The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1934-11-08
INITIATION AIMS
VIEWED AVENUE
TO BANKRUPTCY
Economists ASSaiI Plans Of
Father Coughlin, Owen
and Thomas.
BY JULES BACKMAN AND
Al. JACKSON

yics-Prssidents Economic statistics. Ine.
NEW YORK. Nov. s.-The infa-
tlonists are again with US! Not
satisfied with the havoc which al
ready has been created IL our none
tary system. Father Coughlin, SEN
ator Elmer Thomas. and ex-senator
Robert L owen, are again on the
lob Recently Father Cougnlln
called the credit initiation Of tie late
20's one Of the sources Of our lis
However, his cure for that situation
was not credit oefiation. he seems
To feel that credit imitation can best
be cured by currency imitation. Wnen
will We learn that We can not Dor
row ourselves out Of debt. or thaU
We can not pull ourselves over the
fence Of prosperity BY tugglng al
the boot straps Of debt2
Owen Presents Plan
Mr.. oven presented his plan Tor
converting government bonds INTO
currency TO the President, and II Is
reported that IL did not receive a
hearty welcome, for which attitude
Mr.. Roosevelt is to be congratulated
Mr.. owens theory that the depres-
sion is due TO a lack Of bank de-
posts reveals very clearly that this
leader of the Sound" Money League
has a poor conception Of the place
Of money in our national economy
We can increase bank deposits
from now until dOomsday. but unless
business is ready readiness depends
on the possibilities Of using the
funds profitably) 70 use the funds,
nothing will happen. Credit IS no1
the cause Of business. II IS prlma-
rily a facilitating factor IN business.
As business activity increases, the
amount Of credit needed to enable
the business machine to function
smoothly is increased.
The increase in credit is a result
OF business activity. II is true that
after the cycle Of expanding bust
ness has started. credit is both cause
and effect in the business picture.
However. when you are trying to
start the machine, credit alone viii
not do the trick
Memory Is Short
We hear a great deal about the
necessity for creating confidence, 50
that credit will be used. Here again
we find that the memory Of man IS
short. Confidence is a result OF good
business COnditions-nOt cause.
Was there a lack of confidence in
1923 and 1922 If not. why then
the collapse? Certainly not because
confidence was bad!
Then again, take the situation in
1892 and the beginning of 1888. Con-
fidence was certainly at a low ebb,
but despite this fact, business pro-
crossed steadily ahead. No-both
credit and confidence come into ex-
istence with sound business condi-
tiOns. They are not the cause; they
are a result.
Senator Thomas apparently IS not
vet convinced of the futillty OF toy
ing with the number Of grains OF
gold in the dollar as a means OF
creating prosperity. Our expert
ence since the Warren gold plan was
adopted Cand it might be added
dropped indicated quite definitely
that there is no casual relationship
between movements in the price OF
gold. commodity prices, and bust
ness. However, as IS usually the
situation in such cases, the blame
is laid not to the inherent unsound-
ness Of the scheme. but rather 1t is
laid to the fact that not a sufficient
dose Of devaluation has been taken
Believe Them UnwOrkable
When Will these gentlemen learn
70 analyze currency and monetary
situations in terms Of experience,
and not in terms of experiment?
The vast majority Of monetary
economists have definitely indicated
their belief that these gold tinkering
schemes are not valid, and will not
work.
The question might be asked Of
the devaluatiOnistS. why should
We deyalue only so per cent? If
rising prices (regardleSs Of the
causel are good and If these rising
prices will result from devaluation,
vhv not devalue down TO 80 per
cent?
why stop the flow Of the good
things OF life at a level which ap-
parently is not the maximum that
is attainable? Why not go the fun
way?
II the schemes Of these men are
followed through TO their logical
conclusion. We will have TO go the
fun way ard the full way Is not
prosperity. but national bankruptcy
and the eliminatlSn Of our middle
classes.