Evening star., 1933-02-01
INITIATION PLANS
| SCORED BY MILLS
Collapse Is Ultimate End of
Process, Says Treasury
Head in Address.
By the Associated Press.

By the Associated Press
NEW YORK, February Ogden L.
Mills, Secretary of the Treasury, last
night said imitation, once started, soon
becomes completely out of control and
pursueS an irresistible course until It
collapses."
Addressing the Columbia Institute
OF Arts and Sciences, the Treasury
Secretary said:
While imitation at some stages in
the process appears to correct some Of
the evils arising during a period of de-
natlon, all experience teaches that what
ever the earlier appearance may be. all
classes are ultimately adversely af-
lected and eventually 1t results in ruin
10 the economic life of a nation and
brings terrible disaster to all its people.
Europe Fears Imitation.
visit those countries of Europe.
which, through force of circumstances
rather than choice, experienced the
panacea OF imitation" he added, land
you will find they fear imitation more
than any other economic phenomena, /"
Declaring that we have had a sound
currency for SO long that we take the
sounoneSs CT money for granted" Mills
SAID 1t is difficult for us to picture the
ruinous effects Of currency deprecia-
ton"
He said there are two main classes
OF proposals seeking a short cut out
OF the depression" by means of Gov
ernment action. These classes. he
pointed out. are by no means distinct
ana separate, but tend to overlap.
Ine nrst group would bring about
mnatlon," Mills said, "by the pilinp up
OF large governmental deficits that can
not be met through normal borrowing
operations. Of which proposals for a
huge public works program is an ex-
ample"
Mills said the sound group of pro-
posals would bring about imitation "by
partial or complete debasement of the
currency"
=. Under the first program" he con-
tinued, the Government must inevita-
piy resort TO the central banks of issue.
ihey. not acting on their cwn vo,ition
but by Government compulsion. are
driven to provide the basis for a credit
increase. Such a procedure vas re-
sorted 10 during the war. In fact, many
OF our agricultural troubles TODAY are
directly traceable to this wartime in
fation of prices of agricultural prod
ucts and land"
Would Destroy Confidence.
Under the second method. he said
the Government would issue a paper
dollar which would have no value ex-
cept Tor the say-so of the Government
IT Will be urged, of course, that the
promise of the United States Govern
ment Is worth great deal 1t is, under
ordinary circumstances and when the
Government conducts its business with
prudence and in accordance with the
dictates OF sound financial policy. But
II the Government should undertake to
print and pass out 'say-so' morey, it
would at once destroy confidence in
all United States currency"
What would happen?" the Secretary
asked
go So long as our currency we-e
redeemable in gold, every holde: Of
currency, every one with a bank bal
ance, every foreigner with balances in
this country, or American securities.
would at once convert them into gold.
ne said. In very short while cur
gold stock would approach exhaustion.
We would be obliged to suspend gold
payment. We would then find our
selves on an irredeemable paper cur
rency basis, with currency that. rs the
vicious spiral of Initiation circled up-
ward. would constantly decrease In
value"