The Waterbury Democrat., 1931-01-28
Cash Payments
 Would Depress
(Continued from Page D

organize the governments debt re- funding and retirement program. All bonds would be affected, he said. and capital values aggrcgating hum dreds of millions would be destroyed.
 obviously" said the secretary. "this is no time for the reckless and unwarrantcd abuse of the public credit.
 "The present condition of the pub lic finances is far from being satis- factory. Expenditures are running considerably in excess of receipts.
 "We are apprchensive income tax receipts will not come up to the cs- timntcd figures. According to pres- ent estimates, we will reduce our national debt by about $Gb. 900 ,00O during the twelve-month period. m insignificant amount. and even this reduction may melt away before June 30."
 Emphasizing the difficulty of floating n $3.400. 100000 bond issue, Mellon said nothing would be com parable except liberty loan opera tons concluded during war time in- flation with none unemployed and incomes increasing.
 At the present time" he con tinucd. "the country is going through q severe economic deprcs- EIOn uHu tncIc IB IL iuiRc "' 'y V. unemployed. I can gay without qualification the treasury could not sell $3.400. 900. .000 of bonds except on terms which would be very hard to Justify and without complete dis Organiza ton of the government ana other security markets.
 Coming nt this time. such 0c- ton would seriously retard n busi- ness recovery and So prolong un- employment"
 Mellon said conversion of the ccr- tificatcs as contemplated would cost S1b0,000.O0 additional annually above the cost of carrying the ob'l- gations to the veterans in their pres ent form. He estimated the result mt incrense in interest rates on other government obligations would add nbout $200. 900 to annual government expenses. .,
 ''The effect of these measures, he continued. "would be equivalent 10 capital levy on the holders Of all United States government secur- ities. I venture to say that if these bills were framed in this form you would not consider them.
 "Thcre probably would be some rise in prices, with further dlsloca- ton of the price relationship be- tween consumption goods and raw materials. The rise In the prices of consumption goods would be fol- lowed by q drop when the stimula- ton effect of inflatIon will have worn off. and the drop would bring prices to q lower level than that prevailing at present.
 There would. after while. be q deeper depression than the one from which the world k suffering today.
 There is no economic merit in the proposal. From the point of view of stimulating business. 1t is n plan for unmitigated imitation with the disastrous results of which the world is only too familiar.
 "To tho unemployed 1t spells fur- ther retnrdntion of the day when normal employment will be avail- able. To the taxpayer 1t means de. struction of all hope of the lighten- ing of the load Of taxation.
 How the veterans and their fam files. whose prosperity and welfare arc inextricnbly bound up with the yrcsperity and welfare of all, can Aope to find rtiief and improvement 1n their condition from tho universnl and destructive consequences which thcse measures would entnji. is bee y0nd omprehnrfsep"