The Washington herald., 1920-10-21
NEW BUDGET
PLAN Isl URGED
BY FINANCIERS
Bankers Called on to Fight
Federal Aid as Poor
Business.
EDUCATION BILL HIT
New Department Plan De-
nounced as Effort to So
vietize School System.
EDUCATION BILL HIT

Active opposition to Federal aid
to States. localities and individuals
will be urged upon all financial and
business men favoring effective
budget systems for the government
by W. A. Sadd, president of the
Chattanooga Savings Bank and vice
president of the savings bank sec
tion, A. B. A, at a meeting today
at the Raleigh Hotel
The American Bankers Associa-
tiOn and all business interests are
entific budget system in order to
reduce the burden resting upon tax
payers" said Sadd, who is chair
man Of the sections committee on
Federal legislation, last night. Few
appear to have realized that all
possible benefits from budget con-
troll are destroyed by the adoption
Of Federal aid methods.
Means Huge Appropriations.
In the first place, they presup-
pose the development Of a Federal
bureaucracy on such lines that ap-
preparations must inevitably in
crease, quite regardless of benefits
received. The distribution of the
Federal funds would directly de-
velOp such political support in
States and communities as to de-
stroy all prospects for legislative
check and at the same time offer
Of of
''Of equal Importance is the fact
that the offer OF Federal aid would
make 1t practically impossible for
any State to refuse to comply with
the Federal conditions, and this re-
Sardless of the actual needs in the
locality. In other words, the Fed
eral plan would make it impossible
for the States to determine the
amount Of some of the largest items
in their own budgets.
Rnps Education Bn.
There is one bill before Congress
which carries this Federal aid and
indirect effort at naturalization to
an extreme. We refer to the
Smith Towner bill to establish a
United States department of edu-
cation with maintenance appropria-
tiOn of 100000. but also an annual
appropriation of s1O,OOO,OO to be
disbursed by the secretary of the
department through system of
Federal aid to the States on such
partial payment of teachers SAL
aries, improvement of teachers and
normal training, providing scholar
ships for talented young people"
supervising instruction of native
born illiteratCs, and for teaching
English to immigrant illiterates.
Sees Soviet influence.
We suggest that the propriety
of such legislation should be
brought before State bankers asso-
Citations, as we believe that the bill
represents an effort not only to
Federalize but to Sovietize the en-
tire educational system of the
United States.
Like objections exist to the va
riOus sO-called land settlement
projects, the proof of the fiscal OBJ
jectiOns mentioned above being
proved By the fact that a majority
Of the tSates have already made ap-
propriations to qualify for the Fed
eral grant before the Federal bill
gress, and only as the result of
has passed either house OF Con-
propaganda and even more direct
effort by the executive official who
sponsored the proposal and would
have its management and patron
age"
Optimistic About Business.
Elliot c. McDougal, president of
the Marine Trust Company Of Buff
falO, n. Y and president-elect of
the state Bank Section of the A B.
a, declared yesterday that he was
optimistic about the future of busi-
ness. He said the period of pros
perity upon which the country is
soon to enter would probably exceed
any such period in our history.
Touching on the Federal reserve
system. he said: IF instead of com
planning about the Federal reserve
system bankers would work togeth-
er for its gradual Improvement year
after year, they would be doing the
public a service that only bankers
can do.
Banks. members Of the Federal
reseyve system, are carrying more
than their fair share of the burden
OF supporting the reseve of this
county, while nonmember banks in
directly get the benefit of the sys-
tenn. but remain outside because it
is more profitable to do So"
Seek Foreign Trade.
Definitely recommend the es-
tablishment on or about January l,
1921, Of a 800. 100000 Edge Law
Corporation to finance Americas
foreign trade. the commerce and
marine committee Of the American
Bankers Association in a report
presented to the association yes
terday declare that the time is op-
perfume for the formation Of such
a corporation and there is urgent
need for such corporation.
There exists for the bankers of
America a privilege, opportunity and
duty in pointing the war definitely
to the organization of such a cor
poratior in cooperation with man
ufacturers, exporters and import
ers, producers and others, giving
to It that support which is abso-
lutely essential for II to come into
successful operation" says the COM
mittee.
Concerted Action Urged.
The committee, whose chairman
is John McHugh, of New York, re-
affirmed that it was not its func-
ton to organize the corporation,
but recommended that steps be
taken as soon as possible for con-
certed action by individual bankers
and business men of the country.
The plan for a nationwide for
eign trade financing corporation as
contemplated was presented by the
committee to the executive associa-
n tion last spring after a canvass
OF the bankers of the country.