Middletown transcript., 1920-12-11

to- prove. that a. great democracy car
keep house as successfully and In al
businesslike a fashion as any Other
government. It seems to me that the
first step towards proving this Is to
supply ourselves with systematic
method Of handling our estimates and
expenditures and bringing them to the
point where they will not be an un'
necessary strain upon our, income OF
necessitate unreasonable taxation. In
other words, a workable budget sys'
tenn, and I respectfully suggest that
two elements are essential to such q
system; namely, not only that the
proposal Of appropriations should be
in the hands Of a single body, such
as single appropriations committee
in each house Of the Congress, but
also that this body should be brought
into such cooperation with the de-
partments Of the government and with
the treasury Of the United States as
would enable 1t to act upon COM
plete conspectus of the needs of the
government and the resources from
which it must draw it's income.
1 reluctantly vetoed the budget bill
passed by the last session of the Con-
gross because Of constitutional OBJ
lection. The house Of representatives
subsequently modified the bill in order
to meet this objection. In the revised
form I believe that the bill, coupled
with action already taken by the Con-
gress to revise its rules and proceed
ure, furnishes the foundations for an
effective national budget system. l
earnestly hope, therefore, that one Of
the first steps taken by the present
session Of the Congress will be to
pass the budget bill.
The nations finances have shown
marked improvement during the last
year. The total ordinary receipts Of
$3.50, 100000 for the fiscal year 1920
exceeded those for 1919 by $1,542, ,OOO.-
600, while the total net ordinary ex-
penditures decreased from $18,514,-
100000 to $6,4O3. 100000. The :sross
public debt, which reached it's highest
point on August 81, 1919, when it was
SIG, 500, 100000, had dropped on Novem-
ber 80, 1920, to $24,175, 100000. There
has also been marked decrease in
holdings Of government war securities
by the banking institutions Of the
country, as well as in the amount of
bills held by the Federal Reserve
banks secured by government war OBJ
legations. This fortunate result has
relieved the banks and left them freer
to finance the needs Of agriculture, in
dustry and commerce.
1t has been due in large part to the
reduction of the ublic debt, especially
of the floating debt, but more particu-
larly to the improved distribution of
government securities among perma-
nent investors. The cessation of the
governments borrowings except
through short term certificates of in
debtedness has been a matter of great
to the people Of the coun-
try at large, as well as to the holders
of Liberty bonds and Victory notes,
and has had an important bearing on
the matter of effective credit control.
The year has been characterized by
the progressive withdrawal of the
treasury from the domestic credit mar
KIT and from position Of dominant
influence in lat market. The future
course will necessarily depend upon
the extent to which economies are
practiced and upon the burdens placed
upon the treasury as well as upon in
dustrial developments and the main
tenance Of tax receipts at sufficiently
high level.
Seven and one-haIf Billions in Bonds
Mature.
The fundamental fact which at pres
ent dominates the governments finan-
cial situation is that seven and a half
billions of its war Indebtedness mature
within the next two and half years.
OF this amount, two and half billions
are floating debt and five billions Vic
tory notes and War Savings Certifi-
Gates. The fiscal program Of the gov
ernment must be determined with ref
erence to these maturities. Sound poll
cy demands that government expendi-
lures be reduced to the lowest amount
which will permit the various services
to operate efficiently and that govern
ment receipts from taxes and salvage
be maintained sufficiently high to pro-
vide for current requirements, includ-
ing interest and sinking fund charges
on the public debt, and at the same
time retire the floating debt and part
Of the Victory loan before maturity.
With rigid economy, vigorous salvage
operations and adequate revenues from
taxation, a surplus Of current receipts
over current expenditures can be real
lied and should be applied to the float
ing debt. All branches of the govern
ment should cooperate to see that this
program is realized.
Makes Plea for Economy.
cannot overemphasize the necessity
of economy in government appropria-
tions and expenditures and the avoid
ance by the Congress Of practices
which take money from the treasury
by indefinite or revolving fund appro-
priatiOns. The estimates for the pres
ent year show that over a billion dol
lars Of expenditures were authorized
by the last Congress in addition to the
shown in the usual compiled
Of appropriations. This
illustrates the Importance of
making direct and specific appropria-
tons. The relation between the cur
rent receipts and current expenditures
~ tho Government 61,ripO tho v,ocopk |