The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1934-11-30

Hutchins Group Hits
Alarmists Over
Budget.
: BY VINCENT s. LYONS
Tines Financial Editor

THERE appears to be no sub
4 stsntial basis for the alarm Will
which our unbalanced budget i
viewed in certain quarters of fnnaci
and induSry. according to the repor
Of the commission Of inquiry into
national policy in international
economic relations, headed by Rob-
ert NJ. Hutehins, president Of the
University of Chicago.
This study. excerpts from which
were released earlier in the week,
has been put into a 397-page book
entitled international Economic
Relstions." The recommendations
Of the commission. the reasons for
such views, a report of the director
OF research and representative Sc
lections from the written state
ments of some Of the witnesses at
the public hearings Of the commits
sion are gathered together in the
publication.
The first two parts Of the book,
IN which the recommendations and
reasons are cited, is the most in
teresting. In here will be found
lucid study Of the many compo-
nents entering into the foreign
commerce Of the world. Arguments
are offered and broken down;
others are subjected to analysis and
found TO contain merit.
y n
DUT to continue with the COM
- mission and its view of the
budgetary situation. THE main
tenance Of a large deficit, as an
emergency measure" it is pointed
out" is nowise dangerous to our
financial structure; indeed this
policy is probably the only one
which viii permit that financial
structure to be held together at all.
IF there are dangers, they are
less great than those of any alter
native program. Indeed, it may be
true that serious effort to balance
the budget at present would actu-
ally make the real deficit larger
and more enduring-simply be-
cause of effects on business earn
ings, production and employment.
The prospects of balancing our
budget within a reasonable period
appear TO depend primarily upon
the behavior of those groups which
exercise a measure of organized
control over prices and wages, upon
government policy toward groups
exercising such control, and, to
single out one important factor,
upon government policy as to
freight rates.
TF only those producers who
i have gone furthest in sacrific-
ing volume to price maintenance
(and those labor groups which
have suffered from unemployment
rather than especially from decline
of wage rates. would now make
some concessions, or even accept
their share Of recovery in larger
volumes instead of IN higher prices.
we might look forward to early
conversion Of the federal deficit
into a large surplus"
Going off on another tack the
commission declares that the
United States should avoid further
currency devaluation on the prem
Use that the need for it is very
substantially reduced with so
many countries already having de-
valued. 1t has been estimated
that in the terms of trade and in
ternational finance only 20 per cent
of the world has not devalued.
I'VE should not fear devaluation
by that 20 per cent" the commits
sion continues" unless that de-
valuation is of an extremely dras-
tic nature. Some assert, of course,
that before power further to de-
value is abandoned, an agree
ment should be secured with Great
Britain and the important sterling
area or group of countries whose
currency is linked to sterling.
In our view this is unnecessary
(though not necessarily undesirable),
for an agreement in its self will
not sustain currency. The i'm
proved business situation in the
United Kingdom is the greatest as
surance that moderate methods
will be pursued in financial af-
fairs"