Evening star. [volume] (Washington, D.C.) 1854-1972, 1930-12-28
POINTS
TO CREDIT ABUSES
Minnesota Senator Cited
Factors Which He Declares
Caused Business Slump.
BY JOHN F. sINcLAR,

NEW YORK, December 27.-HendriR
ShipStead, 40. is the lone Farmer-IIabog
man IN the United States Senate. Twice
have the voters of Minnesota, q Re-
publican stronghold. elected this former
country dentist to the Senate, the last
time during the Hoover landslide, By
the greatest majority ever given to d
candidate for any ONCE in that State.
In the next Congress, he will be an
important and conspicuous member. He
even may have the deciding vote on
organizing the Senate, so closely divided
VIII the membership be between the
two old parties. That's why American
ner OF man he Is and how radical his
views are.
What's the matter with business.
SENATOR" was the first question I asked
MIN when I met him recently.
While slow In movement, deliberate
In speech, Senator ShipStead does not
hesitate in his answers. Neither does
ne give one the impression of being
rushed or hurried in his thinking.
Economic Laws.
Perhaps the greatest handicap Of
business" he replied, "iS the refusal OF
the leaders in government, finance and
industry to recognize we'll established
laws OF economics. and, therefore, refuse
70 admit that something is the matter
with business"
Senator Shipstead has never been a
reVolutiontst. He Is not even radical. In
the popular sense of that term. He Is
conservative at heart, an old-fashioned
constitutionalist. He does not object to
being called radical, If one uses It in its
exact meaning OF going to the root
''Mussolini says the trouble with
business is the stock market crash in
New York" continued the Senator.
The British say it Is due to all of
the gold being in France and the United
states and to our tariff wall. The
Germans say 1t is due to PREPARATIONS.
American leadership, up to this time,
has been saying the trouble Is due TO
conditions in Europe and the rest of the
world. NOW all Of these are partly
right, like the blind men who were
asked to describe an elephant.
Inc one who felt of his legs said
the elephant resembled q tree. The
one who got hold of his tail said the
elephant resembled a rope; the one.
who caught his trunk, said he was more
like snake; while the one who felt his
Dooy said he resembled house more
than anything else"
Recalls Prediction.
I'm your opinion, is the present de-
preston similar to that Of 1902" I
asked.
We'll, some say that this depression
VIII disappear quickly, like the depres-
sion OF 1920" the Senator went on.
But in 1920 the world was a vacuum,
as lar as food and commodities were
concerned rl1n - la.
practically sucked commodities out of
the United States, giving us tremendous
exports, for which the world had to pay
in gold. When they had no gold. we
loaned them the gold credits with
which TO buy. In 1920, said that it
would take 10 years for the world to
get back to normal production and the
normal carryover Of surplus. The world
was beginning to catch up as early as
the Spring of 1925, when the decline In
prices started. This decline was check
ed temporarily by heroic use of powerful
credit pumps, not only here, but abroad.
Our Federal Reserve banking system
was so manipulated as to initiate credits
This, in turn, stimulated production
both here and abroad. On account of
our export of commodities and credit.
loans to Germany and reparations, gold
concentrated In the United States and
able TO get gold with which to buy
from us.
rhe British government, IN putting
India on q gold basis demonitized
silver. This, in turn, reduced the
purchasing power by so per cent of
one thousand million people In the
Orient. Nothing else could happen but
what did. The bubble had to burst"
Effect Of Initiation.
Then, in your opinion, an unwise
manipulation of money and credit was
major factor in bringing on the
cr1Sis?" was my next question, and the
Senator continued:
"A credit system can stand only 80
much imitation, just like a balloon or a
rubber tire; when it bursts, we have
oenatlon. The selling Of stocks on the
New York Stock Exchange started In
London, within 80 days after the WAYS
and Means Committee reported the last
tar1n bill to the House. This was largely
a fear-complex, thinking that the In
creased tariff would so decrease their
sale of British goods in the United
States that they would not be able to
accumulate sufficient gold credit to pay
their American debts"
Then, you do not believe that any
one factor contributed to the present
business debacle?" I asked.
The Minnesota Senator has a way
OF looking his listener straight in the
eyes and answering deliberately. He
went on:
There were many contributing fac
tors. think In turning to the gold
standard England pegged the pound too
high and France pegged the franc too
low. The transfer Of debts from allied
taxpayers to American taxpayers, max
ing possible the building of large armies
and navieS in Europe is also, In nv
opinion. contributing factor.
Diminished Purchasing Power.
"In this country, through special
privilege legislation, too numerous to
mention here, Supreme Court decisions
and the lack of enforcement of the
Sherman antitrust laws, a condition
has arisen where an unfair share of
the national income is drained from
agriculture and labor for the benefit Of
corporate incomes. This has largely de-
stroyed the purchasing power of tina
100000 people who work on the
farms and in industry. What's the
result? Production has outrun con-
our people-the working oeople-have
no money to buy goods with. Can YOU
ever remember the time when the farm
er and the working man did not buy.
when he had the money? He all
ways has.
The boarding Of income in the form
OF surplus by corporations In order "a
escape paying income taxes and loans
ing the money to Wall Street spectators
was another factor which helped de-
stroy the purchasing power of tbs
people,
(Copyright 1890. by the North American
Newspaper Alliance.)
THREE DApTMEpc AnnEn