The cabinet officers rarely ever checked over the figures, because they knew with a warranted perspicacity what fate awaited the requests for funds when taken up by the committees. The Treasury merely assembled the totals and rushed them along. The politics in the situation was patent. Actual appropriations, far below the estimated cost of government, served the purpose of the politicians, who pointed to these vainglorious giants of straw and claimed credit for saving millions to the taxpayers.

The budget has made its first bow to the country as a resistant to appropriation. It was sent to Congress admittedly an inconclusive document because the work of research and preparation, which ordinarily will require about four months, was accomplished in the emergency within six weeks, As contemplated in the law, the forty-one spending departments and establishments are required to submit to the Bureau of the Budget not later than September 15th-ten months and a half in advance of the time when the funds become available -their estimates. During the period intervening before Congress convenes on the first Monday in December, the bureau studies, revises, correlates, and whips them into proper form for printing and submission to the legislative bodies.

The present budget is a substantial tribute to the group of thirteen business men who responded patriotically to the call issued by General Dawes and left their positions to become Federal employees at a dollar a year. The present law was approved by President Harding on June 10th. The Director was chosen late that month, The dollar-a-year men were drafted in July. From the very outset, the Director has taken the position that "the solution of the problem of intelligent revision of appropriations is to be found in the principles recognized in a successful private enterprise." While, by its novelty, the budget has occupied a glaring position in the spotlight, the Budget Director has sought to keep it in the background. He has insisted that it ought to be 'nonpartisan, impartial, and impersonal" and that it is "simply a business organization whose activities are devoted constantly to the consideration of how money appropriated by Congress can be made to go as far as possible toward the accomplishment of the objects of legislation."

By virtue of the fact that Government expenditures had swollen to such an extent that retrenchment was imperative, the activities of

the Bureau from the start were directed toward immediate reductions. The President convened the entire business organization of the Government en masse on June 29th. The Director outlined his position and subsequently announced that, by the deferring of expenditures and in part by actual economies, the departments had promised the Executive to cut down the expenditures for the current fiscal year by $112,512,628.32.

The Secretary of the Treasury stated to the Ways and Means Committee on August 4, 1921, that the estimates from the spending departments indicated provision should be made, from the current revenues of the Government, for a total expenditure, during the fiscal year 1922, of $4,550,000,000. "At the time that this statement was made by the Secretary of the Treasury," the Director explained in his report to the President, "the results of the imposition of executive pressure upon the spending departments, inaugurated at the meeting called by the president of that body, had not been fully developed." On December 5th, a revised estimate fixed the total expenditure for the current fiscal year at $3,967,922,366. This apparent reduction of more than a half-billion dollars was not achieved wholly through the practice of economy, but a substantial part of it may be attributed to the imposition of the executive will. The Treasury, it was announced, would provide for two items of estimated public debt expenditure out of other public debt receipts to the extent of $170,000,000. The $112,000,000 cut, likewise, could hardly be considered a saving because payment of a large proportion was merely deferred. However, there is no gainsaying the fact that the operation of the budgetary machinery has resulted in a reduction in the immediate cost of government.

It was timely that the Director should warn against the possible loss of perspective by overemphasis of its function as an instrument for retrenchment. "It must be as willing to advise an increase in appropriations where the same is clearly in the interest of governmental efficiency and true economy as it is to advise reductions in expenses," he cautioned. "It is only by this method, under which it gives an impartial business judgment as to the necessity for expenditures and the functioning of government, that it can, in the long run, maintain its proper influence with the Executive and with Congress and justify its existence."

The habitual disparity in the estimates and the actual appropriations stifled active public interest in the pre-war times. Knowing well in advance that the proposed items were myths, the taxpayers were not stirred by the magnitude of the figures. And during the war, when expenditures soared dizzily into the billions, the public mind grew insensible to shocks. In the cold gray aftermath, when the needs of reconstruction called almost as imperatively upon the Treasury, it apparently had grown hardened.

The question of taxation did not have a popular penetration before the war. The public debt was less than a single billion. It seems ironical in the light of recent experiences that appropriations, greeted with the recurring charges of extravagance, had never in a single year reached the billion-dollar mark. What an impression the first "billion-dollar Congress" made! The tax load rested lightly when customs duties and internal revenues paid substantially all of the ordinary expenses of the Government.

The tax question, with the vogue of direct levies, has become perhaps the most pertinent issue before the people to-day. It is destined to continue so. In spite of the fact that the Revenue Bill recently passed reduces present taxes $818,000,000, further relief during the next few years seems to be a forlorn hope. The United States must reconcile itself to four

billion-dollar Congresses. For indeed, it seems heavier taxes are in prospect. Unless means for running the Government can be devised that are more economical than before the war, it is a practical impossibility to escape a cost of $3,000,000,000, without considering extraordinary or emergency requirements.

The memory of the World War will survive for years not only because of the heroic exploits of the warriors. It has left another legacy--a net increase of $22,043,092,352 in the public debt, according to a recent statement from the Treasury.

If this debt is to be retired gradually and the ordinary expenses of government are met, a four-billion-dollar tax levy seems unavoidable during the next decade or longer unless there are substantial returns from our loans to foreign nations. The blessings of peace are nowhere more manifest than revealed upon the face of the American Government's bill. The figures disclose that substantially 90 per cent. of the total annual expenditures of the United States is traceable to the war-to past wars or to preparedness for future wars. An analysis of the expenditures made during 1920 shows that out of $6,400,000,000 the sum of approximately $5,750,000,000 may be attributed to the force of arms.

The

The whole cost of running the civil establishment proper for a whole year might be paid for by a sum less than the investment in the capital ships, which are to be scrapped by the United States pursuant to the agreement of the arms conference. It is interesting to note the relation of expenditures for various departments to the bills which grew out of wars. entire cost of the diplomatic and consular service, together with the sum provided for the State Department in Washington, is met by an appropriation of less than $11,000,000 annually, offset in a measure by fees and charges. The legislative establishment, with salaries and traveling expenses for all members of Congress, and provision for the expense of printing all public documents, will not exceed $18,000,000 a year. The total appropriations for the Department of Justice, including the total cost of the administration of Federal courts throughout the country with compensation allowed for officials, are estimated at $18,408,000 for the year 1923.

Appropriations for 1922 for seven departments and the official Congressional estimates for 1923 are enlightening:

*Not including Pension Bureau and Indian Service.

Of the independent establishments, only three-excluding the Shipping Board-are spending more than a million dollars a year.

The budget, in the final analysis, is hardly more than a statement of political faith in figures.

It is bringing executive and legislative responsibility that can not be avoided. The President is responsible for a statement of the needs of the Government's business organization. If this be calculated to encourage extravagance in the departments, the Executive must answer to the country. If Congress exIceeds the estimates and commits the Government to a spending programme that permits the outgoing revenues to outstrip the incoming, it must be prepared to be haled before the bar of public opinion.

The hope of a more efficient and economical government lies in this situation, where the men who direct the nation's expenditures are made responsive to organized public opinion. It is restoring to the American taxpayer what has been termed his inalienable right-the "right to holler"-if he is not satisfied with the way that the business of government is being conducted.

In the first place, he will be in a position to know just what the Government proposes to spend well in advance of the actual commitment. In the old days, it was a customary situation for Congress to come to the realization, upon the very eve of adjournment, that appropriation bills, the passage of which was necessary if the departments were to function, had to be pushed through. The leaders, conscious of the political reaction that would follow failure to act, grew frantic. The opposition, pointing to the grossly inflated estimates, howled and charged that the dominant party was saddling the people with extravagance. Arbitrary cuts, in many cases running into the

millions, were ordered. It is little wonder that the essential machinery of the Government often broke down, only to be restarted through the aid of deficiency appropriations.

The budget for 1923, as presented to Congress, carried the sum of $3,505,754,727. It was actually prepared upon the basis of the amount of cash which actually must be withdrawn from the Treasury during the twelvemonth period. It marked a sharp departure from the former method of appropriation. Frank acknowledgment of the tangles and uncertainties which the previous system brought. was made by the Director when he admitted to Congress that it "resulted in a condition of things under which it is almost impossible for either the Executive, Congress, or the Secretary of the Treasury to have before them a true picture of the fiscal condition of the Government at any particular time." It is little to be marveled that the average taxpayer has been forced to throw up his hands in befuddlement in seeking to ascertain just what the Government has cost.

"What are the quick liabilities of the United States?" a high Treasury official was asked.

"I'm sorry," he said. "It is not possible to tell you."

The factors contributing to this hazy state of affairs are the continuous appropriations, revolving funds, unexpended balances, and deficiency bills. It should be borne in mind that appropriations for any given year do not represent the money which will flow out of the Treasury. Congress has generally voted the full amount for the completion of any project authorized. During the war, when it was often uncertain what the fulfillment of a desired object would involve, indefinite appropriations sprang up. Revolving funds, such as that for $300,000,000 provided under the Transportation Act for loans to the railroads at less than the market rate, were created. Balances that were left from former appropriations were voted to the various departments. More than a billion dollars of expenditures were authorized in 1920 by Congress in addition to the amount carried in the usual compilation of appropriations. The Shipping Board was authorized to spend the revenues derived from the operation of merchant ships constructed at a cost of more than three billions. This ran over $400,000,000. By the indefinite appropriation for the railroad guaranty, approximately $650,000,000 dis

The perplexing part of it all may be illustrated by a true story. One of the Congresssional leaders gained an interview with a highranking official of the Treasury to demand an explanation. Pointing to the total appropriation authorized by Congress, he gave vent to a rather heated observation that the statement of the Treasury showed several hundreds of millions had been spent in excess of this sum.

Due enlightenment came when the leader was shown the appropriation ledgers of the Treasury.

These gave mute but striking testimony to the practice, which, according to the UnderSecretary of the Treasury, "reached such proportions as to be almost a national scandal." A grand total of $822,428,028.09 appeared credited on the books, in addition to those established by appropriation acts, under the provisions of laws governing the reappropriation of unexpended balances, revolving fund repayments and appropriation of receipts, during the fiscal year 1921.

The figures summarized were: Reappropriation of balances. Revolving fund repayments. Appropriation of receipts.

$272,052,838.55 508,043,664.89 42,331,524.65

A curb upon these practices has been urged upon Congress by the Budget director. By wiping out the habit of making continuous appropriations, he has pointed out, there will be brought about a careful scrutiny of public work, the revelation of a number of practically forgotten projects consuming large sums of money and a careful annual check on all outstanding obligations and indefinite commitments. Merely to state that there are now in force permanent and indefinite appropriations requiring an annual outlay of $1,434,370,682 is to give a conclusive idea of the importance of this reform. "This system of preparing the budget," General Dawes told Congress, "will confine the attention of the Executive, of Congress, and of the public to the one great important question-the relation of the money actually to be spent by the Government to the money actually to be received by the Government in any given year."

Singularly enough, Congress is now appropriating automatically more each year for permanent and indefinite commitments than it

the Government. Total appropriations for 1922, exclusive of sums payable from postal revenues, will run $3,771,900,514, of which $1,467,816,196 represents permanent and indefinite authorizations. Inasmuch as many are legacies from the dim past, it is readily understood why there is a clamor for a bill which will show where the Federal revenues are going year by year.

Congress in the past, it would seem, has shared the popular child-like conception that the Treasury constituted an inexhaustible source from which wealth, upon proper bidding, would flow without limit. The impressive truth that the Government's income arises chiefly from taxation, with additions from customs and salvage, seems to have dawned. The reluctance to pass a measure providing for "adjusted compensation" to the veterans of the World War before offering the means of raising the revenue is a fresh indication of increasing sanity on the part of Congress.

Time-honored rules in the House of Representatives were thrown into the discard with the introduction of the budget. The several appropriations committees were consolidated into one large committee of thirty-five members, charged with the responsibility of all appropriations. Twelve subcommittees were created to consider each of the bills. Headed by Representative Martin B. Madden, the "engineer of the budget," the Committee has operated with clock-like precision and has examined into the provisions of the bills with meticulous care. The Appropriations Committee is the final arbiter, for, with the introduction of the budget, Congress has surrendered none of its constitutional powers. The first four appropriation bills were cut $54,000,000, and it has been estimated that $250,000,000 will be trimmed from the total estimates. General Dawes, when the first bill came to the Committee, freely conceded that revisions would not be considered an invasion of the sacred document, as the estimates had been built up without the full exercise of research contemplated by the law.

There has been, however, no disposition manifested to regard the estimates as other than the real basis for consideration, The dependence placed in the bureau's judgment is reflected in the three firm rules, which Chairman Madden framed, and which, upon careful examination, reveal the power wielded by the