The Sauk Centre herald. (Sauk Centre, Stearns County, Minn.) 1886-current, 1931-01-15

Mimi.
dawdling with the construction of
needed public buildings.
IF the government were to go at |
all these projects the way private
corporation would if it had them to
do in it's own business employment |
would be given to hundreds Of
thousands of men now idle and
large sums of money would go for
the purchase of machinery and
materials. Money spent on these
public works is not wasted, it is
true capital investment. But it has
the merit of not being Immediately
productive of goods in a situation
that is commonly attributed to
overproduction. While private cap
ital is not in a position to force
employment, for to do so means the
productive of good at once for
which there is no demand, the
government can do it in truly
economic manner without danger
of making conditions worse at
later time.
This is no time for halfway mea-
sures. We must act on the theory
that business is going through a
critical period which is likely to be
of long duration. Such remedial
measures as the government under
takes in the way of public works
should be of a volume and period
that are calculated to produce a
substantial Offset instead of mere
palliative for short time. Sooner
or later we shall do everything that
advocate. The question is wether
we shall do it now, when costs are
much lower than they have been or
will be in the future, and when it
will help take up the slack in bust
ness and employment. Moreover,
any work that is promptly carried
out in accordance with plans, costs
less in the long run than patch
work procedure, and is better done.
These vast public works can be
financed in iether of two ways: We
can issue bonds for them, as we
did for one year the retirement of
the public debt, which now goes on
at the rate of a billion dollars a
year. Some favor the latter way be-
cause it would put the money at
work instead of paying it out to
private investors who at this time
can find no remunerative use for it.
Idle capital pays no income taxes.
On the other hand the government
can now borrow money at most
favorable interest rates, should a
bond issue be preferred. The one
per cent reduction in the normal in
come tax rate cannot be continued.
We need legislation to prevent
the wrongful use of credit. Some
way must be found to keep the re-
sources of the nation from being
used to finance speculation when it
has reached the gambling stage.
Speculation of the gambling type
certainly should not be financed by
credit. Let it be paid out of the
capital of the spectators.
Speculation on borrowed money is
both morally and commercially
dangerous. Some of our great bus
mess concerns have been as guilty
in the matter of financing initiation
ary speculation as the banks them
selves. They have taken money
that belonged in large part to di-
vidend distributions to their share
holders and put it into the stock
exchanges in the form of loans for
speculation. If they had paid that
retaining it Ito avoid income tax
atom they would have done two
constructive things: ID They would
have contributed to the publics
purchasing power, and ~ they
would not have contributed to an
! imitation that could be succeeded by
severe business depression. 1t
might be said that at one and the
same time they reduced their mar
kets and assisted in their demorali-
zation.
This brings us to the matter of
balancing the division of the ma
tional income. It is my opinion
that we are suffering today from
underconsumption rather than ov-
reproduction. Not enough of the
gross income of the corporations
goes back into immediate and
broadly distributed individual in
come In other words, the poten-
tial buyers are not adequately pro-
vided with the means of buying.
When the gross amount paid out
| in wages decreases as the volume
- &l,a y,rod,,ct incroacoS on ir,op eco