Evening star., 1924-03-19
CHAPTER XIV.


Where Big Cuts Might Be Made.
Henry C. Adams was a great Amer
lean. He became associated with the
University of Michigan in 1880. For
forty years he was one of the lead
ing writer's on finance in the United
called 1.-The Science of Finance"
In this book Mr.. Adams divided the
basic functions of government into
three groups:
First, the protective function, in
Guiding a tax from without and
within and the safeguarding of
health
Second, the commercial function, in
cluding all self-supporting enter
prises, such as the post office.
Third, the development of function,
part of society to attain higher forms
of life" and includes all scientific re-
search, education and control of re-
sources, and the collection and spread
of knowledge.
Public welfare, in the finest sense,
then, demands the maintenance of all
three of these functions, with a par
ticu1ar regard for a we'll selected re-
fationship between each. How i'm
portant these three functions have
become in the life of a nation may
be largely judged by the amount of
money spent for each of them.
DIR. Edward B. Rosa was another
high minded American. He was as
sociated for many years with the ia
nous bureau of standards in Wash
ington. In 1921 he made a very clab-
crate Independent analysis OF gov
ernment receipts and expenditures
from 1910 to 1920, inclusive. He had
large. competent staff under him.
For many months he worked putting
together the figures. Then he pub
lished his report. It is unuuestion-
ably the most comprehensive and
most intelligent survey from the
plain citizens viewpoint of govern
ment finances which was ever under
taken. He attempted to put together
into figures Henry Adams general
outline. His analysis stopped with
the nscal year year which ended June
80, 1929. Unfortunately for America
DR.. Rosa died shortly after his report
was issued.
Figures Brought Down to Date.
But the figures based on DR.. Rosas
plan have been continued by certain
well known experts up to and incIud-
ing the fiscal year 1928. I have be-
fore me the essential figures under
such classification from July 1, 1909.
to June 80, 1922. DR.. Rosa's analysis
shows that the expenditures of the
government did not greatly change
from 1910 to 1915. In 1910 they were
s64O 100000 net, and in 1915 were
$3.50. 100000. The net debt remained
at about $1,000, 100000 during the pc
riod.
If we take two normal pre-war
~ rah
seyen abnormal war and postwar
years, 1917 to 1923, inclusive, we find
seven amazing revelations:
FIRST. in the pre-war years, 1915
and 1915, the protective function
military expenses) took two-thirds
commercial function (primary ex-
penses) took 80 per cent: while the
development function (research. sci
ence and educationaD took only
per cent of the total amount spent
Second. in the war years, 1917 to
1922. the protective function ac-
counted for SO per cent of the total
expenses of the United States gov
ernment. the commercial function s
per cent, while the development func-
ton had to be satisfied with / per
cent. Eighty-thr cents out of every
government 81 spent from 1917 to
1922, inclusive, went into the great
war.
war to July l, 1922, was s31,650,-
$4,000. This does not include sink
ing fund payments. unsettled claims
and other accrued liabilities.
Fourth. in 1923, the great war
costs were $4,000. 100000 out of total
expenditures of about s3,500. 000. 900
This is about the annual burden the
people of the United States will have
to meet for many years to come,
over and above normal military ex-
Il ,yxv
est payments will diminish. but as
we have already seen in our chapter
on pensions, pensions will tend to
grow perhaps even faster than inter-
est decreases.
Surplus Piled Up.
Fifth, revenue from taxes has more
United States government from 1920
to 1923, inclusive-a surplus of over
three billions having been piled up
during this period. But even with
this surplus. about twelve billions of
deficit covered by borrowing still re-
mains to be met. This deficit plus
ten billions of principle loaned to the
allies during and after the war over
and above this, gives us approx
mately twenty-five billions of dollars.
or about the total on June 80, 1928,
of the public debt of the United
States. On March 1, 1924, the public
debt stood at s21,7S1, ,s66 900.
Sixth, the annual cost of the gov
ernment now is about three and one
half billions of dollars, where in 1916,
it was 100000 0O0-five times as
great today as then.
Seventh, the outgo for public
works continues at a high figure. de-
spite the war burden that the Amer
ican people are now iaboring under
Let us bring the figures right up to
1924. The actual expenses are fol-
lowing very closely the estimates of
the bureau of the budget For the
year ending June 80, 1924, according
to the official report of the director
of the budget. military expenses are
expected to take 38.S cents out of
every 81 spent by the government;
the public debt charges will take an
other 40.S cents. Together these two