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Show PRESIDENT DISCUSSES EXPENSE OF GOVERNMENT Atlantic coast and It must be defended. de-fended. "In the naval expenditures we have retained a provision for two battleships battle-ships of tho largo 25.000 ton capacity and we have done this on the ground that, until the Panama canal Is completed, com-pleted, we ought to go on and add to our naval strength. The Panama canal certainly will be completed In 1915, and If we hae two battleships a year until that time, the opening of the canal will see double the efficiency ef-ficiency of our navy for the protection protec-tion of our Pacific and Atlantic coasts that we can abate and reduce our expenditures ex-penditures In new construction. "I have already occupied your time too much and I perhaps have not made this statement very Informing or Interesting, but I cannot close without with-out congratulating you and myself on the prospect that the present tariff bill offers such an increased Income ag to make deficits under any condition condi-tion unnecessary Of course. If there were to be a halt In our prosperity and a panic, the reduction In exports might ic so substantial as to lead to deficits again. Let us hope, however, that tho prosperity of our country" Is founded on such a stable basis that no flurry in the stock market and that no other temporary cause may prevent the continuance of good business busi-ness on a stable basis." Newark, N. J.. Feb. 23. President Taft. the first executive since Grant, to visit Newark today addressed one of the largest and mo6t enthusiastic dinner audiences he haa met In all bis travels. The banquet was given by the Newark board of trade and more than 00 members and guests attended. attend-ed. Mr. Taft took for his theme the subject of governmental economy and said he shared the hope that the commission com-mission which Is to be appointed to revise the business methods of the big departments at Washington may affect a saving of $100,000,000 a year. Newark. N. J., Feb. 23. President Taft, after acknowledging the pleasure of being afforded the opportunity to speak to the businessmen of New Jersey Jer-sey said: "When I accepted the Invitation to come here, I learned that I was to have the pleasure of being a fellow guest with my friend Senator Lodge, and that he was to take up the question ques-tion of high prices, a question that has occupied the attention of all the people jind bus invited the Investigation Investiga-tion Into Its cause by the congress of tho United States and by some of the stat legislatures. For my part of the evening, I should like to direct j-our attention tot a more prosy sub-Jec, sub-Jec, to the question of government expenses ex-penses and government revenues and the possible economies and what expenditures ex-penditures are essential at whatever burden of taxation. ; "In the first place. It should bo ! said that we have been so far from , i-xhaustlng the resources of national taxation and federal revenues have been collected eo easily and In such an I amount. In the past to adopt a budget system which Is practiced In every I other civilized country. By a budget system I mean a reference of proposed propos-ed expenditures and receipts to some one authority or tribunal, which, after af-ter determining what the revenues will be must also determine what tho expenditures can be, and make a budget bud-get without a deficit. This Year Deficit. "The calculations of the secretary of the treasury for the present year showed that the deficit was likely to be $31,000,000 in rospect to ordinary receipts and expenditures. I am glad to say that the operation of the new tariff bill has been so much more productive of Income that this deficit for the current year Is likely to be considerably reduced. In addition, however, to the ordinary deficit, we have to add the Panama canal expenditure expen-diture for Immediate provision of the ?38,00,1.00o or. whgt was estimated to lc a total deficit o'r $72,000,000 Is now reduced considerably by the better rates under the present tariff bill. "By meeting the expenditures on the Panama canal with the proceeds of bond Issues, w-e have enough cash In the treasury to meet the deficit In our ordinary expenses for the current year, and If we meet the expenditures on the Panama canal for the follow: lng year, we shall have a surplus of $35,000,000; or, If the revenue producing produc-ing capacity of the new tariff keeps up to its present Indications, this surplus sur-plus may be Increased to $50,000,000. On the other hand, If congress proposes pro-poses to add to the expenditures of the government over those estimated for new enterprises In the river and harbor bill, and for the construction of the federal buildings under a building build-ing act, It will be easy to consume or exceed the entire surplus. Recommends Bond System. "Not only Is such a principle just In the case like the Panama canal, but It seems to be appropriate to adopt it with reference to other projects. pro-jects. I refer to those definite projects pro-jects that have been agreed upon In respect to the Improvement of our Inland In-land waterways. I would not begin the expenditure of any money on any project the wisdom of which had not been fully vindicated; but having determined de-termined to put; through the Improvement, Improve-ment, It ought not to be done by fits and starts, but It ought to be done as one job. Financial Condition. "To return to the state of finances. I repeat that the surplus for the year ending June 30, 1911, and which we are now making provision in this congress by appropriation will be about $35,000,000 If the estimates made by the departments and transmitted trans-mitted by the secretary of the treasury' treas-ury' to congress are not exceeded, and If th? revenue from the tariff hill equals that which the' secretary of the treasury has estimated It as likely to he. This nurplus Is also upon the supposition that the J3?,000.ono necessary neces-sary annually In the construction of tho Panama canal will be met by bonds. "In view of the threatened shortage for the year enJlng Juno 30. 1911, I directed the heads of tho departments In making their estimates to cut them to the quick and to avail themselves of every possible economy and reduction. reduc-tion. Tho result was that the total of tho estimates forwarded by the secretary sec-retary of the treasury was J12.S1S.000 less than the total of the appropriations appropria-tions for the previous year ending June 30, 1910 A river and harbor bill has now ben Introduced and has passed the house, which appropriates nearly $10,000,000. "NV.w I would like for a moment to go Into tho question of what It was that we cut dovn In our estimates for the coming year In the depart-I depart-I ments. Reducing Expenses, j "The reduction In the estimate of the war department below the appro-, appro-, prlations of last year amounted to $10,000,000. The reduction In the es-1 i tlmate of the navy department for the expense of the year ending June 30, 1911, also amounted to 10,.H0.000. The reduction In the Interior department depart-ment of estimated expenses for l.Ml below tho appropriations fpr 1910 j amounted to $8,000,000. Tho reduction reduc-tion In the treasury and In tn post-. post-. ofilce department made up balance bal-ance of the $42.000,0v0. Let us take the war department. There l ned vil at the" mouth of Chesapeake Bay. between - Cape Henry - and Cape Charles an artificial Island upon the fo-called middle pround, which shall command the entrance to ChesajM?ak Day. Chesapeake Bay I the most j Important body of water from a strag- I etlcal naval standoolnt on the whole I |