, 1920-12-16

the sample democracy of the world and
the triumph of democracy depends
upon Its success.
Adoption of Budget System Asked.
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
it seems to me we ought to attempt
to assist that recovery and prove the
in~destructible ~recuperative force of
a great government of the people.
II reluctantly vetoed the budget
bill passed by the last session of the
Congress because of a constitutional
objection. The House of Representa-
tives subsequently modified the bill
in order to meet this objection. In
the revised form 1 believe hat the
bill, coupled with action already TAX
en- by the Congress to revise its rules
and procedure, furnishes the founda-
tions for an effective national bud
fore that n of the first steps taken
by the present session of the Con-
gress will be to pass the budget bill.
"The nations finances have shown
marked improvement during the past
year. The total ordinary receipts of
SO, 694.000,000 for the fiscal year 1920
exceed those for 1919 by 81, $40, 000, 900,
while the total net ordinary expendi-
lures decreased from SIS, $4,000, 900 to
5 6,403, 900 900. The gross public debt,
which reached its highest point on
Aug. =, 1919, when it was $26,596,-
100000, had dropped on Nov. 80, 1920,
to $24, tx ,000,00 There has also been
a marked decrease in holdings of gov
eminent war securities by the banking
institutions of the country as well as
in the amount of bills held by the fed
eral reserve banks secured by govern
ment war obligations. This fortunate
result has relieved the banks and left
them freer to finance the needs of
agriculture. industry and commerce.. 1t
has been due in large part to the re-
duction of the public debt, especially
of the floating debt, but more particu-
larry 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
consequence 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
market and from a position of domi-
nant influence in that 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 industrial developments and the
maintenance of tax receipts at q suf-
ficiently high level.
1.-THE fundamental fact which at
present dominates the governments fl
nancial situation is that 81, 800, 000, 900
of its war Indebtedness natures with
In the next two and a half years. OF
this amount S2,500,000 900 are floating
debt and $4,000, OO0, 1000 Victory notes
and Wan Savings certificates. The fls-
cal program of the government must
be determined with reference to these
maturities.
Sound policy demands that govern
ment expenditures be reduced to the
lowest amount which will permit the
various services to operate efficiently
and that government receipts from
taxes and salvage be maintained suffI-
GENTLY high to provide for current re-
quirements, including 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 econ
omy, vigorous salvage operations and
adequate revenues from taxation, a
surplus of current receipts over cur
rent expenditures can be realized and
should be applied to the floating debt.
All branches of the government should
cooperate to see that this program Is
realized.
Payments to Roads a Handicap.
IL cannot overemphasize the neces-
sity of economy In government APP
preparations and expenditures and
the avoidance by the Congress of
practices which take money from the
treasury by indefinite or revolving
fund appropriations.
THE estimates for the present year
show that owe a billion dollars of
expenditures were authorized by the
; last Congress in addition to the
amounts shown in the usual compiled
statements of appropriations. This
; strikingly illustrates the Importance
of making direct and specific appro-
} priatlons.