“Give Tax-Payers Benefit of Doubt”

J. HERBERT HODGINS April 1 1925

“Give Tax-Payers Benefit of Doubt”

J. HERBERT HODGINS April 1 1925

“Give Tax-Payers Benefit of Doubt”

J. HERBERT HODGINS

IF YOU were to ask Calvin Coolidge, president of the United States, for the basic ingredient of national economy he would most certainly tell you “first watch your pennies.”

Calvin Coolidge has a tremendous respect for the small coin. Colonel George Harvey, former United States ambassador to Great Britain, himself a Vermonter, tells this Coolidge story:

When Calvin was six years old he had obtained, by working for the promoter of a local entertainment, a ticket of admission, but he needed some incidental spending money and he asked for it. Freely and generously he got a silver three-cent piece from his father—wealth beyond the dreams of avarice! But, shortly before the day of the performance his father called the boy to him, and said, “Now, son, we are apt to get into hard times, and I need that three-cent piece. We mustn’t spend it. We must save every penny.

For, if the election goes wrong and General Hancock wins, we’re going to have hard times.”

Cal. gave up the silver piece: the election passed. General Garfield won. The father came around, returned the identical three-cent piece, saying, “Now, don’t spend it foolishly.”

Here, we find the answer to the riddle of the White House; the background for the homely practices which Calvin Coolidge of Vermont, as president of the United States, is bringing to national arithmetic.

Calvin Coolidge is accustomed to frugality. He is not the type of man by nature or by endowment to take on “side” at this late date. Last month, when he went to the Capitol for his inaugural speech—“the simplest inaugural since Jefferson rode his horse from the White House to the Capitol and tied it to a hitching post,” as a Washington Hotel man lamented—he was following his own, simple, inbred inclinations.

But he set a further example to the nation.

The inaugural, stripped of its all-day parade, its fireworks, and its ball, cost the country only a few thousand dollars. Other years the inaugural has been the occasion of lavish spending, from individual and from public purse.

Washington, as the official heart of the United States, was chagrined at Coolidge’s “cheap” inaugural—Just as Ottawa, unquestionably, would be, were the pageantry of parliament eliminated.

But in the main the press of the United States seems to confirm the dictum of the Columbus Ohio State Journal: “President Coolidge may well view with equanimity all the jibes at his propensity to economy; this characteristic, perhaps more than any other, accounts for his great and apparently growing strength with the people.”

“What the people want is lower taxes, which can only come out of savings,” the Minneapolis Journal stresses.

Coolidge’s Actual Economy

AND President Coolidge, with the active help of the Ax Director of the Bureau of the Budget, has given the United States lower taxes, “a material reduction of about $2,000,000,000 yearly” as he, himself, stated in Washington on January 26. Which, after all, touches the average citizen in his most sensitive spot, his purse, and convinces him of the worth-whileness of the national effort.

In a previous article I quoted figures that were presented by President Coolidge to show, how in four years, 1921-1924, there was the remarkable cut in the United States public debt of $3,198,000,000. This reduces the annual interest from $999,000,000 to $865,000,000—a saving of $134,000,000, or a sum within one million dollars of Canada’s annual interest bill.

President Coolidge has saved the United States more than $5,343,000,000.

How has it been possible, in four short years?

Old-fashioned Thrift

PRIMARILY this remarkable correction of national * bookkeeping was brought about by old-fashioned economy. Penny saving has been accompanied by modern efficiency to remedy an unhealthy national condition.

To begin with, it is conceded that the individual efforts of President Coolidge would have been powerless had not Congress created a business-like machine in the Bureau of the Budget. But it is equally true that the machine might not have functioned unless operated by one who, down in his heart, believed in its out-turn.

WHEN 2 PER CENT. MEANS $62,000,000: Federal estimates in the U.S.

provide for the spending of $3,062,277,407 for 1925. President Coolidge wants the amount pruned to an even three billion.

General Lord has counselled all federal spenders: “Go over your estimates with a microscope in one hand and a pruning knife in the other. If there is doubt whether a cut should be made—cut, resolve every doubt in favor of the taxpayers

“Little or no saving was achieved, prior to the Budget,” Genera] H. M. Lord, Director of the Bureau of the Budget, told me when I was in Washington last month. He explained the workings and the ramifications of that Budget.

Prior to the Budget system forty-three departments of the federal government pursued an independent course. Hopeless, of course, for frugal administration!

But is this not the present situation at Ottawa? The departmental independence at Ottawa is proving increasingly costly. For instance: Overmanned departments in four “peace” years rolled up national expenditures of $9,000,000 a year because of the addition of two thousand more government employees.

The president of the United States—as the premier of Canada, to-day—prior to the Budget, had no agency to control and carry out restrictions in federal outlays. The politicians dictated as they dictate at Ottawa. And with a Dominion election in the offing the politicians this session will be more than ever disposed toward a “Youscratch-my-back-and-I’ll-scratch-yours” sentiment. “Porkbarrelism” will be rampant.

One of Canada’s urgent needs, as it was the United States need, is for an agency to control definitely departmental estimates, as a practical medium for pulling down government costs.

“If you give government agencies free spending powers no matter how determined they may be to save they will end up by over-spending,” General Lord pointed out.

So the first effort of the director of the Bureau of the Budget was to prune estimates. With the installation of the Budget, the Anti-deficiency Act of 1906, which had fallen into disuse, was resurrected and strictly enforced. Departmental executives were warned that failure to comply would impel summary action.

“The result is that during the four years of the Budget $1,203,000,000 has actually been cut from original esti-

mates, while actual departmental deficiencies have been practically eliminated,” announces General Lord.

Another source of waste and inefficiency was found in the lack of co-operation among departmental executives. Under the budget system, certain, definite coordination of effort has been effected. A Chief Co-ordinator was given a co-ordinating board made up of several departmental officials; thus no additional cost was added to administration.

Nine of these boards cover all activities of federal government as follows:

Permanent Conference on Printing;

Federal Real Estate Board;

Federal Purchasing Board;

Federal Liquidation Board;

Federal Traffic Board;

Federal Specification Board;

Federal Board of Hospitalization; Interdepartmental Board of Contracts and Adjustments.

What has resulted from this broad and penetrating policy of co-ordination?

The Co-ordinating Agencies

HpAKE for example the Federal Real Estate A Board: under the old conditions, if the New York federal wanted additional space, it would go into the market and hire it, without inquiring if some of the other governmental departments had suitable unoccupied space. To-day, that agency must channel its request through the representative of the budget, who ascertains if there is federal space available. The final hiring is then determined by the co-ordinating agencies.

If this business-like system were in effect at Ottawa would wre be likely to have, as now, the lamentable and nationally extravagant spectacle of a federal administration housed under thirtyeight separate roofs and scattered over twentyfive of Ottawa’s streets—some of them miles apart. The Justice Department for instance is under five different roofs, the Department of Agriculture under eight.

Then, the United States budget system has innoculated its Traffic Department with the serum of big business. Now, if any agency of the government in any city wants a truck or launch, application can be made to the budget agency. The whole principle is that it is reprehensible for a government agency to spend without first inquiring.

The same thing applies to the Purchasing Board, which co-ordinates governmental purchasing so that the government may get the full benefit of its great buying power.

Federal hospital work, too, has been co-ordinated.

The Federal Specifications Board is getting the government down to commercial types and away from costly special types. It has completely standardized government contracts. The standardization of government leases, alone, will save ten per cent, of an annual expenditure of $23,000,000, according to General Lord.

The Federal Printing Board eliminated all fancy printing; in the one item of fancy calendars the 1924 expenditures were three million dollars less than before the Budget system.

“The greatest saving has been accomplished by preaching and practising economy,” says General Lord. “To-day we have reached a point where not only departmental heads, but the men in the shops and the clerks at the desks desire real economy.”

And that in government service!

The spirit of business co-operation has entered into the federal departments, with the result that one department frequently helps another to save or even to make money.

“Not only do they co-operate in those matters, required by law, and in those cases where gain may urge one department to request the co-operation of another, but services and materials are being offered to other departments in the interest of economy, efficiency and unity of government operation,” is the statement of H. C. Smither, Chief Co-ordinator.

Before me is a remarkable document; remarkable in that it enumerates, with commendable pride, economies which the federal departments throughout the United States were able to affect last year. These items illustrate Continued on page 40

“Give Taxpayers Benefit of Doubt”

Continued from page 20

“pennies” actually saved, rather than millions theoretically saved. But these “pennies” are the base of that impressive structure which has grown up under the president’s guidance until it has become a formidable factor in a nation’s up-building.

The chief co-ordinator tells of the coordination of government motor transport in the District of Columbia._ There has been a net saving of $100,000 in three years due to co-ordination of motor transportation. Rented garages have gradually been eliminated and vehicles housed in government buildings. This alone has saved $20,000 annually.

Co-operation of all departments in the handling of Washington’s Christmas mail resulted in saving $36,000.

Significant savings followed adoption of a cash policy. This is simply an application of an everyday, sound, business principle, taking advantage of discounts. The War Department, for instance, in three years saved $1,344,688 by discounts.

Since the organization of the Traffic Board a recorded saving of $835,354 has been made in the transportation of persons and commodities through proper classification of freight, better freight rates, larger use of water routes and designation of routes or combination of routes.

Re-adjustment of government telephone service in the District of Columbia resulted in an annual saving of $66,500 over the cost of service before the survey was made. Several federal departments have leased wires that are not always used to capacity. Other departments are now cutting down their monthly bills by using these leased wires when not otherwise in operation.

Even so apparently unimportant an item as securing hotel rates for government employees has resulted in economies.

The collector of customs at Boston, Mass., needed sixty office chairs. They were located as surplus property of the U.S. Shipping Board and five hundred

and ten dollars saved the government.

The agent in charge, Sea Service Bureau, United States Shipping Board, was ordered into cheaper quarters. The co-ordinator helped him get located at a saving of $693 per annum.

The Lighthouse Service at Seattle, Wash., paid four cents per square foot to commercial firms for making blue prints. The Army Engineer corps did it for one cent.

The Post Office department borrowed idle railway tank cars from the War Department and purchased gasoline at Philadelphia; $10,000 annually was saved.

The government printing office, in Washington, now does its own trucking with War Department trucks and saves $10,000 annually above the cost of maintenance and operation!

The Department of Agriculture stopped getting ice for water coolers during the winter months and saved five hundred dollars.

The New York station of the Bureau of Chemistry discontinued drinking cups and issued individual glasses at a saving of ninety-eight dollars.

Through a co-operative arrangement the Bureau of Public Roads repaired the roads on the Weather Bureau premises; eight hundred dollars was saved.

No Mystery About the Thing

THESE are random instances of what is being done all over the United States to-day in an economically sound and far-reaching effort to bring the utmost economy to national business.

There is no mystery about the thing, or about the way it is being done.

It is a clear-cut attempt to run the country as you would run your own business, or your own personal affairs.

These are actual instances of money saved for the government by commonsense business methods. And the best of it all is, that in the long run, every man, woman and child in the United States is going to benefit. So long as the Coolidge policy persists, there will be so much less to pay each year to the government in taxes.

Savings are not always so tangible as those which have been shown. In fact, as the chief co-ordinator stresses, those savings and that measure of efficiency that comes about through closer cooperation, that gradually developing state of administration wherein the whole government service operates as a unit, all result in an economy that exists because useless expenditures of funds are avoided.

“Negative rather than positive, these are true savings of real financial advantage to the Government—one characteristic of a well-conducted business, coordinated in all its aspects.”

“Operate Less, Co-operate More”

GENERAL LORD has consistently argued for co-operation. “Don’t attempt too much. Do less and do it

better. Spend less and accomplish more. Operate less and co-operate more,” he said at the eighth annual meeting of the business organization of the Government, in Washington.

Apropos of the need of co-operation he tells a story: A young man’s trousers were too long. He asked his mother to shorten them. Mother was too busy. He asked sister. Sister was too busy. Thrown upon his own resources he cut a section from each leg and put the trousers aside for Sunday. Later, mother regretted her failure to attend to her son’s request. She cut another section off the rapidly receding trousers. Sister’s conscience troubled her. She cut another section. Sunday morning the young man ruefully remarked: !‘What this family needs is less operation and more co-operation.”

General Lord has no patience with a government servant who is a thrift laggard.

“Back of the ceaseless whittling down of estimates, back of this three billion dollar campaign, back of the demand for a balanced budget, back of the urgent, persistent, continuing appeal for economy is the unalterable intention of the president to cut down taxes and revive not business alone, but the rank and file of the people of this great nation,” declared General Lord the other day in a spirited address:

“If we are not in full sympathy with the programme of the chief executive,” he continued, “if we are not prepared to sacrifice our personal wishes, plans and opinions to the general administrative policy; if we are not willing to make our pride of performance subsidiary to the welfare of the government as a whole; if we are not ready to march loyally with the president along the high road of economy, we should enlist under another flag.”

A Question of Leadership

TT WAS plain talk. But it was from a A man of driving purpose and tremendous sincerity of effort. Such men are too infrequently encountered in public service.

After all, as Calvin Coolidge and Herbert M. Lord have demonstrated, this surge of public economy now sweeping over the United States is simply a question of leadership.

“The policies of a nation,” as the Montreal Daily Star succintly remarks, “are shaped and developed either by the pressure of a majority opinion or by the zeal, the activity, the persuasiveness and the power of leadership of the few.”

Granted, therefore, that the need of national thrift is urgent, pressing and beyond dispute, in the Dominion of Canada, as it has been found necessary in the United States, it rests either with the leaders of Dominion life or with the mass of vote-empowered Canadians, or with both, to put these aspirations into definite practice.