Evening star., 1933-10-01
BY WILLIAM HARD.

BY WILLIAM HARD.
The stars In their courses seem to be
fighting now on the side Of the inda-
tionistS.
These stars were set going by Her
bert Hoover. Till this fact is realized,
the ensuing developments remain unin-
telligible. Mr.. Hoover detested imitation.
but he furthered the forces making for It.
He undertook to use Government
credit for the purpose OF maintaining
the debt structure Of the country es-
sentfally intact. To this end-through
the Reconstruction Finance Corpora
tion-he loaned vast sums to banks, TO
insurance companies. to railroads and
to other private business institutions.
He was determined to keep them SOL
vent. He was determined to save them
from the bankruptcy courts.
He simultaneously-through the Farm
Board-loaned vast sums TO farmers
and their organizations. Agriculture
was crushingly burdened with debt the
Hoover theory basically was that q 1T
tie more debtor lot more-would en-
able agriculture to weather the storm
and then to sail happily into the placid
waters of q new prosperity where It
could liquidate its Indebtedness WIN
ease.
Thereupon, when Franklin d. Roose-
welt became President. the industriaI
indebtedness and the agricultural In
debtedness Of the country were stu IN
fact quite unliquidated. The new pros
perity had not arrived. Its dept-uqul-
dating power had not come into exist
nd
debt-load still lay upon the back OF the
country.
Mr.. Roosevelt in this matter chose 70
continue and to accelerate the Hoover
policy. Grover Cleveland. IN the great
panic of the early nineties OF the last
century. chose to allow insolvent insti-
tutions to 70 through the mangle OF
the bankruptcy courts and to emerge
with their excess Indebtedness squeezed
out Of them. Mr. Hoover shrank from
that heartlessness. Mr.. Roosevelt
shrank from it, too. We live in softer
age. We cannot so well endurU the
tragic processes Of the sheriff, the re-.
ceiver, the auctioneer, the dispoasesseo
old owner, the speculative new buyer,
the ruthless replacement Of the lost and
zone by the fresh and coming. We
Invoke instead the conserving power OF
the State In order to keep the invest
ments Of past prosperity surviving into
the gains of the anticipated prosperity
Of the future.
This idea Mr.. Roosevelt inherited
from Mr.. Hoover, and he has acted
upon it spaciously. The Hooverite gov
ernmental loans to banks have peen
supplemented by outright Rooseveltlan
governmental purchases OF the securt-
ties of banks. The HOovertte govern
mental loans to industrial and CONNER.
cial enterprises through the medium OF
the banks are being pressed rapidly TO
their logical conclusion. The banks
are on their way to taking less ana
less of the risk Of those loans. !ne
Government Is on its way to taking
mora and more Of the risk. The PM.
iosonhy Of the matter ut bottom Is that
new credit will float American pus!-
ness safely over the submerged Ise!s
Of receiyerships into the sale' oeep
waters Of new recovery.
Mr. Hoover called that prospective
newness prosperity" Mr.: RooseVeie
e caIIs If "recoyery." The difference IN
noiitical nomenclature carries with II
NJ difference in economic theory. Tne
theory is the one already mentioned o.
r. has animated not only two Presi-
dents but the vast majority OF the GU.
zens of the country during the last
four and q half years. It Is the harvest
the gains Of the future without pusy1ns
the losses Of the past: =.
It Is being pursued IN refetence "
agriculture as ardently as N reIe5encs
to<industry and commerce. Ine eno,ts ~
Of the Government to rennsnce tas
MORTGAGES Of farmers and thus 10
uShten their indebtedness proceed ex-
tremely slowly. The efforts OF the Gov
ernment to extend new loans to farmers
proceed with increasing speed. Some
amazing paradoxes thereupon emerge;
The Government-through special
corporation-is about to make great
new loans to farmers on cotton. But
when the cotton farmers get that
money. what creditor will be first on
their doorsteps? Why, the Govern
mental agency called the Farm Credit
Administration, to which the cotton
farmers owe great sums OF money. on
certain already existing loans called
crop production loans"
In such circumstances the cotton
members Of the Senate and OF the
House Of Representatives are aroused
to new fury. They are appalled, by
their constituents debts. They have
always favored credits; but, when
credits boomerang back as debts, they
contemplate and execute pilerimases
of remonstrance to the White House.
They are now Joined by many OF the
spokesmen Of many of the farmers OF
the West and even Of the East.
All these farmers have twin griev-
ances in the matter Of debts. One Is
that the debts which they have incurred
on their own private properties are ex-
cessiye and unbearable. The other Is
that the debts which have been incur
red by the local governments to which
thsy pay taxes are Likewise excessive