Evening star., 1931-06-25
RY Pred RoGERs FA1RCHTLD

BY FRED ROGERS FAIRCHILD
professor Of Political Economy, Yale
Untversityl
Copyright, 1891, by the Associated Press)
NEW HAVEN, Conn, June 25.-At q
time when the whole world Is passing
through q period unprecedented In
dustrial depression accompanied by tax
burden unprecedented except in time
Of war years respite from repara-
ton and interally debt payments
as proposed by President Hoover un-
doubtedly will have a favorable eject,
perhaps far beyond what may be meas
ured by the actual money considerations
involved.
without doubt the harassed financiers
Of Wilhelmstrasse, struggling with re-
calcitrant budget that refuses to ball
ance while industry languishes, will
take courage from the hope of relief.
But more Important than this In my
opinion is the promise held out to the
industrial world that our governments
may perhaps be on the point OF rec
ognizing the fighting effect OF swollen
tax burdens. If the Presidents move
may be taken as the harbinger OF re-
turning moderation in public finance
then it may well furnish real I'm
petus toward the restoration OF eco
nonic prosperity.
Open Eyes to Real Meaning.
In this same connection think It
well that the American public have
its ewes open to the real meaning OF
President Hoovers proposed mora
toriurn. The two countries to be chiefly
affected are Germany and the United
States. Great Britain as debtor has
about as much to gain as she sacri-
fees as q creditor. Similarly we may
safely assume that France VIII accept
no arrangements whereby she suffers
anv an Substantial net loss. Canceling
actions and reactions we have in net
effect assistance from America to
Germany.
without doubt here Is where assist
ance at the moment is most needed, but
the American public should recognize
that Germany's financial relief can be
no greater than Americas financial
sacrifice. This is q hard lesson to
learn. There will be many who will
hail the Presidents move as q happy
gesture bringing joy and relief to Ger
man industry while costing NOBODY
anything. It is In the field OF public
finance that the joyful delusion OF
having our cake and eating It, too,
dies hardest.
Struggle With Tax Increases.
The United States clso are involved
in industrial deprc-- 11 and the Amer
ican people are ling to cope with
reduced incomes OH the one hand and
ever growing burdens Of taxation on the
other.
Industrial depression has been with
us, the occasion not Of moderation in
the demands of government. but the
reverse. Federal, State and local exac-
the breaking point. Our Federal Gov
ernment spent more in 1880 than in
1929 by 140 million dollars. The net
expenditures of 1881 will be still great
er by $50 millions.
Instead of comfortable surpluses.
each year the Treasury Is facing huge
deficits. The reduction of our public
debt, which has been progressing at
50 favorable a rate. already Is being
retarded by some 800 millions year.
REIMBURSEMENT Of the payments due
from our former war allies will mean
just so much more to be imposed soon
er or later upon the shoulders Of the
American taxpayers. say this In no
spirit of criticism Of the proposed NOR
atorium, which welcome. My purpose
is to suggest that the American public
in approving the Presidents suggestion,
as hope it will, do so with its eyes
open to the cost.
The act of generosity to our former
enemy will be so much the more gra-
cious If granted with intelligence and
sober Judgment and may we perhaps
be bold enough to hope that the next
move may be consideration of meas
ures to promote prosperity by tighten
ing rather than further increasing the
tax burdens of the American people.