The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1934-09-13
Continued From Page oneD

the general scale of national de-
mand. Each capitalist and worker
took purely parochial view, and
no one saw the plan from the wide
national standpoint.
Additional complaints were lev
eIled at the administration for the
industrial dislocation caused by the
codes. For instance, if car manu-
facturer who was flooded with or
ders. could not get delivery of, say,
speedometers, owing to the eight
hour day in the accessory industry,
and so could not give quick delivery
of his cars. he naturally complained
that the MIRA was foolishly running
his business.
Numerous other powerful inter
ests have recently joined in this
general attack. Wall Street, for in
stance, now is strongly against the
NRA, because of Stock Exchange
control. Orthodox bankers dislike
the heavy increase in the govern
ment debt; they also dislike the dol
lar experiments. Lovers of freedom
hate the Presidents plans; they OBJ
iect on principle to government reg
ulation.
TT is necessary, therefore, to try
Il to explain in brief the underly-
ing reasons for the various meas
ures adopted by the administration
and to see them as a connected
whole, rather than as merely re-
flecting a desire to interfere.
America was taken off gold, not
because she had an adverse inter
national payment balance, or be-
cause her gold stocks were I'M
perilled, but because a devalued eX-
change rate is check to imports,
stimulus to exports, and by being
(wrongly) regarded as inflationary'
is psychological stimulus to gen.
eral rise in prices and trade.
authors Note-An external fall IN
the value of a currency is not the
same thing as an internal fallo
A federal plan of civil works (the
civil works administration was in
stituted and financed so that the
unemployed could perform some
useful work instead Of merely re-
ceiving doles. Something in the
nature of unemployment relief was
at the time essential, not only on
humane grounds, but because revo-
luton was then widely threatened.
Public works, financed by govern
ment borrowings, were instituted
(a) because it is method of absorb
ing idle public savings and OF max
ing them flow direct into industry,
thereby increasing general employ
ment and demand; and (b) because,
in so far as the works are financed
by borrowing from the banks, 1T
leads to bank credit imitation. CAu-
thors Note-If a government bor-
rows check currency from the public
and responds it, the volume of check
currency in issue does not increase;
it's ownership merely changes hands.
If, however, a government, or any
one else, borrows from the banks,
a so-called deposit is created by the
banks and transferred by the gov
eminent to public contractors, etc.
In this way, whereas. government
borrowing from the public is not in
flationary, government borrowing
from the banks is. This theory was
widely disputed in the past, but is
now accepted as a true, though ira
tional fact0
The President continued using
the R. F. c. Reconstruction Finance
Corporation) established by Hoover
so as to strenthen the finance of
banks, insurance companies, rail-
ways, ETC., and so as to help small
business which could not raise public
loans.
He also instituted home loans for
house repair in the hope of gene
rally stimulating the building indus
try; and with the same end in view
funds have been made available for
housing. The joint total amounts
to $2,0O0,0O0000.