The New York herald. [volume] (New York, N.Y.) 1920-1924, 1920-12-08

brought it's Government into ex-
istence and established 1t In the face
of almost universal opposition and
intrigue, even in the face of wanton
force, as. for example, against the
orders In council OF Great Britain
and the arbitrary Napoleonic de-
crees which involved us in what we
know as the War OF 1912.
! urge you to consider that the
display of an immediate disposition
on the part of the Congress to rem
edy any injustices or evils that may
have shown themselves In our ma
tional life will afford the most ef-
fectual offset to the forces Of chaos
and tyranny which are playing so
disastrous a part In the fortunes of
the free peoples of more than one
part of the world. The United States
is OF necessity the sample democ-
racy of the world, and the triumph
OF democracy depends upon its sue
cess.
Budget System Is Urged.
Recovery from the disturbing and
sometimes disastrous effects of the
late war has been exceedingly slow
on the other side OF the water, and
has given promise. I venture to say.
of early completion only in our own
fortunate country but even with us
the recovery halts and Is impeded at
times, and there are Immediately
serviceable acts of legislation which
1t seems to me we ought TO attempt,
to assist that recovery and prove
the indestrucuble recupera tive force
of a great government of the people.
One OF these is to prove that a
great democracy can keep house as
successfully and in as businesslike a
fashion as any other government. It
seems to me that the first step to-
wards proving this is to supply our
selves with q systematic method Of
handling our estimates and expendi-
lures and bringing them to the point
where they will not be an upneces-
sary strain upon our income or ne
cessitate unreasonable taxation. In
other words, workable budget sys-
tenn, and I respectfully suggest that
two elements are essential to such a
system: namely. not only that the
proposal OF appropriations should be
In the hands of a single body, such
as a single appropriations committee
in each house of the Congress, but
also that this body should be
brought into such cooperation with
the departments of the Government
and with the Treasury of the United
States as would enable 1t to act
upon complete conspectus of the
needs of the Government and the re-
sources from which 1t must draw its
income.
7 reluctantly vetoed the budget
az Of
the Congress because OF q constitu-
tional objection. The House Of Rep
resentatives subsequently modified
the bill in order to meet this OBJ
lection. In the revised form 7 be-
lieve that the bill, coupled with
action already taken by the Con-
gress to revise its rules and pro-
cedure, 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 Con-
gress will be to pass the budget bill.
Country's Finances Improying.
The nations finances have shown
marked Improvement during the last
year. The total ordinary receipts
of S6,594,O 0o. 900 for the fiscal year
1920 exceeded those for 1919 by
sl,542,O00, 900. while the total net
ordinary expenditures decreased from
$1S,514,0O0, 900 to sc, 403, 000,0 900. The
gross public debt, which reached Its
highest point on August 81, 1919,
when 1t was s26, 1896, 100000, had
dropped on November 80, 1920, TO
$24,175, 900, 900. There has also been
a 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 obliga-
tions. This fortunate result has re-
lieved the banks and left them freer
to finance the needs of agriculture,
industry and commerce.
II has been due in large part to
the reduction of the public debt, es-
pecially of the floating debt, but more
particularly to the improved DIS
tribution of Government securities
among permanent investors. The
cessation OF the Governments bor-
rowines except through short term
certificates of indebtedness has beeL
a matter of great consequence to the
people OF the country 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 market and from @ position
Of dominant influence in that mar
ket The future course viii neces-
sarily depend upon the extent to
which economies are practised and
upon rhe burdens placed upon the
Treasury as well as upon Industrial
developments and the maintenance
Of tax receipts at a sufficiently high
level.
1-2 billions In Bonds Mature.
The fundamental fact which at
present dominates the Governments
financial situation is that seven and
half billions Of It's war indebted