Evening star. [volume] (Washington, D.C.) 1854-1972, 1927-06-11
PRESIDENT WARNS
TAX CUT DEPENDS
ON LESS SPENDING
Sounds Note of Caution in
Address to Government
Business Meeting.

Unless we succeed in holding
expenditures at about their presen
level, hope Of further tax reduction
will be gone"
With this warning. Presiden
Coolidge last night sounded a note
of caution in the face of a steadily
rising demand for tax reduction a.
the next session of Congress.
Speaking to the thirteenth regular
meeting of the business organization
OF the government at Memorial Cont
mental Hall. and by radio to the
American people, the chief executive
expressed qualification over the rec
ord breaking Federal surplus Of about
$500, 900 900 for this fiscal year ending
June 80, and an estimated surplus Of
S338,000,000 for the next year. But
he set forth clearly and at some de
tail why "as a guide to the future
this years surplus is OF douottul
value"
homecoming items, and a number
of extraordinary receipts that cannot
be counted on for more than limited
period were ascribed by the Presi
dent as the principal reasons why the
SURPRISES looked more promising for
tax reduction than in reality they
we're.
Lord Announces New Club.
Gen. Herbert NJ. Lord, director of
the Bureau of the Budget, who fol
lowed the President. reviewed at
length the record Of the Government
under budget control. and announced
81 Of CT
sther savings, the formation of a new
club for Federal workers. to be
known as the Loyal Order of Wood.
peckers," humorously explaining the
need for concerted tapping away at
waste
In advising caution in the matter
of prospective tax reduction, Presi.
dent Coolidge said, I'VE must keep in
mind that our revenue laws cannot
be written from the standpoint Of a
single year, but must be expected to
yield adequate revenue over a period
of years. It is essential therefore to
discount temporary and homecoming
items and to base the estimated reve
nue. on those resources which can be
looked upon as essentially permanent
in character" Among the non-recur
ring items, he referred to sale of
capital assets, collections from farm
loan bonds, and other miscellaneous
securities. Railroad receipts growing
out of wartime Federal control of
the roads the President predicted
could not be expected to return any
substantial amount after 1929. The
net revenue of back taxes over tax
refunds was said also to be an item
which could not safely be counted
upon for future years.
I'VE have no fear" said the Presi
dent, that our present revenue laws
will not produce ample income to
carry on the business of the Gov
eminent. But this does not justify
an enlargement of our expenditure
program. Rather does it dictate and
demand that we make renewed effort
to keep within our present eXpendi.
lures. One thing is certain. Unless
We succeed in holding expenditures
at about their present level. hope of
further tax reduction will be gone.
Surplus Influence Great.
SURPRISES of the Government, how
ever, the President pointed out, had
had great influence" in making tax
reduction possible. Application of
surpluses to the public debt, he ex.
planned. had permanently" reduced
interest charges, cutting these charges
for the current year.
For the next fiscal year. known as
1929, President Coolidge called on the
Government spending agencies to hold
their total expenditures, exclusive of
reduction of the debt, the Postal Serv-
ice and tax refunds, down to $780,
GOO. 900.
Sharp warning was issued by the
President that administrators of Gov.
ernment funds should keep within the
original appropriation of Congress.
~f"In recent years" said the Chief
Executive, actual deficits have been
few. and in most cases unpreventable.
There have been cases. however
where administrators have so obi
gated their funds in the first months
of year that unless Congress af-
fcrtied relief necessary activities would
have been stopped. I am determined
there shall be an end to procedures
of this sort. Good administrators will
plan their operating campaigns to
conform with the appropriations made
by the Congress. There is no place
in the Federal service for other than
good administrators"
Cites Mississippi Disaster.
The Mississippi disaster was re-
ferred to by the President as prob
ably reducing prospective revenue
and increasing prospective eXpendi-
lures.
Gen. Lord reviewed the history Of
the Federal surplus and pointed with
some pride to the fact that this year
it had been possible to bring expendi-
lures down TO about $2,975.235, $50,
which was 100000 less than spent
in 1924 and within the goal of SO ,000,-
mn mn he h1id
Through the 1.-TWO Per Cent Club"
which planned to operate by not fill
ing vacancies in the Federal pay roll.
Gen. Lord announced that a saving of
about $4,000. 900 had been made.
Prompt settlement of bills had saved
more than 100000 he said.
During the coming pear, the budget
director declared, the operating agen-
cies thought they would spend 5000.
100000. This. he said, lis $4,000, 900
in excess Of our expected expenditure
this year. we must put the
inspected and condemned mark on
that S45, 100000"
New Club Based on Story.
The new club, which Gen. Lord
stated with be known as THE Loyal
Order of Woodpeckers," for the pur-
pose of saving Government funds, was
DaSed on a story Wnlcn ne tolu, III
brief, as follows:
"a speaker was lecturing on for
estry. I don't suppose said he, that
single person here has ever done
anything to conserve our valuable tim
ber.' moment of silence, and then
"A meek-looking little man in the rear
of the hall arose and said i once shot
a woodpecker.'
''We need a woodpecker club" con.
tipued Gen. Lord, ''in the interest of
a 100 per cent commitment Of the peo'
pie in the service to crusade for
small Savings-a sort of shrapnel at
tack on that $45, 100000 for which we
vii be cunning next year. All
hail 10 the LOYAL Order of Woodpeck