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HE President's picture of the If there is to be responsible party governcountry is one of great opti- ment, the party label must be something more mism. He feels that in our than a mere device for securing office. Unless foreign relations and in our

those who are elected under the same party domestic situation there is

designation are willing to assume sufficient

responsibility and exhibit sufficient loyalty much that is satisfying and still more that

and coherence, so that they can coöperate with is encouraging. And this picture of the

each other in the support of the broad general condition of the United States is true.

principles of the party platform, the election is We are a fortunate people. The cata- merely a mockery, no decision is made at the clysm that depressed living conditions polls, and there is no representation of the all over Europe has left our industrial popular will. masses relatively more comfortable than Common honesty and good faith with the they were before the war, and even people who support a party at the polls require our farmers to a certain extent share in that party, when it enters office, to assume the this general well-being. In spite of our

control of that portion of the Government to great taxes the pursuit of happiness in the

which it has been elected. Any other course is

bad faith and a violation of the party pledges. United States is more encouraging than almost anywhere else in the world. The

When the country has bestowed its confiPresident happily reflects this feeling. in the Congress it has a right to expect such

dence upon a party by making it a majority He rightly stresses again the necessity of unity of action as will make the party maour continuing our world relationships jority an effective instrument of government. and joining the World Court without too much quibbling. He again rightly urges

Theodore Roosevelt and Woodrow economy and pictures it in its nobler Wilson believed that for effective governaspects. And he forbears to remind

ment a large degree of Presidential leaderCongress that, of all the program for the ship was necessary. President Harding benefit of the country which he suggested preferred to interpret the Constitution when he succeeded the late President to the effect that the President's responsiHarding, it has granted him next to noth- bility ended with his recommendations, ing. But he does remind Congress that- unless he saw fit to veto. President


Persistent Efforts for Economy


Coolidge seems to follow the Harding Ordinary Civil

$250,000,000 precedent, for he takes occasion to say Indians

30,000,000 that our system of government, made up


260,000,000 of three separate and independent depart


900,000,000 ments, needs constant effort and tireless

Army and Navy


Miscellaneous, including vigilance for its protection and support.

War Risk, Rehabilitation, The program which the President has

and other items

200,000,000 outlined has the endorsement of the public

$2,220,000,000 in the conviction that it will add somewhat to the good fortune with which On January 26, 1925, the President Providence has blessed us. The problem urged that, exclusive of $471,000,000 rebefore the President is: How much of quired by law to be applied to the reducthat program will become translated into tion of the national debt, the expenditures actuality? The country wishes Mr. Cool- for 1925 be kept down to $3,000,000,000. idge every success.

In other words, our effort now is quite far

removed from the best expectation for The President's Next Term 1925 held four years ago. What hap

pened to change the picture? INCE Mr. Coolidge has been The appropriations of the last Congress launched upon his own four-year for the Army and Navy somewhat ex

term, it is opportune to analyze ceeded Mr. Houston's expectation. The the program which he presents for the Indian and pension expenses were a little country's benefit.

less than his hope. The interest charge The President's efforts toward econ- was less by 70 million. The chief places omy have been considerably successful where economy has not succeeded are the and the public has every reason to War Risk Insurance Bureau and kindred thank him for his persistent efforts in this activities.

activities. Mr. Houston's pious hope direction. It is interesting, however, to that its business might take a turn for the check the actual results which the Gov- better was answered by the appointment ernment has obtained with well-informed of Forbes. Partially because of this and expectations of three years ago. In partially for other reasons the GovernOctober, 1921, David F. Houston, recent- ment'sexpenses on account of the veterans ly having left the Secretaryship of the is about $343,000,000 a year instead of Treasury, wrote:

the $200,000,000 he hoped. The items

which Mr. Houston expected under the If we assume that within two or three head of ordinary civil expenses to cost years—that is, by the end of the fiscal year $250,000,000 actually cost more than

— 1923 or 1924, the ordinary civil expenditures $500,000,000. In that $500,000,000 are are reduced to a minimum; that the Shipping

such items as 24 million expenses on the Board draws much less heavily on the Treasury; that the business of the War Risk Bureau

emergency fleet and 80 million given to takes a more favorable turn; that the railroads states to aid road building, and 127 and the War Finance Corporation are out of

millions for the soldiers' bonus. The the Treasury; that special items of military President did not desire the bonus; but origin disappear; that particularly large new he was not strong enough to block it. raids on the Treasury are frustrated, and that The President does not relish the shipping the appropriations for the Army and Navy,

loss. His party's spokesman in the as a result of agreement partially to disarm

campaign regarded the possibility of the or for other causes, are reduced to double

Government in the railroad business as a their average for the five years preceding the war--and they are not likely to fall below

menace to the Republic. Presumably this; and that the sinking fund operates in

the Government in the shipping business full measure, we might see an expenditure is a like danger, not to mention its 24 of about $2,000,000,000 roughly as fol- million a year loss. The President aplows:

pointed a commission to solve this problem, but it is likely that direct and drastic were forbidden to consolidate. Railroads, action on his part must be taken before now more largely owned by the public the Government gets out of this business and operated by men with a keen sense and this loss.

of public obligation, are urged to consoliThe President intimated that he ques- date. Twenty years ago “trusts” were tioned the policy of state aid. Here is being “busted,” and suits for conspiracy another great item which provides op- and restraint of trade filled the courts. portunity for economy. The real op- Combinations were unlawful and even to portunities for economy are in the lopping talk to a competitor about business was off of such wholesale expenses at the ship dangerous. Now the Department of ping and state aid items. The Washing- Commerce invites one trade after another ton Conference was the most courageous to Washington and urges organization, act of economy in many years, for it standardization, and regulation of each prevented an international race in naval trade by itself. expenditure with the United States as The vast stimulus to business which the pace-maker.

Department of Commerce gives under The country endorses the President's Mr. Hoover's inspiration can hardly be general policy of economy and wishes him overestimated, and this stimulus to busiwell in its continuation and amplification, ness does not carry with it the dangers to of the difficulties of which he is more the public which combinations threatened aware than is the public.

twenty years ago, for both the GovernPart of the President's tax program is a ment and business have learned much in complement of his economy program.

the meantime. He wishes to reduce the direct taxes which arose in the war, especially the super- Interior Development and Foreign taxes and the inheritance tax (which the

Affairs President believes should be left to the states). The maintenance of a high HE development of the St. Lawtariff has not much relation to economy. rence River, the plan for the disIt is the fulfillment of the extreme protec

tribution of cheap water power tionist theory.

from Maine to Florida, and the harnessTo increase the efficiency of the Gov- ing of the Colorado River have the enernment, the President endorses a plan dorsement of the Administration. This for the reorganization of the executive de- whole hydroelectric program gives great partments and an extension of the civil promise for the industrial advance of the service in the Post Office Department. United States. It is a most practical apBoth are greatly needed. Mr. Hughes plication of the doctrine of conservation advocated allowing the Cabinet members

and use. to appear in Congress to explain and de- The President appointed an agriculfend their policies—a step toward tural commission, but there is nothing in better coördination of the executive and its findings that promises such help for legislative branches. The President was agriculture as the Department of Comnot interested in this. Yet it is at that merce gives to business. Yet the newly point that our governmental machinery appointed Secretary of Agriculture is able, most often breaks down. Mr. Coolidge courageous, and sound. He is likely to do

. has had little coöperation with Congress as much for agriculture as any man could. so far. Time alone will tell how much The President begins his new term less coöperation he will get under the present auspiciously in foreign affairs than in the system from the Sixty-ninth Congress. domestic field. It is no disparagement

The President believes in the consolida- of Secretary Kellogg's abilities to record tion of the railroads—under government the fact that the resignation of Mr. pressure if necessary. Twenty years ago Hughes was a severe loss to the Adminisrailroads owned largely by individuals tration. Added to that, in the last year

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Just Cause for Optimism



American relations with France and Japan large degree of public sympathy and suphave been distinctly worse than before. port. With Mexico they constantly improve, and with the rest of the world there is

Public Ownership in Our Industrial little change.

The President wishes the United States to join the World Court set up by the HE Armours have sold a third of League of Nations at The Hague. Fur- their stock in their packing comthermore, he seems sympathetic toward pany to a group of bankers who further disarmament conferences, but will sell it to the public.

will sell it to the public. If this succeeds, there is no evidence that it has been possi- they will sell more. So another personal ble to work out a program for a new con


company is becoming a public company. ference such as Mr. Hughes worked out It has become so common for this to hapfor the Washington Conference, and until pen that it is almost a general rule of that can be done a conference would be American business to-day that when a futile.

company becomes very large the public The President sticks to the general takes it over. The high risk attending proposition that all debtor nations shall the starting of businesses with the attendpay us in full the principal of what they ing high losses or high profits are underowe us. He has not disclosed his mind taken by individuals. But if the business

. upon the important question of the rate largely succeeds, the tendency is to disof interest, nor given any indication of tribute its ownership amongst the emhis conception of our debtors' ability to ployees or the general public or both. pay, the form which the payment is to The Bethlehem Steel Company is still take, or how the reception of the goods, Schwab's company, but the United States services, or gold will affect our economy. Steel is largely owned by the public. He seems to feel that the debtors should There are few railroad owners now in the come forward with an offer and they sense that Hill and Harriman owned seem to feel that such a course would be railroads. The public owns the American unwise, either because they know what Telegraph and Telephone Company and kind of an offer would be acceptable to most of its subsidiaries, and likewise us and are unprepared to make it or be- innumerable electric light and power cause they do not know and are unwilling companies. to move until they do.

The growing phenomenon of public Altogether, for the next four years the ownership may largely explain the very President's program means the continua- different attitude the public now has tion of Mr. Mellon's able financing, a toward the great corporations compared sound policy of economy and taxation- to what it held twenty years ago. A man one that will take the full measure of the who owns stock or bonds of a railroad President's strength to carry into com- is not likely to be hostile to railroads in plete execution-two valuable reforms in the way he might be hostile to a railroad the machinery of our government: the owned by "rich men.” The superintenreorganization of the departments and the dent of a local telephone exchange not extension of the civil service, a continua- long ago received a message like this: tion of Mr. Hoover's unusual work in the “Does Peter Wright work for the teleDepartment of Commerce, and a foreign phone company?"

a policy with good predilections but rather “Yes," he answered. difficult to judge because there is no clear "Well, he is home now painting his indication of how much power Mr. barn." Coolidge intends it to have. It is a pro- The superintendent called Peter gram in which there is nothing to fear Wright's boss and found that Wright and much to hope for, and in working had been sent out on two jobs. The for it the President has an unusually superintendent and the boss then jumped




into a car and went to Wright's house. attention. They are indications of a vast Sure enough, he was painting his barn. increase in the stability of the Republic A one-sided discussion ensued on the and an increasing opportunity for its morality of painting the barn on the com- citizens. Neither governmental action pany's time.

nor the ingenuity of business planned this In the old days, Wright's neighbor or controlled it; it came under the direcwould have been amused at the barn tion of a Divine Providence and its painting on company time. But now economic laws. For it we should be Wright's neighbor is a stockholder in the eternally grateful. telephone company and the painting of the barn on his company's time shocked

The French Debt him into reporting it.

The wide distribution of the ownership HERE have been indications that of stocks and bonds is making us into an

the settlement of the French debt economic democracy, giving more and to the United States would get more men a stake in the country and in into the same condition that enveloped our industrial system. The encouraging the German reparations. The people of phenomenon has grown more rapidly the various countries concerned had been since the war. The relative income of given different conceptions of the reparathe working man to his expenses is greater tions, each country having a conception than before. He has more margin, more favorable to itself. These conceptions saving capacity, more chance to save were so strongly rooted that the premiers money and to invest it.

of the different countries could not abanFrom a social and political point of view don them and survive. So the nonthis is probably the most important thing partisan committee--the Dawe Comthat has happened in this country since mittee-was given the onus of telling the the abolition of slavery. The real test of different people that a compromise was a civilization is not its form of govern- necessary.

. ment, the development of its resources, Members of the French Chamber of the speed of its trains, its mechanical Deputies and members of Congress have ingenuity—these all may help toward been doing their best to plant diverse the real criterion, which is the well-being rigid conceptions of the debt problem of the mass of the people. Happy is the in the minds of their respective peoples. country that has the good fortune and When the settlement comes there will be brains to be able to pay high wages. In

In compromises to makeperhaps more this the United States is thrice blessed than political leaders will have the and particularly has this been true in the strength to shoulder. A study of the last few years. Professor Carver of French ability to pay and of our profit in Harvard rightly says that this increased receiving the payment might be as fair prosperity amongst the masses in America and useful in the case of our friends as it is the only revolution of any importance has been in the case of our enemies. that has happened in our time. It is It is of course possible for France to pay often true of political revolutions that the principal of her debt to us if she is the more they change the more all the allowed to pay it in a sufficient number of essentials remain the same. But this instalments-fifty, seventy-five, or a huneconomic revolution is not so. It has dred. The real crux of the matter is the changed, and greatly for the better, the rate of interest. The money was borstandard of living of the people.

rowed at 5 per cent. interest. No one The New York Central recently an- expects France to discharge the obliganounced that forty-one thousand of its tion on that basis. The rate on the Britemployees own stock in the railroad; the ish debt was reduced from 5 per cent. to railroad brotherhoods have a chain of 33 per cent. At what rate do we expect banks—these are the signs that arrest France to pay and at what rate does

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