The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1933-02-14
MOVE SEEN TO
SCALE DOWN
DEBT BURDEN
Orderly Method of U. S. Aid
Predicted After BaruCh
Tells Plan.
BY RAY TUCKER
Times STAFF Writer

WASHINGTON Feb. 14.-An
orderly method of federal aid in
scaling down the burden of debt
resting on business, industry, agri-
culture and individuals may be adj
vanced by the Roosevelt admlnistra-
ton along lines already framed in
the La Guardia bankruptcy pill.
This was the belief here today as
a result OF several remedies for the
depression presented TO the senate
finance committee by Bernard NJ
Baruch, New York financier, who
has conferred frequently with Pres
ldent-Elect Franklin D. Roosevelt,
and is mentioned for a cabinet post.
Baruch suggested a detailed plan
for creation of a government cor
poration to reduce farm mortgages
by 40 per cent, and said he hoped to
frame a program under which 1.-The
government would support the value
OF reorganized and scaled down
securities"
Criticising the R. F. c. policy Of
advancing money to pay interest
and principal on private debts of a
doubtful nature as postponement
and Illustration of economic cure"
the New York man said:
After debts and capital struc-
lures are scaled down to a real
iStic basis I think the government
could aid, not by itself assuming
direct liability, and not on any
plan tnat requires it to raise money,
but by assuming only a contingent
liability in guarantees Of interest
to support the value of reorganized
and scaled-down securitie'
Under his farm mort ge plan
the government corporation would
issue B per cent exempt bonds.
guaranteeing the interest. It then
would offer to exchange these bonds
at not to exceed 90 per cent of the
mortgage value, and for less, if
possible.
Preserve Federal Credit
The mortgages then would be re-
financed on a basis of 3h interest
plus a graduated amortization
charge ranging from Il of per
cent the first year to 2 per cent in
the fifth year.
Baruch and C, C. league of Cali
fornia, the other witness at the
opening session, declared preServa-
ton of federal credit and restora-
ton of farm buying power were the
first steps to end the depression.
Each urged budget balancing by all
the nations, and insisted on drastic
economies in government.
Baruch declared the governments
first responsibility was to prevent
human suffering, adding that sound
federal credit would facilitate the
sale of bonds for this purpose, if
necessary.
When asked where his proposed
savings of $8OO,OOOOOO should be
made he suggested the army, navy
and veterans bureau.
Criticises Allotment Plan
Committee members agreed $780,
100000 could be saved in the vet
Grams costs alone, but added that
it would not be.
Criticizing the domestic allotment
plan now before the senate, Baruch
proposed that the government pay
about So an acre to lease land which
farmers agree to withdraw from
production.
league presented a similar plan,
and the two estimated the cost at
$2,000,0O0 annually.
Legalization of beer and pro-
hibition repeal were demanded by
Baruch in order to rid the country
of those evils and obtain new
revenue. He warned against in
flation either through printing fiat
money or cutting down the gold
content Of the dollar.