The Washington herald., 1921-07-13
Says Overburdening Of
Treasury Now Means
Disaster Later.

The text of President Hardins's
address in the Senate yesterday. is
as follows:-
There has come to my attention
the pending unfinished business be-
fore the Senate, and II is an i'm
perative duty to convey to you the
probable effect OF the passage at
this time of the proposed act pro-
viding for adjusted compensation
to our service men in the world
war. II this measure could be
made effective at the present time
without disaster to the nations
finances and without hindrance. to
imperative readjustment Of our
taxes it would present an entirely
different question than that which
Is before you. In personal as
well as 4 public manner. which
ought to be a plight of good faith.
| have commended the policy of gen.
erous treatment Of the nations de-
tenders. not as a part of any con-
tract. not as the payment Of a debt
which is owing, but as a mark OF
the nations gratitude. Every obli-
SdNlOh " lHc ulSdblcu anu uc-
pendent. In such reference as has
been made to general compensation
there has been a reservation as to
the earliest consistent time for such
action IL 1t is taken. Even without
such reservation. however. a modi-
fed view would be wholly justin
able at the present moment. be-
cause the enactment OF the compen-
sation bill in the midst of the strug-
gle for readjustment and restora-
tion would hinder every effort and
greatly imperil the financial sta
bility of our country. More. this
menacing effort to expend billions
in gratuities will imperil our ca
pacity to discharge our first obli-
cations to those we must not fail
to aid.
Problems to Settle.
I am addressing the Senate d.
rectly because the problem is i'm
mediately yours, as your unfinished
business. but the executive branch
of the government owes It to both
Houses OF Congress and to the
country frankly to state the diff
culties we daily are called upon to
meet, and the added peril this
measure would bring.
Our land has its share of the
financial chaos and the industrial
depression of the world. We little
needed the growth of Indebtedness
or the limits OF expenditure during
the war. because we could not stop
to count the cost. Our one thought
then was the winning of the war.
and the survival OF the nation. We
borrowed and loaned-individuals
to the nation and the government
to other governments. and to those
who served the nation. with little
thought of settlement 1t was
relatively easy then. because ma
tional life was at stake. In the
sober aftermath we face the order
of reason, rather than act amid the
passions of war. and our own land
and the world are facing problems
never solved before. There can be
no solution unless we face the
grim truths and seek to solve
them in resolute devotion to duty.
After a survey of more than four
months, contemplating conditions
which would stagger all of us
were it not for our abiding faith In
America. / am fully persuaded that
very beginning OF the restored
order of things. There are the re-
vision. including reduction. of our
internal taxation. the refunding of
our war debt, and the adjustment
of our foreign loans. 1t is vitality
necessary to settle these problems
before adding to our Treasury any
such burden as is contemplated in
the pending bill.
Heavy Tax Hurt Business.
1t is unthinkable to expect a
business revival and the resump-
ton of the normal ways of pea>e
while maintaining the excessive
taxes of war. 1t is quite as unthink-
able to- reduce our tax burdens
while committing our Treasury to
an additional obligation which
ranges from 100000 to $4,000
900. The precise figures no
one can give. II it is conceivably
true that only s200,000,O00 a
year will be drawn annually
from the Treasury in the few years
before US, the bestowal
Is too inconsequential to be of real
value to the nations defenders: and
IL the exercise of the option should
call for cash running into billions,
the depression in finance and indps-
try would be so marked that vastly
more harm than good would attend.
Our government must undertake
no obligation which 1t does not in
tend to meet. No government fiat
will pay our bills. The exchanges
of the world testify today to that
erroneous theory. We may rely on
the sacrifices of patriotism in war,
but today we face markets, and the
effects of supply and demand, and
the inexorable laws of credits in
time of peace.
Treasury would Face Disaster.
At the very moment we are
Obliged to pay SIX per cent interest
for government short-time loans to
care for our floating Indebtedness,
a rate on government BORROWING, in
spite of tax-exemption, which ought
to prevail in private transactions
for the normal interest charges in
financing our industry and COM
merce. Definite obligations amount
ing to $500. 100000 in war savings
Victory bonds and GER
tificates covering floating indebted
ness are to mature in the two years
following, and the
of the Treasury now
means positive disaster in the years
before us. Merest pru-
dence calls out in warning.
Our greatest necessity is a re-
turn to the normal ways of peace
activities. A modest offering to the
,,illiops of service men Ia "a moor