The Washington herald., 1920-02-17
MUST CURTAIL
MONEY OUTFLOW
Government Should Rem
edy Unlimited Expendi-
tures of Public Funds.
NEED BUDGET SYSTEM
Impossible to Appropriate
Intelligently With
out 1t.
NEED BUDGET SYSTEM
Economy in governmental expen-

Economy in governmental expen-
ditures-such economy as win per-
init a reduction in taxes without
creating a gap to be filled by more
Iioans-is demanded by every rule
fof reason and common sense. We
cannot go on spending public money
without regard to the effect Of the
example upon the people. il We In
tend to meet our problems sanely
and efficiently. The war ended
more than a year agoS yet some
Of our departments of government
are carrying a greater payroll bur-
den than they did when the war
was at its height To make mat
ters worse, the tendency Is appar-
entity toward further increase in
the number of employees instead of
toward a decrease. The money we
are spending in some OF our de-
partments today would have run
the entire government twenty-five
years ago.
The question is not merely one
pay the taxes-it is a question Of
sound national economy question
which perhaps embraces the solu-
tion of some OF the problems which
are ordinarily associated with other
causes. il is contended. and there
Is sound reason to believe correctly
contended. that high taxes, especial
ly corporation profits taxes, are a
Fundamental cause OF high prices.
Certainly they are a direct cause Of
Extravaganza, looseness in business
methods and a disregard for the
earnings that go to the govern
ment anyway" The objections that
apply to the cost plus system OF
contracting apply with equal force
to profits taxes-they result in the
same sort OF abuses and waste.
Decreased Income Taxes.
The contentious favoring a de-
crease in income taxes will not be
accepted as readily as the conten-
tions favoring a decrease in cor
poration profits taxes. for the rea-
son that the harmful effects of the
income taxes work subtly. The OBJ
jections TO a system that renders
manufacturer careless as to costs
which inevitably go into the price
the public pays for goods. are
obvious; the objection made to ex-
cessive income taxes on the score
that they drive investors into tax
exempt securities. and out of indus
trial and railroads securities-na-
tional enterprises which need funds
and can not get them-are not i'm
pressive so far as the public is con-
cerned.
Municipal Extrnvagapce.
Security dealers. whose business
/ IL is to find the capital needed to
keep the production machinery Of
the country sound. know that the
income taxes, especially the supers
taxes. are driving men Of wealth
out of these investments into others
less beneficial to the public. Mu-
inequalities can borrow money at
easy terms, and in large sums,
where the railroads and other arms
of industry are unable to borrow
a penny. The ease with which rnu-
nicipalities can borrow opens an
other avenue to extravagance, and
there is grave danger that our cities
will spend more easy money than
is good for them. The railroads
tials. the cities do not.
budget System Imperative.
We are told by the Secretary of
the Treasury that while readjust-
ments Of the tax schedules are de-
sirable there can be no reduction
in the volume. of the taxes unless
Congress tones down its schedule
of appropriations for 1920. The
trouble with the situation is that
no disinterested authority is in po-
sition to say what appropriations
asked are essential and what are
not essential. In other words Con-
gress needs the budget system more
than it needs anything else, and
We will never have intelligent
treatment OF government eXpendi-
lures until We get it. The head
of department. a bureau chief.
or any other oficlal directly con-
cerned with the expenditure OF
money, should not be relied upon
to pass final judgment upon the
amount his department needs. The
system Is a system of guesse: the
department head guesses how much
the Appropriations Committee will
cut OF and pads accordingly. and
the Appropriations Committee
guesses how much the department
head puts on. and cuts on accord
ingly. sometimes to the detriment
of the public serviO- The sys-
tenn is haphazard and foolish. un-
I