The Washington times. [volume] (Washington [D.C.]) 1902-1939, 1934-05-16


owners" Lewis Haney
The general idea is more credit,
and shifting of private debt to
public debt.
Federal participation and con-
troll in business and finance is
greatly extended. The HCIC
Home Credit Insurance Corpo-
ration and the FSLIC Federal
Saving and Loan Insurance Cor
poration are to be added to the
alphabetical list of Government
institutions, to say nothing of a
flock of National Mortgage AS
Sociations" to be esta bliShed under
the Hole.
The Federal Home Loan banks
are to have their discount func-
lions ''iberalized" in making
loans on home "modernization,
and the Federal reserve act is to
be amended to make siX-month
loans on residential building eligi-
BILE for rediscount as commercial
loans.
Thus another link in the alpha
betical chain of paternaliSm and
RECOMMENDATION is forged.
Nobody seems to know how to
run business or extend credit eX.
cept the boys at Washington.
Another point to note is that
the old mixture of motives is
apparent. The new move is
again for "twO purposes: %
Relief-tO give employment to
millions of labOrers and to pro
tect the health and safety of the
people,; ~ Stimulation of bus
iness-put money in circulation
and prime" the building trades.
1 maintain that the two mo-
tiveS don't mix. Relief must be
given on a charitable basis.
Stimulation must be on a bust
ness. Business stimulation can
come only by making production
profitable. Unfortunately, en-
pIOyment and health and safety
don't necessarily mean profits
or net income.
For example, how is anyone to
employ much building trade labor
at present wages in a profitable
way? Unless we are trying to
fool ourselves, we cannot employ
high-wage labor for nonincome
yielding purposes without recog-
nizing that it is a dole system,
and that it does not stimulate
business.
Another thing to remember is
that residences are consumers
goods" If the loans for bathtubs,
painting, etc., are good loans, the
people may get more health and
comfort, but they will have less
money left to spend for automo-
biles and clothes. If the loans
are good" residential expendi-
lures must come out of the con-
Sumer's dollar.
On the other hand, if the loans
are not to be paid by consumers,
then they will have to be assumed
by the Federal Government and
add to the public debt. That is
what I fear will be the case to a
very large extent.
These new agencies may easily
become a sort of RFC for those
who live in houses" thus shifting
individual debts to the Govern
ment. Particularly the new FSLIC,
in undertaking to insure shares
and deposits in building and loan
associations, with their slow as
sets, is a dangerous experiment.
think that the "home mod
ernization" aspect of the new
move will have little Importance
as a business stimulant. I think
that the effort to stimulate new
construction under Government
direction" will either have little
result or will swell Government
debt dangerously.
1t is time to quit experiment.
ing and to decide on a policy.
If we are going to initiate, let's
do it. If we are going to slim
ulate by Government spending
let's do it directly and in a big
way. Or if we are going to
deflate and economic, let's
do that.
We want certainty and a
clear-cut program.
Pennies ReDenLS