Evening star. [volume] (Washington, D.C.) 1854-1972, 1932-03-20

wherefore 1t has been necessary Tor the
Reserve Banks to place gold back OF
their notes, as collateral, in addition to
! amounts required to be held as re-
serve. The Glass-Steagall measure OBJ
viates this condition by permitting the
substitution of Government bonds above
the 40 per cent gold minimum. Thus
any threat to our gold standard, re-
mote in the first place, has been re-
moved.
The Strengthening of the Federal
Land Bank system, for which purpose
Congress has appropriated $l25 900, 900.
will insure to the farmer the credit
facilities to which he is entitled and
maintain at the high point. which the
investor has the right to demand, the
credit of these institutions. The crea-
ton Of a system OF Home Loan Dis
count Banks should serve the construc-
tive purpose of partially hberating re
sources that at present are tied up, and
thus encourage new construction and
permanently improve the facilities for
financing this type Of operation.
Anti Hoarding Campaign.
Finally. a word about the Presidents
anti-hoarding campaign. Although
mainly a direct appeal to the patriotism
and common sense of the people, this
also, through the issuance OF baby
bonds" offers to currency hoarders q
convenient investment backed by the
full strength OF the Governments
credit
Here is something which should re-
store the confidence of the most timid,
to whom perhaps the technicalities OF
finance involved in the other remedies
I have been discussing are q closed
book. 1t Is estimated that from ST.
600 600 900 to 81, SOC, 600 900 has been
withdrawn from circulation by the
hcarder, destroying from to 10 times
that much credit which would other
wise be available to the conduct Of
business. Since the campaigns initia-
| ton. however some $50, 900 900 of this
money, to judge from the currency
statistics, has found its way back into
the channels of trade, with every in
dication justifying the belief that the
boarding movement Is reversing itself.
And now for the indispensable pre-
requisite to the continued success of
all this wise treatment-the imposition
OF increased taxes. Congress, having
to q gratifying extent sunk its party
differences, has made all haste with a
new revenue law which, If the schedule
proposed by Mr.. Mellon last Pail
namely, a halt to further increase Of
the public debt in the fiscal year
1928 and q balancing Of the budget
in the year 1933-34-is to be main
tanned, will have to raise SASS, 900 900
more than he contemplated on the basis
of conditions at the time. One Of the
main items in the congressional pro-
gram Is a manufacturers sales tax, to
yield possibly $500, 000, 900. in addition
to higher income taxes and miScellane-
Gus levies. For purposes OF an emer-
gency revenue program the Treasury
Department voiced its preference for a
selected list of excise taxes in place of a
general sales tax. 1t took its position
partly because Of the advantages offered
by its experience with the former as
against the latter, which would involve
unfamiliar problems both for the Treas
ury and for the taxpayer; further, it
was Of the opinion that somewhat better
results in respect to the incidence Of
the additional tax burden would be
obtained through employment Of select
ed excise taxes. The Treasury, how
ever, welcomes whatever equitable law
promises to yield the necessary revenue
and has actively co-operated with the
Congress in the formulation Of the
revenue bill.
have no illusions as to the feelings
with which a program OF drastic tax
increases is received, and can assure
you that it Is anything but q pleasant
task to participate in formulating and
levying such a program: but no man,
whether he be Treasury official or
taxpayer can -mindedly examine
the existing situation and not reach the
| conclusion that the alternative TO in
creased taxation Is infinitely worse for
the Nation.
What we still have, what we hope
for In the future, are dependent in a
large degree upon the preservation
unimpaired, OF the credit of the United
States. 1t will cost something to pre-
serve 1t. The cost is additional taxa
ton. The wealthy, the captains Of
industry the bankers, must contribute
to meet this cost: but small business
man, the white collar man, the farmer
and the wage Garner have an equally
vital stake in the preservation Of the
Nations credit. The new taxes viii cut
into the incomes of the rich, and they
will affect the contributions made to the
Government by those in moderate cir
cumStanceS. But the result-the pres
ervation Of the Nations credits worth
this cost and for that matter an even
greater one, to all who are called upon
to make some temporary sacrifice.
/ mentioned in the beginning the
patience, intelligence and leadership
which have marked the Nations reac-
ton to this depression. It's patience
has been displayed already in the re-
markable absence of those disorders,
social or industrial. which have accom-
panied other trials Of this kind, and
this patience will be further shown,
believe. In an acceptance, individually
and collectively. Of the pains incident
to supporting the national credit It's
intelligence Is reflected in its under
standing and support of the Presidents
reconstruction program, undertaken and
now on the point of being carried
through with a splendid show of nom
partisan unity on the eve of presiden-
tial campaign. In the face Of such
demonstrations its leadership goes with
out saying Rather q fortunate people,
everything considered-scarcely the sort
to be licked by bogies.