Monday, Jul. 14, 1924

"Economy" Lord

When President Coolidge made his speech to the Budget Conference of Executive Officers (TIME, July 7, THE PRESIDENCY), he used some language more congruous on the lips of a business man than a politician. Said he:

"We must reduce the Government payroll. I am satisfied that it will lead to greater efficiency. And in this same connection, I desire careful scrutiny of travel orders. Our travel expense item is too great. An order for travel should be given only when absolutely necessary. You can effect economy in this item.

"A further fertile field for economy is the item of printing and binding. I am sometimes startled at the number of Government publications which come to my attention. It cannot be that all are necessary.

"Having thus struck a purely business note, he closed by turning to one of his official business men. "I will now turn this meeting over to General Lord, the Director of the Bureau of the Budget. He is human. He hates to say 'No.' But he is a brave man and he does his duty without fear or favor. This nation is his debtor."

To those assembled there, it was unnecessary to say that General Lord was human. It was proved by the fact that most of them liked him, although he has a most ungracious task. To him the Chiefs of all Departments, after paring off every cent from the sum on which they think their Departments can function, bring their estimates of required appropriations. General Lord lops off a good bit more. The Department Heads then estimate how they can worry along on General Lord's allowance. If they feel they can't do it, they are allowed hearings. General Lord goes over the estimates with the President. Finally the approved estimates are taken to Congress. They are the only lawful estimates of the Government's needed funds. On them Congress bases its appropriations.

This manner of doing business was instituted in 1921 when the Budget Act was passed. General Charles G. Dawes was Director of the Budget for the first year. After his resignation Brigadier General Herbert Mayhew Lord, with a notable and long record in the financial affairs of the War Department, took the place and has held it since.

A grievous situation called for the institution of the Budget. The War had multiplied our public debt more than 20 times. A public debt of itself is not a bad thing, if it is not excessive. It serves as a check on extravagance. Once, in 1840, we had a public debt as low as 21 cents per capita. It did not pay and the debt was increased to about $2 20 yearly later. The Civil War shot the debt up to $76 per capita, from which it was gradually reduced. From 1900 to 1917, we went along on a debt of about $10 per capita. By the year 1919, our debt was $230 per capita.

Government expenses took a similar turn, advancing tremendously. The subjoined table (in millions of dollars) shows the course of events:

Fiscal Years Expenditures Gross Debt

1913 682 1,193

1914 700 1,188

Pre-War 1915 731 1,191

1916 724 1,225

1917 1,147 2,975

War 1918 8,966 12,243

1919 15,365 25,482

1920 6,141 24,927

Post-War 1921 5,538 23,976

1922 3,795 22,964

Budget 1923 3,697 22,349

1924 3,506 21,254

Pointing to this record, the Director of t!he Budget, who has won himself the nickname of "Economy" Lord, exclaimed : "In three budget years we have cut the ordinary expenses of Government in half. Go tell it in the highways and byways, proclaim it from the housetops. . . .

"The budget pruning-knife is badly worn, though still serviceable. In the three years of its active, and, as some of the people in the service term it, ruthless career, it has cut out of annual estimates $865,517,155.65. If that amazing amount had been left in the estimates, as would have been the case in pre-budget days, the President would have had no warrant for recommending reduction in taxation."