Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-01-24
POLICY OF THRIFT
URGED ON PUBLIC
Mutual Savings Banks Off
ciaI Believes Now Is
Time to Save.
BY JOHN F. SINCLAIR.

BY JOHN F. SINCLAIR.
Special Dispatch to The Star.
NEW YORK, January 24.--Can a
nation save too much? Can thrift be
carried too far?
Thomas F. Wallace, president OF the
National Association Of Mutual Savings
Banks, answers the question in the
negative. He says that in such times as
these, every dollar not needed for
necessity should be deposited in q
bank. This is the traditional, accepted
"safe, sane orthodox point OF view,
shared in by most bankers.
But it's not as simple as that-not
by q long shot. The Right Honorable
Reginald McKenna, head of Britain
largest bank--the Midland-and next to
the Chase National of New York the
largest bank in the world, takes the
exact opposite point Of view from that
Of MIR. Wallace.
These are times when, judged by the
interests of general economic welfare,
thrift may be carried to excess" says
Mr., McKenna, land excess saving, or
thrift, is an evil when the expenditure
Of O people on consumption is less than
is required to keep existing business or
Plantations going and below what their
earnings would justify"
Wages Aid Output.
This former chancellor of the ex-
cheouer further insists that that is
Just what has been going on in the
United States during the past Is
months.
DR.. william T. Foster, well known
money economist, agrees with Mr. Nc
Kenna that the United States is saving
too much right now. And by that ne
hnC L
ready far too many mills, mines, fac
tories, foundrieS, cannerieS, oil wells,
railroads, Office buildings and power
plants"
0r. Fosters conclusion is based upon
the premise that from 1900 to 1925 real
W&ges, in all manufacturing concerns,
Increased only 80 per cent, while pro-
ductivity per employe increased "a per
cent.
Thus wage earners produced far more
goods than they had any means OF buy
ing. Most of the difference was saved
In the form of capital goods.
Bank Credit.
Theodore Knappen, editor of the
Magazine of Wall Street, says that the
total bank credit of the United States
now stands at about 100000, 000, 900,
but that 1t can be expanded on the
basis of the gold reserves which we now
have to $4,000 900 .000-perhaps even
500 900 600 000-through the opera
tons of the Federal reserve system.
In other words, the gold supply of
the United States will support credit
expansion at the average normal rate
for 10 years to come, without reducing
the present reserve ratio which is 40 per
cent.
But IT, in the meantime, through
some such organization as the Bank
for International Settlements, the
worlds gold reserves are internationally
pooled, the amount of gold in the world
is sufficient to carry on a normal de-
velopment over much longer period.
Mr.. Knappen believes that the effec-
tive, or negative, control of credit has
been well ordered and developed, but it
Is too cautiously utilized, while initia-
tive, or directive, control is still in an
infantile stage.
A thoughtful article!
Dance Manager Making Money.
Arthur Murray, New York dancing
manager, is congratulating himself
these days because during the past
three months his business is more than
so per cent ahead of the figures. for
the same period a year ago
when business began taking a turn
that the Only way to dig up business
was to go after it, even more strongly
than during normal times.
MY contention has proven the sound
ness of my theory. Big business should
spend more money in so-called bad
times than during times of normalcy.
1t might be that if the larger corpora
tons and enterprises had done just
this thing, the period of depression
would have been shortened con-
giderably."
And this business of Mr.. Murray's is
not small-for he crosses more than
$4,000 a week at the present time in
his New York studios.
In times of depression, the amuse-
ment field seems to suffer the least.
Theater and Bread Lines.
Recently the City Of New York es-
tablished supply station where hungry
unemployed men could get hot soup
and fresh bread directly in front OF a
popular movie theater. Around 6 o'clock
the breadline began to form. And at
the same time another line-much
larger-began to form in front of the
theater, but the theater line grew much
faster and in a short time it was more
than a block longer than the bread
line.
Money Sterilization.
Norman Lombard, vice president of
the Stable Money Association, when
asked by Gov. Roosevelt of New York
to submit a memoranda on the rela-
tionship between unemployment and
business depressions and monetary and
credit policies" summed up the situa-
ton TO the Governor as follows
1.-The most effective available meals
Of curing the present condition of I'M
employment and preventing future
periods both of boom and depression
Is to recommend to our monetary au-
thorities, to the commercial bankers
and to our business leaders the accept
ance and advocacy of the idea that the
sterilization of the purchasing power of
our unit of value should be the primary
aim of monetary and credit policy"
The Governors of seven Eastern
States are meeting with Gov. Roosevelt
to suggest ways and means of helping
TO relieve the present depression and
unemployment.
In view of the fact that both whole
sale and retail prices are still drop
ping, the memoranda Of Mr. Lombard
should receive careful attention from
the Governors.
For no building, either physical or
business, was ever built on quickSand.
copyright, 1881. by North American News
paper Alliance)