The Bridgeport times and evening farmer., 1919-12-02

To the Senate and House of Repre-
 sentatives:
 I sincerely regret that I cannot be present at the opening of this session If the Congress. I am thus prevented from presenting in as direct a way as I could wish the many questions hat Ire pressing for solution at this time. Happily, l have the advantage of the advice of the heads of the several ex- ecutive departments who have kept in close touch with affairs in the:r detail and whose thoughtful recommends tions 1 earnestly second.
 In the matter of railroads and the readjustment of their affairs, growing out of federal control 1 shall take the liberty at a later day of addressing you.
 hope that Congress will bring to a conclusion at this session legislation 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 not be made independently of each other, but with reference to one single com prehensive plan of expenditure prop erly related to the nations income,
 
 burden of preparing the budget must, in the nature of the case. if the work Is to be properly done and responsi- bility concentrated inst cad of divided, rest upon the executive. The budget SC prepared should be submitted to and approved or amended by a single committee of each house Of Congress and no single appropriation should be made by the Congress, except such as may have been included in the budget prepared by the executive or added by the particular committee of Congress charged with the budget legislation.
 Another and not less important as- pect of the problem is the ascertain ment of the economy and efficiency with which the moneys appropriated are expended. Under existing law the only audit Is for the purpose of as- certa1ning whether expenditures have been lawfully made within the appro- pr1ations. No one is authorized or equipped to ascertain whether the money has been spent wisely, eco nornica1ly and effectively. The audi tors should be highly trained officials with permanent tenure in the treas ury departm ent, free Of obligations to or motives of consideration for this or any subsequent administration
  anime into and make report upon the methods employed and the results ob- tained by the executive departm ents of the government. Their reports should be made to the Congress and to the secretary of the treasury.
 trust that the congress will give it's immediate consideration to the problem of future taxation. Simpli- fication of the Income and profits hos iT01r0 a1J n n- cessity. These taxes performed In dispensabIe service during the war. They must, however, be sinphfed, not only to save the taxpayer incon- venience and expense, but in order that his liability may be made certain and definite.
 With reference to the details of the revenue law, the secretary of the treasury and the commissioner of in- ternal revenue will lay before you for your considerati ton certain amendments necessary or desirable in connection with the administration of the 1aw-recomme endattons which have my approval and support It 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 con- sider whether the higher rates of tn- come and profits taxes cal in peace times be effectively product of rev. enue, and whether they ns mot, on the contrary, be destructive of busi- ness activity and productive ef waste and inefficiency. There is a point at which in peace times high rates of Income and profits taxes discourage energy, remove the incentive to new enterprise, encourage extravagant ex- pendftures and produce industrial stagnation, with consequent unem- ployment and other attendant evils.
 The problem is not an easy one. A fundamental change has taken place with reference to the position of America in the worlds affairs. The prejudice and passions engendered by deca des of controversy between two schools of political and economic thought-the one believers in protec- tion of American industries, the other believers ,in tariff for revenue only must be subordinated to the single conside eration of the public interest in the light of utterly changed condi- lions. Before the war America was heavily the debtor of the rest of the world and the payments she had to make to foreign countries on Ameri- can securities held abroad the expen- Trures of American travellers abroad and the ocean freight charges she had to pay to others, about balanced the value of her pre-war belance of trade.
 During the war Americas exports have been greatly stimulated and in creased prices have increased their value. On the other hand, she has