Evening star., 1928-10-18
MELLON COMBATS
SMITH ON ECONOMY
Secretary Says Candidate Is
Inaccurate and Misintormed
on Federal Finances.

| Gov. Smiths Sedalia attack on Cool
! idge economy" has brought down upon
! his head the indignant protests of two
/ of the Presidents most ardent cham
pions Of the economy program-Secre-
| tary of the Treasury Mellon and former
! Secretary of the Interior Work. now
chairman of the Republican national
| committee.
Secretary Mellon in a 10-page reply
today TO the Democratic nominee
charges the New York governor with
what even the most charitably minded
! would have to describe as inaccuracies"
and suggests that perhaps the most ac-
curate statement in Gov. Smiths en-
tire speech is the one in which he said
that the fiscal reports of the Federal
finances were Chinese puzzle to him"
Dr. Work at the same time issued a
statement accusing Smith of being
"Shrewd enough to avoid all reference
to the four tax-reduction measures,
totaling ST 800 900 900, which have be-
come effective in the last seven and one
half years" and of overlooking the fact
that the Republican administration has
paid off $4,000 10000 of Government
bonds, known as the Understanding
public debt"
Mellon Strikes Back.
"Under ordinary circumstances l
would not think it wor while to answer
purely political speech Secretary
Mellon said. But in the address de-
livered at Sedalia, Mo- by the Demo-
cratic candidate for the presidency he
undertook to challenge my good faith
and to accuse me of presenting a false
picture to the Nation. He included in
this charge the director of the Bureau
of the Budget and the UnderSecretary
of the Treasury. In other words. Gov.
Smith accuses the financial officers of
the Government Of carrying on a de-
liberate campaign Of misrepresentation
intended to conceal the true picture of
the Nations finances. This will not do
Before a responsible man makes
such charge he should have a thor
ough and intimate knowledge of all the
facts and be able to support it with
clear and convincing proof.
Let me begin by correcting Gov
Smiths conception of what this ad-
miniStration understands by economy
In government. Economy is not Just
saving, but wise spending the elimina-
ton OF waste: the promotion of eff
cheney and busineSslike methods: tia
building up of sense of responsibility
to the taxpayer on the part Of all pub
lie servants: the careful management
=
emplifed. for instance, by a policy of
steady debt reduction with consequent
relief from the heavy burden of inter-
est charges Under such a definition,
expenditures might actually increase
from year to year and yet the Nation
receive an economical and businesslike
administration of its public affairs.
Defends Minor Savings.
IF Gov. Smith understood the
meaning of economy in government in
this sense, he would not point the finger
OF Scorn and ridicule at the items of
minor savings effected by individuals
holding subordinate positions in the
Federal Government. Doesn't
he realize that these examples of minor
savings effected by people holding sub
ordinate positions, sometimes In a dis
tant part Of the world, are simply
proof that the example set by the
President at the top has reached down
until it has permeated the whole civil
service and revolutionized their atti-
| tude toward the expenditure of the pub
lie funds?
1T is the best example of the high
morale that has been built up under
President Coolidge's leadership, and
nothing that know of is more condu-
Give to the destruction that morale. than
| to have candidate for the presidency
of the United States hold up to ridicule
and contempt the efforts of public serv-
ants to save the money of the tax
payers.
Gov. Smith sought to establish his
case by claiming that the reduction in
expenditures effected since 1921, was
not due to economy and good admins
tration, but to the automatic demobili-
zation OF the wartime machine The
trouble with that contention is that the
war had been over for 212 years when
the Republican administration took
control OF the Government in March,
1921. II this savings were inevitable,
as Gov. Smith would have us believe,
why hadn't they already been more
largely effected?
Sees Smith Misinformed.
me come to the central point of the
governors speech, to the statement
which he says is a pretty good. clean,
clear-cut statement, made without
| equivocation,' from which he has got
| nothing to subtract or deduct and
made with the knowledge that the
| figures are right What is that state
ment?: All of the departments of the
/ Government in 1927 cost $500, ,000,00
more tnan JheY ola IN 1874.
| Il am afraid Gov. Smith has been
/ grossly miSinformed. The total ordi-
| nary expenditures of the Government,
which does not include the expenditures
| payable from postal revenues, aggre-'
| gated in 1924 $1,828, 100000, and in
! 1927, 81 1857 900 900, or an increase OF
| $29. 100000, and not $4,000 900. The
| postal expenditures are not included
| for the very good reason that they are
met from postal receipts, which the
| law requires shall be kept separate and
earmarked for postal expenditures. Ex-
cept to the extent that there is de-
/ f1ciency, they do not constitute a drain
! on the general resources of the govern
ment.
This is the second time that Gov.
Smith has been guilty Of an error OF
this character. In his speech Of ac-
ceptance, in charging the Republican
administration with the maintenance
! of useless offices and commissions mere
! ly for the benefit of patronage seekers,
he makes this statement: The appro-
priations for independent bureaus and
Offices not responsible to any cabinet
officer increased from 100000 In 1914
to Sl63000000 in 1921, and to $685.
100000 in 1929
Big Sum for Veterans.
Gov Smith stopped there. He did
not say that Of the 1855 900 ex-
pended in 1928 $500, ,000.0 900, or all but
$50 0OO, 600 can be accounted for by the
United States Veterans Bureau, which
had not come into existence in 1914,
and whose expenditures in 1921 were
comparatively small because the United
States Government had not then begun
to meet its obligations to It's wounded
and mutilated veterans.
Gov Smith cannot be ignorant OF
the fact that these large expenditures
on the part OF the Government are not
only iustifiable but inevitable and ire,
ducible in amount-and yet he would
create the impression that these ex-
| yonGiturae u,aro duo In the maintenance