Las Vegas Age

903 MILLIONS DEFICIT IN TREASURY IS SEEN
Misjudged Duration Of Depression, One Of Reasons Given
Revenue Reduced And Expenditures Were Greater This Year

BY WILLIAM C. MURPHY. JR
United Press Staff Correspondent

WASHINGTON. July 1 (U.P)The federal government closed its books for the fiscal year 1931 about $1,550,000,000 worse off than it was on July 1, 1930. according to Treasury figures made public today. The total is made up of a $903,000,000 deficit contrasted with the last year's $184,000,000 surplus. to which is added a $463,000,000 net increase in the public debt.

EXPENDITURES GREATER
Acting Secretary of Treasury Ogden Mills ascribed the result to "a considerable reduction in federal reserves" and "an increase in expenditures."
Appropriations for agricultural aid and relief. additional benefits for war veterans and the accelerated government construction program designed to relieve unemployment were held responsible for most of the increases in expenditures.
Enormous shrinkages in revenues from the sources which supply most of the funds to operate the government were recorded. Customs and internal revenue receipts, exclusive of income taxes aggregated $2,808,000,000 or $818,000,000 less than in 1930. Income tax collections dropped to $1,860,000,000, a decrease of $551,000,000.
Total ordinary receipts aggregated $3,317,000,000 or $861,000,000 less than in 1930 while expenditures chargeable against ordinary receipts increased $226,000,000 to a total of $4,220,000,000.

SLUMP MISJUDGED
The treasury misjudged the length and severity of the economic depression when its annual report was submitted last fall. Mills said.
"In the annual report of the secretary for the fiscal year 1930 the deficit for 1931 was estimated at $180,000,000 or $723,000,000. less than the actual deficit shown for the year." Mills said, explaining that:
"The treasury underestimated the severity of the depression and the effects which the fall in prices of commodities and of securities and the reduction in the volume of business operations would have on taxable incomes."
Mills explained the $205,000,000 excess of expenditures over budget estimates as follows:
93 MILLION EXCESS
"The major increases included an excess of $93,000,000 over estimated expenditures of the department of agriculture. due largely to activities under agricultural relief measures and federal aid to highways; an increase of $91,000,000 over the estimated amount of loans under the agricultural marketing act; an increase of $35,000,000 in the postal deficiency: and the advance appropriations of $112,000,000 to the adjusted service certificates fund which ordinarily would have been made in the fiscal year 1932.
On the economy side of the ledger. representing cuts below budget estimates. Mills listed $59,000,000 for the treasury department. $21,000,000 for the navy department: $28,000,000 for tax refunds: and $14,000,000 for shipping board loans.
While the gross public debt mounted from $16,185,000,000 on July 1. 1930 to $16,801,000,000 today, Mills pointed out that:
"Money market conditions during the year permitted the issue of new debt at unusually low rates with consequent reductions in annual interest charges on the public debt."
An increase of $153,000,000 in the general fund balance cut the $616,000,000 gross increase in the public debt to a net increase of $463,000,000.