Evening star., 1932-10-20

! gave cur Treasury-without hesitation
or limit-every cent CT rerenue it asked
| TO- and that, at the end the admins
| tra.icn assured Congress ard the coun-
/ try ticat the task had been accomplished.
I haze already shown how unrelioble
these constant assurances are. 1t is
net seenly to conjecture motives, but
think it is fair to say of the whole
record of administration policy in the
last four years reveals that it has been
afraid to trust the people of the United
States with the true facts about their
affairs. That is fundamental error
which shows unfamiliarity with the true
basis Of American character.
Courage Held Too Late
While the President claims that he
did finally recommend new taxes, fear
that this courage came two years too
late and in far too scanty measure. It
explains Prosperity around the corner"
1t explains two complete concealment5
of deficits and the insufhciency Of the
action taken last Winter. 1t is an error
of weakness and an error which assure
you I shall not make.
Our Federal extravaganza and i'm
providence bears a double evil; first,
our people and our business cannot
carry its excessive burdens of taxation
eccond, cur credit structure Is impaired
by the unorthodox Federal financing
made necessary by the unprecedented
magnitude of these deficits. The latter
is the more technical but, to my mind,
the more Immediately dangerous evil,
and. at the risk Of being tedious to many
of my audience, I want to ask their in
dulgence while I talk fer a moment.
straight to our financiers
Instead Of financing the billion-dol-
lar deficit Of 1881 in the regular way,
cur Government simply absorbed that
much of the lending capacity of banks
and by so much impaired the credit
available for business. In that year the
amount CT Government obligations held
by cur banks increased by little more
than one billion dollars.
Claims Held Not Frank.
You know es we'll as I do that this
administrators claims that it has pro-
vided credit for industry and sgricul-
ture by pouring credit into banks are
not frank. Commercial credit has con-
tinuously contracted, and is contract
ing now. Most of this new Govern
men-created credit has been taken to
finance the Governments continuing
deficits. The truth Is that our banks
are financing these stupendous deficits.
and that the burden Is absorbing their
resources. All this is highly undesir-
able and wholly unnecessary. 1t arises
from one cause only, and that is the
unbalanced budget and the continued
failure Of this administration to take
effective steps to balance 1t. If that
budget had been fully and honestly
balanced in 1880. as it could have been.
some OF the 1881 collapse would have
been avoided Even if it had been bal
anced December l. 1881. as it could
have been. much of the extreme dip in
1892 would have been obviated. Our
financial men know the unnecessary
muddle that has accumulated, and is
still accumulating In Washington.
Now how can we continue to counte
nance such condition? In all con-
science. can an administration which
has frequently failed in a matter so
directly touching your own response
bilities, ask for your support and trifle
with our common sense by these cam
paign alibis about mysterious foreign
forces and this specious talk about
sound fiscal policies and administra-
ton? Would it not be infinitely better
to clear this whole subject of obscur-
ity-to present the facts squarely to
the Congress and the people of the
United States and secure the one sound
foundation of permanent economic re-
covery-a complete and honest balance
of the Federal budget? In all earnest
ness I leave the answer to your COM
mon sense and Judgment.
Quotes From Statement.
The other bad effect of this fiscal
mismaNageMent Is not at all technical.
1t is the burden of high cost on the
backs Of all our people. can state the
condition best by quoting one paragraph
from a document published week ago
and signed By both Alfred E. Smith
and Calvin Coolidge:
"All the costs of local, State and ma
t;onal government must be reduced
without fear and without favor. Un-
less the people, through unified action,
arise and take charge of their Govern
ment they will find that their Govern
ment has taken charge of them. In
dependence and liberty will be gone
and the general public will find itself
in a condition of servitude to an ag-
gregation of organized and selfish mi
noritieS."
Every word of that warning is true,
and the first and most important and
necessitous step in balancing our Fed
eral budget is to reduce expense.
The cir IS now full of Republican
death-bcd repentance on the subject
of economy, but we must look deeper
than these eleventh-hour pronounce
ments. You cannot go very far with
any real Federal economy without
complete change of concept OF what
are the proper functions and limits OF
the Federal Government itself.
Cites 1928 Speeches.
Perhaps we can get some glimp-e
of the Presidents underlying idea about
the Federal Government frcm his 1928
speeches lie proposed, you remember,
"a new thing in Government He says
he "rccrgenized the Department OF
Commerce on greater scale tnan mas
e;er been attempted or achieved by
anv Government in the world" In his
book, The New Day" he says, "A
nsticn which is spending ninety bi.-
.icns a year can wcll afford few nun
drcd million for workable program"
I could so On quoting for good
many minutes, but perhaps the point
could BE- made clearer by recalling that
the Department CT Commerce went
through even the heavy war strain on
about thirteen millions a year. When
thirty-nine millions and for 1888 it
estimated it will spend forty-three mil
lions. It is now housed in what is face
tiously called in Washington the
Temple of Fact Finding" which cost
the people considerably more than the
Capitol of the United States.
That record may explai. the SO per
cent increase in Government overhead
in four years. 1927-1931, and am sure
that the whole group of quotations re-
veal why you can never expect any i'm
portant economy from this adm. nistra-
ton. It is committed to the idea that
We ought to center control of every
thing in Washington as rapidly as pos
sible. That was the idea that increased
Government cost by billion in four