The President did not specify the sources for new revenue, but said, "I hope Congress will follow the accepted principle of good taxation, of taxing according to the ability to pay, and will avoid taxes which decrease consumer buying power."
The President budgeted for a net deficit of $2,176,000,000, but avoided an election year recommendation that the Treasury's $45,000,000,000 borrowing limit be increased to finance deficit. spending, Mr, Roosevelt estimated that the national debt by June 30, 1941—the end of the fiscal year for which the budget is drawn—will aggregate $44,- 938,000,000.
The budget indicated that the Philippines would continue to occupy the same role in United States national defence in 1940'as in 1939.
It did not show a specific military budget increase in either the Army or Navy, but informed military sources said they believed the Philippines department would share in the general, broad increases in enlistments, aeronautical and other supplies, and also in the tremendously increased naval estimates, The budget did not show specific allotments for the Far Eastern Fleet division or other regional activities.
The budget alloted $2,672,000 for the Insular Department's sea coast defences, as against $1,017,000 allowed during the current year.
Text read from the printed page and cleaned; old type leaves the occasional error.