Statement on Government Expenditures.

THE PRESIDENT said:

"I have received the proposals of the high officials of the Navy of plans for reduction of expenditures. They are being considered in the full light of maintained efficiency of the Department. Such studies and revisions are equally in progress in every other department of the Government. The proposals of all the departments will require study and consideration. No conclusions have been reached on any particular proposed expenditure or economy. Final decision will not be reached until the final budget is presented to Congress. All of the principal officers of the Government are cooperating to bring about reductions. In times when the income of the people is reduced and when taxes or loans may stifle economic recovery there is only one course of sound fiscal policy, and that is to reduce the expenditure of the Government to the last cent consonant with the obligations of the Government.

"There are two great difficulties which confront us in programs of reduced expenditures. The first is the very large proportion of Federal expenditures that are irreducible. We must meet interest payments on the statutory redemption of the public debt; we must pay allowances and pensions to veterans and pensions to civil servants, et cetera. Thus over 2 billion of the Federal budget is in fixed obligations, and such reductions as we can bring about must need be concentrated on less than one-half of the budget.

"The second difficulty is that the Federal Government must make its contribution to expanded employment so long as the present situation continues.

"I fully realize that while governmental economy as a whole is strongly desired by the public, yet every variety of expenditure has its adherents throughout the country, all of whom are naturally solicitous that their special project should be continued even in times of national difficulty, and they are impatient of reduction or deferment or delays of their projects. Public opinion in support of drastic economies will need to reach into these directions. It must extend also to discouragement of special interests desirous of securing new expenditures for the special projects. The essential services of the Government must and will be maintained, but these are times when, with the large deficit facing the country, even meritorious projects can, must, and will be deferred."