Evening star., 1933-02-14
COALITION CABINET
URGED At HEARING
Paul Block Tells Senators
Strong Action Needed
for Recovery.
BY the Associated Press.

Ter with the President and his cabinet
to devise helpful economic measures
was suggested to the Senate Finance
Committee today by Paul Block, New
York publisher.
In its resumption Of the economic
survey begun yesterday, the committee
also heard from Block proposals for .
balanced budget, q cut in veterans
compensation the fiotation of bonds to
provide public works employment, re-
tention Of the gold standard, farm
mortgage readjustments, tariff changes
to meet the changed currencies of
other nations and repeal Of the eight
zenith amendment
Balancing the budget by reducing
expenditures, including salary reduc-
| tons for all Federal employees from the
President down, was advocated by Dr.
Herman D. Arendtz, . Boston econ
onist
Prompt but constructive action to
balance the budget and cut Federal ex-
penditures WAS advocated by Block -
one Of the chief things necessary for
recovery from the depression. A sim
liar call for o balanced budget as the
keynote Of q more cheerful business
tone was sounded yesterday by Bernard
Baruch, New York f1nancier, at the
opening Of the committees hearing.
Stresses Debts Problem.
Block told the committee one vital
Of the foreign debts question.
Perhaps, as has been suggested" he
said, these debts should be reduced q
certain percentage for each million dol
lars spent with us by the debtor ma
tions. Possibly a further percentage
OF discount should be given for each
million dollars of armament reduction
made by the debtor country.
We should seek agreements with
foreign nations which are now off the
gold standard to return to It 20 that
all OF us would be On q more nearly
equal basis in international trade.
The repeal Of the eighteenth amend
ment should be hurried because of the
large excise tax this would bring to our
Treasury, which would permit us to
reduce many Of our present day taxes.
including, perhaps, the manufacturers
sales tax II adopted. 1t Is not necessary
to add how much the repeal Of this
amendment would also mean to the
morale Of our entire citizenship.
I would suggest q coalition cabinet.
but I fear that our two-party political
system is IN the way OF this, and more
Is the pity.
Perhaps an active advisory board
having certain defined power could be
appointed by the President to include q
half dozen OF our leading citizens. no
matter what their political afiiliations
may be, but whose names would bring
confidence to our people and who
would confer with the President and
the cabinet, Is well as with the chair
men OF various committees In Congress,
to devise ways and means to obtain
measures which would be helpful to all
the country"
Block suggested q bond issue to be sold
As were Liberty bonds These. he said,
would help to stop the agitation for
lnnation OF the currency. which Is too
dangerous to be attempted"
u Sees Justification.
I'VE are, I believe. justified In In
creasing out national debt to help re-
gain prosperity for our people" he said.
Il have no doubt there are some re-
ductions that should be made in our
tariff schedules, but I am very much
opposed to changes being considered
except with nations which are definitely
on gold basis. In fact, I consider it
necessary to raise tariffs against the
products OF countries which use de-
preciated currencies.
"A way should be found to reduce
the number Of working days and work.
ing hours.
neip the farmers; but I do not believe
In dole system for them or for any
one.
"Moratoriums for farm morteages It
seems to me, are essential
Il believe also that the creditors Of
farmers should adjust their claims on
basis more in keeping with the pres
ent value Of farm lands I believe it
VIII be necessary to fix lower interest
rates on farm mortgages, and the same
consideration should be given to small
nome owners everywhere.
AS 10 prices OF agricultural prod
ucts, II legal way could be found to
unit the production Of wheat and cot
C0n and to place q minimum price on
tnem That could be successfully worked
OUT without Federal subsidy, and with
OUT loo great cost for administration
tnls may be the method to pursue"
BLOCK suggested giving veterans pref
erence Tor employment on public works.
said: "-'0'
I'VE could cut the cost of sovernno.nt
very materially If Congress and the
President would, among other things
proVloe Tor reduction in bonus paw
ments now being made to veterans of
the World War.
Respects Veterans Highly.
mo one has greater respect or senti.
ment for our veterans than I have
put our country cannot afford bonuses
and pensions to those who either never
went overseas or were not injured in
actual service.
Congress would be doing not only its
duty In providing for such q reduction
out would help q vast ma ajority Of the
people by using this means of cutting
down the terrific burden Of taxation "
DR.. Arendtz, a monetary expert. who
followed Block, attributed hard times
to q collapse of over extended credit"
In this country and the long and grind
ing world depression"
Immediate relief is obviously neces-
sary," he asserted Ito prevent the
banks, railroads and insurance COM
panies from collapsing and people from
starving.
Apparently the greater part Of that
has got to be done on Federal credit"
DO you believe that to keep the
banks operating and the railroads run.
ming, we've got to keep on an unstable
capital structure?" asked Senator
Couzens, Republican Of Michgan).
Temporarily" replied Arendtz. but
the capital structure has got to be re-
duced"
The bankruptcy relief bill will help do
that, he said, adding there must be re-
adjustments
Couzens observed that continuation
OF an unstable capital structure would
mean collapse, to which Arendtz said
the only alternative seemed TO be Ito
let things 60 to smash"
Arendtz said he favored budget bal
ancing by reducing expenditures rather
than increasing taxes. He advocated
sharp cuts in veterans expenditures and