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Evening star. [volume] (Washington, D.C.) 1854-1972, January 29, 1929, Image 6

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TEXT OF PRESIDENT S SPEECH TELLING OF FINANCES OF U. S.
COOLIOGE LAUDS
BUDGET SYSTEM
Executive Declares Financial
Plan Saved Country From '
Economic Disaster.
The text of the President's speech
before the semi-annual business meet
ing of the government last night
follows: '* * I
"The present fiscal year will bring to
a close eight years of conducting the
finances of the Government ot the
United States under the budget system.
It was put into operation to save the
country from economic disaster, it has
been fully justified by the results. In
the first instance, the President, of
course, is responsible for the direction
of the system. In the second place,
that responsibility is shared with the
Congress in making appropriations. In
the next place the responsibility for
efficient expenditures rests with the
chiefs of the various departments. But
in the final analysis success could have
been achieved only by the loyal co
operation and faithful service of the
great rank and file of the Government
personnel. To that great body, of
which you are the representatives, the
people owe a debt of gratitude, which I
especially wish to acknowledge at this
last budget meeting of my administra
tion. Without their devotion to the
cause of constructive economy we could
have done nothing. With it we have
been able to do everything. The victory
has been their victory, and the praise
should be their praise.
“When we began the task in June.
1921, of reconstructing our public
finances, it looked almost impossible of
accomplishment. The entire Govern
ment structure was permeated with ex
travagance. The expenditures for that
fiscal year, exclusive of debt reduction
were about $5,000,000,000. The interest
charge alone was more than $1,000,000 -
000, and our outstanding indebtedness
was nearly $24,000,000,000. The busi
ness of the country was prostrate. Its
different branches of agriculture, com
merce, banking, manufacturing, and
transportation were suffering from
severe depression. Employment was
difficult to secure. Wages were declin
ing. Pive million people were out of
work. The price of securities, even of
Government bonds, was very low. It
was difficult to find any market for
commodities. Confidence in our entire
economic structure had been shaken
Progress had stopped.
‘‘lt I* easy to see what the condition
of the people would be under such cir
cumstances. Those who had property,
even though it was much diminished in
value, could take car# of themselves,
as they always can. But to those who
were carrying on business with bor
rowed capital and had outstanding
notes and mortgages there seemed
nothing ahead but ruin. Wage earners
and their families were faced with Want
and misery. The cause of this distress
was not difficult to ascertain. The
country had been living beyond its
means. It had been spending much
more than it was earning, which meant
that it had been using up its capital.
The savings of previous years were
being exhausted, principally through-
Government extravagance.
No* a Pleasant Picture.
“This was not a pleasant picture to
behold. If relief were possible, those
who were able to provide it could well
afford to be charged with considering
nothing but the material side of life,
with advocating a penurious and
cheese-paring policy, and with neglect
ing to supply the public needs. If a
remedy could be found, when it was
put into operation business would re
vive, profits would increase, employ
ment would be plentiful, wages would
be good, the distress of the people
would be relieved, and a general con
dition of contentment and prosperity
would prevail. Whatever criticisms
there might be against those who had
labored to secure this result, the satis
factory condition of the country would
be a sufficient answer and a sufficient
reward.
"The evils and abuses of Government
extravagance were perfectly apparent.
It was believed, and as experience has
demonstrated, correctly believed, that
the distress of the country would be
relieved if Government extravagance
ceased. It was for this purpose that
the radical and revolutionary system
was adopted of centralizing in the
President the primary authority for the
recommendation of all departmental
estimates and establishing for his in
formation and advice the Bureau of the
Budget.
"Seemingly without effort, but actu
ally by hard and effective work, the
change was wrought. Each of the suc
ceeding years brought an ever-increas
ing improvement in the business of
government. Expenditures diminished
until 1927, when, exclusive of the
amount applied to debt reduction, they
reached a point below the $3,000,000,000
mark. This was $2,000,000,000 below
1921. Billions were cut from the public
debt with a large saving of interest.
The first tax reduction came in No
vember, 1921, and was followed by
three succeeding reductions. Funds
were saved to meet the cost of our
much - needed public improvements,
which had been in abeyance during the
war period. Short-time notes and long
time bonds were paid off and refunded
at lower rates.
"Working in that spirit which force
fully asserts itself in time of need, the
executive and legislative branches of
the Government, with the backing of
the people, have inserted a golden page
in our history. It fittingly portrays that
peace hath its victories no less than
war. In the short period of seven and
one-half years the public debt has been
reduced $6,677,000,000. The total sav
ing in interest alone from this and re
funding operations is $963,000,000. Four
reductions in taxes have returned to the
people approximately $2,000,000,000 a
year, which would have been required
had the revenue act of 1918 remained
in force. Two and one-half million
people have been entirely relieved of all
Federal taxation.
Departments Welded.
“One of the first essentials in the
work of making the Federal Govern
ment a real business organization was
the welding of the various departments!
and independent establishments into a ;
harmonious, efficient concern. We found ]
43 independent departments and estab- i
lishments, each operating under its own !
customs and rules, utterly regardless of
the existence of other departments 1
which were parts of the same great es
tablishment—the United States of
America. There was little community
of thought or harmony of action. Deep
seated hostility between certain Gov
ernment agencies existed. That the
National Government ought to be one
great entity, responsible for the happi
ness of 120,000,000 of people, was en
tirely overlooked in the exclusive devo
tion of groups of Federal officials and
employes to one particular subordinate
department. This same obsession often
characterized the relation between bu
reaus in the same department.
Heroic effort was needed to substitute
national loyalty for department and
bureau loyalty. Efficiency and economy
In operation were hopeless under such
conditions. The situation called for a
revolution in the attitude of Government
agencies toward each other. Exclusive
devotion to their subordinate even
through important departments must
give place to loyalty to the whole
Government. To effect this great trans
formstion a wide co-ordinating plan was
■tn into
the various departments and establish
ments were called together and organ
ized into effective committees and
boards to simplify and unify procedures
and eliminate tortuous, wasteful, and
unbusinesslike methods. In this way all
the major activities of the Government
were studied and harmonized by the
effects of our own personnel. Out, from
this study and effort sprang a business
organization that compares favorably
with like establishments in the business
world in efficiency and unified control.
Harmonious co-operation has won.
"In pre-budget days not a single
administrative form indicated there
was such a thing as a National Gov
ernment. The several departments had
their own business forms in varying
and confusing multiplicity. Today we
have 38 Federal forms displacing the
many hundreds that served to confuse
business and add to the cost of
government. Not a single specification
contributed to good Govrmpient busi
j ness. Today we have 602 standard
ized specifications which cover in large
part the entire field of Federal require
ments. We are using one uniform
Government lease in place of several
hundreds of departmental leases, while
uniform construction and supply con
tracts in connection with our standard
ized specifications are contributing
daily to good business and material
saving.
Spread Gospel of Saving
“Our great real estate and rental
interests, our hospitalization, our buy
ing, selling and printing, our patent
interests and office methods are sub
ject to the same careful study and
supervision. Out in the field we have
our area co-ordinators and our 280
Federal business associations, with 63
more in the making. These unique
Government agencies are spreading
the gospel of efficient government
economically administered. They are
our most trenchant exponents of co
operation. The intangible savings re
sulting from this co-ordinating work
mounts into millions yearly. The work
is not spectacular, but it is the very
foundation or good business. I believe
that the Federal Government today is
the best conducted big business in the
world. To these faithful workers in
our co-ordinating agencies, in Wash
ington and elsewhere the country owes
a great debt of gratitude. This picturp
of widespread commitment to good
government throughout the service—
and extravagant government is not
good most inspiring
and encouraging. We have demon
strated that saving results from efficien
cy and efficiency comes from saving.
"Largely because of such work as this
less than two years from the time when
the lowest point was reached, the
country was very genertlly restored to
normal conditions. From that time on
there has been an upward swing, broken
only by short static periods or slight
temporary recessions. The closing
months of 1928 and the opening weeks
of 1929 have seen American industry
and commerce at the highest point
ever attained in time of peace
“ln order to understand more clearlv
what the effect of these efforts has
been on the country, it is only neces
sary to compare some of the major
economic factors of 1928 with those of
1921. The output of our factories in
creased during that interval nearly 60
per cent; in some cases, such as iron
and steel production, it was more than
doubled. The production of the mining
industries as a group was at least 50
per cent greater last year than seven
years before. The construction of new
buildings was much more than twice
as great in 1928 as in 1921. The ad
vance was especially notable and grati
fying in the building of homes and
schools. Check payments outside of
New York City, where the volume is
much affected by stock exchange trans
actions, have increased by about 57 per
cent over 1921. Railway traffic has
been about one-third greater than in
the earlier year and has been carried
on with far greater efficiency and dis
patch.
“The number of automobiles regis
tered is now nearly three times as
great as at the beginning of 1921, and
the number manufactured during 1928
was more than three times as great as
during 1921. Electric power produc
tion last year was considerably more
than double what it was seven years
before. From practically nothing the
business of radio broadcasting has be
come enormous, and the number of
radio receiving sets produced exceeds
13.000,000. The burdens of our house
wives have been immeasurably lightened
and their lives broadened by the intro
duction of numerous electrical con
veniences and devices, most of which
were unknown a few years ago.
Wealth Increases.
“The extent that the financial re
serves of our citizens have increased
is strikingly apparent. Savings de
posits rose from $16,500,000,000 at the
end of the fiscal year 1921 to mbre
than $28,000,000,000 on June 30, 1928
Between 1921 and 1927 the amount of
life insurance in force very nearly
doubled, and the total of suen protec
tion came to exceed $87,000,000,000.
The assets of building and loan asso
ciations have risen from less than
$2,900,000,000 In 1921 to more than
$7,178,000,000 in 1927.
"The record of the advance in educa
tion m this country during recent years
has been truly astonishing. Figures for
1927 and 1928 are not yet available, but
in the short period of six years, between
1920 and 1926, the number of students
in our high schools, colleges and uni
versities grew from about three to nearly
five millions. There has been an im
mense increase in the output of reading
matter of all kinds.
"With all our increase in production,
the numbers of persons employed in
several of our major activities have,
apart from the sharp recovery after the
depression in 1921, tended to decrease.
At present there are fewer persons em
ployed in manufactures, mining, rail
way transportation and agriculture
than in 1919, and the increase as com
pared with 15 or 20 years ago is de
cidedly less when compared with the
total population of the country. This
change means the elimination of waste
and is an evidence of advance ii> liv
ing standards. With the constantly
rising efficiency and greater production
per man the quantity of goods avail
able per capita of the population has
increased materially. It has also been
possible to set some workers free to
lurnish us services as distinguished
from commodities—services of distri
bution, automobile travel, recreation
and amusement. By this means the
whole number of persons employed has
increased,
"I do not claim that action by the
National Government deserves all the
i credit for the rapid restoration of our
I country’s business from the great de
gression of 1921, or for the steady
j progress that has since taken place.
; Unquestionably, however, wise govern
i mental policies, and particularly wise
| economy in Government expenditures
I steady reduction of the national
! have had a dominant influence.
: The people gained confidence in them
| selves because of increasing confidence
iin their Government. The reduction
i of taxation made possible by the cutting
I down of Government expenditures left
more income in the hands of the
| people, enabling them to increase their
.expenditures, and thereby not only to
| obtain greater comforts, but to add to
, the demand for commodities: it like
wise helped to provide funds for build
j lng up the capital of the country and
i augmenting its productive capacity.
Needs Not Neglected.
! “The public needs have hot been
, neglected. We have been able to em
bark upon a building program which
for public works, hospitals and our
military housing requirements will cost
, nearly half a billion dollars. We are
i amortizing the cost, of the adjusted
service certificate fund of veterans of
. the. World War and the retirement
funds of our civil establishment at a
t cost of $132,000,000 a year. Additional
, funds -are being <tevoted to flood control
THE EVEXTXO STAR. WASHINGTON. T), T., TUESDAY. JANUARY 29. 1929,
■ j work and improvements made necessary
; by disasters which have overtaken our
I ! own States and outlying territory,
i j These expenditures could not have
I j been financed without an economical
l j administration. We could not have had
; tax reductions and the added expense
1 of these necessary things without care
i ful and orderly management of the
» business of Government.
"In this period of greatest prosperity
i the purely business phases of adminis
tration, the interests of commerce and
the encouragement of industry have
not been permitted to absorb our atten
-1 Hon and mortgage our revenue to the
' exclusion of the more humane objects
| and purposes. The duty and privilege
' i of providing for our veterans and em
: ployes who have need of relief have
j not been neglected. The Employes'
j Compensation Commission in 1923 paid
| out $3,267,000 for the benefit of Injured
Government employes, while the ex
penditure for pensions, compensation,
insurance and care for the veterans of
various wars exceeded in 1928 $600,000,-
000. In all these fields of need the
Government has disbursed with gen
erous hand, and its hospitals and
homes lor its wards thickly dot the
land. In times of great disaster It
opened the doors of its Treasury.
“On the artistic, altruistic and patri
otic side there has been no parsimonious
withholding. The beautiful Arlington
Memorial Bridge that is spanning the
Potomac, the preservation and marking
of historic spots, the character of the
public buildings being erected through
out the country, eloquently deny the
charge that we are only a commercial
Nation with no regard for anything but
the pursuit of the dollar. During these
late years there has been a steady
growth of interest in the higher and
better things, and I am convinced that
the tone and character of the Nation
has constantly improved.
, "We are giving the people better
! service than ever before. The post
! office is extending to the people, rich
! and poor, ever-increasing facilities.
The Public Health Service protects
us from plague and other evils with a
painstaking care heretofore unequaled.
In all our lives, sleeping and waking.
:we are guarded and protected and
helped by the Federal Government in
more and more ways. This has been
done under the restrictions of a policy
of drastic economy, which have saved
from waste the funds to make increased
and better public service possible. You
certainly have given abundant reason
for being proud of our great Govern
ment.
Much Remains to Be Done,
“In spite of all these remarkable ac
complishments, much yet remains to be
done. We still have an enormous public
debt of over $17,000,000,000. In spite of
all our efforts for economy, our great
savings in interest, and our four reduc
tions in taxes, the expenses of the Fed
eral Government during the last year
are showing a tendency to increase.
While much has been done In reducing
the costs, by far the largest item of
credit is due for preventing increased
expenditures. A short time ago there
were pending before the Congress, and
seriously being advocated, bills which
would have doubled our annual cost of
Government. At the present time com
mittees have reported,, and there are
on the calendar in the Congress, bills
which would cost more than a billion
dollars. Had there not been a constant
insistence upon a policy of rigid econ
omy, many of these bills would have be
come law.
"It would be a great mistake to sup.
pose that we can continue our national
prosperity, with the attendant blessings
which it confers upon the people,
unless we continue to insist upon con
structive economy in government. The
margin between prosperity and depres
sion is always very small. A decrease
of less than 10 per cent in the income
of the Nation would produce a deficit in
our present budget. The costs of State
and local governments ate; rapidly
mounting. From $3,900.000,060.in S§2l
the National Industrial • Conference
Board estimates that they reached
$7,931,000,000 in 1927. This is such a
heavy drain on. the earnings of the
people that it is the greatest menace to
the continuance of prosperity. It is a
red flag warning us of the danger of
depression and a repetition of the
disaster which overtook the country in
the closing days of 1920. It is a warn
ing that should be heeded by every one
intrusted with the expenditure or ap
propriation! of public funds. It is the
reason that further commitments by
the national Government for any new
projects not absolutely necessary should
be faithfully resisted.
"The results of economy which have
meant so much to our own country, and
indirectly to the world, could not have
beep • successful without the Bureau of
the Budget. It has been able In eight
years to reduce estimates by $2,614,000,-
000. The ability with which that bu
reau has been managed is due to its
director. Since I have been President
it has been under Gen. Lord. In all
our meetings I have spoken of him in
terms of commendation. He has con
tinued to justify all I have ever said
in his praise. I wish to take this last
opportunity which I shall have during
my administration publicly to express
to him again my appreciation of the
high character of his work and my in
creasing confidence in the budget sys
tem. No friend of sound Government
will ever consent to see it weakened. No
one who admires fidelity and character
in the public service will ever fail to be
grateful for the services of Gen. Lord,
who will now address you.
GEN. LORD DECLARES
ECONOMY IS KEYNOTE
IN BUSINESS ADDRESS
The text of Gen. Lord's speech before
the semi-annual business meeting of
the Government last night follows:
"Some years ago Peter Cornelius, a
more or less well known musician,
composed a musical number called "Ein
Ton" or "One Tone." One note domi
nates the entire composition. Measure
follows measure, chord succeeds chord
in rich and varying harmony, but that
persistent, note marches
on, commanding the musical unfold
ment. It is always there, Insistently
asserting itself. The pleasing har
monies, the musical variations, the
changing phases of this unusual num
ber are artistically woven in and around
that ever - appealing, ever - insistent,
never-varying, never-silent note. Any
; departure from that commanding tone
not in accord with the law of harmony
: would yield an unmusical dissonance to
| mar the beauty and perfection of the
■ i composition and discordantly interfere
1 with the enjoyment afforded the listener.
r j “Twice each year for eight years we
, j have met in friendly conference to dis
. cuss the Nation’s business. These con
• ferences have all been “One Tone"
i gatherings. Their dominant note has
[ always been "economy.” No matter
. what the subject discussed, the keynote
. has always been the same —“economy"
. j —with its inseparable comrade and
, companion, "efficiency.’’ Our efforts to
, make effective this never-changing note
' of constructive economy, our endeavor
I to achieve harmonious and worthwhile
1 j results have, I am sure, been more suc
, j cessful than the attempt of the colored
, brother to entice music from his saxo
. phone. A friend asked him how he
. was getting on with his saxophone.
I “ ‘Porely, Porely,’ was the dis
couraged reply. ‘Ah blows into that
J instrument the sweetest noises you all
evah heard, but de mos’ awful of a
i I blah comes out of de otha end.’
"In our campaign for constructive
i economy the aim has always been to
r plead for the obvious, possible and
t reasonable thing, to urge policies that
J would appeal to Federal administrators
J as sound and workable. We have tried
f to show our fellow-workers that what
t we wanted them to do was what they
i should do. If ouf efforts for retrench
-1 ment and efficiency were to be suc
-1 cessful we must nave something more
j!
|
. j
President Coolidge last night, at the semi-annual business meeting of the Government in Memorial Continental
Hall, delivered his final address on the budget. The President and members of the cabinet photographed on the stage.
—Associated Press Photo.
than perfunctory assistance from serv
ice people. Hearty, whole-souled co
operation was necessary. That kind
of co-operation we have had. It is
because of this attitude on the part of
our personnel, because of their interest
in better administration, that so few'
false notes, so few discordant blahs,
have marred the harmonious full-toned
chords of accomplishment, woven in
and about that dominating, never
ceasing note of “economy.”
Budget System Broad.
‘‘We have a great deal to say about
the budget system—possibly too much.
I wish, however, to emphasize the fact
that the budget organization comprises
not only the President, the Budget Bu
reau, the budget officers of the various
departments and establishments, the
chief co-ordlnator, our splendid co
ordinating boards, the area co-ordinat
ors and the 280 Federal business asso
ciations, but includes every person in
the Federal service. When we speak of
budget achievements we are voicing the
accomplishments of the people in the
Federal service and the Congress that
in its wisdom gave us our budget system.
“The man of the house arrived home :
from militia drill and pridefully in- j
formed the members of his family that i
he had been appointed corporal.
“ ‘Are we corporals, too?’ eagerly asked
the children.
“ ‘No. no, children,’ replied the mother
of the family, ‘only me and your pa.’
“But not so in this successful fight
against waste, indifference and inef
ficiency, for we are all corporals and en
titled to wear the chevrons of honor
able budget service.
“The Federal budget system is no
longer an experiment. It is not strange
that its entry into Government opera
tion was regarded with misgivings by
administrators, who, through years of
service, had experienced little control
over their estimates and less control
over their expenditures. It, however,
has come to stay. Chief Executives,
cabinet olficers, budget directors, bureau
chiefs will continue to play their
part* and pass off the stage, but the
fundamental Importance of budgeting is
so evident that it has .become the fixed
policy of the Government. The manner
in which the policy is carried out, the
methods of the budget bureau, may be
legitimate objects of criticism, but the
system Itself defies attack. And the
attitude today of the people in the serv
ice leads one to think that they believe
In it and approve of it. It is possible,
however. In some cases, that this atti
tude may be one of resignation. Said
one friend to another:
“ ‘I understand your daughter is tak
ing piano lessons. What progress is she
making?'
" ‘lmproving, I think.’ was the answer,
‘either that or we are getting more used
to it.’
Comparisons Made.
“In budget discussions, heretofore, we
have made our comparisons with the
year 1921. That was the last year free
from budget control. The total expendi
ture for that year, exclusive of debt
reduction and postal expenses, was $5,-
115.927,689.30. In 1927—six years later
and six budget years—that extraordi
nary outgo had been battered down
to $2,974,029,674.62. This gave us a re
duction of $2,141,898,014.68 in six
years. The figures I have given, which
have been challenged, are exact—taken
from the records even to the last strag
gling penny—and I think can be
understood even by the schoolboy whcr
said he had no difficulty with algebra
and geometry, but couldn’t understand
mathematics.
"That year—l927—was also dis
tinguished as the year of largest 5ur
p1u5—5635,809,921.70, which you may
recall we applied to the debt, saving
thereby $25,000,000 in annua! interest.
“That 1927 figure of $2,974,029,674.62
is the lowest expenditure level this gov
ernment will ever see. The country is
growing, expanding, developing glori-
Its population is increasing—
-105,000,000 in 1920 and 120,000,000 in
1928. You can’t run a modem mogul
locomotive for the money that was suf
ficient to maintain and operate an old
style wood-burning engine. When legiti
mate operating expenses fail to show
development and growth it will be evi
dence that something is radically
wrong with the republic.
“From now on we can look for steady
Increase In necessary national expendi
tures. This, however, does not change
budget policy nor weaken the demand
for the strictest economy in federal
operations. Rather that demand is
strengthened. With the growth of the
country new important projects will
present themselves, calling for more
money from the Treasury, and no mat
ter how great the revenues, unless they
are courageously controlled and wise
ly directed into channels of useful and
necessary purposes, burdensome addi
tional taxes, or Inability to carry on
necessary constructive w r ork, will result.
Certainly we contemplate no such pos
sibility.
“And the year 1927, with its record
of smallest expenditure and biggest
surplus, forms the new starting point
for budget operations. From now on,
instead of striving each year to reduce
expenses below the preceding year, we
enter upon a new and equally important
duty to see that advancing costs are
reflected In necessary development and
constructive progress.
Supreme Fight in 1929. ~
“Expenditures in 1928 exceeded the
1927 record by $149,935,355.73. This
was almost entirely due to new legis
lation providing for new projects of
great national importance. We man
aged, however, with the aid of a $50,-
000,000 reduction in interest, to end
the year with a surplus of $398,828,-
281.06. Os this amount $367,358,710.12
was applied to the debt with an annual
interest saving of $14,000,000.
"The current year thus far has not
been a happy one for the budget organ
ization. An original estimated surplus
of $252,540,283 was by new legislation,
including tax reduction, transformed In
to a threatened deficit of $94,000,000.
At the last meeting of this organiza
tion In June the President called at
tention to this radical change in pros
pects, stated that he nevertheless con
templated no deficit at the end of the
year, and called his executives and ad
ministrators into action, to work an
other transformation—to convert that
$94,000,000 indicated deficit into an as
sured surplus. By his direction the ex
penditure program for the year was
radically modified. The pruning knife
fell here and there and everywhere in
the grim fight for a balanced budget.
Proposed expenditures of doubtful im
nediate necessity went under the guillo
tine. Every year since the installation
of the budget system has been a fight
ing year, but this year we are making
the supreme fight of our history.
"A man and his wife were brought
before the judge for disturbing the
peace. In response to the judge’s in
quiry the man explained:
“ ‘lt was thls-a-way, Jedge. Me and
the wife was quarreling over the wash
money. She called me a lazy loafer
and hit me over the head with a kittle.
I knocks her down. Up she comes and
knocks me down and kicks me in the
neck.'
“ Well, what then? asked the Judge.
“ ‘Well, then we gets mad and starts
to fight.”
“And we have started to fight. We
have not had a deficit since the inaug
| uration of the Budget. We think it too
i late to begin now. We realize the
! seriousness of the deficit threat, and
are calling out all our reserves to meet
It. If we fail and June 30 finds the
balance on the wrong side of the Treas
ury ledger we propose that the Federal
service be able to say with clear con
science—
“ ‘We made an honest fight for a
balanced budget, we husbanded our
supplies, we conserved our funds, we
made every endeavor to increase our
receipts and reduce our expenditures,
we have done all we could. t
Devotion of Personnel.
“One of the greatest assets of this
great Government is the devotion of its
personnel to the Federal service and
their whole-hearted commitment to the
particular projects with which they
are charged. It is therefore a radical
departure from the usual to call upofi
these administrators and ask them tb
modify their plans for the purpose of
saving money with which to balance
the National budget. The quite gen
eral ready and sympathetic response'
to the President’s appeal emphasizes
the splendid morale of the service and
shows Its realization that the Impor
tance of a balanced budget outweighs
the importance of their especial proj
ects. .
“One able Federal administrator who
disburses millions was greatly concern
ed when it Was suggested that he re
duce his spending program by a con
siderable amount. Said he: ‘lf I re
duce my expenditures by that amount
it will seriously interfere with my
plans. What am I going to do?’ He
was told the story of the woman on an
Atlantic steamship. The Sea got a
little rough, and she sent for the color
ed steward.
‘“What am I going to do if I am
taken sick?’ she asked.
“Said the steward: ‘Lady, it’s no use
telling you what you’se goin’ to do if
you’se taken sick. You’se going* to do
it anyhow.’
“The money is being saved!
“As a result of this drastic action
and an improvement in the revenue
outlook, the budget for 1930 as sub
mitted to Congress showed a possible
surplus for the current year of $36,-
990,192. And while the flush of victory
still mantled our cheeks unexpected
and unheralded demands rudely wiped
out our $37,000,000 surplus and put In
its place an apparent deficit of about
the same amount. But we are still
fighting.
Federal Casualty Club.
“We haven’t organized a new service
club since the advent of the much dis
cussed Woodpecker Club. The time is
ripe and need urgent for the installation
of a new saving organization, and so I
present for your approval the Federal
Casualty Club. To acquire membership
you will from now on up to and includ
ing June 30 next, let all vacancies re
main unfilled, thereby contributing to
ward a balanced budget the far from
negligible sum of $12,500,000. This does
not contemplate the withholding of pro
motions. It directs itself only to the
filling of vacancies by new appoint
ments.
“The Bureau of the Budget makes
first application for membership.
“And I am confident this can be done
without much trouble or sacrifice. You
should take for your model the mem
ber of the country band which was re
turning on a midnight train from a
celebration in a neighboring town. The
train conductor asked one of the some
what inebriated members of the organ
ization for his ticket. The man said he
had lost it. The conductor said:
“ ‘Oh. no, mv man. you couldn’t do
that. You couldn’t lose your ticket.'
“ ‘I couldn’t lose my ticket?’ replied
the man. In an aggrieved tone of voice:
‘l’ve lost the bass drum.’
“You have accomplished much more
difficult things than the one you are
now asked to do—to save us that
$12,500,000.
Cut on Estimates.
“The estimates sent to Congress for
1930 call for $280,777,617.33 less than
the departments originally asked. Cuts
in estimates made by the Budget Bureau
during the entire budget period—reduc
tions made by direction of the President
before submission to Congress—totaled
$1,961,681,076.49. This, however, does
not tell the whole story, for budget
boards organized in the various depart
ments take their toll before the esti
mates are sent to the Budget Bureau.
The Treasury Department Budget Board,
for example, reduced estimates by $61,-
325.085.54, while the War Department
authorities shaved $590,560,046 from
estimates before sending them to the
Bureau of the Budget. Exclusive of re
ductions made by oth*r budget boards,
we have a total reduction under budget
procedure of $2,613,766,207.54. These
major operations were not performed
without protests and prophecies of dire
calamity as a result of such reductions.
But the disasters and fatalities predicted
have not materialized, and we have to
day a more efficient organization than
ever before. Many plants thrive with
pruning, and the Federal plant seems
to be one of them.
“The estimates for 1930 show a pos
sible surplus of $60,576,182. This result
is reached without figuring into the
equation pending legislation and pos
sible court action that may add millions
■.o our expenditures and seriously threat
en that narrow safety margin of $60,-
000.000. Facing these conditions, the
President stated that no estimates would
meet with his approval that would con
tribute to a deficit in 1930. Appeals for
funds must be confined to purposes of
such supreme importance and urgency
as would obviously warrant the risk of
jeopardizing the 1930 bafcmce. From a
budget standpoint no other course is
possible, and supplemental estimates are
having a hard time. Proponents of these
supplemental urge that their needs, as
voiced in their estimates, meet in full
these requirements of importance and
urgency.
“The members of a certain denomina
tion decided to remodel the church. Ap
peal was made to one of the members to
contribute toward the building fund. Hz
demurred, saying he owed a great deal
of money to various people In the town
and could not afford to contribute.
’Don’t you owe the Lord something?’
asked one of the soliciting committee.
‘Yes; I s’pose I do,’ was the frank reply:
‘but He ain’t pressing me like these
others are.’
“We try in reviewing estimates to de
cide on the merits of each case and no s
allow ourselves to be convinced by the
eloquence shown or the pressure applied
by the advocates of particular projects.
Some of the Federal representatives are
gifted above others in the advocacy of
their wants. It is the duty of the Bud
get Bureau to see that priority of merit
is recognized irrespective of the strength
or weakness of the presentation.
The Nation’s Debt.
"We still have a national debt. While
we are committeed to its reduction and
final extinction we will miss it in away
when it is gone for it stands as a con
stant, eloquent appeal for economy in
operation. Its consistent reduction is a
nAigttfe'fffa large way of the effective
ness of Our administration- Every dole
lar whittled from its all too magnificent
proportions Is a tribute to thrift in Gov
ernment.
“The books of the Treasury August
31, 1919, showed a gross national debt
of $26,596(701.648.01. By application of
the various surpluses of the years of
1920 to 1928, amounting to $3,091,000,-
000. through the operations of the cum
ulative sinking fund act, by foreign pay
ments, the brilliant refunding operations
of the Treasury Department and other
factors, on June 30 last that crushing
total was reduced to $17,604,293,201.43.
This gave us an actual reduction in a
little less than nine years of $8,922,408.-
446.58—an average reduction over a
period of nine years of $1,000,000,000
a year. Could anything be more elo
quent of the stability of our great Gov
ernment and the wisdom that has gov
erned its administration!
“We are committed to the important
task of bringing that debt balance down
to $15,000,000,000 in three years. From
July 1 to December 31 last, the debt was
reduced by $290,000,000 which means an
annual saving of $11,000,000 in interest.
“The more I see of our great Treas
ury Department the more I am im
pressed with the punctilious care with
which it watches over even pennies and
fractions of pennies. This same great
care governs all its procedures, which
are never modified until every last
shadow of doubt as to the wisdom of
such modification is removed. I read
of the clerk of a Western town who
might well have served an apprentice
ship In the Treasury Department. He
was noted for the accuracy and com
pleteness of his records. One evening
while the town council was In session
an earthquake rudely shook the town
house. Trie council abandoned the
shaking building in fear and haste. The
clerk, however, remained, and true to
form closed the record of the session
with these words. ‘On motion of the
townhouse the council adjourned.’
Treasury Metfiods Safe.
"While we may in this facetious way
speak of the Treasury and its devotion
to established procedures, we must
admit that its methods are safe and
sound. During the World War while
we were concerned as to the draft,
worried about the construction of can
tonments, troubled regarding supplies,
and fearful about transportation, we
never gave anxious thought to the
Treasury. Facing financial demands of
a magnitude never before known, con
fronted with financial problems of the
most extraordinary character, it stood
like a Gibraltar, weathering every
storm. All honor to those worthies who
through the years have so ably carried
on this great activity, and on the roll
of honor we give high place to those
who through the World War and since
have so admirably administered its
great Interests.
"There are hundreds of live, active
organizations, created for the purpose
of getting money out of the Federal
Treasury. The Budget Bureau Is an
organization created and set apart by
Congress for the defense of the Treas
ury. In the fight for protection of the
taxpayers' money we meet always well
organized, amply financed opposition.
The budget director, as the President’s
representative, is almost overwhelmed
at times with floods of letters, tele
grams, personal appeals and pressure
of various kinds for favorable recom
mendation to the President for funds
from the Treasury for purposes which
he, with his impartial view of the
entire field of Federal operation, knows
should not be approved. If ever the
budget Is set aside through the efforts
of its enemies, and they are many, some
one should tell to the beneficiaries of
the budget, whose name is legion, the
story of the colored worker in a South
ern cotton field on a sweltering day in
August, who, pointing an accusing
finger at the sun blazing in scorching
splendor overhead, asked complainlngly.
‘Where was you last January, when I
needed you so bad?’
“In June, 1927, the Loyal Order of
Woodpeckers was organised In the Fed
eral service to give thousands of Federal
workers a definite place in the cam
paign lor thrift. To become a member
a saving of at least $1 a year must be j 1
made. With 568,715 employes there
could be effected a saving of more than
a half-million dollars,a year, and that
seemed worth trying. Os course, the ;
more important purpose was the devel- 1
opment of the spirit of conservation of j
Government money, time and supplies.
The proposal met with loyal response !
from the service.
Idea Is Contagions.
“That this Woodpecker idea is con
tagious is shown by a letter from a
citizen of Waco, Tex., who learned of
the project over the radio from this
auditorium. He asked for more details,
saying he planned to organize one of
i the clubs in the plant where he is em
ployed. I quote from his letter:
j “ ‘As business is rather poor Just now
I and expenses rather high, it seems to be
! necessary to assist my company in
j every way possible to cut the cost and
increase production, and in so doing I
realize we shall all benefit.’
“Fortunate the business that has
men of this type on its pay roll.
"I have an illustration for the especial
benefit of those critics who can see in
a budget report a few cents saved on
pencils, which they ridicule, and fall to
notice a saving in that same report of
$384,000,000 under our general reserve
policy.
"The Interior Department circularized
its employes urging them to enlist in
the Woodpecker Club and pledge them
selves to make a specific saving during
the year of at least sl. I read from
a letter send to the district superin
tendent by a clerk at an Indian agency
in Oklahoma. The letter was a re
sponse to the department circular:
“ ’From the appropriation for lights
and fuel I have saved at least $1 * * •
by sitting by the open fire in the eve
ning with the lights turned out except
when reading. * * • Through an open
window my kitchen light shines into a
mirror on my bathroom wall, which in
turn reflects the light onto the white
wall opposite and illuminates the entire
bathroom.’
“And you smile. I did when I first
read it. Then I pictured that lone
Federal worker, on an Indian reserva
tion, in far-distant Oklahoma, with
little opportunity to save, studying to
make his contribution to Federal econ
omy and efficiency. And I smiled no
longer. Spanning the prairies, crossing
the rivers, and singing its way across
the great open spaces, that subdued
but penetrating note of economy that
pulses through every phase of Federal
activity, sounding clear and full in the
remotest parts of the globe wherever
the flag flies, found a responsive echo
in the thought and consciousness of this
loyal worker at one of the Nation’s
outposts.
" ‘Through an open window my j
kitchen light shines into a mirror on :
my bathroom wall, which in turn re
flects the lieht onto the white Wall od- !
posite and illuminates the entires bath- 1
room.’
Men of Crusading Spirit.
“Fortunate the Government that has
men of that type on its pay roll. If
that crusading spirit could possess the
entire service, what a staggering record
of saving we could make. Thank God
there’s no degree of merit in honest
service. The charwoman who con
serves Federal soap at the expense of
her elbow in the interest of saving is
entitled to the same medal for service
as he who saves millions.
“Mr. President, at the Federal busi
ness meeting held In this hall June 30,
1924, you made this declaration:
“’I am for economy. After that I
am for more economy. At this time
and under present conditions that is
my conception of serving all the people.’
"Here Is the inspiration of our great
thrift crusade—not merely to save
money, but to save people. We had
tried to substitute 'to save’ for ‘to
spend.’ It had seemed a dreary, drab
program, but J»U, Mr. President, vital
ized it, and gave it human interest.
From a cold, impersonal thing, economy
became a matter of the most Intense
personal interest, not only to the peo
ple to the service, byt to the people of
the country who gave to your policy of
saving their enthusiastic approval. A
miracle was wrought in the minds of
the many, and thrift became more
nearly than ever before the habit of
the Nation. As a result of the policy,
taxes were reduced and something
more of hope and comfort and content
ment brought into the homes of the
people. Joaquin Miller has a new and
I believe truer conception of that often
misapplied word ‘hero’:
“ ‘The hero we love in this land today
Is the hero who lightens some fel
low man’s load—
Who makes of the mountain some
pleasant highway,
Who makes of the desert some blos
som-sown road.’
“This you have done, Mr. President.
The interest of the taxpayer and the
well-being and happiness of more than
120.000,000 of people are inseparably
bound up in this policy of saving.
Thrift has won for itself permanent
and prominent place in Federal admin
istration. To you the everlasting
credit, to you the gratitude of the peo
ple of the country, and to you the
respect and appreciation of the Federal
service.’’
MOUNHNgIxPENSE
DESCRIBED AS “RED
FLAG” BY COOLIDGE
(Continued From First Page !
Coolidge declared that much remained
to be done. In spite of determined
efforts for economy, savings in Interest
due to reduction of the national debt
and four reductions in taxes, he said.
Government expenditures are showing
a tendency to increase. Bills pending
in Congress a short time ago, he esti
mated, would have doubled the annual
national outlay, while measures are now
on the congressional calendars, ap
proved by committees, which would, if
passed, cost the Government more than
a billion dollars. But for a policy of
rigid economy, he said, many of these
would have become law.
Constructive Economy Vital.
"It would be & great mistake to sup
pose that we can continue our national
prosperity,” the President continued,
“with the attendant blessings which it
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confer* upon the people, unless we con
tinue to insist upon, constructive
economy in Government. The margin
between prosperity and depression is
always very small. A decrease of less
than 10 per cent in the Income of the
Nation would produce a deficit in our
present budget.”
Mr. Coolidge outlined the conditions
he said had been prevalent when the
budget system was Instituted, enumerat
ing depression in business, declining
wages, unemployment, lack of markets,
and the low price of securities, includ
ing Government bonds. The country,
he continued, had been living beyond its
means, spending much more than it was
earning, using up its capital, and the
savings of previous years were being ex
hausted. principally through Govern
ment extravagance. As a means of
bettering conditions, and curtailing
national expenditures, he said, the bud
get system was adopted.
While not claiming “that action by
the national Government deserves all
the credit for the rapid restoration of
the country's business from the great
depression of 1921 or for the steady
progress that has since taken place.”
the President declared that “unquestion
ably, however, wise governmental
policies, and particularly wWh economy
in Government expenditures with a
steady reduction of the national debt,
have had had a dominant influence."
The Army band played several selec
tions. The whole program was broad
cast.
Cabinet Members Present.
President Coolidge on the occasion of
his last appearance at such a function
was honored by attendance of all mem
bers of his cabinet, who flanked him on
either side on the front row. Vice Presi
dent Charles G. Dawes, the first director
of the budget, and a large number of
heads of independent establishments,
including Prank T. Hines, director of
the Veterans' Bureau, were present on
the platform. A photograph was taken
of the assemblage.
Although President Coolidge in hi*
address made several references to the
fact that this was his last appearance as
President before the business meeting
of the Government, such reference was
absent in Gen. Lord s address. It Is
known that he would be willing to con
tinue in the same po6t under President
Hoover, and report* yesterday that he
would probably be reappointed gained
strength from the fact that the general
made no reference to retiring.
“J,” the latest addition to the English
alphabet, did not come into general
use in English books until the middle
of the seventeenth century. The dot
remains as a witness that the letter
was developed out of the "i.”
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