Evening star., 1933-03-27
INITIATION URGE
SEEN IN SENATE
Method May Be Sought by
Opponent of Present
Farm Bill.
BY MARK SULLIVAN

Senate discussion now generating
about the farm bill starts with one
promise. 1t is that throughout the farm
territory there Is a condition so intoler-
able that no humane person and no per-
son interested in preserving orderly civ.
tlization can consent to It's continuing.
This opinion is 50 generally held by per-
sons equipped to know that the country
may as web accept it as the determining
factor In what is about to happen.
From this starting point, talk among
Senators goes on to assert that I'VE must
do one Of two things: Either we must
raise the, price Of farm crops by action
OF the Government. ~ contemplated in
the farm bill. or We must accomplish
the same end by enacting imitation Of
the currency. As soon As the farm bill
appears in the Senate, measures for in
flating the currency will be brought for
ward as an alternative and the notion
Of imitation seems destined to become
active during April as subject more
generally agitated than since the depres-
sion began.
Impulse Accelerated.
The impulse toward imitation, long ex-
iSting in the farm territory, is likely to
be accelerated in the country ~ . whole
by delayed consequences Of the bank
closings early in March. The aftermath
Of the closingS includes the most drastic
single spasm Of deflation since the de-
preston began. Preceding March l, the
total Of bank deposits was about As bill
lion dollars. For sound reasons the
Government has kept closed banks con-
tanning about six billions Of deposits
That Substraction from available bank
deposits constitutes new deflation. The
extent Of this deflation. amounting to
six billion dollars of bank deposits, is
suggested when it is understood that the
total Of three years Of deflation preced-
ing was only l6 billions. from a high
Of 81 billions in 1929 down to 46 early
this year.
1t is true the new defation Of six bill
lions Is considerably offset by several
conditions. 1t is partly Offset by the
addition Of two billions to the currency
1t Is also increasingly offset by tho en-
ergy. speed and success with which Sec
retary OF the Treasury Woodin Is bring
ing about reopening Of closed banks. 1t
is further offset by increased confidence
in banks due to the Governments care
full and drastic sitting Of the sheep from
the goats. 1t Is somewhat offset by q
considerable increase in deposits in
Postal Savings Banks. 1t Is also par
tiallv Offset by other conditions making
for higher prices for goods. Commodi-
ties have had a material rise In price in
March,
Nevertheless, the new deflation until
it is overcome by other forces is bound
to express itself In the phenomena OF
deflation now sadly familiar. Any per-
son with six thousand dollars in q
closed bank knows that his personal
buying Is restricted Multiply one such
experience by a million and the aggre-
gate condition can be realized.
Consequence Of Defation.
The consequence Of this new squeeze
Of deflation is that the impulse and
temptation toward statutory imitation by
Congress is likely to be stronger than
ever about the time the farm bill is
pending in the Senate. II the move
ment toward imitation Is held of during
that period. 1t is likely to diminish In
intensity A distillation Of the present
atmosphere of Congress would say the
feeling is that the country Is in q con-
,dition OF strain where something must
break, and that limited and con-
trolled imitation would be the best re-
lief. 1t would be inaccurate to imply.
as Of today. that Congress u yet pre-
pared to initiate.
1t is from Congress that the impulse
toward imitation will come. Every act
and utterance Of the administration
points toward courses which exclude
imitation. Up to q certain point. op-
position by the administration to in
fiation would influence Congress greatly,
especially the House. which is strongly
disposed to follow President Roosevelts
leadership There is, however. q degree
Of distress through defiation which
might cause Congress to act, perhaps
rather .explosively.
Imitation. If it comes at all would be
likely to take the form of reducing the
quantity OF gold IN the dollar from
1922 gains to something like is. The
other forms Of imitation, coinage OF
more silver or issue Of large quantities
of irredeemable paper currency, have
less favor than reducing the quantity
Of gold in the dollar. All the talk and
all the tendency deals with an imitation
which shall be carefully limited and
controlled.