Evening star., 1935-01-01
SH|PSTEAD URGES
NEW DISTRIBUTION
Better System Necessary to
Insure Recovery, Says
Senator in Forum.

must he tannd if America is to recover
from depression, Senator Henrik
Shirsead of Minnesota, Farmer
Labor, said in a New Year eve speech
last night.
The Minnesota Senator's address
was delivered In the National Radio
F'ornm, arranged by The Washington
Star and broadcast over the network
Of the National Broadcasting Co.
Other problems in addition to find
ing q better system Of distribution OF
plenty which the country must and
should deal with In the coming year,
listed by Senator Shipstead, were:
Restoration of the credit system by
which the country does its business
by making it possible for the people
to pay their debts.
Advises Bank Regulation.
Control and regulation of the banks
for the public welfare, so that the
peoples money in these institutions
shall not be regarded as the private
funds of the bankers.
Assurance to the farmers of the
country of the cost of production OF
their crops.
Pensions for the aged and work for
those who are able to work.
An optimistic note was sounded by
Senator Shipstead as he looked for
ward to the new year. He said:
IT do not believe that We have to
become content with little because
we produce so much. I do not be-
lieve we have to become poor be-
cause We are so rich.
Stresses Value Of Credit.
"The people of this Nation are too
virile and too courageous to sink into
the inertia OF despair
Progress, Senator Shipstead de-
clared, had been made in 1884 to-
ward recovery. But much remains
to be done in the coming year.
"Our system of production is the
marvel of the world" he said. Ma
cninery for distribution of produc-
ton is as necessary as production"
Senator Shipstead said that the me-
dunn of exchange is credit, and that
the national credit system must be
rebuilt through reduction of debts or
another cut In the gold dollar. Only
by making it possible for the people
to pay their debts, he contended, is
It possible to restore the credit system.
The text of Senator Shipstead S
address follows:
It is a pleasure and a privilege on
behalf of The Washington Star 70
greet you on the last evening of the
old year and just before the dawn
Of the new
have been asked to talk about
the outlook for the coming year.
We can only Judge the future by
the past. There are many things
in the past year we would like to for
get. They are the disagreeable things.
The pleasant things We like to re-
member. The things that are dis
agreeable and that we like to forget
are usually the result of our mistakes.
If we do not entirely forget them re-
membrance may prevent us making
the same mistakes in the future.
Nineteen thirty-four has been a
difficult year for all our people. We
hope 1885 will be better. I think we
can make the new year better, and if
We are to do so we must enter its
portals with courage, vision and hope.
There are those in this country who
preach a doctrine of despair, who be-
l;eve that hereafter we must have
less because we produce so much, that
we must be poor because We are SO
rich. This is an ignominious confess
sion of failure to use what we pro-
duce. do not subscribe to such q
doctrine.
Sees Fault in Distribution.
Our system of production is the
marvel of the world. Nowhere in hu-
man history has a country perfected
its machinery of production as we
have in the United States. That ma
chinery is still intact. But machinery
for production is only half of the
machinery needed. Machinery for dis
tribution of production Is as reces-
sary as production.
The basis for distribution Is ex-
change Of goods. Production and dis
tribution are the basis of prosperous
trade provided the machinery of ex-
change is functioning. To exchange
goods we must have the medium of
exchange, money and credit. Until
1929 the medium of exchange was
furnished by the banks. The founda-
ton Of the banking system was credit.
The foundation of the credit system
was confidence that debts could be
paid. When it became apparent that
credits have been so overexpanded
that debts could not be paid the
credit system, which was the founda-
ton of our banking and commercial
system, ceased to function. Bank de-
posits dropped 10000, ,000, 900 in three
years. There was $4,000, 900 900 less
medium Of exchange last year than
there was in 1929. The only credit
that was functioning was the credit
Of the Government and the Govern
1nent has been furnishing the medium
Of exchange based on its credit.
The functioning of our credit sys-
tenn must be restored. I hope it will
be done in 1885. In my opinion, 1t
can only be restored by making 1t
possible to pay debts. If our debts,
corporate or private, are too large to
permit liquidation or payment of fixed
charges from national income, debts
or carrying charges must be reduced.
Debts can be reduced by voluntary
reduction between debtor and creditor
or by voluntary writing of watered
stocks and bonds, or adjustment in
the bankruptcy courts. That is what
bankruptcy courts are for. Another
method Of reduction of debts is the
lowering of carrying charges by the
lowering Of interest rates, thus escap-
ing bankruptcy and saving principal
Of the expense of income. Another
method of reducing debts would be
ID cheaper the domestic dollar.
WuHld Curb Bank Abuses.
In 1S3Nwe had a national income
Of $50. .e61Q. 900, and last year that
income Had been reduced to $4,000
5000. I think it worth while, early
in the year 1885, to explore the pos
sibility of paying fixed charges: that
were incurred under q national in
come Of $50 o,000, ,000,000 with an in
come Of sac, GOO, ,00O, 600. If we come to
the conclusion that it cannot be done
ve shall have to cut the coat to fit