Evening star., 1932-03-08

Army and the Navy. The one-year
moratorium on debts due from foreign
governments not already Cancelled will
! cost us $3.50. .000, 900 additional this year
That increases our budget another s
per cent. Out of the remaining IS cents
is paid all the other activities of the
Government. such as the expenses nj
the departments of the Government
executive, legislative and judicial. Time
does not permit me this evening Ia
enumerate the expenditures here. and
Congress is now making a very sincere
effort to reduce expenditures wherever
possible.
Il have pointed these few items ont
to you to show you how difficult it is
to make any material reduction in Cow
ernment expenditures, because rs Der
cent of them are fixed charges, due Ia
war, and must be paid This is some
thing the people should think Of before
we go to war. War expenses call for
payment.
THE question Is to what extent can
we balance the budget by raising taxes
The question is also raised, who shall be
taxed? 1t Is now proposed to raise
| income by sales tax on goods manu-
| factured for general consumption. This
| Is another attack on the income Of the
great mass of the people whose income
| is already reduced. The large incomes
are usually enjoyed by corporations and
/ individuals having special favors and
protection of the Government; there
| fore. out of that income they should
paw most of the taxes We must raise
| their income tax now, but because in
cones of corporations are greatly re-
duced 1 fear the income from this source
of taxation will prove disappointing
But suppose we are able to balance the
budget by this form of taxation and
reduction OF all possible expenditures
but continue the policies that caused
the deficit. The deficit will be growing.
and likely will be greater next year.
What are We then going to do? Again
raise taxation and again cut expendi-
lures?
In my opinion the only wav to per-
manently balance the national budget
is to restore the income and purchas-
| ing power of the great mass Of the
people. When you restore the pur-
chasing power of the 10000 900 work.
| ing for wages and dependent on the
farm for inc Jme. you restore the income
Of everybody else in the country, In
Guiding tn. of the Government.
During this Winter We have passed
several legislative measures tapping the
Federal Treasury for the purpose of
helping the railroads, the banks and
the life insurance companies, in the
hope that this would relieve the paraly-
sis and make it possible to initiate the
credit system. I hope these pieces Of
! legislation may prove beneficial, but
fear they will prove disappointing, be-
! cause to restore prosperity by imitation
] nF credit tn r,rncparitu
| by increasing Indebtedness. I do not
believe we can borrow ourselves out OF
debt or out of the depression. Imitation
of credits increases debts and overhead
charges. A reasonable initiation of the
| currency Will make 1t possible to pay
! Debts, as was done in France and Italy
and is being done in England now. II
! this is not done, We will very likely have
| most of the debts. such as stocks, bonds
and mortgages, liquidated in the bank
/ ruptcy courts, which means chaos
However, if we do initiate the currency
| to a reasonable extent. and so make 1t
possible to paw debts, the relief will be
| temporary only. unless we change our
economit policies.
/ IT do not believe we can restore pros
/ perity by taking money out of the Fed
eral Treasury for the banks and the
/ ralIrOaQS. you cannot TeSIOIe pros
perity from the top. Shakespeare
mercy flowed gently from Heaven. but
l do not believe you can make pros
perity flow to the people in the same
way from the Treasury OF the United
States. The safety Of ths banks. the
prosperity of the railroads and corpora
tions depend, in the last analysis. upon
the prosperity and purchasing power OF
the 100000 people on the farms and
working for wages. Until they are
prosperous, industry, transportation and
commerce cannot be prosperous. Com
pei corporations by taxation to distribute
their exorbitant earnings in the form
of wages to create purchasing power to
buy the products of industry and thus
increase employment.
We must restrict our corporations In
their consultations and capital issues.
Complete the inland waterways author