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HEARINGS

BEFORE THE

COMMITTEE ON EINANCE
UNITED STATES, SENATE

SEVENTY-SIXTH CONGRESS

THIRD SESSION

ON

H. R. 10039

AN ACT TO PROVIDE FOR THE EXPENSES OF NATIONAL
PREPAREDNESS BY RAISING REVENUE AND
ISSUING BONDS, TO PROVIDE A METHOD
FOR PAYING FOR SUCH BONDS,

AND FOR OTHER PURPOSES

241705

JUNE 12, 13, AND 14, 1940

Printed for the use of the Committee on Finance

UNITED STATES
GOVERNMENT PRINTING OFFICE

WASHINGTON: 1940

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Ogg, W. R., Washington, D. C., representing the American Farm
Bureau Federation___

133

Sullivan, Hon. John L., Assistant Secretary of the Treasury.
Thomas, Hon. Elmer, United States Senator from the State of Okla-
homa

1, 31

Humphrey Robinson & Co., certified public accountants, Louisville,
Ky..

155

III

REVENUE ACT OF 1940

WEDNESDAY, JUNE 12, 1940

UNITED STATES SENATE,
COMMITTEE ON FINANCE,
Washington, D. C.

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.

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