The adoption of the budget for 1938 was then proposed by Mr. Franklin and seconded by Mr. W. H. Plant. In proposing the adoption Mr, Franklin said that despite the introduction of increased taxation, as already authorized, the estimated receipts were approximately seventeen lakhs under the figure for 1937. This was partly due to the abnormal conditions in the Hongkew and Eastern Districts, and the probabi only a slow reoccupation of th districts.
Expenditure on the Ordinary Budget showed approximately a reduction of fourteen lakhs. All departments, he said, realized the necessity for keeping expenditure down as much as possible, without impairing efficiency. A larger item than usual under General Charges New York, Apr.
Tie Administration's pump-priming is encounter siderable protests from business interests, who point out that, in spite of incurring a deficit of $16.500,000,- 000 to finance the greatest Govern: mental pump-priming effort duri the past five years, the level of bu ness activity today is a little high than that of 1933.
Basic economic objections mentioned against pump-priming are:—
1. The stimulus imparted by heavy Government spending only lead to a subsequent relapse like the current recession.
2. Postponement of the necessary adjustments in wages and prices, pre-Vent establishment of a basis for lasting recovery.
3. An inevitable increase in the National debt which jeopardizes the stability of the market for Treasury obligations.
4. Expansion of bank deposits caused by sales of additional Government bonds to banks makes the exigencies of Government finance again the dominent factor in the formulation of bank credit control policies.
5. Further confirmation of the precedent of relying upon heavy Government spending instead of a correction of economic maladjustments as a recovery measure.
6. Postponement of necessary revisions to Federal policies owing to the reliance upon Government spending to relieve economic pressure, and Competition of public works with private enterprises, thus discouraging investment by industry.—Reuter.
Text read from the printed page and cleaned; old type leaves the occasional error.