The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1934-09-13
Liberal Viewpoint
by DIR. HARRY ELMER BARNES

THE textile strike now in progress is serious
Il enough. Yet it involves only one industry
Even under the most disastrous circumstances
it will be settled in time without running the
economy Of the country.
Another strike. far less prosaic but far more
menaclng has been in progress since 1929 and
has settled down with particular determine
ton since June, 1888 If this strike is not set
tied before too long, the capitastic economy
at least capitalism under Democratic form of
government-will be impaired beyond all re-
covery
I refer to the strike of American capital and
It's refusal to finance industrial activities and
business recovery. Some time ago 1 mentioned
an article by Governor La Toilette in Common
Sense" on this subject. There is a much more
factual and informing discussion by Raymond
G. Swing in the Nation"
Mr.. Swing makes it clear that while business
has been falling off since June, 1888 the stock
market slumpng downward and relief rolls
mounting, capital and credit reserve in this
country have been steadily increasing. But the
capital is extremely loath to leave the bank
vaults for the purpose of stimulating or support
ing business investments.
Bank deposits in the United States have
grown by more than IA per cent since June,
1898, standing at S26,762 100000. They are only
II per cent less than they in June 1929
The strike of capital not only is illustrated
by this accumulation of bank deposits but also
by the related reluctance to make commercial
loans. Since June 1929 loans have declined
over 81 per cent while bank deposits have de-
chned only II per cent. Mr. Swing estimates
that capital to the extent of at least 81 / 0O0.-
100000 is being withheld from what would be
It's normal use if capital were not on strike.
THIS strike of capital has been determined
u especially since June 1888 when the Roose-
welt economic policy stood revealed fairly clearly
mot n11Xr ic 1nlH oioJ
loans but it is refusing to invest normally in
private securities. In March, 1884 the banks
held less private securities than in June 1888
the decline being no less than 81 500 100000 The
trend has been toward investment in government
securities. Here the banks hold So $50 900 900
more than June 1888
This baking by capital has forced the gov
eminent to finance many enterprises ordinarily
handled by banks. In 1929 all governmental
agencies produced only 78 per cent of the IA
tional income while today they are producing
about 20 per cent. In short, the government to-
day is carrying about one-fifth of the country's
business as against the one-thirteenth carried
when private capital operates in normal fashion
Incredible as it may seem, private business
puts up shrill squawk because of this so-called
governmental interference" which is caused by
the strike of capital itself.
i circle: - y ' - . ''''''''
What faces America is a process of which
it is hardly aware, an unformuated conflict be-
tween capital and the state. The longer the con-
hlct lasts, the harder it is to resolve The more
the state interferes in businessmen if it is to
take the place of striking capitalize more capt.
tai will go on strike. And the more capital goes
on strike, the more the government will have to
interfere.
Unless the strike is broken, there seems to
be one of two possible endings The state be-
comes the fountain-head of business, and con-
trolls it either for social purposes which is social
ism, or to guarantee the profit system which is
faScism.'
Mr.. Swing is inclined to believe that this
strike of capital is for most American business
men not an act of deliberate intent. 1t is due
to the fact that they feel uncertain about such
things as Mr.. Roosevelt's economic and financial
policy
There is one thing about which they need not
feel uncertain. That is that unless American
capital loosens up the day of private captalistc
enterprise, as it has been known in the past will
be over. The risks of business today are trivial
compared to the certainties of large scale disas-
ter if these risks are not promptly and resolutely
accepted on large scale.