Evening star., 1934-02-19
Radicals IN administration
Intent on Bringing Reuolt
Latest Step to Bring About Collectiuisd'
ton Held Embodied in Stock
Exchange Bill.

| shall be permitted to use 1t except IN
such ways as the Government passes
upon and permits. Concretely. a shoe
manufacturer, for example, shall not
be permitted to enlarge his factory,
even though he uses his own capital,
until after getting permission from the
Government. The case OF the shoe
manufacturer Is specifically cited by
the potential planners in the Admin
istration. They say there Is already
capacity to make more shoes than the
country normally consumes, and they
proposed to forbid increase of plants
until after they judge that the country
needs more shoes than existing plants
can provide. Their intention is the
same with respect to every other kind
of manufact actLre-concrete, steel rails,
mouth organs, mouse traps or what
not.
The control over the issue Of new
securities PROPOSED in the stock ex-
change control bill Is obviously to be
one of the means Of preventing erec-
ton Of new plants. The same inten-
ton underlies provisions in the securi-
ties act, passed last year. The funda-
mental long distance aim Of both is
not merely to regulate issues of securi-
ties by private institutions, but to
make them impracticable or impos-
Sible. The ultimate aim Of making
private issuance of securities and pri-
vate lending of capital impracticable
Is to bring about Government monop-
oily of the whole function of credit.
Government monopoly of credit would
be Government control or ownership
Of all industry. This would bring about
and constitute the planned econ
omy," which is the objective of the
radicals.
Not Wish Of President.
Government monopoly of credit and
banking is not the wish Of President
Roosevelt. He has said so. through
Jesse H. Jones, chairman OF the Re-
construction Finance Corporation. in
the following words: go Z" The Pres
ident would be greatly disappointed
If the banks do not perform
all the functions that banks are in
tended to perform" Yet Government
monopoly of credit and banking is
being brought steadily nearer by step
after step the administration takes
in several different fields upon the
initiative Of the radicals.
The divergence between the Presi-
dents own objectives and those Of the
radicals Is Illustrated by one provision
OF the stock exchange control bill. A
major wish Of the President Is to
expand credit A major concern Of
President iS tn
currence OF the violent def1ation of
credit which was at once the cause
and the very substance of the de-
preston. Yet the stock exchange con-
troll bill requires that by next October
every bank having loans to brokers
on stock exchange collateral shall re-
duce the loans to 40 per cent of the
market value Of the collateral. That
proposal, If put in effect at once,
would, it Is not too much to say,
start a violent spasm Of defation
and cause the depression to begin
| again. Every banker and borrower
| from a bank knows that at the pres
ent time the average bank loan to
every type of borrower on collateral
is closer to 80 per cent Of the value
than to 40 Just now many loans are.
in the banking phrase, under water"
Wholesale, forced selling Of collateral
to reduce loans would be just what
the depression consisted Of Even
though the rule be restricted to loans
to brokers, and even though 1t be
spread over seven months until Octo-
Der, it would work a serious contrac-
ton of credit and of bank money,
which Is the last thing that the
President or the country desires