The New York herald., 1921-12-06

Treasury TO have before them "A true
picture of the fiscal condition Of the
Government at any particular tlmc. AL
though Congress has by stringent ..ensl
law prohibited the creation OF defi-
ciencies and clearly Indicated that its an
nual appropriations were intended to
limit the amount to be expended for such
period. yet millions of dollars havo been
annually spent by the departments above
the estimate submitted at the oeginning
OF the fiscal year, and in recent years,
due to the great sums appropriated In
connection with the war. hundreds of
millions Of dollars have been so ex-
pended by the departments. A course
made possible by deficiency and supple
mental appropriations. the existence Of
revolving funds and unexpended bal
ances.
The distinction between the appro-
rriations for given year and the actual
expenditures for that year should be
clearly borne ir mind. Appropriations
for any given year do not represent the
money actually spent during that year,
but are intended to cover the obligations
which are incurred in that period. part
of which are paid currently and part
OF which mature and are discharged In
subsequent years. Consequently the ex-
pendtures Of a year must be composed
of the amounts maturing in it, some
Of which were appropriated in previous
years and some OF which are covered
by the current appropriations. In addi-
ton to this should be added the uae OF
permanent and indefinite appropriations
which require no annual action by Con-
gress and funds from other sources.
while the Director Of the Budget
Toe, hA t,afn
nation necessary to enable Congress to
make its appropriations In the former
way. 1t is urged that II it will pass the
budget providing simply for the amount
actually TO be expended during the fiscal
year with Executive pressure now being
exerted to keep the departments within
the limits of this expenditure a contin-
uance of the method will automatically
largely eliminate the indefinite cash de-
mands currently made In the past by
departments on account Of unexpended
balances in addition to their current
appropriations.
"A system by which requests for ap-
preparations are based upon the actual
need Of money for disbursement during
the fiscal year for which the appropria-
ton is made will thus tend to prevent
hereafter the wide, indefinite and fluc-
lures for any given year and the appro-
priations requested of Congress to cover
the same period
BuGSet Reform began mt Once.
The report reveals that the newly Gre
ated Bureau of the Budget did not wait
for a new fiscal year to begin curtailing
government expenditures. More than
half billion dollars (s5s2, 900, ,00o) was
saved from the original estimated ap-
preparations for the current year. a
further saving Of s462,l67.639 below the
1922 figures is indicated In the esti-
mates for 1923.
Reference to the accompanying table
will show the comparative receipts and
expenditures for the fiscal years 1921,
1892 and 1928.
Charles g. Dawes is head of one OF
the biggest banlts IN Chicago, and when
President Harding called him TO Wash
ingtor last June to take charge of the
newly created Bureau OF the Budget ne
studied his problem from a business
mans point of view.
lie has summed up the situation as
he found IL in his report az follows:
Heretofore, our Government, IN rou-
tine business administration. has labored
under difficulties analogous TO those OF
private corporation in which
"First--the president OF the corpora
tion gave practically no attention to it's
ordinary routine business. He avoided
his responsibility for the proper conduct
of the business OF the corporation. and
neither assumed nor delegated active
control over 1t.
"Second-The administrative vice.
presidents of the corporation were al
lowed to run their several departments
without any enforced contact In the dis
cussion of routine business matters of
the corporation and as II each separate
department was an Independent author
ity in all matters of routine business.
'Third-Because OF the lack of any
outlined business plan. resulting from
the absence of executive pressure and
supervision. the several departments
operated with almost an entire lack of
coordination. No system existed for
making purchases or in selling material
along business lines under unified
policy. A lack Of material or facilities
suited in no adequate search being made
for the existence OF such supplies or
facilities IN the hands OF another depart
nent which might Se available. In al
most every case recourse was had TO the
open market
"Fourth--Thc corporation was not
operated for profit and its principal funds
fer operating expenses were obtained by
a levy upon stockholders Can appeal to
Congress for an appropriation. involving
collection through taxes or irnposts).
Nations First Balarce Sheet.
"Fifth--No balance sheet or the cor
poration as a whole was ever prepared
No complete Inventories OF Its properties
existed. No statement of It's current
assets such as Balable material and cur
rent supplies had ever been made. nor
was there any easy method existing of
securing Il.
"Sixth-When cash was placed by the
stockholders at the disposal OF the cor
pcration for It's purposes the custom was
10 notify the different departments that
a certain amount Of credit was available
with the treasurer of the corporation. to
bc drawn upon as might be necessary to
meet any estimated expenditure involved