Evening star., 1933-02-13
BARUCH OUTLINES
RECOVERYPROGRAM
Close Adviser of Roosevelt
and Hoover Appears at
Senate Hearing.
tcontinued From First Page


per cent tax-exempt 30-year bonds
with interest Internationally guaran-
teed by the Government.
The bonds would be exchanged for
existing farm mortgages or for the title
of foreclosed farms, but not to exceed
so per cent Of par Of such mortgages.
The mortgages would be revised on
the basis Of 81 per cent interest on a
scaled-down principal" the effect be-
ing to write down the principal of ex-
isting mortgages by one-half and the
interest rate by two-thirds.
Baruch's second proposal for farm
relief was to have governmental
agency rent land from farmers to be
taken out of production. This, he said,
was an exact reversal Of the prin-
ciple now proposed for bounties on pro-
duction.
Looks to World Farley.
Baruch looked forward to the coming
World Economic Conference and Dis
armament Conference with some hope.
"Out Of the depths of this gloom"
he said, "the hope of humanity is be-
ing beckoned by two great councils of
the coming year on world economics
and disarmament"
Asserting that the worlds hope Is to
revive commerce and give men q
chance to earn their daily bread,
Baruch said commerce Is languiShing
because you can't buy goods with
chaff."
THAT is the malign center of this
blight" Baruch said. Economic bar
riers and ornaments and debts-all
these are surface stigmata. Unsound
money is the evil to be crushed"
Unsound money, he continued, re-
suits from nations spending more than
they take in in revenue.
mo nation is living within its in
come now and the money Of all is un-
sound or suspect" he said. THAT Is
the defective cause Of continued misery,
and cure of that Is the controlling
principle for any council among ma
tions
There Is no need for long agenda
or complicated plans. The program
for both talk and action can be written
on calling card. Balance the budgets
Of the world
I'VE should make one single and in
variable dictum and theme of every
discourse:
Balance budgets. Stop spending
money we haven't got. Sacrifice for
frugality and revenue. Cut govern
mental spending-cut it as rations are
cut in siege. TaX-tax everybody for
everything. But take hungry men OF
the worlds pavements and let people
smile again."
Baruch testified that In the economic
conference there Is only one other
subject worth considerine-some inter-
national agreement on silver"
Sees War Causes.
Gas to disarmament-both military
and economic" he said, turning to the
other conference, "the sole construc-
tive possibility seems to me to be the
removal OF the age-old causes for world
conflict.
THE peace Of Versailles was q peace
dictated at the point Of q gun. Its
sanctions are failing.
"The questions of the Silesian from
tier, the Polish Corridor, the Saar, the
Gordon Sanitaire which France has
negotiated around Germany, and many
boundary and ethnic questions left un-
settled or badly settled ut Versailles are
the real cause Of the heavy armament
under which the world Is growing and,
In my Judgment, they are also the cause
of most of the artificial trade barriers
about which so much has been said"
Reading slowly from q paper bound
booklet, Baruch asked the committee
members to permit him to complete 1t
before questioning him.
"We built up tinsel tower of paper
prosperity out Of debts and speculative
hopes and such other things as dreams
are made Of" he said.
ut lies IN ruins, but the debts re-
main. What shall we do? Are we to
try to put or keep the substance in
things which had no substance in the
beginning, or shall we clear away the
wreck?
mo return to normal living is posi-
Bile until We clear away the vestiges of
that wreck. Natural processes are
working to cure every evil But what
have We done to aid that cure?"
He said the pending bankruptcy bill
to relieve debtors was "the single
project to aid (and not oppose) natural
cure"
Between our present status and
disaster there Is only = thin veil Of
popular complacency, and there are
projects before you now which might
destroy that slender protection IN one
day." he said. 1.-The most dangerous
are the projects to initiate the cur
rency."
Baruch then launched into q discus
sion Of what he considered the dangers
Of imitation.
Denies Good Results.
He denied what he said was q pop
ular conception that commodity prices
could be raised by the simple process Of
Issuing more money.
Confidence is the basis OF higher
prices" he said IF there Is no con-
fldence, no amount of tinkering with
the currency can raise the price level.
On the contrary-and this is the very
heart of the whole problem of the de-
1A xantx, -
them by bank money imitation Cor even
the mere talk of monetary inf1ation)
impair confidence still more and drive
money deeper into hiding"
Balance the budget, Baruch said, and
money will flow here from all the
world" and there will be more sound
money available than all the inf1ation-
lists propose to print"
That is the only way to restore to
our people the means to earn their
daily bread and that will do it, in my
opinion, with great rapidity," he added
The flnancier said the Nation today
faces the most serious" condition in its
history. He said it was worse than war
and added he was willing to make any
sacrifice Ito fight this terror" but
warned that the intiationary path IS
the road to ruin"
The Government" he said, return
Ing to other questions. Should stop ad-
vancing money to pay interest and
principal on private debts OF doubt
ful nature.
1T is postponement and frustra-
fion of economic cure" he warned. II
realize the danger of wholesale re-
ceiverships and crash sales on sterile
markets, but the way to avoid that is
being blazed by the principles of the
La Guardia bill. pending bankruptcy
measure)
Fears Allotment Plan.
"After debts and capital structures
are scaled down to q realistic basis. l
think the Government could aid-not
in itself assuming direct liability and
not nm anv nla,, that rno,tjrAe ~ IN