Annual Report

The President sent to Congress, following his annual report "on the state of the nation," another message the sending of which is rapidly becoming habitual--the message which accompanies the budget. In this he dealt with the fiscal affairs of the Government for three years: briefly with the fiscal year of 1925 (closed last June) and the fiscal year of 1926 (now in progress, closing next June), and more at length with the fiscal year of 1927 (beginning next July), for which appropriations will be made at this session of Congress.

Fiscal Year of 1925. The Government's actual finances for this year may be summarized:

Receipts................ $3,780,148,684

Expenditures......... 3,529,643,446 _________________ Surplus...................$250,505,238

The entire surplus was used in paying off part of the public debt. It had been estimated that this surplus would amount to only $67,884,489. It was about four times as large, partly because expenditures were smaller than expected but largely because revenue was much larger than expected.

Fiscal Year of 1926. The present estimate of the finances of the Government for the year now about half passed may be summarized:

Receipts..................$3,880,716,942

Expenditures...........3,618,675,186 _________________ Surplus....................,$262,041,756

A year ago the surplus for this year was estimated at $373,743,714. Although the revenue now expected is $239,420,000 greater than the estimate of a year ago, the estimate of expenditures is $351,124,000 greater--therefore reducing the expected surplus. The extra expenditures which cut the surplus include:

1) $106,000,000 more for the soldier bonus.

2) $91,000,000 more for tax refunds.

3) $23,000,000 for Federal subsidies to states for road building.

4) $37,100,000 to meet the postoffice deficit caused by the increase in the pay of postal employes made last year.

5) $8,000,000 for additional pensions.

Fiscal Year of 1927. The expected financial statement of the Government for the next fiscal year may be summarized:

Receipts....................$3,824,530,203

Expenditures..............3,494,222,308 ___________________ Surplus........................$330,307,895

The receipts indicate the amount the Government would expect to receive under the present tax laws. The surplus therefore represents the amount available for tax reduction. The expenditures represent the total of the appropriations asked by the Administration. The itemized list of these appropriations made last winter for the present year is as follows:

REQUESTED APPROPRIATED FOR 1927 FOR 1926 Congress $16,498,381 $14,915,001 White House 441,960 489,960 Veteran's Bureau 458,965,000 405,700,000 Other Bureaus, etc 46,302,899 53,630,499 Departments of Agriculture 140,717,758 138,075,191 Commerce 30,402,847 28,542,129 Interior 250,967,602 262,255,603 Justice 24,367,027 24,205,822 Labor 8,567,305 8,627,625 Navy 322,869,430 302,862,378 State 16,614,932 16,277,652 Treasury 157,563,713 153,708,404 War 335,641,525 339,765,931 District of Columbia 35,626,579 36,032,853 _____________ ________________ Total $1,845,546,960 $1,785,089,050

In addition to these there are the Post Office Department, which is supposed to pay for itself, and the sums required for retiring part of tho public debt and paying interest. The amount of money devoted to debt service is about $1,310,000,000, or two-thirds as much as all other expenditures.

The President said: "We have about reached the time when the legitimate business of Government cannot be carried on at a less expenditure than that which it now requires. With regard to our legitimate business the operating costs have been reduced to nearly a minimum. The normal expansion of the business of the Government in keeping pace with a growing nation will involve added expenditure from year to year.

"The effort for economy, however, must continue. So far as it lies within the power of the Chief Executive it will continue."

The President called attention to the appropriations for the air services:

Army.................$16,793,000 Navy..................22,391,000 Air Mail.............2,750,000 Nat'l Advisory Committee.........513,000 ___________ Total.................$42,447,000

As these items do not include pay, housing and general supplies, the real expenditure is "not less than $76,000,000."

Appropriations for prohibition enforcement come to $21,940,529, including $12,634,000 for the Coast Guard but not including extra appropriations for the Department of Justice for this purpose.

Federal subsidies for states now amount to $110,000,000 a year, of which $80,000,000 is for roads. The President recommended restricting road subsidies in future to interstate roads.

The President also recommended a building program for the District of Columbia amounting to not more than $10,000,000 a year for several years. This is necessary for Government efficiency. The Department of Agriculture is now distributed among 45 widely separated buildings in Washington. The Accounting Office is in 20 buildings. The Bureau of Internal Revenue of the Treasury is in eleven buildings.

The Army is greatly in need of new housing. Many War buildings used as quarters are in such bad condition that it is wasteful to repair them.

About $140,000,000 a year for the next 20 years will be necessary to pay the soldier bonus.

* The decrease of $48,000 in appropriations for the White House, or "Executive Offices," comes about because last year $50,000 extra was appropriated for "extraordinary repairs" to the White House. With this factor eliminated, apparently the President's household costs $2,000 more than last year. Not so! The Vice President's salary is part of the "White House" appropriation, and the Vice President's salary was increased $3,000 last year (to $15,000) when Congress raised its own salaries and the salaries of the Cabinet and Supreme Court. Actually the President cut his household expense $1,000. Most of the cut came out of uniforms and equipment for the White House police.