Evening star., 1933-01-29
BY WILLIAM HARD.

In the great economic political race
Of 1888 there are three outstanding en-
trants. The first is the reduction Of
debts, especially farm debts. The sec
ond is the monetary and commercial
negotiations which will take place In
the International Economic Conference
next Summer. The third Is the inf1a-
ton Of the currency of the United
States.
It is hoped in conservative quarters
in Washington, DEMOCRATIC as we'll as
Republican, that the first two Of these
entrants will crowd out the third and
prevent 1t from ever passing the winning
post. 1t is hoped that the reduction OF
debts through legislation by the Con-
gress and the enhancement Of prices
through cooperative action In the In
ternational Economic Conference may
so improve the general economic situ-
alton that the advocates of currency
imitation will be silenced.
**
The reduction of debts Is now broadly
admitted In Washington to be the fore
most national economic problem con-
fronting the Congress. This is a be-
lated realization of the true nature OF
the economic emergency. The Congress
to date has been giving its attention
almost entirely to secondary matters
1t has nibbled at the ultimately disap-
pointing idea Of trying to restore pros
perity through the legalization Of in
toxicating liquors 1t has endeavored
to better the condition of the farmers
through limiting imports Of agricultural
products from the Philippine Islands
1t has given considerable time to the
allotment plan for raising farm prices
1u DC ,iyn fn 40
tailed consideration Of the methods
whereby a reduction of debt can be ac-
complished
In the matter of farm debts it now
is clearly apparent that it would be
cheaper for the people of the United
States to pay of all the farm debts now
existing through congressional appro-
priations OF governmental money for
that purpose than it would be to adopt
the allotment plan or any other corre-
spending plan for farm price f1xation
as permanent policy.
The allotment plan would lay upon
the consumers of the United States an
annual tax Of at least one billion dol
lars. It would do this If passed by the
Senate in the form in which it was
passed by the House Of Representatives
1t probably cannot ever be successfully
materially different. The allotment plan
may accordingly properly be estimated
as a plan requiring billion dollars OF
annual tax expense.
X * &*
Meanwhile the grand total Of all farm
mortgage Indebtedness in the United
States is less than $4,000, ,OO0, 900
The billion dollars necessitated annually
by the allotment plan, if transferred to
the liquidating of farm mortgages
would pay them all of in less than II
years.
Naturally, it is not proposed that any
such draStically complete operation
should be undertaken by the Fedora.
Government It is proposed only that
the Federal Government should con-
tribute its guarantee to the rewriting OF
certain numerous farm mortgages ano
that 1t should make advances Of money
Tor assisting in the process of reducing
both the face value and the interest
borne by such mortgages in the more
distressed parts of the agricultural com.
munity. The legislation introduced to-
ward that end by Senator Hull of Ten.
nessee and Senator Robinson of Ar
kansas has the approval not only OF
many political friends Of the farmer IL
Washington, but also of many highly
conservative flnanciers in the wal
Street district of New York City.
This legislation is defended on thu
ground of humanity and of justice anc
defended likewise on the theory that 1,
the farmers debts are reduced he will
not SO eagerly demand an inflated anc
increased currency wherewith to pay
them. The debts reduction Legislation
is an attempted circumvention of cur
rency imitation legislation.
\ X X
1t Is simultaneously desired by many
high political and diplomatic authori.
ties here that the International Eco
nomic Conference next Summer shall
IN two ways attempt to raise prices both
for the farmer and for the manufac-
turer.
The first way has to do with the
management of central banking sys-
TENS. It is suggested that those sys.
TENS in all leading countries, including
the United States, should agree te
maintain an easy money" policy
whereby potential credit should be ex.
panded and the possibility of a rise ir
prices created. The objective is tt
make prices rise all over the world BY
making credit superabundant all ovel
the world.
Critics of the proposal maintain thai
1t Is merely a scheme to substitute in.
f1ated credit for an apprehended in.
f1ated currency. They denounce it IL
the same terms In which they denouncl
currency imitation proposals. They con
tend that at the present time in thu
Federal Reserve System Of the Unitet
States there has been an expansion O.
potential credit so stupendous that an!
sudden marked revival of business
might give us an imitation of actua
credit and an imitation Of prices
particularly stock market prices-tha
might defy all efforts at control by th'
Federal Reserve authorities. The posi-
ton of these critics is that we are al
ready faced with the chance of exces
sive imitation in the next period of pros
perity, and that the International Eco
nomic Conference should do nothing Il
enlarge and accentuate that chanc
through concerted credit activities b,
the central banking systems on the tw,
sides of the Atlantic.
BY such observers Q preference Is e