appear in the President’s
budget message. Trust funds, amounting respec—
tively to $138,675,539, $179,672,622, and $179,167,-
922, exclusive of gold Profit and silver items, have
been omitted.

The administration is to be commended for having
shifted from the emergency to the regular budget
about $200,000,000 for ordinary public works, in-
cluding river and harbor improvements and federal
highways and for the Tennessee Valley Authority.
Inasmuch as expenditures of this character are to go
on indefinitely, it is proper to include them as part
of the general budget. The appropriation of specific
sums for these purposes will enable Congress to
scrutinize these items more carefully than if the
projects are financed by allotments from emergency
funds.

Unfortunately, a considerable part of the increase
in regular expenditures is due to a greater liberality
all along the line. While expenditures for veterans
remain below the totals for 1931, 1932 and 1933, the
1936 estimated total is almost as high as in 1930.

Interest on the public debt will account for an in-
crease of about $205,000,000 over the amount used
for this purpose in 1930. Expenditures for national
defense will be about $180,000,000 greater in 1936
than in the current year of 1935. The restoration
of the final five per cent of the fifteen per cent salary
reduction of all government employees accounts for
an increase of about $65,000,000 over the current i
year.

Comparisons of estimated expenditures for the
regular departments in the fiscal year 1936 with it
actual expenditures in 1934 make it appear that
the economy policy is a thing of the past.

Increases for these departments in the two-year
period include about $21,000,000 for the Interior
Department, about $20,000,000 for the Treasury
Department, about $9,000,000 for the Department
of Commerce, about $7,000,000 for the Department
of Agriculture, about $5,000,000 for the Depart-
ment of Labor, about $3,000,000 for the Department

[6]

 of Justice, about $2,000,000 for the State Depart-
ment, and about $8,000,000 for miscellaneous per-
manent independent offices and commissions.

It is shown in the budget that the total payroll of
the government in the fiscal year 1936 will amount

i to $1,356,964,579, of which $1,1so,soo,9o9 is for
civilian employees and $226,463,670 for commis—

a, sioned officers and enlisted personnel in the army

- and navy and other services. The total payroll in
the fiscal year 1934 was $1,152,668,420, amounts
for the two classes being $966,293,813 and $186,-
374,607.

Congress in the present session should give close
attention to the expenditures of the regular govern-
mental establishment. Approval of the expanded
regular budget means a postponement of the date
when all expenditures can be brought into balance.
It means, furthermore, that there can be little hope
of a. material lightening of the present heavy burden
of taxation.

II. THE PUBLIC DEBT

The steadily mounting public debt presents a
situation which calls for careful consideration by
Congress.

The soundness of the Nation’s financial structure
will be jeopardized by a debt burden which is ex-
cessive. Once the debt of a nation goes too high
there is a weakening of confidence which is reflected
in higher interest rates in the marketing of govern-
ment securities. If it becomes too difficult to borrow,
the next step is inevitably the issuance of flat cur-
rency to meet expenditures. Such a course leads
to a depreciation of currency and to inflation.

It is impossible for anyone to state exactly how
high our public debt may be allowed to go with
safety. A year ago President Roosevelt in his annual
budget message estimated that the debt would in-

.” crease to $31,834,000,000 by June 30, 1935.

The President then said:

i. “It is my belief that so far as we can make

‘ estimates with our present knowledge, the gov—
ernment should seek to hold the total debt
within this amount. Furthermore, the govern-
ment during the balance of this calendar year
should plan to bring its 1936 expenditures, in-
cluding recovery and relief, within the revenues
expected in the fiscal year 1936.”

Whether the $31,834,000,000 total represented a
precise estimate of a proper limit for debt increase

[7 l

 or not, the country accepted it as a maximum to
which the debt might go with safety. The assurance
given that the government would seek to hold the
debt within that total was a factor which tended to
give confidence to business and to remove fear of
inflation on a large scale.

The President’s statement in the new budget that
the debt at the end of the fiscal year 1936 may in—
crease to $34,239,000,000 injects a disquieting ele-
ment into the situation. The failure of the President
to fix this total as a new limit for debt increase adds
further reason for a feeling of uncertainty. There is
no assurance that the $4,000,000,000 lump sum ap-
propriation which the President asks for relief of
unemployment through public works and projects of
other kinds will mark the end of emergency outlays
which must be financed by borrowed money.

We are at present in the fifth year of Treasury
deficits. The first deficit was in the fiscal year 1931
when expenditures, including statutory debt retire—
ments, exceeded receipts by $902,716,845. In the
fiscal year 1932 the deficit was $3,153,097,507; in
1933, $3,068,266,874; and in 1934, $3,989,496,035.

The official estimate of the deficit for the current
fiscal year of 1935 is $4,869,418,338, and for 1936,
$4,528,508,970. The 1935 and 1936 estimates are
exclusive of deficits of $12,800,643 and $10,114,812,
respectively, in trust fund accounts, which are not
mentioned in the President’s message.

There is small consolation in the fact that the
estimated deficit for 1936 is a little less than that for
1935. The total would be considerably greater ex-
cept for the use of revolving funds such as of the
Reconstruction Finance Corporation to meet new
emergency outlays.

The aggregate deficit of the six fiscal years from
1931 to 1936, inclusive, will be in excess of $20,500,-
000,000. The deficit of the six years will be a total ,
much larger than the entire public debt at the begin-
ning of the depression. The debt on June 30, 1930,
amounting to $16,185,308,299, showed a reduction
of more than $10,000,000,000 from the peak of the '
war debt, $26,596,701,648 on August 31, 1919.

On June 30, 1916, the end of the last fiscal year
prior to our entrance into the World War, our entire
public debt amounted to only $1,226,145,568. The
per capita debt at that time was only $11.96. Our
present public debt, which on December 31, 1934,
amounted to $28,478,663,924, represents a per
capita of about $232.

[ 8 l

 The present annual interest on the public debt is a
total greater than the entire ordinary expenditures in
any year in the history of our country prior to the
year 1917 with the exception of two years during the
Civil War.

The interest on the public debt for the fiscal year
1936 is estimated at $875,000,000, as compared with
$835,000,000 in the current fiscal year of 1935 and
$756,000,000 in 1934. In the fiscal year 1932 the
interest on the debt dropped below $600,000,000.
Before the World War our annual interest charges
were less than $25,000,000.

Every indication is that the present tremendous
debt will be passed on to future generations. Such
amounts as may be returned to the Treasury in the
liquidation of emergency loans will be a relatively
small part of the total debt. The present statutory
sinking fund is not adequate for a rapid reduction.
It was intended originally to be sufficient to retire in
a period of about thirty-five years from the date of
the World War the half of the war debt which repre—
sented our own expenditures. It was then supposed
that the other half of the debt, representing loans to
our allies, would be cared for through repayments.
Not only have foreign nations ceased repayments
on their debts but all the retirements effected through
the sinking fund in the decade following the World
War have been nullified by the deficits of the present
depression period.

Fortunately, our government has had but little
difficulty thus far in borrowing sufficient money to
meet its needs. The tremendous charges for general
and emergency purposes have been met by ordinary
revenues supplemented by borrowings by regular
methods. The financing of deficits, however, has
been carried largely by the banks, which have ab-

’ sorbed as much as five-sixths of the new offerings
by the Treasury in recent years. It is estimated that
as much as sixty per cent of the total public debt is

» being held by the Federal Reserve banks and the
commercial banks, including both securities owned
by them and those held as collateral on loans.

The financing of deficits through the banks is an
inflationary process which is menacing to the credit
structure.

There are danger signals ahead which warn that
the government should eliminate deficits and conse—
quent debt increases at the earliest possible date.

[9 l

 III. EMERGENCY FUNDS

The President’s request for blanket authority to
use $4,000,000,000 for relief of unemployment illus-
trates strikingly the trend toward increased execu-
tive authority at the expense of the legislative branch
of the government.

Under the President’s recommendation this vast
sum would be “subject to allocation by the executive
principally for giving work to those unemployed on
the relief rolls.”

The details of the President’s program have not
been made known, but it is evident that it will in-
volve operations of many different kinds and that
numerous collateral issues of policy will be raised.

What is proposed is that the President shall have
power to decide all the different questions of policy
arising in connection with an expenditure of an
amount of money equal to the total annual costs of
the government at the beginning of the depression.
Congress is asked to waive entirely its right and duty
to make proper segregation of the purposes for which
the money is to be spent.

There has been nothing so broad as this delegation
of power with respect to expenditures heretofore.
Not only is the sum larger than the $3,300,000,000
authorization for public works in the National In-
dustrial Recovery Act but that Act set up certain
limitations on the manner in which the money could
be expended.

While an even larger amount than the present
$4,000,000,000 has been handled by the Reconstruc-
tion Finance Corporation, its funds have been used
only in accordance with detailed specifications in acts
of Congress.

The authorization for the expenditure of $4,000,-
000,000 would take the place of authority now
granted in no less than three different laws. These
are Title II of the National Industrial Recovery Act
relating to public works, authority under which ex- ‘
pires on June 16; the Federal Emergency Relief Act,
authority under which expires on May 12; and the
Civilian Conservation Corps Act, authority under ,
which expires March 31.

If the amount were to be used only for direct relief,
there would not be the occasion for specific instruc-
tions by the Congress in respect to its expenditure.
The President proposes to embark upon an extensive
program for conservation and development of nat-
ural resources which is of a character that demands
careful consideration by Congress. The principles
which, according to the President in his annual mes-

l 10]

 sage to Congress, will govern the undertaking are
excellent, but there remains the question as to what
may be included or may develop in the actual carry—
ing out of the plan.

The Federal government should not shirk its full
duty in providing relief for the unemployed. Pri-
marily, relief is a concern of the states and local
communities. The decision of the administration to
return so-called unemployables to local relief rolls
is proper. T o the fullest extent possible the states,
local governments and private relief agencies should
bear the load of unemployment relief. The burden
has become so great, however, that the Federal
government can not escape a large share of the
responsibility.

The present public works program has failed to
accomplish what its sponsors hoped it would do.
The amount of employment created has not been
sufficient to justify the use of funds for unnecessary
projects. The American Federation of Labor’s most
recent figures show a decrease of only a few hundred
thousand in the number of unemployed since July
1933 and an actual increase since November 1933.
Of funds allotted for public works less than half has
been expended.

A reasonable amount of work relief is proper,
provided the projects are useful and possess eco-
nomic justification, and provided further that the
governmental activities do not interfere with private
business.

It is a recognized fact that allotments from present
public works funds have been given to projects which
have previously been held by Congress to lack eco-
nomic justification.

The $4,000,000,000 appropriation is roughly
equivalent to the estimated deficit for the fiscal year
1936, exclusive of statutory debt retirements. It is
this amount which stands in the way of a balanced

. budget. If there could be assurance that it would
be the last great expenditure of this character, the
American people would not begrudge the amount
provided it is spent wisely and without waste. It

' has been indicated by the President that the sugges-
tions in the recent report of the National Resources
Board will furnish guidance in the expenditure of
the fund. The amount now requested is only a frac-
tion of the total which might be expended over a
period of years in the projects suggested in that
report. What is likely to happen is that at the end
of the fiscal year 1936 many projects will be only
partly completed and as a consequence it will be

I 11 l

 necessary to appropriate large additional sums to
carry them on.

The President has asked Congress to transfer
$900,000,000 from unobligated emergency author—
izations to direct relief needs during the remaining
months of the current fiscal year. The effect of this
method of appropriation is to use funds of the Re-
construction Finance Corporation and other agencies
which might otherwise be returned to the Treasury.
Such action tends to cut into revolving funds which
represent assets recoverable at some future period.

It would seem fairer to the public to appropriate
such money as is needed for relief directly from the
Treasury instead of using unobligated emergency
funds. The method proposed seems to imply that
the money is already available and that it involves
no burden upon the taxpayers. This is not the fact.

The entire situation with respect to emergency
funds calls for a careful study by Congress to the
end that