The New York herald., 1922-05-08
MONDAY. MAY s, 1922.
An Economy Business Admins
tration That Economies.


CHARLES G.. DAWES, Director of the
Bureau of the Budget, is so thor
oughly the business man pure and
simple that at the very outset OF his
report on the economies and savings
in the management of the Govern
ment under President HARDING he
frankly declares that some of the big
moneys which appear as savings un-
der the Governments archaic system
of accounting are not savings at all.
At the close of 1921, for example,
1t was estimated that 1887 7,679,235
would be paid out of the national
Treasury for railroad loans, advances
and other requirements under the
transportation act and this amount
was allotted in the budget. Under the
weird and wonderful Government ac-
counting system still in vogue such
moneys, even though loans, are called
an expense" Now, it happens that
after this railroad expense" allot-
ment was made there came an enor-
nous improvement in the securities
market. The United States Railroad
Administration was enabled thereby
to market under the most favor
able circumstances railroad securities
which it held.
So large q volume OF these securi-
ties could be disposed Of at such
good prices that thenceforth the Rail
road Administration did not need to
touch a dollar OF that expense" al
lotment of 1887 7,679, ,235. More than
that, since then the Railroad Admin
istration not only has financed all it's
needs for giving assistance to rail
roads out of the proceeds of the sales
OF the securities in hand but it will
turn into the Treasury about s56,000,-
900 besides.
But just as the Government book
keeping system enters loan to a
railroad as an expense" it enters
the return of the loan as receipt
In this matter of the estimates for
the Railroad Administration, there
fore, the Government accounts would
appear to show a saving of about
S393, 100000 from the estimates of
expense. The horse sense Budget
Director does not countenance such
bookkeeping nonsense. Furthermore,
he comments on this Government
scrambling of capital funds and op-
Grating costs in the following vigor-
Gus and picturesque terms: IAN ac-
counting system like this might be
regarded as humorous in small busi.
ness. 1t is nothing short OF ca
lamity in governmental accounting"
But the Harding economy admin
istration did economize vigorously
on actual operating costs and did
save enormously on real expendi-
lures In cold cash. as the Director Of
the Budget is able to explain with
impressive facts and figures.
There are of course three ways to
economic and save in the Govern
ment's business, or rather to begin to
save. as the mass OF financial details
In the Dawes report reveals. One is
for the budget to put the broadax
to its estimates Of what the depart
mepts need to spend. The second is
for Congress to hold down the appro-
priations of the moneys it will give
the departments to spend. The third
and this has been the Harding way
lis for the departments actually to
spend less than the budget makers
estimated they would need to spend
and less than Congress gave them to
spend.
There are. on the other hand, two
ancient and notorious ways to upset
the attempted economies and saw
ings. One is for the departments to
overspend their appropriations and
put the deficiencies up to Congress
later. The other is for Congress to
vote the main supply bills with SEN
sational flourish at rigid economy to
attract public applause and then,
when the public is not looking, TO
sneak through various supplement
tai and deficiency appropriations.
whether pork barrel grabs, schemes
for personal political benefit or what
ever 1t may be.
This Congress has done some of the
usual spending tricks of slipping
cards under the table. After the reg
uiar appropriations were made, for
instance. there came along an ap
preparation of $5,Ooo,oO0 for payment
TO Colombia. another OF $1,000,000
for the Brazil exhibition, still an
other OF $i,500,O00 for seed loans
These appropriations. let it be noted