The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1933-09-29
M. E.TracySays

THE following resolution was adopted by the
l. conference of mayors at Chicago last
Saturday:
There are in the United States at this time
approximately 1900 governmental units actually
in default are in default in the payment of prin-
cipal or interest or both upon their outstanding
Indebtedness, and a recent survey discloses that
the number of defaulting units is rapidly in
creaSing.
The fact that these cities are in default is
having a serious effect upon the credit of all
solvent communities. Because of constitutional
restrictions, the states are unable to enact neces-
sary remedial legislation, and action by the ma
tional congress is necessary if these hopelessly
insolvent units are ever to be restored to a SOL
vent basis"
Whatever you may think of that resolution, it
reveals the Starkest reality of our recovery prob
lem. The burden of debt, contracted in boom
times and through cheap dollars, is not only
sapping the c%ountry's life blood, but proving an
obstacle to every plan of rehabilitation.
TINE notion that we can borrow our way out
l. of such a condition by substituting federal
debt for municipal and private debt is just one
more of those asinine delusions which character
ize the present era.
False and exaggerated conceptions of pros
perity led us Americans into the same kind of
an economic moraSs as war led Europe. We fell
1Cr the ABSURD IDEA that nations, communities
and men could not possibly over-borrow, that
good times had become permanent and that the
human capacity to pay was limitleSS.
Well, German reparations collapsed, the war
debts collapsed and inflated credit for our own
economic structure is in the process of collapse.
Still, we have the obSession that continued Dor
rowing will correct the evil and that we can ex-
tricate ourselves by having the federal govern
ment not only take over all existing I. O.. US, but
accept a lot in addition.
II n y
MORE than half the wealth of this country
1v1 is hypothecated for debt in one form or
another, and nearly one-third of the income
il being absorbed by interest and amortization
charges, yet we pursue the rainbow dream of
paying up by borrowing more. The mortgaged
farmer is told to relieve himself by getting an
additional loan on his crop, and the insolvent
city is advised to provide work through bond
issues. BY some hook or crook, it is imagined
that the federal government can be made to
shoulder most of this load without digging
deeper into taxpayers pockets.
Not only is a large portion of this debt un-
collectible except through forced levies, but the
bulk of it is unjust because Of the rise of money.
Most people are paying nearly twice what they
borrowed if the amount were reckoned in wages
or commodity prices. We are attempting to adj
vance both by legislation, or increased taxes,
but the process promises to be too spotty for
common benefit.
Clearly something must be done to reduce
the debt burden all along the line and bring the
relationship of money TO labor and goods back
where it was when the debts were contracted.
My own thought is that this can best be done
by controlled imitation.