The Ely miner. [volume] (Ely, Minn.) 1895-1986, 1935-03-22
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National Topics Interpreted "a TIINA11S
by William Bruckart TYYTTTTHY}
PressB C. NkST-11n}U
Long and
Coughlin

| COuSuIlu. Tie Tdult
priest, concerning plans for redistribu
ton of wealth. The consensus has
been that their plans sooner or later
would fall of their own weight. But II
can be denied n, longer that Long and
Coughlin have developed gigantic fol
lowing of people who lack information
as to the fallacies of the arguments
however logical they sound, that have
been spread by these politically smart
showmen.
One reason that serious attention to
their proposals is now necessary is that
vanced from higi. places in the federal
government. / refer specifically to the
testimony before the house committee
on banking and currency by Mariner
S. Eccles, governor of the Federal
Reserve board and as such the titular
head of the nations banking system.
Mr.. EccleS did not quite take a leaf
out of Huey Longs book. He APP
preached the position of the Louisiana
senator, however, when he proposed a
redistribution of income. whereas Sen.
ator Long has urged a redistribution of
| wealth.
| Mr.. Eccles suggested in his testimony
In effect that it would be all right for
man with say ten million dollars in
capital to keep that sum, provided his
income was redistributed. Mr.. Eccles
went back to the days Immediately fol-
lowing the World war to illustrate his
argument and showed that at the top
of the postwar boom zone tenth of one
per cent of the families at the top of
the income received as much as AZ per
cent of the families at the bottom of
the list" Furthermore, he said that
the single average family in the big in
come class got as much as four hun
bred families at the bottom of the in
come list.
"This one-tenth of I per cent was
unable to use all the income in con-
SUMPTION" he continued "They there.
fore had to find an outlet in the in
vestment field. AS result, the capacity
to produce increased out of all proper
ton to the capacity to consume"
So Mr.. Eccles took the position that
solution of the depression was re-
distribution of this income with the
idea that it would increase purchasing
power in the lower brackets. The gov
ernor offered no explanation of how
those In the lower income class were
going to obtain possession of the redis-
tributed income of the rich because
his argument stopped at the point
where the government would take this
money by taxation.
| That is the recognized weakness of
the programs advanced by Senator
Long and Father Coughlin, and Gov
ernor Eccles showed no ability to solve
the problem.
On top of the outbursts by Long and
Coughlin and the serious testimony by
! Governor Eccles
| proposes comes Senator Nye
Central Bank the North Dakota
| progressive, with q
bill in the senate to create a central
bank. Senator Nye's action has caused
many humorous expressions. Here we
have senator who has fostered, even
boosted about, progressive ideas and
has called himself liberal. 1t is nee
essary only to recall that the father of
the central bank idea was the ultra
conservative Alexander Hamilton, the
first secretary of the treasury.
Senator Nye advances a bill with
the thought that the central bank
would avoid hamstringing of credit.
think financial experts all agree that
this is true. The thing which Senator
Nye overlooked, however, is that Mr..
Hamilton's central bank collapsed and
brought ruin and grief to thousands.
The reason it collapsed was because in
removing control of the banking facili-
ties from experienced bankers. the
whole thing had been turned over to
the control of politicians who, general
ly speaking, are experienced only In
politics. 1t seems paradoxical that the
North Dakota senator should advance
as a liberal scheme the creation of
central bank which one hundred and
| y
of conservatism.
| The Nye legislation was offered In
the same week that Governor Eccles
had proposed in his testimony on the
banking bill in the house that the Fed
eral Reserve board should have COM
plete control of the credit expansion
and contraction in this country. / be-
lieve most persons will have difficulty
in considering the two schemes as sep
arate and distinct. They certainly fit
together.
1t is to be noted that there are at
least ninety-nine radical members of
the house of representatives who are
convinced that the federal reserve sys-
TEN has failed of its purposes. Most
| of them have been repeating without
rhyme or reason the accusation that
bankers are refusing" to make loans.
They think, therefore, that If there is
q central bank or If credit control is
placed In the reserve board and taken
| away from the federal reserve banks
where it now reposes there will be ad-
ditional loans forced out of the COM
mercial banks. History indicates, how
| ever, that this is fallacious. No bust
ness is going to borrow money when it
| doesn't need 1t and neither is any per-
son in his right mind going to make a
loan unless he has at least reasonable
assurances of repayment
1t will be recalled that President
Roosevelt at one time spoke disparag-
| ingly of the refusal" of the bankers to
make loans. The President subsequent
| ly learned that attempts to pump money
| out of banks must fail for lack of bor-
rowors I think overvOpe acuuaintpd