New-York tribune., 1920-10-21
Houston Sets
Need for 1921
At 4 Billions
Continued from page ons)

Continued from page one)
tended. Between the armistice nnt
October 1, 1920, the loans and invest
ments Of all banks, it is estimated in
creased more than S7O0O,0OO.O00, an(
Federal Reserve notes more than $740,
100000.
"A little while ago. it appears, the
crest of the wave Of high costs, ot
credit expansion and high price:
passed. Labor troubles seemed to be
decreasing, industrial conditions to be
in the process OF adjustment and the
way to be opening to more normal &C
tivities"
Here the Secretary made an easy
transition. which gave him a chance td
take thrust at tho farmers who last
week sought to have the government
underwritc high prices for their prod
ucts.
"Scarcely,' he asserted, chad the
tendency towyrd a reduction of the
cost of living manifested itself wher
counter forces began to operate. Re
sstance on the part of the produce,
producer is willing for the products o1
every other producer to fall, but pro
tects the decline of his own.
"Just now the chief complaint comes
from the producers of agricultural com
modities, and there is no question thai
they are confronted with serious anC
real difficulties. In the circumstances
it seems to some farmers that they arc
in the way of being hit first, if no
exclusively. They are naturally dis.
turbed and distressed, and are seeking
relief through measures, some Of which
are not practical and others of which
are suicidal.
Many Groups Demobilized
"The first impulse of many who arc
searching for the way out is to turr
to the government, and especially tc
tue treasury. as the ssole nstrumen.
tal;y for full economic salvation. w,
nave demoblllzed many groups, but we
have not demo mobilized those whose raz
is concentrated on the treasury. II
tfc present circum stances producers
whose products cannot be satisfactoril,
marketed and whose prices are fall
ing are demanding that the treasur,
intervene. Ihey ask either that it de
I oslt money III certain sections or .hat
t. activities of the War Finance Cor
roratlon be resumed. Neither of th..t
things is feasible
During the war forces were set il
motion which no government could o,
ald control. No government proceeded
in checking the rising tide of costs ane
prsces, and now with the return OF
millions of men to productive activi
ties, with the beginning of more norma
conditions everywhere. with the res
toratlon OF better transportation or
land and sea, and with the fuller con
tribution of nations once more to th,
worlds stock of goods, reverse force.
are operating which no governmen,
can thWart.
Several things seem theoretical,
clear. The first is that those who pro
duce what farmers buy should be will
ing to DO everything in their powe,
to continue production and to sustain
their fair part of the burden incident
to falling prices. An argument Ger
tainly can be made for the contempo
raneous reduction of the prices Of al
commodities, and one might be made
Tor the prior reduction in the prices oi
manufactured products, since the turn.
over in business is rapid. while that oil
the farmer is seasonal. The second is
! that nothing be omitted consistent with
sound finance to assist IN the gradual
and orderly marketing of all commo
dities and particularly of the farmers
| products
Financing Up to Banks
Mr.. Houston then pointed out that
the job of financing is squarely UP tc
the member banks, and criticized the
habit of relatively few institutions
OF "lndulging III the game we'll known
! III Washington of passing the buck anC
Ct ascribing their unwillingrsss or in
ability to extend loans to the actor
OF the Federal Reserve Board This is
as much out of accord with the facts
as it is with good ethics"
Moving to another subject, the Sec.
retary rejected the proposals which
many outsiders have made for refund
/ ing the various outstanding Liberty
/ bond issues.
Fundamental objections to these
suggestions" he said, ARE that refund
ing is unnecessary, that it would tend
to perpetuate the war debt and would
upset the Treasury's wcll-considered
program of debt reduction"
In respect to arguments for lower
ing the burden on tax payers. Mr
Houston remarked: Sound fiscal policy
dictates that the receipts from taxes
ana salvage be kept sufficiently high
not only to meet current bills, includ-
ing interest and sinking fund charges
but also to retire the floating indebted
ness and considerable part of the
Victory notes before the close of the
fiscal year of 1923. Earlier plans were
dlsarranged by the Unexpectedly large
burdens placed on the Treasury by the
transportation act. There will be paid
on account o. the railroads during the
current fiscal year probably $1,000
CC0,000 NN''
I'm saying that the aggregate re.
celpts Tor the government should be
maintained at high level for the nur-
poses Indicated I am by no means com
mlttlng myself TO the existing sched-
uies or to specific taxes"
The Secretary estimates that at least
sa'ooo'o ooo,oo0 year will be needed,
and indicates that the revenue for the
current hsca! year may not exceed
thlS minimum, COMPARED with receints