Message to Congress on the Budget.

To the Congress:

In my budget message to the Congress of January 3, 1934, I said to you:

"It is evident to me, as I am sure it is evident to you, that powerful forces for recovery exist. It is by laying a foundation of confidence in the present and faith in the future that the upturn which we have so far seen will become cumulative. The cornerstone of this foundation is the good credit of the Government.

"It is, therefore, not strange nor is it academic that this credit has a profound effect upon the confidence so necessary to permit the new recovery to develop into maturity.

"If we maintain the course I have outlined, we can confidently look forward to cumulative beneficial forces represented by increased volume of business, more general profit, greater employment, a diminution of relief expenditures, larger governmental receipts and repayments, and greater human happiness."

The budget which I submitted to the Congress proposed expenditures for the balance of this fiscal year and for the coming fiscal year which, in the light of expected revenues, called for a definite deficiency on June 30, 1935, but, at the same time, held out the hope that annual deficits would terminate during the following fiscal year.

It is true that actual expenditures since January have proceeded at a slower rate than estimated; nevertheless, it must be borne in mind that, even though the actual deficit for the year ending June 30, 1934, will be below my estimate, appropriations are still in' force and the amounts actually to be expended during the following fiscal year will, therefore, be increased over and above my estimate for that fiscal year. In this connection it is relevant to point out that during the fiscal year 1935 it is estimated that there will be actually expended on public works $1,500,000,000 out of appropriations heretofore made.

In my budget message of January 3, 1934, it was pointed out that there could be no abrupt termination of emergency expenditures for recovery purposes, that the necessity for relief would continue, and that appropriations amounting to $3,166,000,000, in addition to the appropriations contained in the budget itself, would be requested for the two fiscal years ending June 30, 1935.

The present Congress has already made appropriations out of which, for the two fiscal years in question, it is estimated there will be expended the following sums:

Relief $950,000,000

Crop Loans 40,000,000

Farm Mortgages 40,000,000

Reconstruction Finance Corp 500,000,000

Veterans' Benefits 22,000,000

Army Air Corps 5,000,000

Flood Control, Mississippi River, etc 19,000,000

Independent Offices Act 228,000,000

$1,844,000,000

This leaves a balance of $1,322,000,000 to be appropriated.

Out of this balance it is necessary first to take the specific items to be appropriated for:

Federal Land Banks—

Subscription to paid-in surplus $75,000,000

Reduction in interest payments 7,950,000

Emergency Bank Act and Gold Transfer 3,000,000

Internal Revenue Service 10,000,000

Salaries, Office of the Secretary of the Treasury 100,000

Secret Service 45,000

This leaves $1,225,905,000 available for the following purposes:

Civilian Conservation Corps Camps, Public Works, and Relief Work, in addition to amounts already appropriated, and including aid to the dairy and beef cattle industries.

It is estimated that the minimum requirements for the Civilian Conservation Corps will be $285,000,000 and that the amount available, therefore, for public works and relief will be $940,905,000. A very simple checkup of these figures shows that they total $3,166,000,000, to which reference was made in my budget message of January 3, 1934.

It was my thought in January, and is my thought now, that this sum should be appropriated to me under fairly broad powers because of the fact that no one could then, or can now, determine the exact needs under hard and fixed appropriation headings. In furtherance of this thought it seems appropriate to provide that any savings which can be effected out of certain appropriations made for emergency purposes shall be available for emergency relief purposes.

In my judgment an appropriation in excess of the above amount would make more difficult if not impossible an actual balance of the budget in the fiscal year 1936, unless greatly increased taxes are provided. The present estimates should be sufficient as a whole to take care of the emergencies of relief and of orderly re-employment at least until the early part of the calendar year 1935. If at that time conditions have not improved as much as we today hope, the next Congress will be in session and will have full opportunity to act.