The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1932-04-26
BY ELMER THOMAS

and n throw as much light on the gem
eral situation as possible.
BY ELMER THOMAS
Information has been presented
to congress indicating that the
country faces crisis. A nation
wide survey, just made. shows that
private and local resources have
been overtaxed, that in many places
funds are exhausted, and that "a
crisis in unemployment relief in the
United States is imminent"
Many relief plans have been sub
mitted to and considered by con-
gress, but none of consequence has
been adopted. At this time We have
no relief proposal pending save the
bill for the payment of the balance
due World war veterans.
Supporters Of this measure claim
that it will do more than simply
adjust with the soldiers; that it will
be a real and effective means not
only Of checking defation and de-
preston, but, in addition, assured
ly will place additional money in
circulation and thereby bring about
immediate relief to every part Of
the country.
Opposition Is Powerful
No bill in my time has faced the
opposition confronting this measure.
The President vetoed it in advance
Of its passage. The treasury and
federal reserve system, reinforced by
Wall street are leaving nothing IN
done to defeat the proposal.
The big banks object to the pro-
vision which forces additional
money into circulation. These banks
do not object so much to any plan
which simply increases deposit
money or bank credit, but when one
suggests that some real money, such
as gold, silver or paper-the kind
which we can spend with strangers
be forced into circulation, they
at once rebel.
Their chief argument Is that it
will be a bad precedent. The people
must know the difference between
deposit or credit money and real
money. In other words, it is not i'm
portant how much deposit or credit
money we have outstanding, but it
is all-important how much real
money is permitted to get into actu-
al circulation.
Too Little MOrov
AS stated in former article,
practically all now agree that we
have too little real money in circula-
ton. The administration, the treas
ury, the federal reserve system, the
big banks and the economists are
agreed that the currency must be
RELATED is. some additional
real money must be added to what
already is outside the treasury.
This admission is made generally
even by the big banks and the fed
eral reserve system, yet the bankers
are exceedingly careful that all
money placed in circulation shall at
all times be under their protecting
hand, supervision, and absolute con-
troll; and when the banks admit that
we must "relate," they thereby like
wise admit that the veterans have
won their first point. Second point
in the controversy is over the plan
of getting the funds out of the
treasury. The bankers plan is to
have The reserve system buy govern
ment bonds at the rate of some
$1O0,OoO,OO0 a week, paying therefor
federal reserve notes, furnished the
federal reserve system by the gov
eminent at a cost of some 80 cents
on $1,000.
"Offset' Plan Charged
Supporters of the so-called bonus
legislation favor issuance by the
government of low-rate bonds; that
said bonds be sold direct to the
federal reserve banks, and the
money received for such bonds used
to adjust with the holders of the
outstanding adjusted service GER
tifcates.
1t is charged openly here that
the big bank plan of increasing
circulation through buying of gov
eminent bonds is being put forth
specially to Offset the demands be-
ing made for increase in circulation
of money.
A widely read eastern paper says,
The federal reserve plan is eX-
pected to weaken the agitation for
the payment in full of the soldiers
bonus, which was being supported
by a number of members of con-
gress on the ground that it would
revive prices
The article suggests further, ITO
some extent, the cryStallizing of the
federal reserve credit expansion
program at this time may be at
tributed, in the view of some Wall
s vet observers, to the discussions
q the bonus bill and the wide
spread demand accompanying them
for some strong effort to restore
the level of prices"
Sends Bonds Higher
Since the bankers plan for relief
through purchase of government
bonds was announced. all such
bonds have gone up from three to
thirteen points. Liberties have gone
UP from 81 to 101 and treasury is
sues from, SO to 96.
This illustration is given to show
that where there is buying power
there are increased prices and act
i've business. All persons. corpora
tons, and banks holding govern
ment bonds which a few weeks ago
were selling in the 80s, now can
turn them over to the government
AT practically mar or some issues