Republican farmer., 1919-12-05
TEXT OF MESSAGE

1
 sentatiyes:
 1 I sincerely regret that I cannot be present at the opening of this session ] of the Congress. Lam thus prevented from presenting in as direct a way as i I could wish the many questions that
 are pressing for solution at this time 1 Happily, I have the advantage of the 1 advice of the heads of the several ex- 1 ecutive departments who have kept in l close touch with affairs in their detail 1 and whose thoughtful recommenda-
 tions I earnestly second.
 In the matter of railroads and the
 readjustment of their affairs, growing l out of federal control, I shall take the i liberty at a later day of addressing i you.
 f I hope that Congress will bring to 1 conclusion at this session legislation ] looking to the establ. .shment of a 1 budget system. That there should be
 one single authority responsible for 1 the making of all appropriations and i that appropriations should not be l made independently of each other, 1 but with reference to one single com 1 prehensive plan of expenditure prop i erly related to the nations income, i there can be no doubt. I believe the burden of preparing the budget must. , in the nature of the case, if the work ! is to be properly done and respOnsi- i biIity concentrated instead of divided, l rest upon the executive. The budget l so prepared should be submitted to 1 and approved or amended by a single ] committee of each house of Congress 1 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 1 the particular comm !ttee of Congress l charged with the budget legislation. i Another and not less important as pect of the problem is the ascertain ment of the economy and efficiency 1 with which the moneys appropriated
 are expended. Under existing law the
 only audit is for the purpose of as | pertaining whether expenditures have l been lawfully made within the appro- priations. No one is authorized or l equipped to ascertain whether the money has been spent wisely, eco nomicaIly and effectively. The audi 1 tors should be highly trained officials with permanent tenure in the treas 2 ury department, free of obligations to i or motives of consideration for this or any subsequent administration and authorized and empowered to ex- ! anime into and make report upon the
 methods employed and the results ob tained by the executive departments i of the government. Their reports should be made to the Congress and 1 to the secretary of the treasury. 1 1 trust that the congress will give ! it's immediate consideration to the l problem of future taxation. Simpli- i fcation of the income and profits l taxes has become an immediate ne | cessity. These taxes performed in dispensabIe service during the war. ! They must. however, be sinplifed, not
 only to save the taxpayer incon- i Venience and expense, but in order ] that his liability may be made certain ] and definite.
 l With reference TO the details oi | the revenue law, the secretary of the
 treasury and the commissioner of in i ternaI revenue will lay before you i for your consideration certain ! amendments necessary or desirable in ! connection with the administration of the law-recommendat 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- i s:der whether the higher rates of in | come and profits taxes can in peace | times be effectively productive of rev.
 enue, and whether they may not, on [ the contrary, be destructive of buSi- | ness activity and productive of waste and inetticiency There is a point ! at which in peace times high rates of 1 income and profits taxes discourage i energy, remove the incentive to new ! enterprise, encourage extravagant ex- . I ind q stagnation, with consequent unem- 1 ployment and other attendant evils. The problem is not an easy one. A
 fundamental change has taken place 1 with reference to the position of
 America in the worlds affairs. The prejudice and passions engendered by l decades of controversy between two
 schools of political and economic thought-the one believers in protec-
 ton of American industries the other
 believers in tariff for revenue only
 must be subordinated to the single
 consideration of the public interest in
 the light of utterly changed condi-
 tions 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-
 ditures 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 l trade.
 During the war Americas exports
 have been greatly stimulated and in
 creased prices have increased their
 value. On the other hand. she has
 purchased a large proportion of the
 American securities previously held
 abroad has loaned some s9,O0o, ,eoO,-
 900 to foreign governments, and has
 built her own ships. Our favorable
 balance of trade has thus been great Iy increased and Europe has been de-
 prived of the means of meeting it l heretofore existing. Europe can have
 only three ways of meeting the fa- |. . vorable balance of trade in peace , i times:
 By imports into this country of gold , or of goods, or by establishing new credits, Europe is in no position at the present time to ship gold to us,
 nor could we contemplate large fur ther imports of gold into this country without concern. The time has nearly
 passed for international governmental loans and it will take time to develop