This is being, accomplished by a drastic but orderly retrenchment, which is bringing our expenses within our means.  The origin of this has been the determination of the American people, the main support has been the courage of those in authority, and the effective method has been the Budget System.  The result has involved real sacrifice by department heads, but it has been made without flinching.  This system is a law of the Congress.  It represents your will.  It must be maintained, and ought to be strengthened by the example of your observance.  Without a Budget System there can be no fixed responsibility and no constructive scientific economy.

This great concentration of effort by the administration and Congress has brought the expenditures, exclusive of the self-supporting Post.  Office Department, down to three billion dollars.  It is possible, in consequence, to make a large reduction in the taxes of the people, which is the sole object of all curtailment.  This is treated at greater length in the Budget message, and a proposed plan has been presented in detail in a statement by the Secretary of the Treasury which has my unqualified approval.  I especially commend a decrease on earned incomes, and further abolition of admission, message, and nuisance taxes.  The amusement and educational value of moving pictures ought not to be taxed.  Diminishing charges against moderate incomes from investment will afford immense relief, while a revision of the surtaxes will not only provide additional money for capital investment, thus stimulating industry and employing more but will not greatly reduce the revenue from that source, and may in the future actually increase it.

Being opposed to war taxes in time of peace, I am not in favor of excess-profits taxes.  A very great service could be rendered through immediate enactment of legislation relieving the people of some of the burden of taxation.  To reduce war taxes is to give every home a better chance.

For seven years the people have borne with uncomplaining courage the tremendous burden of national and local taxation.  These must both be reduced.  The taxes of the Nation must be reduced now as much as prudence will permit, and expenditures must be reduced accordingly.  High taxes reach everywhere and burden everybody.  They gear most heavily upon the poor.  They diminish industry and commerce.  They make agriculture unprofitable.  They increase the rates on transportation.  They are a charge on every necessary of life.  Of all services which the Congress can render to the country, I have no hesitation in declaring t neglect it, to postpone it, to obstruct it by unsound proposals, is to become unworthy of public confidence and untrue to public trust.  The country wants this measure to have the right of way over an others.

Another reform which is urgent in our fiscal system is the abolition of the right to issue tax-exempt securities.  The existing system not only permits a large amount of the wealth of the Notion to escape its just burden but acts as a continual stimulant to municipal extravagance.  This should be prohibited by constitutional amendment.  All the wealth of the Nation ought to contribute its fair share to the expenses of the Nation.