Evening star., 1934-11-29
Treatment of Banks Held Justified
By Unfairness in Bank System

The old argument. which We
| thought was settled in the legal ten
| der decisions, as to whether Congress
or the banks had the primary right
| to control the issuance of legal ten
| der is up again, this time in the
form of dispute over checking &C
counts But If the banks may not
and should not start new checking
accounts. free Of cost to any one, by
the coming of any sound" asset
which applies for coinage through
loans" then the public budget must
take over that function, not by lend
ing. but by spending without any
! lending, SO that the tax burden may
be lifted as means of putting new
money into use in industry whenever
investment tends to draw on savings
so much as to remove funds from
active use and SO cause lower price
levels and depression" Otherwise
the legal tender decisions have set
tied nothing. for their intent must
and will continue to be evaded
through the use Of checks instead OF
bank notes as socially unjust and
unsound but necessary source Of new
money.
May We not. on this basis. proceed
to suggest answers to Prof Carothers'
economic catechism as it appeared in
The Sunday Star?
/. When are we going to have a
monetary system and what is it to be
Answer: Immediately. based upon a
free money budget, with control of in
flation by taxation automatically ad-
| justed as to rate of collection by a
price index.
q Is there any plan to balance the
budget?
Answer: No. except as above.
3. How many more Government
bonds are We going TO be compelled to
absorb?
Answer: None.
4. How long is the adulteration Of
our currency with silver to continue?
Answer: The illusion Of Karl Marx
as to a metallic currency serving as
a measure of intrinsic value is dis
carded and Government meddling
with the price or market for precious
metals is at an end.
5. Are the suicidal provisions OF the
Thomas imitation act to be repealed
or are they 70 be put into operation
by Executive order?
Answer: Repealed.
6. How long is the Government TO
remain partner of the banks?
Answer: No longer.
Z. Is the Federal Reserve Board to
be restored to its former position or
is it to be abolished?
Answer: Abolished.
8. How long is a politically ap-
pointed Secretary of the Treasury 10
be permitted to have a secret fund
Of $4,000 100000 for manipulation OF
the securities market?
Answer: No longer.
8. What does the administration
plan to do about the temporary and
uncertain guaranty plan?
Answer: The Government will guar
antee only MISUNDERSTANDING de-
mand deposits, which must not be
loaned, but will be conducted by the
Government.
10. If the temporary guaranty Is to
be made permanent, will the provision
compelling State banks to join the
Federal Reserve be enforced? II SO,
why does not the administration state
directly that it expects to force uni
fed system of banking on the country?
Answer: Banking will not be ma
tionalized or publicly conducted except
as criminal and business law requires
national instead of State codlncatlon
under present conditions.
II. What is the prospect that in
dustry will be free from interference,
so that loans to industry can be made
safely?
Answer: Excellent-but loans will
not be made from demand accounts.
Industry, will not be permitted to issue