The Washington times. [volume] (Washington [D.C.]) 1902-1939, 1935-05-23


1 think that
Lewis Haney at least three
explanations may be given.
!. Even before the social re.
formers got into power, the pre-
ceding. administration was strug.
Cling to stop deflation by resort
ing to initiation. They were let
ting down the bars to unsound
banking (Glass Steagall bid,
starting on the way to increased
public debt (RFC) and excess
bank reserves (open market opera.
tions). The New Dealers have
merely gone them one better in
trying to stop deflation by infla-
ton.
2. In the second place, most of
the reforms" are designed to re-
strict the money incomes of some.
while increasing the money in.
comes of others. Much that has
been done has been in the way Of
attempts to raise prices for the
benefit of farmers and laborers.
The constant attempt has
been to help debtors by de-
preciating the dollar.
These things have been at
tempted by inflationary means,
either by depreciating dollars
directIy$ or by reducing the
security back of bank credits.
3. In the third place, the prob
lem of providing the means Of
payment involved in the various
reforms" has arisen. Where will
the reformers get the funds with
which to carry on the spending
and lending which their reforms
require?
This question has now become
the most critical of all, and to
my mind the most menacing.
open market operations" orig
inally a business stimulation meas
ure, have become forced loans
made by the banks to the govern
ment. The devaluation of the
gold dollar was not only price
lifting device, but also a nest
egg" for the Treasury. The silver
buying program is not merely to
depreciate our currency, but also
to make money for the govern
ment.
The Eccles banking bill is typl-
cal and represents the climax OF
the radicalism, both in social re-
form and in money. 1t can be
understood only as joint pro-
vision both Cd for the control OF
business through control over
bank credit, and CD for provld-
ing a forced market for Govern
ment debt (bonds).
It seems to me that it is vain
to maintain that the President
is radical in social reform way,
but that he is conservative as to
initiation. OF course, it is true
that most of the radical bills
which have been passed or will
pass, have been sanctioned by the
President. But it is also true that
the growing initiation in this coun'
try, which will be climaXed by the
banking bill, is sponsored by him.
Old fashioned greenbacks are
not half so much to be feared as
the new bank credit greenbackS
which are being prepared. The
old greenback initiation could be
seen, and measured, and dealt
with. The new greenbacks are
stealthy and little understood BY
the people.
The President stands firmly
against greenbacks to pay the
soldiers bonus. But all the
time he is turning our banks
into greenback mills for pay
ing other bonuses.
He will not come out and
frankly issue greenbacks. But
he first loads the banks with
his Governments promises to
pay, and then he expects them
to issue their notes and make
loans on the strength of such
promises.
What is the difference? Are
we to be fooled this way?
Some one must pay for all this
PWA, IVA, AAA stuff. The Gov
eminent debt must be paid or be
defaulted. This banking bill Is
the final arrangement for Selling
the bank deposits of the people
and giving them in return Gov
eminent promises which are as
green as any greenback.
The New Deal Administration
is preparing to pay" its debts
with more debts.
0~oSI Do01oo+nd