The President's News Conference
THE PRESIDENT. I haven't anything for quotation this morning. I have two or three questions on which I can give you the background.
CONFERENCE WITH THE PRESIDENT-ELECT
Governor Roosevelt and I are having a conference on Friday morning. As far as I know it is confined entirely to questions of foreign affairs, which the two administrations are equally interested in carrying forward. It will be a discussion of what is going on. Other than that there is nothing contemplated that I know of.
Q. Mr. President, by foreign affairs does that include the debt questions?
THE PRESIDENT. Not necessarily.
FEDERAL EXPENDITURES AND REVENUES
Now, there was some discussion in Congress yesterday with regard to the economies. Mr. Byrns 1 misunderstood one sentence--which was rather isolated from others in my message--construed it into the meaning that I wished Congress to appropriate a maximum of the budget. I think anyone who will read the surrounding sentences will see it is directed to the maximum economies. The fact of the case is that the Appropriations Committee and the administration uses different figures, which leads to confusion in all these discussions. We have a constant, inherent confusion in the budgetary questions arising out of the permanent and continuing appropriations as distinguished from the annual appropriations. The budget is made up to include the continuing and permanent appropriations always, so as to display the entire problem. The committee, on the other hand, deals with only the annual appropriations; so there is a constant confusion of figures there. It does not matter which base one takes if you simply stick to it either side. And, therefore, the figures which Mr. Byrns gave--and there is no incorrectness on his part--he was talking about appropriations as recommended to the committee, which do not include the permanent appropriations. Do you see ?
1 Representative Joseph W. Byrns, chairman of the House Appropriations Committee, had challenged the President's message on Federal expenditures and revenues (Item 450) and declared that, despite the President's claims, real savings had been effected in the supply bills.
But there is one difference in presentation of the budget, entirely apart from that question of difference in base, that arises out of the method in which the budget was formulated this year. If you will look at the budget message you will find that it was gotten up in two columns. The first column was the budget as estimated in the body of the budget. And the second column was the budget as modified by the additional recommendations in the budget message. New appropriations were sent up in draft to the appropriations committees as usual sometime before the budget message, and in the budget message further reductions and further economies were proposed, bringing the budget down by an additional $200-odd millions. The Appropriations Committee seems to insist upon using the preliminary figures setup and not including the supplemental reductions which were sent up and which are in column two of the budget message. If those figures were used--the final figures of the budget as sent up--the appropriations would show a saving of $43 million in the five bills already dealt with in the House committee, of more economies than those in the preliminary budget figures sent to the committee. So that by using the preliminary figures they rather have the advantage of the administration by $43 million, and at the same time they do not include the whole of the economies which were recommended. But any check of the figures that were sent up yesterday will find they are completely accurate, as they were formulated by the Bureau of the Budget after very careful examination on all sides.
There is one very important legislative matter before Congress. It is in the nature of emergency legislation, and that is the alteration of the bankruptcy laws. That is, I believe, one of the most forward steps taken in dealing with the present emergency. It goes very deeply into the whole of the problems which we are confronted with. Under the bankruptcy law as it has hitherto existed, the creditor moves in on the debtor. He sets up a process in the court which leads only to the liquidation of the property--either foreclosure of a mortgage or receivership in railways, et cetera, and commercial concerns, intended to liquidate the property and displace the former management.
The object of this bill is to secure a method by which you preserve the debtor and give him an opportunity to work out his situation. If he can make an agreement with the majority of his creditors he can then obtain the protection of the court and continue in the operation of his property. It gives him an opportunity to work out. It is the longest step that we have ever taken in the legal relations of the debtor and the creditor. Now, thousands or hundreds of thousands of people are in difficulties through no fault of their own, and in the ordinary readjustment of the economic situation they will be able to pull their businesses through on some basis of adjustment with their creditors, or even, if they have time, to pay their creditors entirely. But at the present moment under the present laws the creditor goes to the court and secures the eviction of the man from his home or his farm or the eviction, in effect, of the management from a commercial concern and starts in to liquidate. Liquidation is always destructive. Under this proposed process the debtor can get together with the majority of his creditors. And you will find that the majority of the creditors in these times are anxious for the man indebted to continue to struggle and get himself out, and they are only too glad to have him go on. The usual difficulty arrives with some minor creditor. And this gives him an opportunity to set up an agreement with the majority of the creditors and continue to conduct his business under the protection of the court.
I do not know of anything that would be of more value to the country at the present moment than the passage of that legislation. So far as I know there is no opposition to it. It is purely a question of routine or getting around to it. I think there is a widening general agreement both in the country and in the Congress. That fundamental proposed change in the bankruptcy laws, of course, was made as the result of the whole bankruptcy situation, the original recommendations as to which were sent to Congress a year ago. But the growing acuteness of the economic situation has brought it not only into more urgent desirability but has gotten it a very large public interest which it would not otherwise have.
And that is all that I have got today.
Q. Mr. President, is that background?
THE PRESIDENT. Yes.
Note: President Hoover's two hundred and sixty-fourth news conference was held in the White House at 11:30 a.m. on Wednesday, January 18, 1933.
As enacted, the Bankruptcy Act of 1898, amendments (H.R. 14359) is Public, No. 420 (47 Stat. 1467), approved March 3, 1933.
Herbert Hoover, The President's News Conference Online by Gerhard Peters and John T. Woolley, The American Presidency Project https://www.presidency.ucsb.edu/node/208027