Evening star., 1931-12-30
Everybody's
Business
Indications Are That the
Foundations for Economic
Recovery Are Now Being
Laid.
BY DIR. MAX WINKLER.
Special Dispatch to The Star.

Special Dispatch to The Star.
NEW YORK, December 3o-One o.
the most trying years in the history o.
finance is coming to a close. Difficult
ties of political and economic nature
characterized the years developments
both at home and abroad. However, il
appears that the foundations are be-
ing laid for solving the many and com
plex problems with which the world i:
confronted.
l. In the United States the Nationa
Credit Corporation has recently beer
established to cope with the existing
banking problems. Bank failures II
1881 were the largest ever recorded II
any one year. The amount involved
also constituted record. Millions Of
depositors were affected, their losses
seriously influencing the purchasing
power of the Nation.
Thus far the corporation does moi
seem to have been successful in putting
a stop to bank closures. 1t is, of course
possible that the number would have
been much larger were it not for the
corporation.
At any rate, a certain degree OF dis.
appointment is noticeable, and the puO.
lie is beginning to view somewhat
skeptically the promises held out by the
sponsors of the institution.
2. The railroads, admittedly the back
bone of the Nations economic life, are
now receiving serious attention. Many
naively believed that the status OF the
country's carriers affects only the
holders of railway securities and con-
sequently regarded whatever aid was
proposed for the railroads either with
antipathy or with tepid sympathy at
best. They apparently chose to ignore
the fact that a very substantial part of
the invested funds of life insurance
companies, savings banks, fire insur-
ance and casualty companies and trus-
tees is represented by railroad oonds.
and that wholesale receivership would
impair most seriously the status OF these
institutions, affecting, directly or 1ndl-
rectly, the whole Nation.
Remedial Measures.
1t is for these reasons that remedial
measures had to be rushed through
They include an increase in freight
rates granted by the Interstate Com
merce Commission and the probability
of a wage reduction to be put into ef-
feet at very early date. They further
include the proposed formation OF the
Reconstruction Finance Corporation
which will, among others, come to the
aid of weak systems, assisting them in
meeting fixed charges and maturing
obligations during period OF emer-
gency.
These steps, however, were not taken
until a victim was found in the wabash
Railroad, which had to be put into the
hands of receivers before the powers
that be woke up.
8. The rapidly mounting deficit OF
the Government is another problem
which is being viewed with some appre-
hension. A drastic revision in the tax
system of the country has been pro-
posed to cope with the Nations bud
getary situation. The rates obtaining
in 1924 are to be re-eStablished, with
some minor notifications.
The sponsors of the proposed change
are doubtless aware of the fact that
conditions in 1881 are vastly different
from those prevailing in 1924. While
governmental receipts will increase ma
terially as a result of new measures,
one must not expect too much.
Those who regard the new rates as
too drastic should derive consolation
from the tax rates in force In Great
Britain. How much relief such COM
parison will afford the American tax
payer is highly problematical.
4. A new corporation is to come into
being, whose main function will be TO
study and devise means OF Straighten-
ing out the real estate situation. Bill
lions Of dollars are involved, and fore
closures are increasing at an alarming
rate II Is hoped and expected that the
instrumentality which the President ad-
vocated recently will be able to accom-
plish what its sponsors confidently an
ticipate.
5. In the field Of international
finance, political dehts-that is, repara-
tions and interally debts-command
attention. It Is these problems which
constitute the principal impediment to
a speedy rehabilitation of the world.
They are not insoluble.
Solution Suggested
The chief difficulty, however, resides
in the fact that economists propose and
politicians dispose. Whether the latter
subordinate petty politics to sound
economic reasoning remains to be seen.
1t is confidently hoped that they will
do this ere it is too late. If a re-
adjustment of debts cannot at the
moment be resorted to, other arrange
ments ought to be made in order to
avoid a general collapse. The following
solution is submitted:
A non-partisan commission should be
appointed by President Hoover for the
purpose of investigating prevailing con-
ditions and arriving at conclusions to
be presented to Congress as to how re-
payment of both principal and interest
of the so-called ntergovernmental debts
due the United States could best be
utilized to worldwide advantage. Such
a commission could. without in any way
causing en05arrassment to the nations
involved, a1vise that the money due the
United States be Ieloaued to the debtors