Evening star., 1925-12-08
LOWER TAXES AND WORLD COURT
HAVE FIRST PLACE In PROGRAM
Creation of Division in Agriculture Department to
Assist in Cooperative Marketing Asked for
Farmers, in Line With Chicago Speech.
Continued from First Page)

Continued from First Page.)
except for a necessary public purpose
duly authorized by the Constitution.
The power over the purse Is the
power over liberty.
That is the legal limitation within
which the Congress can act. How 1t
will proceed within this limitation Is
always a question of policy. When
the country is prosperous and free
from debt when the rate of taxation
is low, opportunity exists for assum-
ing new burdens and undertaking new
enterprises. Such condition now
prevails only to a limited extent. All
proposals for assuming new obllsa-
tions ought to be postponed unless
they are reproductive capital invest
mentS or are such as are absolutely
necessary at this time. We still have
an enormous debt of over S20,O00,oOU,-
600 on which the interest and sinking
fund requirements are 81 $40 900 900.
Our appropriations for the Pension
Office and the Veterans Bureau are
$500, 200, 900. The War and Navy De-
partments call for S642, 900 900. Other
requirements. exclusive of the Post
Office, which is virtually self-sustain-
ing, brought the appropriations for
the current year up to almost $780,
600 900. This shows an expenditure
of close to $50 for every inhabitant Of
our country. For the average family
Of five it means tax, directly or In
directly paid, of about $3.50 for ma
tional purposes alone. The local tax
adds much more. These enormous
expenditures ought not to be in
creased. but through every possible
effort they ought to be reduced.
War Debt Less by $4,000, 900, 900.
Only one of these great items can
be ultimately eXtinguished. That is
the item of our war debt. Already
this has been reduced by about S6,0O0,-
G0G 600. which means an annual saw
ing in interest of close to $3.50 0,0O0, 900.
The present interest charge is about
$500 900 900 yearly. 1t would seem to
he obvious that the sooner this debt
can be retired the more the taxpayers
will save in interest and the easier 1t
will be to secure funds with which to
prosecute needed running expenses,
constructions and improvements. This
item of S920, ,000.0 900 for interest is a
heavy charge on all the people Of the
country. and it seems to me that we
might well consider whether it is not
greatly worth while to dispense with
it as early as possible by retiring the
principal debt which it is required to
serve.
IL mas always pttH ouI pOiiSS " iC-
tire our debts. That of the Revolu-
tionarv War period, notwithstanding
the additions made in 1912. was paid
by 1885, and the Civil War debt within
% years. OF the amount already paid,
over $1,000, 900 900 is a reduction in
cash balances. That source Is ex-
hausted. Over one and two-thirds bill
lions of dollars was derived from eX-
cess receipts. Tax reduction elimi-
hot 1a S-o1n of fF-rNl1Y a Y
materials has been another element of
our income. That is practically fin
ished. With these eliminated, the re-
duction of the debt has been only
about 100000 each year, not an
excessive sum on so large debt.
States Cost to Taxpayers.
Proposals have been made to extend
the payment over a period of 62 years.
If $1,000 900, 900 Is paid at the end of
20 years, the cost to the taxpayers Is
the principal, and If the interest Is IA
per cent, total Of $3.50 100000. If
the same sum is paid at the end OF 81
years, the cost is 1885, 900, 900, or al
most double. Here Is another consid.
Grafton: Compared with its purchas.
ing power in 1918, the dollar we bor-
rowed represented but So cents. AS
the value of our dollar increases, due
to the falling prices Of commodities.
the burden of our debt increases. 1t
has now risen to 6312 cents. The tax
payer will be required to produce
nearly twice the amount of commodt-
ties to pay his debt if the dollar re-
turns to the 1913 value. The more we
pay while prices are high, the easier
it will be.
Defiation of government after war
period is slower than deflation of
business, where curtailment Is either
prompt and effective or disaster fol-
lows There is room for further econ
omy IN the cost of the Federal Gov
ernment, but a comparison OF current
expenditures with pre-war expendi-
lures is not unfavorable to the effi-
cheney with which Government busi-
ness is now being done. The expendi-
lures Of 1916, the last pre-war year,
were s742 100000, and in 1925 over
$500, 900 900, or nearly five times as
great. If we subtract expenditures
for debt retirements and interest. vet
erans' relief, increase Of pensions and
other special outlayS, consisting of re-
funds, trust investments and like
charges. we find that the general ex-
penditures of the Government in 1925
were slightly more than twice as large
as in 1916.
Relative Cost Increases.
~
nately 40 per cent higher than In
1916 the cost of the same Govern
ment must also have increased. But
the Government is not the same. 1t
is more expensive to collect the much
greater revenue necessary and to ad-
minister our great debt. We have
given enlarged and improved services
to agriculture and commerce. Above
ell, America has grown in population
and wealth. Government expenditures
must always share in this growth.
Taking into account the factors l
have mentioned, / believe that present
Federal expenses are not far out OF
line with pre-war expenses. We have
nearly accomplished the defation.
This does not mean that further
economies will not come. AS we re-
duce our debt our interest charges
decline. There are many details yet
to correct. The real improvement,
however, must come not from addi-
tional curtailment Of expenses. but by
n more intelligent, more ordered
spending. Our economy must be con-
structive. While we should avoid as
far as possible increases in perma-
nent current expenditures, oftentimes
q capital outlay like internal improve
ments will result in actual construc.
tive saving That is economy in its
best sense. 1t is an avoidance of
waste that there may be the means
for an outlay today which Will bring
larger returns tomorrow. We should
constantly engage in scientific studies
of our future requirements and adopt
an orderly program for their service.
Economy is the method by which we
prepare today to afford the improve.
ments of tomorrow.