Evening star., 1932-01-03
by WILLIAM HARD.


apparently quite unable to manufacture
its own red oorpuscles and loudly call
ing upon the Government at Washing
ton for blood TRANSMISSION.
That Is what all the pleas now d.
rected to the Federal authorities leave
behind them as their residuum when
the fire water of oratory is boiled out.
These pleas come from bankers, farm
ers, radicals, reactionaries, the poor ana
the rich All alike want the Govern
ment to transfuse its resources into the
bloodstream of private enterprise. The
! year 1892 bids fair to take the Amerl-
can private-proflt system and add 10 II
a State-credit system.
The policy of the administration Is
TO pump enough credit into the body of
business to enable 1t to survive with a
minimum of bankruptcies among finan-
cial and industrial and transporta-
tional institutions. This is in a con-
siderable degree a reversal of the prac-
tice prevailing in previous depressions.
Then there was more governmental In
clination to let mature" produce all the
bankruptcies she could and to let her
| take her own course" toward a revival
| thereafter Of business health.
x X *
The advantage claimed for mature"
was that she eliminated a large num-
Der of feeble institutions, cleanSed
others of their eXcesses Of bonds and
other debts, and ultimately gave us once
more business society purified of its
| weaklings, lightened of its capital bur
dens and able again thereupon to stand
and run.
The defenders and advocates of ma
ture" still exist and are sometimes
heard in Washington, speaking to the
authorities of the Government in mel
ancholy tones on the theme of the fine
old depressions of the past, which, as
| they say, did endless good by sweating
useless and dangerous elements out of
the business body and by restoring it
thus to a new abounding athletic vigor.
Indeed, these protagonists of bygone
era often earnestly declare that the
artificial expedients, as they call them,
of the present moment will collapse and
that we shall yet find ourselves seeking
the promised land via the ancient eS-
tablished receiver route.
x 4
Such analysis and such prophecies
constitute, however only a minor dis
cordant note in the chorus of demands
for Federal governmental intervention.
This past week in Washington there
have been many national meetings Of
learned doctors of business. These doc
tors call themselves economists and are
members of distinguished academic So
cieties, but many of them are in the
employ of large corporations and are
paid large salaries for the supposed or
actual commercial value Of their stu
diousneSs and of their advice. 1t has
been very noticeable that most of the
advice they have given here to the Fed
eral Government has been to the effect
| that the various Federal governmental
boards and bureaus have not yet inter
vened in our business catastrophe
| enough.
x X x
Several of them declared In this
writer's hearing that they did not at
all fear the word imitation" They, in
fact desire the Government to initiate" 4"
They desire the Government to use all
feasible means to swell the amount of
credit available to the business enter
priser.
They assail the Federal Reserve sys-
tenn for not buying more Government
bonds in the market and for not thus
increasing the amount Of money in the
pockets of individuals and in the bal
ances of banks They want the Federal
Reserve system to buy so many Govern
ment bonds and to put so much money
thus into the balance of banks that
those balances will become excess bal
ances" and the banks will search eagerly
for borrowers to take the money away.
The Federal Reserve system tends to
reply that the trouble is not with the
amount Of money available but with
the willingness of the banks to loan it
and with the ability Of prospective bor-
roWers to commend their projects to
bank officials. The Federal Reserve
banks stand ready, it is observed, to
| redlscount the loans made by member
banks to worthy borrowers, but worthy
borrowers-worthy in the eyes of bank
officialS-do not sufficiently come for
| ward The existing difficulty. as the
Federal Reserve system apparently views
1t, is not lack of courage on its own
part, but lack of confidence on the part
of the people at large.
A legitimate deduction might be that
| such devices as the recently erected
National Credit Corporation under pri
Vate auspices with governmental inspi-
ration and such devices also as the pro-
spective Reconstruction Finance Cor
poration under direct governmental
ownership and management would avail
us little as long as confidence on the
part of the people at large had not re-
| tufueu NcNeFtHclcSS tIldt ueCuCJlOn Is
not generally drawn. The Federal Re-
serve authorities themselves were largely
instrumental in many instances in sue
gesting the existence OF the National
Credit Corporation and are now in
many instances largely instrumental
again in bringing the Reconstruction
Finance Corporation into prospective
being To that extent the Federal Re-
serve system itself is bent upon what
| is called imitation" by old-fashioned
critics.
| n
It can thereupon be fairly reasonably
maintained that almost all of Washing
ton is today, in one way or another.
"infiationist." Senator Shipstead of
Minnesota, most heroic of all Washing
tonians in his "infiationism, demands
that It be produced through deliberate
exDsnsjons of the CURRENCY He is for