Evening star. [volume] (Washington, D.C.) 1854-1972, 1929-06-14
BUDGET SYSTEM
| HELD ECONOMY AID
Effect of Plan on Taxes and
l. Public Debt Are
Discussed.
1.-THE BUDGET SYSTEM.
BY FREDERIC J. HASKIN.

II was on June 10, 1921, that Con-
kress passed the act creating the Blu
reau Of the Budget, placing it in the
Treasury, under the general supervision
of Secretary Mellon and the direct con-
troll OF Gen Charles G. Dawes, later
Vice President of the United States.
Nhe dramatic fashion in which Gen.
Dawes held the first business meeting
81 the United States will remain long
n the memory of Treasury and other
nfncials. Standing before his audience,
he told OF the necessity to make clean
sweep of waSteful practices and empha-
sized his remarks by welding brand
new broom.
Under the joint direction Of Sec
tetary Mellon and Gen. Dawes, the
general supply committee, in charge OF
purchases for the Government agencies,
Nas re-organiZed both at washington
and in the field. Co-ordinators were
appointed and every expenditure was
ecrutiniaed with all the skill which 1t
was possible to bring to the task. No
appropriation was too large to be over
hauled by the Bureau of the Budget:
no item too small. All Government
property. from large buildings and
tracts OF land. to pens and pins, was
handled with single eye to effecting
savings. If the Bureau of Budget
thought that too much rent was being
paid for post Office quarters in some
city or town, cheaper quarters were
Cbtained as soon as leases expired.
1t was possible for the Budget Bureau
DO supervise practically every expendi-
ture Of the Government because the
Treasury Is the national paymaster.
Heads Of the executive departments and
Independent establishments were called
4nto close cooperation never before
equaled or contemplated
Budget Cut $1S,3S6.s47.
While the work of the Budget Bureau
extended into every department, the
Treasury itself was made a special ex-
ample. AS an indication of the type Of
work done, the budget experts, after
studying the estimates submitted for
the fiscal year, 1924, by the various
Treasury bureaus and offices, revised
them in accordance with the new policy
and cut $18,336,647 from the total. BY
an extension OF this method to all of
the Government activities hundreds of
millions were saved to the taxpayers.
Nor can 1t be forgotten that the re-
quirementS of the Government were
huge at this period. AS an example Of
extra expenses produced by the war,
the Veterans Bureau had A great hos
pitfalls to operate and maintain, and
there were heavy payments to disabled
veterans and their dependents.
The institution named by Gen. Dawes,
~the business meeting of the Govern
ment," became a regular Semi-annual
event, being held about the middle of
January and the latter part of June.
The President always attended and adj
dressed the assembled heads of depart
mentS, bureaus, commissions and in
dependent establishments. Unremitting-
ny the President, Secretary Mellon and
the Director OF the Budget hammered
away at the policy of economy.
1t is interesting to note that at the
january, 1929, business meeting, Presi-
dent Coolidge. making his final appear
ance before that gathering, declared
that the policy of parsimony in govern
ment expenditures had been wholly jus
tined. He went so far as to declare that
the policy had saved the country from
economic disaster" He pointed out that
the rigid economies had made possible
the reduction of the public debt by bill
lions with the result that 1868 ,000, 900
in interest had been saved. Further, no
less than $4,000, 900, 900 had been left
in the hands of the people which 9TH
erwise would have been collected In
taxes. Two and a half million people
had been entirely relieved from paying
any income tax at all.
Economy Policy Unpopular.
Needless to say this drastic policy of
economy was very unpopular with many
! persons. Supernumerary employees
found themselves out of jobs, and off,
/ cials found their special budgets for
odds and ends cut down. Mr.. Mellon
! and the President were put in the posi-
/, tion of Old Mother Hubbards, and other
Government officials felt rather like
I the poor dogs who suffered from the
bare cupboard. This does not mean
| that Mr.. Mellon was not given remark
able cooperation in his program by off,
Gals generally. but nevertheless fat APP
| preparations which have become q habit
are difflcult to forego.
| President Coolidge recognized this
state of affairs in his valedictory adj
dress to the last business meeting. He
declared: IF relief was to be possible
those able to provide 1t could well af-
| ford to be charged with considering
nothing but the material side OF life,
with advocating penurious and cheese
pairing policy, and with neglecting 10
supply the public needs.
| Whatever criticism there might be
| against those who had labored to Sc
cure this result the satisfactory con-
dition OF the country would be a suf-
| AANtCAAN 0AAoNNL ohd a ouAuClCtlI IGWdI0
The results became increasingly plain
as each year saw surplus of funds in
the Treasury. each year saw diminu-
| ton Of the public debt, and nearly every
year reduction in Federal taxes.
Both 1920 and 1921 were years of
business depression but the necessities
of the Government remained at o high
level. This policy Of the utmost econ
omy was all that prevented the neces-
sity Of further bond issues. Just how
well bonds would have sold is difficult