HEARINGS BEFORE THE COMMITTEE ON EINANCE SEVENTY-SIXTH CONGRESS THIRD SESSION ON H. R. 10039 AN ACT TO PROVIDE FOR THE EXPENSES OF NATIONAL AND FOR OTHER PURPOSES 241705 JUNE 12, 13, AND 14, 1940 Printed for the use of the Committee on Finance UNITED STATES WASHINGTON: 1940 Alvord, Ellsworth C., Washington, D. C., representing the Committee on Federal Finance, Chamber of Commerce of the United States__ Bell, Hon. D. W., Under Secretary of the Treasury. Brenckman, Fred, Washington representative, the National Grange-- Carroad, Kenneth, New York City, acting chairman and secretary, Cooley, Hon. Harold D., a Representative in Congress from the State Davis, Manuel, Washington, D. C., representing Mr. William Stein- berg, New York City, president, National Retail Liquor Package Dow, Fayette B., Washington, D. C., representing the American Petroleum Industries Committee, the National Petroleum Associa- Garcia, Alvaro M., president, Cigar Manufacturers Association of Jones, Jr., Rowland, Washington representative, the National Asso- ciation of Retail Druggists _ _ Kelly, Dr. E. F., Washington, D. C., representing the American Kolodny, Joseph, New York City, executive secretary, National Asso- Ogg, W. R., Washington, D. C., representing the American Farm 133 Sullivan, Hon. John L., Assistant Secretary of the Treasury. 1, 31 Humphrey Robinson & Co., certified public accountants, Louisville, 155 Sturges, Wesley A., executive director, Distilled Spirits Institute, United States Savings and Loan League, Chicago, Ill., letter from III REVENUE ACT OF 1940 WEDNESDAY, JUNE 12, 1940 UNITED STATES SENATE, The committee met, pursuant to call, at 10 a. m., in room 312, Senate Office Building, Senator Pat Harrison (chairman) presiding. The CHAIRMAN. The committee will be in order. We have met this morning for the purpose of considering H. R. 10039, the Revenue Act of 1940, which passed the House of Representatives last night. The CHAIRMAN. We have the Secretary of the Treasury before us and other representatives of the Treasury Department. Mr. Secretary, the committee desires to hear any statement or explanation you desire to make concerning H. R. 10039. You may proceed. STATEMENTS OF HON. HENRY MORGENTHAU, JR., SECRETARY OF THE TREASURY; HON. DANIEL W. BELL, UNDER SECRETARY OF THE TREASURY; AND HON. JOHN L. SULLIVAN, ASSISTANT SECRETARY OF THE TREASURY Secretary MORGENTHAU. Mr. Chairman, I am here today to give my support to the pending bill for increasing the revenue of the Government and raising the limit of the public debt to meet urgent needs of national preparedness. Since the members of this committee are thoroughly acquainted with the fiscal situation, I will do no more than review it briefly. The President in his Budget message of January 3, 1940, estimated that expenditures for the fiscal year 1941 would exceed normal receipts by $2,876,000,000. He anticipated that recovery of excess. capital funds from Government corporations would yield $700,000,000, and he recommended that $460,000,000 additional taxes be imposed to cover emergency defense expenditures. This left an estimated deficit of $1,716,000,000 to be financed by borrowing. Events since that time have made it urgently necessary to increase expenditures for national preparedness far beyond the amounts included in the 1941 Budget. It is estimated that, on the basis of appropriation bills which have passed and those which are now pending in Congress, expenditures for the fiscal year 1941 will exceed by $4,350,000,000 the revenues so far provided. The borrowing power remaining under the existing debt limit was, on May 31, 1940, $1,950,000,000, and it is estimated that by June 30, 1940, the unused borrowing power will have shrunk to $1,700,000,000. 1 |