Federal Revenues and Expenditures

Report Outline
Federal Revenues and Expenditures, 1920–1930
Prospects of the Fiscal Year 1931
Foreign Repayments and the Public Debt
Special Focus

The first quarter of the fiscal year 1931, ended September 30, 1930, was marked by a continuation of the upward trend of federal expenditures which has been in evidence since 1927, and by a sharp drop in federal revenues. The total revenues of the government showed a decline of 14.4 per cent during the quarter, by comparison with the first quarter of last year, while federal expenditures were up 4.0 per cent.

On the basis of receipts and expenditures during the first half of the quarter, ended August 15, 1930, the statement was made by a “high Treasury official,” (later publicly identified as Secretary Mellon), that the Treasury had little hope of being able to recommend a continuation through 1931 of the reductions in income taxes voted by Congress last December. It was said at the same time that “hope has not been abandoned for maintaining: the tax level of the 1928 Revenue Act on corporation and individual incomes.” In other words, there was still hope that an increase in the rates as they stood prior to the 1929 reduction might be avoided.

A federal deficit of large proportions appeared to be in the making at the time these views were expressed. Federal expenditures during the first six weeks of the present fiscal year had exceeded those of the like period of last year by about 8 per cent, while federal revenues had slumped more than 20 per cent. During the second half of the quarter, as shown in the following table, there was a slowing down of the rate of decline in federal revenues, accompanied by a curtailment of federal expenditures, but a deficit was still indicated for the full year's operations.