The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1934-10-17
Liberal Viewpoint
by DIR. HARRY ELMER BARNES

by DR. HARRY ELMER BARNES
TINE present depression faces different con-
i ditions from those which have existed in the
past The way TO recovery must therefore be
different Indeed. it must offer hope of curb
ing depressions in the future if there IS to be
any real recovery
These facts are brought out admirably in an
article on Recovery and Finance" by David
Cushman Coyle in the Virginia Quarterly Re-
view Mr.. Coyle already has made a name for
himself by bringing out with great clarity the
fundamental opposition between business and
speculative finance.
The procedure in meeting the impact Of
earlier depressions has been essentially the fol-
lowing: Cd a thorough-golng and relentless
process of defation which has ruined debtors IN
order to reduce debts to volume which could
be borne by existing business % the revival
of capital goods industries; 80 the fotation Of
new flock Of capital issues imposing a debt
burden upon future business and "a the pro-
motion of a bull market to produce speculative
profits and generate boom psychology.
The conservative group in this country DOM
mated by finance capitalism would like to repeat
this again But the old formula no longer will
work In international economic affairs, we now
have become a creditor nation and can not send
goods abroad to pay of our debts AT nome
business has piled up too great burden OF DEBT
to make a thorough-going defatlon at all safe
or possible.
ter end following 1880 would have brought about
complete economic collapse Of American cap
italism. This collapse was prevented by the re-
construction finance corporation which the
Hoover administration had sense enough to set
up in order to check the increasing wave OF
bankruptcy
WE are moving ahead in the quest of recov-
w cry with the apparent intent of carrying
along the present debt structure only slightly re-
duced This means that we can not add tens
of billions more to this debt structure through
the fotation of new capital issues on vast
scale. Nor do we need a great deal of new plant
for production hence, there is little rational
ground for any extensive revival of the capital
goods industries outside the field OF new nous
ing and perhaps, improved railroad equipment
Nor is there a great deal of hope IN the
shorter working day and week Advances III
technology and labor saving machinery are
bound to eat up all the gains in shortened
working period. In the end probably less WORK
ers than today can be fruitfuIly employed.
Economic security in the future will have to
be attained through such measures as various
forms of social insurance, including unemploy-
ment insurance And we shall have to adapt
resolutelv ourselves to the prospect of increased
income taxes, particularly in the higher brackets
to carry the new expense involved
Finance capitalism will fight bitterly against
anv such solution and will struggle Valantly 10
follow the old road of def1atlon and new caplCdI
issues The fortunes of the New Deal Will de-
pend largely upon our capacity to snow nusl-
ness that it must free itself from the DOMINION
Of finance.
"EINANCE is the influence by which money Is
II withdrawn from the business market ana
passed through the finance market. The money
goes back to business only through loans mat
is. only through building new debts. finance
lives on the instability of business. Finance nVes
by pumping up the stock market, distributing
stocks to the people, pulling the plug, ana selhng
the market down. Business pays the COST
Finance lives by forcing little businesses INTO
big mergers where they can be peacefully
MIXED Business labor and the consumer pay
the cost. Finance grows fat by reducing IN
come taxes and laying taxes on the customers
of business. Business pays the cost in lower
sales and higher capital overhead. Finance digs
the hole and business falls into it.
"The New Deal is the quest of the American
people for way to free themselves from the
octopus of finance that has been strangling their
free business for several generations. The es-
sence of the New Deal is that some day the lines
shall be drawn for a battle between the Amerl-
can people and the lords of finance. Everything
that interferes with the coming of the day and
the drawing of that battle line is an obstacle OF
the New Deal"