The Abbeville press and banner. [volume] (Abbeville, S.C.) 1869-1924, 1920-03-10
BORROWING OR ECONOMY?

Mr.. McAdoo expresses a sentiment
almost universal when ne says tnat
the taxes taken from the public
'have an injurious effect on busi-
ness" They do, but more as the et-
feet of the method of taxation than
of the maount taken. The country
ould bear an even greater burden II
j, were better distributed, with a
view of financing the Treasury
rather than furnishing wealth and
political sections of the country
gainst which the taxpayers had a
grudge. The time is distant when the
country could stand taxation better
than now, when it is enriched by the
war, and trade daily disappoints the
prophets of reaction. The Federal
Reserve some months ago said that
for eign trade was evidently thriv-
ing, although the way in which it did
so was puzzling. The same is now
true of domestic trade. Commercial
loans are expanding in a manner
contrary to the policy of antagonism
to initiation proclaimed on behalf of
the Federal Reserve. And now comes,
/ Mr.. McAdoo with proposal to
finance the Treasury by borrowing
two billions instead of paying out
that sum in establishing the Liberty
Bond sinking fund, by funding the
interest on loans to foreign Govern
ments which they cannot convenient
ly pay, and by discontinuing pur-
chase cf Liberty bonds for retire
ment, which now involves the Treas
ury in floating debt to an embarras-
sing amount.
Approval of making the taxes
etsier to bear cannot extend to such
methods. They are unworthy of
Government so rich as ours and par
ticularly so when the successor of
Secretary McAdoo recently has given
Treasures in such singular contrast
to this plan of substituting loans for
taxes as a means of balancing the
national budget. There is no partlcu-
lar fondness for the sinking fund,
since it is likely to be as disappolnt-
ing in it's work as other sinking
funds. But borrowing against a sus-
pension of the sinking fund is a
novelty. Borrowing against foreign
interest payments not received is
the same sort of finance. That meth
cd of turning unavailable debts into
assets has been practiced by this
city, which has issued bonds against
taxes not collected and not collect
ible; but nobody has paid any COM
pliments to those who did it, and the
city was never benefited thereby.
The suspension of the purchases of
Liberty bonds would give them fur
hter sinking speels, and already they
are too low for the Treasury's COM
fort,
These are objections in detail
merely. Not even such finance could
trouble the Treasury seriously. 1t is
more important that trade should
not be further inflated by new bor-
rowings of billions at time when
deflation is the policy of the Federal
Reserve Board. The Treasury and
the Federal Reserve should cooper
ate. The world is neither producing
nor distributing on the pre-war scale,
and there is a faminine of goods
which explains the excessof demand
over supply. Depreciation of cur
reney in the various nations depends
more on the creation of buying
power by Government borrowing
than any other one thing. When
Governments issue currency, rum
ming printing presses to balance bud
gets, money loses its purchasing
power to the extent illustrated in
Russia at one extreme and the Uni
ted States at the other, but in pro-
portion to the watering of Govern
ment finance without exemption in
any case. 1t is time that should be
stopped in the United States as well
as in the nations to which Secretary
Glass gave such virtuous advice.
They accepted it with outward meek