Evening star., 1932-05-06

sage delivered to Congress yesterday
afternoon follows:
II should not be discharging my
constitutional responsibility to give to
the Congress information on the state
of the Union and to recommend for
it's consideration such measures as may
be necessary and expedient, if 1 did
not report to the Congress the situa-
ton which has arisen in the country
in large degree as the result of incl
dents of legislation during the past six
weeks.
THE most essential factor to eco
nomic recovery today is the restora-
ton of confidence. In spite of the
unquestioned beneficial effect of the
remedial measures already taken and
the gradual improvement in fundamen-
tai conditions, fear and alarm prevail
in the country because of events in
Washington which have greatly dis
turbed the public mind.
The manner in which the House OF
Representatives rejected both the rev.
enue program proposed by the Treasury
and the program unanimously reported
by the Committee on Ways and Means;
the character of the tax measures
passed; the action of the House which
would increase governmental expendi-
ture by S132 100000 for road building;
the action further to enlarge expendi-
lures in non-service connected bene-
fits from the Veterans Bureau at the
very time when the House was refusing
to remedy abuse in these same services;
the virtual destruction Of both the ma
tional economy program proposed by
the executive officials and the program
of the Special House Committee on
Economy: the failure Of the House to
give adequate authority for early re-
duction of Government bureaus and
commissions; the passage OF legislation
by the House placing burden OF I'M
possible execution upon the Federa!
Reserve System over the protest OF
the Federal Reserve Board: the threat
of further legislation looking to un-
controlled infiation-have all resulted
in diminishing public confidence and
offsetting the constructive, unified ef-
forts of the Executive and the Con-
press undertaken earlier in the yea1
for the recovery of employment and
agriculture.
Revenue Decrease.
"I need not recount that the reve-
nues of the Government as estimated
for the next fiscal year show a de-
crease of about $1,700, 100000 below
the fiscal year 1929 and inexorably re-
uuire a broader basis of taxation and
a drastic reduction of expenditures in
order to balance the budget. Nothing
is more necessary at this time than
balancing the budget Nothing will
put more heart into the country than
prompt and courageous and united
action in enacting the legislation
which this situation imperatively de-
mands and an equally determined
stand in defeating unwise and unneces-
sarv legislation.
Most expeditions action is necessary
If the revenues, appropriations, economy
legislation and a balanced budget are
to be attained before the beginning OF
the new fiscal year on July l, next.
THE details and requirements of the
situation are now well known to the
Congress and plainly require:
81. The prompt enactment OF a
revenue bill adequate to produce the
necessary revenue and so designed as
to distribute the burdens equitably and
not to impede economic recovery.
"2 A drastic program of economy
which. including the savings already
made in the executive budget of $685.
OO0, 900, can be increased to exceed
O0,000,0 900 per annum. Considering
that the whole Federal expenditure,
except about 81 700 900, 900, is for un-
controllable obligations this would rep
resent as unprecedented rLiuction. Such
a program, to accomplish its purpose,
must embrace the rejection of all meas
ures that increase expenditures unless
they be for undoubted emergency; the
reduction in appropriations now pending
below the figures submitted in the ex-
ecutive budget on December 9, last;
reconsideration of the legislation cover
ing those economy projects which re-
uuire repeal or amendment to the laws,
AMI an effective grant of authority to
the Executive to reorganize and con-
solidate and eliminate unnecessary Gov
ernment bureaus and establishments.
In the category of appropriations
within the authority of the Appropria-
tions Committees those committees have
given some months to devoted con-
sideration of the executive budget,
which, as I have said, in itself carried
reduction of 1869 900, 900 below the
expenditures of the current year. Con-
sidering the situation in the country
and a study of the results so far at
tained by the committees, together with
review by the executive officials. 1 am
convinced that, subject to the inclusion
of conditions mentioned later, reduc-
ton of at least $3.50 100000 below the
executive budget can be made in the
supply bills (of which some $4,000, 900
or $50, 600, 900 may be the subject of
deficiency bills at the next session.. In
order to effect these economies, to pre-
serve the efficiency of the Government
and to assure the humane treatment
of Government employees, authority
must be given to meet emergencies
which may arise from such close
budgeting by the transfer of not to
exceed IS per cent of any appropriation
to any other appropriation within the
same department, provided no appropri-
alton is Increased more than Is per cent
but subject to the approval of'the di-
rector of the budget, and to suspend
the leave with pay so that the five-day
week and its equivalent to salaried en-
ployes can be installed where necessary.
with the reduction proposed in the
original budget, together with the fur
ther reductions here proposed. it will be
necessary to discharge $4,000 to 100, 900
employees unless We divide the remain
ing work of the Government among
the whole of its employees just as has