Evening public ledger. [volume] (Philadelphia [Pa.]) 1914-1942, 1919-12-02
Combat Cost ofLivit1G Estab-
ish Budget System Re-
organize Taxation
RECOGNIZE WAR VETERANS
AND GIVE THEM FARMS
Enlarge Program for Rural Develop.
n1ent in Recognition of Farmers
Work in War

son today sent the following message t
Congress
To the Senate and House of Repre-
Sentdtives:
/ sincerely regret that I cannot be
present at the opening of this ses-
sion of the Congress. / am thus
prevented from presenting in as di-
rect a way as | could wish the many
questions that are pressing for solu-
tion at this time.
Happily, | have had the advantage
of the advice of the heads of the sew
eral executive departments who have
kept in close touch with affairs in
their detail and whose thoughtful
recommendations l earnestly second.
In the matter Of the railroads and
the readjustment of their affairs
growing out of federal control, shall
take the liberty at later day of
addressing you.
Urges Budget System
] hope that Congress will bring to
conclusion at this Session legisla-
tion looking to the establishment of
budget system. That there should
be one single authority responsible for
the making of all appropriations and
that appropriations should be made
not independently of each other, but
with reference to one single compre-
hensive plan of expenditure properly
related to the nations income, there
can be no doubt.
/ believe the burden of preparing
the budget must, in the nature of the
case, if the work is to be properly
done and responsibility concentrated
instead Of divided, rest upon the ex-
ecutive.
Z The budget SO prepared should be
submitted to and approved or amend
ed by a single committee of each
House of Congress and no single ap-
preparation should be made by the
Congress, except such as may have
been included in the budget prepared
by the executive or added by the par
ticular committee of Congress charged
with the budget legislation
The problem is not an easy one. A
fundamental change has taken place
with reference to the position of
America in the worlds affairs.
Economy Audit Needed
y Another and not less important as
peet of the problem is the ascertain
fnent of the economy and efficiency
with which the moneys appropriated
are expended. Under existing law
the only audit is for the purpose of
ascertaining whether expenditures
have been lawfully made within the
appropriations. No one is author
lied or equipped to ascertain whether
the money has been spent wisely,
economically and effectively. The
auditors should be highly trained Off
cials with permanent tenure in the
FIroa m lnnn rt tpnnt frnn of fhIioa
tions to or motives of consideration
for this or any subsequent admin
istration. and authorized and empow-
cred to examine into and make re-
port upon the methods employed and
the results obtained by the executive
departments of the government.
Their reports should be made to the
Congress and to the secretary of the
treasury.
Must Simplify Taxation
/ trust that the Congress will give
Its immediate consideration to the
problem of future taxation. Simpli-
hcation of the income and profits
taxes has become an immediate nec-
essity. These taxes performed indis-
pensable service during the war.
They must, however, be simplifed,
not only to save the taxpayer incon-
venience and expense, but in order
that his liability may be made certain
and definite.
the revenue law, the secretary of
the treasury and the commissioner
of internal revenue will lay before
you for your consideration certain
amendments necessary or desirable in
connection with the administration
of the accommodation which
have my approval and support. 1t
is of the utmost Importance that in
dealing with this matter the present
law should not be disturbed so far
as regards taxes for the calendar
year 1920, payable in the calendar
year 1921. The Congress might well
consider whether the higher rates of
income and profits taxes can in peace
times be effectively productive Of
revenue, and whether they may not,
on the contrary, be destructive of
business activity and productive of
waste and inefiiciency. There is a
point at which in peace times high
rates of income and profits taxes dis
courage energy, remove the incentive
to new enterprise, encourage ex-
travagant expenditures ard produce
Industrial stagnation, with conse-
quent unemployment and other at
tendant evils.
Public Should Come First
The prejudice and passions engen-
dered by decades of controversy be-
tween two schools of political and
economic thought-the one believers
In protection of American industries,
the other believers in tariff for reve-
nue. only-must be subordinated to
the single consideration of the public
interest in the light of utterly
changed conditions.
Before the war America was heav-
fly the debtor of the rest of the world,
and the interest payments she had to
make to foreign countries on Ameri-
can securities held abroad, the ex-
penditures of American travellers
abroad and the ocean freight charges
she had to pay to others, about bal
anced the value of her pre- war ia
vOrable balance of trade.
During the war Americas exports
have been greatly stimulated, and in
creased prices have increased their
values. On the other hand, she has
purchased a large proportion of the
American securities previously held
abroad, has loaned some $4,000 ,0OO,-
600 to foreign governments, and has
built her own ships.
Our favorable balance Of trade has
thus been greatly increased and
Europe has been deprived of the
means Of meeting It heretofore ex-
Europe can have only three ways of