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December 87, 1939« My dear Mr. President: In accordance with your request, I am enclosing the best estimates available of gross public and private debts in this country for 19£3, 1933, and currently. The sources of the data are indicated. However, the available statistics are at best' rough estimates, and are not altogether satisfactory which—with the holidays—account:? for my not getting them to you sooner. What has impressed tm moat by such comparisons is the fact that private debt is smaller than it was in 1929, while the combined private and public debt, notwithstanding the increase of the Federal debt, is materially less than the 1929 total. Carrying charges, of course, have been substantially reduced by reason of the reduction in interest rates that hasbeen brought about under Administration policy. The growth of public debt has been a necessary offset to the contraction and liquidation of private debt in the deflation after 1929, end the Federal debt had to be increased more than would have been the case if States and municipalities had been able to finance relief and recovery expenditures themselves , As the figures shot;, and as we know, the States and cities had largely exhausted their credit, many were bankrupt, and only the Government had the credit resources to meet the emergency. Finally, ao private debt expands, as it smst under our economic system if we are to have reasonably complete recovery and full employment, the public debt will not have to be further expanded and can be reduced, as it has been in the past, as an offeet should en inflationary boos develop. Respectfully yours, The Honorable The President of the United states, The White House. enclosure ET:b December 26, 1939 PUBLIC AKD ROTATE DEBTS IK THE LIMITED STATES (In billions of dollars) latest 1929 Private State and municipal (gross).........*.. Federal (gross)•••..................... Total 1933 153 17 16 date available U9 20 186 16C 1?3 Sources of datas Private; Estiiaate for end of 1929 is based upon Twentieth Century Fund study * Debts and Recovery1*, nhile those for 1933 &»d the latest date (end of 1937) su*® unofficial comparable estimates by a Department of Cossaeree expert* Bank deposits and insuranoe company liabilities to policy holders are not included in these totals. State and aunicijml; Annual Report of the Secretary of the Treasury for 1938. Figures are for June 30 of 1929, 1933, and 1938, Present total is probably little changed from Federalt Figures showi are gross public debt on Treasury statements of D e c e d W 31# 1929# March 3, 1933, *n& December 21, 1939 • From these debt figures might be deducted the Treasury's working balance -which amounted to |173,OOO#OOO on December 31, 1929, |159#OOO,OOO on March 3, 1933, and 11,865,000,000 on December 21, 1939.
