Oral History Interview with
John W. Snyder
Secretary of the Treasury in the Truman Administration,
1946-53. Other Federal positions once held include Executive Vice-President
and Director, Defense Plant Corporation, 1940-43; Assistant to the Director
of the Reconstruction Finance Corporation, 1940-44; Federal Loan Administrator,
1945; Director, Office of War Mobilization and Reconversion, 1945-46.
Secretary Snyder was a longtime close friend of Harry S. Truman beginning
with their service in the U.S. Army Reserves after World War I.
Washington, D.C.,
July 2, 1969
By Jerry N. Hess
[Notices and Restrictions | Interview
Transcript | Additional Snyder Oral History
Transcripts]
NOTICE
This is a transcript of a tape-recorded interview conducted for the Harry S. Truman Library. A draft of this transcript was edited by the interviewee but only minor emendations were made; therefore, the reader should remember that this is essentially a transcript of the spoken, rather than the written word.
Numbers appearing in square brackets (ex. [45]) within the transcript indicate the pagination in the original, hardcopy version of the oral history interview.
RESTRICTIONS
This oral history transcript may be read, quoted from, cited, and reproduced for purposes of research. It may not be published in full except by permission of the Harry S. Truman Library.
Opened September, 1970
Harry S. Truman Library
Independence, Missouri
[Top of the Page | Notices
and Restrictions | Interview Transcript
| Additional Snyder Oral History Transcripts]
Oral History Interview with
John W. Snyder
Washington, D.C.,
July 2, 1969
By Jerry N. Hess
[1704]
HESS: Mr. Snyder, this morning let's continue on with our discussions
of matters of taxation.
SNYDER: In our reporting on the tax activities and the tax problems,
I believe we got up through fiscal year 1949 in our discussions last week.
In taking a look at fiscal years 1950 and 1951, today, I find that in
fiscal year 1950 we had a deficit of four billion six hundred million
dollars. This was brought about somewhat by the tax reduction of 1949,
which affected us in 1950 and we had not been able to cut back expenditures
quickly enough to keep the budget balanced. The cuts in the tax structure
amounted to about this deficit, a little less probably, somewhere around
four
[1705]
billion dollars. Then in 1951, however, we had apparently got hold of
things and we showed a surplus again of three billion five hundred million
dollars. In fiscal 1950 there was no major revenue legislation enacted.
A tax revision bill, House Bill 8920, was passed by the House on June
29, 1950, but developments in Korea led to substantial changes in the
bill and the Revenue Act of 1950 was not approved, finally, until September
the 23rd 1950, which was in fiscal year 1951. This revenue bill was not
quite up to what it should have been, but it at least made a step towards
meeting the Korean expenditures that were, of course, at that time, completely
unpredictable. And we did take a step to try to meet some of those expenditures,
war expenditures, with increased taxes.
[1706]
When I went before the Ways and Means Committee in February 1950, I tried
to emphasize the necessity for limiting the amount of excise tax reduction,
because of the Korean situation, and specified most urgently the need
of reduction of the excises on transportation or property and persons,
long distance telephone and telegraph communications, and the retail excises.
Those I felt could be modified, to some extent, to help with the rehabilitation
of our economy. Then, in the interest of tax equity, I very strongly recommended
that the manufacturer's excise tax on radios be extended to television.
Television was coming then into great popularity. I discussed, at that
time, very seriously, Mr. Hess, the necessity for us facing up to the
many flagrant loopholes that existed in the tax structure. Some of those,
through the
[1707]
years, have been patched up to some extent, some in the gift area, and
some in the estate tax area, but there are many more that are wide open
and seem to be very controversial and we're still talking about trying
to close some of those loopholes. One of them, of course, is the oil depletion
loophole. We permitted that concession in days when we were trying to
encourage exploration for oil, but that necessity has long since expired.
We know where oil reserves are, far beyond our use for many years, including
our defense needs, and because of our American companies invading foreign
fields and coming across enormous fields in which they have a large interest,
the necessity for this loophole has been obsolete in my opinion.
HESS: I have heard that Sam Rayburn took a very
[1708]
close interest in matters of the oil depletion allowance. Is that right?
SNYDER: Mr. Rayburn took very prompt and immediate action every time
the question came up and, I must say, that he was very instrumental in
sidetracking any efforts that were made for changing the oil depletion
ratio.
In fiscal 1951, Congress continued the policy of strengthening the revenue
system to meet increased expenditures for defense. Two major revenue taxes
became law during this year, which helped materially as you saw in my
report. It helped us change back to a surplus for the year '51. The two
major revenue acts that were enacted that year were the Revenue Act of
1950 and the Excess Profits Tax Act of 1950. In addition, action
[1709]
was initiated during the fiscal year 1951 on the Revenue Act of 1951
which, however, was not enacted until October 20th, 1951, which threw
it into the 1952 fiscal year. Altogether these three revenue measures
increased tax liabilities to an estimated fourteen billion seven hundred
million dollars for the full year operation at the calendar 1951 income
level. Of this total, the Revenue Act of 1950 accounted for five billion
eight hundred million dollars, the Excess Profits Tax Act of 1950 put
three billion five hundred million dollars, and the Revenue Act of 1951
for five billion four hundred million dollars. All but a billion of this
increased revenue under the three measures, came from increased taxes
on individual and corporate incomes. That amount of new tax coming in
materially assisted the Treasury
[1710]
in its program of trying to keep on top of our fiscal and monetary problems
without going into deficit financing.
Of course, about this time we began to move more positively into the
U.S. participation into the European recovery program. In the fiscal year
of 1950, about four billion dollars were transferred to that activity
and that increased our expenditures to about nine billion dollars by the
close of fiscal year 1950. And then we began to get the feel of the improvement
that was taking place in the European situation by the end of fiscal year
1951. At that time the United States' balance of payments underwent a
considerable change, which was only natural. If the European countries
got back into production they could produce many things that they had
been
[1711]
forced to buy from the United States; therefore, our balance of payments
underwent a change, as I said. For the fiscal year of 1951, the total
merchandise imports of the United States amounted to eleven billion seven
hundred million dollars as to compared to seven billion four hundred million
dollars in 1950. In the same period, the United States' merchandise exports
increased from ten billion to thirteen billion so that the excess of commodity
exports over imports was reduced by around three billion dollars as you
can see, which changed our balance of payments picture rather markedly
at that time.
I want to remark again that during all this time the Treasury was constantly
endeavoring to improve its entire operation through management procedures,
through reorganizations of department, and through continual application
of new
[1712]
methods and new processes, and through close attention to the findings
of the congressional committees that were trying to help in these reorganizations.
A complete chapter could be written on that one subject. We've touched
on it from time to time in our various discussions, but it was an enormous
job that the Treasury undertook and accomplished in the years that I was
Secretary of the Treasury.
At this time, I think that we might inject some figures which maybe would
be better deferred until our next session, but I'm going to introduce
it here to show you the efforts that have been made by the Treasury, both
by President Truman and myself, because it was through his splendid leadership
and cooperation in these fiscal matters that enabled our
[1713]
financial situation to remain as splendid as it was throughout his administration
as President. I'm going to give you a chart here. The figures that are
shown on the chart were taken from Page 11 of the annual report of the
Secretary of the Treasury for the fiscal year 1953 and, since that annual
report was signed by my successor, G. M. Humphrey, who was then Secretary
of the Treasury, you can see that these are not figures that have been
in any way dressed up to present this picture.
HESS: They were not favorably doctored in any way.
SNYDER: Yes. Because they actually were lifted right from his report
and I call your attention to this, Mr. Hess, that during the period that
I served as Secretary of the Treasury, from June 25th, 1946
through January 20th, 1953, the
[1714]
records show that we practically operated the Government on a net balanced
budget basis, except for the last few months when the Korean war disrupted
our record. If you take the reporting of the Treasury up through March
31st, 1953, which had some bearing because we went out on January
20th, but the next figures that we could pick was '53 and there
was no material changes that took place in policy or in action on the
part of the Treasury in that short time, you will see we operated on a
balanced budget for a period of about six years. So, I think that that
gives you the true picture and this chart shows that in the fiscal year
1947, we had a surplus balance of eight hundred million dollars; fiscal
1948 we had a surplus of eight billion four hundred million dollars. Then
in '49 we
[1715]
had a deficit of a billion eight hundred million dollars. That big drop
came about because of the tax reduction, as I mentioned awhile ago. And
then 1950, a further deficit of four billion and six hundred million dollars
when that tax reduction was catching up with us more. Then in 1951, we
had a surplus again of three billion five hundred million dollars. In
1952, of course, the expenses and costs of Korea were beginning to show
up in the budgetary operation because there had been a lag time between
June 1950 when the Korean trouble started, it took time to get things
in motion and fiscal 1952 when we had a deficit of three billion nine
hundred million dollars. Until September of 1952, we still had sufficient
revenue coming in that our deficit was held to an additional three billion
nine hundred
[1716]
million dollars; and then going from September 30th, 1952
to March 31st, ’53, after we out, the deficit was a billion
nine hundred million dollars. But, cumulatively, adding and subtracting
the surpluses and the deficits, we ended up for the period of Mr. Truman’s
administration, while I was serving as his Secretary of the Treasury,
with a net deficit of three billion four hundred million dollars, with
a year and a half of war going on in between, don’t you see. So, I thought
that was an extremely interesting set of figures as to how Mr. Truman’s
administration met the financial problems of its times.
HESS: That’s very good.
SNYDER: I think that’s all for this morning.
[Top of the Page | Notices
and Restrictions | Interview Transcript
| Additional Snyder Oral History Transcripts]
|
