Evening star., 1934-09-13
Bad Management of Capital and Not
G Distribution Brings Hard Times

were NOT In terms Of money and sub
ject to the unfair manipulation which
money undergoes In the banking sys-
tenn. II he were to devise and cons
strucs capital goods stump puilers
for instance-and lend them 70 his
neighbor In return for some favor
which the neighbor might do him, he
would Be collecting interest on his
investment. A money system simply
or not 50 simply-universalizes this
lending process, thus affording maxi
mum values Of time and place In the
neighboriy favors which interest makes
available to lenders and borrowers.
As for rent, II the management and
use of land are not to be governed
by ownership and by the resulting
financial responsibility for obtaining
maximum income (rental value) from
1t on competitive basis, then whose
decision Is going to determine how any
particular land shall be used? And II
some one uses 1t or might use 1t more
profitably than such social decision
supposes, will rent" be raised thereby
or viii this more profitable use be pre-.
vented?
Mr.. Kern rightly feels that our
alphabetical soup" ID Q meddlesome
futility, but the planners Of the New
Deal are only o platoon - compared
with the regiment Of paternalizers
that viii be required when We start
collecting q single" tax and trying 70
decide what trent" shall be. And
when the super N. r. A. Of this pipe
dream has its schedules and codes ell
ready, what will 1t do when 1t wakes
up the next morning an6 finds money
values have changed? win the tax be
collected on q price-index basis? II
not, what Is to prevent the same DIM
Guilty with tax rates and everything
else that we are having now?
Does It not also follow that II popu-
lation alone creates land value, the
claim to land must be yielded ON the
basis of numerical superiority rather
than upon any crieterion Of tntelli-
gence and high standards that might
limit population and hold land out OF
full use against those who would popu-
late 1t to the limit and 30 raise the
specter Of war, famine and pestilence
as the inevitable control for such popu-
lation?
1t Is bad management Of capital, not
unequal inequitable distribution Of
ownership and capital income Except
as this might affect management) that
brings "hard times" Such universally
bad MANAGEMENT Unbalanced produc-
tion) Is produced by the deceptive ef~
fects Of profits due to rising price
levels that result from the infiationary,
counterfeit loans" Of the commercial
banking system. This can be stopped
without any Of the utilities Of att
tempts ct redistribution Of wealth.
such as seems to be implied In Mr..
Kern's and in several other recent
letters printed in The Star.
Let's not forget that 1t Is not labor,
but the saving Of labor by intelligence
and thrift in the building up Of ''un-
earned" capital income, that raises the
standard Of living and makes an indie
yidual and, like him, Q community
prosperous. It u this "unearned" In
come that tends TO increase the demand
for labor while decreasing the supply
q. G., the number Of those who must
labor for hying). and so raises real
wages.
The mutual character Of the benefits
arising from rent. interest and profit
have brought them into existence ana
assures their continuance through the
ages. This Is not true. however, of our
present monetary and banking system.
All Of which reminds me-what u
Upton Sinclair. In his EPIC" plan,
going to do about banks and bank
loans in handing his scrip? Russia
has rather recently reformed" her
banking system, yet It does not seem
that she--or Mr.. Sinclair--has elimi-
mated the dangers OF imitation that are
constantly harrassing other Occidental
nations That are using the old Jewish
ioea 10 banking and seem unable 70
conceive OF any other plan for mons-
tary expansion In time Of need for Il
ALDEN 4. POTTER.