January 8, 1932: I wish to emphasize to the full extent of my ability the necessity, as a fundamental to recovery, for the utmost economy of governmental expenditure of all kinds. Our people must realize that Government cannot continue to live in a depression upon the scale that was possible in times of great prosperity.
The developments of the past week should give great assurances to the country. The public statements of the Republican and Democratic leaders of the Senate and House show a real non-partisan determination in cooperation with the Administration to assure the country of the balancing of the Federal expenditures and income for the fiscal year beginning July 1st. The amount of taxes we will need to impose for this purpose will depend entirely upon what further cuts we can make in government expenditures. The budget before Congress represents a reduction of $360,000,000 in Federal expenditures for the next fiscal year. I shall welcome any further reduction which can be made and still preserve the proper and just functioning of the Federal Government. With the general realization of the necessity of reductions in expenditures we should also at last be able to bring about the wholesale elimination of overlapping in the Federal Government bureaus and agencies which will also contribute materially to the program of economy.
With this program we are thus assured that we can maintain the full stability and credit of the Federal Government by no increase in the public debt after covering the deficit of this fiscal year and no further increase after the first of next July.
The balancing of next year's expenditure and receipts and the limitation of borrowing imply the resolute opposition to any new or enlarged activities of the Government. With the assurances which have now been given from the leaders in Congress I do not believe there is any ground for apprehension by the public from the flood of extravagant proposals which have been introduced there. It is true that these bills would imply an increase of Government expenditures during the next five years of over 40 billions of dollars four or more then 8 billions per annum. The great majority of these bills have been advanced by some organization or some sectional interest and are little likely to see the light of day from congressional committees. They do, however, represent a spirit of spending in the country which must be abandoned. I realize that drastic economy requires the sacrifice of large hopes of expenditures promoted by such interests. However, I appeal to their sense of patriotism in these times not to press their demands. They should withdraw the pressures upon Government officials.
Rigid economy is a real road to relief, to home owners, farmers, workers, and every element of our population. The proposed budget of Federal Government expenditures for the next fiscal year amounts to about 4 billion dollars of which over $2,800,000,000 is for debt, military and veterans' services, and nearly half the balance is for aid to employment in construction works and as aids to agriculture. It is worth noting that the state and local government expenditures of the country amount to nearly 9 billion. The Federal Government itself ofttimes contributes to increased state and local expenditure by appropriations requiring a matching of money by the states. The result is pressure upon state officials by the groups who will receive benefits from these expenditures and makes them the unwilling victims of increased Government costs.
Our first duty as a nation is to put our governmental house in order, national, state and local. With the return of prosperity the Government can undertake constructive projects both of social character and in public improvement. We cannot squander ourselves into prosperity. The people will, of course, provide against distress but the purpose of the nation must be to restore employment by economic recovery. The reduction in governmental expenditures and the stability of Government finance is the most fundamental step towards this end. It can contribute greatly to employment and the recovery of prosperity in agriculture. That must be our concentrated purpose.