Evening star., 1923-06-27
Harding Warns States and Cities of Menace Rising Taxes

world. I undertake to say that no
event since the conclusion OF nos
tilities has contributed so much 70
to stabilization, to confidence In its
governments. and to the estapneheo
conviction that our social institutions
are yet secure.
No consideration Of public finances
can omit the fact that the single item
of interest on the public debt ex-
ceeds $1,000. 100000 annually. For the
| fiscal year 1929, this item Will be
$1,100. 100000. Beyond this. we Will
reduce the public debt this year by
| proximately $500, 100000. That Is.
over IS per cent of the national rev.
enue will this year go to paying in :.
| terest or extinguishing the principal
| OF the public debt.
Is Best Showing.
1 have not been able to gather con-
| elusive statistics as to the accom-
plishments Of states. cities and coun-
| ties, to compare with this showing of
the federal government. But with
some general knowledge of the fiscal
! eral, I feel quite safe in proffering
my congratulations to any state. any
city. any foreign country. which has
| made better showing in the matter
Of reducing it's public debt within
the period since the war. I most
| been able to make a similar showing.
On this latter point I wish to say
| word further. Taxation decidedly
is local as well as a national question.
| Prior to the war federal taxation was
! an unimportant item; SO small that
| in 1917 state and local taxes, in a
| group of ten representative states. in
| all parts of the country. constituted
10 per cent Of the entire tax burden.
The federal tax was indirect and
! unfelt. Then came the enormous cost
OF the war which the federal gov
ernment had to bear. and in 1913 state
| and local taxes constituted only AZ
per cent OF the entire tax burden.
| In 1919 they represented "A per cent
of the whole: in 1920, II per cent.
| But in 1922, the last year for which
figures are available, state and local
| taxes were again In excess and rep
resented 60 per cent Of the entire tax tax
| calculation are Arizona, Connecticut.
Michigan, Minnesota, New Hampshire,
Ohio. Oregon. South Dakota, Washing
ton and Wisconsin.
Spending IL Habit.
The world. its governments, its
| quasi public corporations. its people
acquired the spending habit during
| the war to an extent not merely un-
1
| There Is but one way for the COM
| munity finally to get back on its feet
| and that Is to go seriously about pay
| ing it's debts and reducing its ex-
| penses. That is what the world must
! face. The greatest and richest gov
| the humblest citizen. No habit Is
so easy to form. none so hard to
| treak, as that of reckless spending
| And on the other side, none is more
| certain TO contribute security and
| happiness than the habit of thrift, of
savings. OF careful management in
| all business concerns, Of balanced
| budgets and living within incomes
| If / could urge upon the American
/ people a single rule applicable to
every one of them as individuals. and
! to every political or corporate unit
! among them. 1t would be to learn to
| spend somewhat less than your in
| come all the time. If you have debts
| reduce them as rapidly as you can;
/ II you are one of the fortunate few
| who have no debts, make 1t a rule
to save something every year. Keep
| your eye everlastingly on those who
| administer your governmental units
| for you; your town, your county, your
state. your national government
! Make them understand your are ap-
i plying the rule OF thrift and savings
| in your personal affairs. and require
| them to apply 1t in their management
| of your pubic affairs. II they fail.
| find other public servants who will
succeed. II they succeed, give them
] such encouragement and inspiration
| as will be represented by full meas
ure OF hearty appreciation for their
| efforts.
| This brings me to brief reference
| to what has proven so helpful to the
! federal government in effecting the
! approach to the expenditures of nor
/ NAL times. For the first time in
/ our history we have the national
budget. under which there is an eff
fective scrutiny of estimates for
| public expenditure. More. we have
co-ordinated government activities in
! making the expenditures which Con
| gress authorizes.
Praises budget System.
1t seems now unbelievable that we
| should have been willing to go for
a century and a third without this
| helpful agency of business admins
| tration. But we did, and only now
| have we come to an appraisal of the
| cost of this great neglect.
] 1t has been no easy task to estab-