Evening star., 1935-11-12
FISCAL DISASTER
|. FEARED BY MILLS
Sound Recovery Waiting on
Job Problem Solution,
He Tells Chicagoans.
By the Associated Press.

BY the Associated Press
CHICAGO, November l2.-Ogdcn l.,
Mills. former Secretary of the Treas
ury, said today the United States Is
faced with a fiscal problem that
threatens our national solvency and
invites a major disaster.
Until unemployment is solved there
can be no sound recovery" he SAID IN
an address prepared for delivery be-
fore the Chicago Rotary Club.
Forty millions employed cannot
carry indefinitely the dead weight OF
10 million unemployed" he said. Our
national economy cannot bear the
load. The Federal credit must break
under the continuously increasing
strain"
Job Problem Still Major One.
Mills said the problem of unemploy-
fnent is still major one because the
policies of the administration have
been better calculated to perpetuate
the evil than to terminate it,"
There was and is only one way to
cure unemployment-that is to in
way to increase production is to stimu-
late buying by giving the consumer
the benefit of lower prices for finished
products and simultaneously to create
conditions which will invite the flow
OF capital into producers goods or
heavy industries, thus increasing cur
rent purchasing power by transform
ing savings into wages.
The administration elected to do
just the opposite, to restrict produc-
ton, to force up costs and prices and
to paralyze the flow of capital by fiscal
and monetary policies that destroy
indispensable confidence
ASSailing the administration none
tary policies Mills asserted a Govern
ment should Influence the environ
ment in which business is conducted. "
adding that "a first requisite is the
provision of stable monetary conditions
and sound credit conditions"
Contrary Aims Pursued
The administration" he declared.
has actively pursued contrary aims.
Devaluation dealt a terrific blow to
confidence and the integrity of the
Government, created an insidious
precedent, contributed to international
monetary unsettlement and did moth
ing to improve our basic price malad-
Justments, Deficit financing is steadily
undermining the credit of the Gov
eminent.
1t is impossible to measure what
these tragic fiscal and monetary blum
ders have already cost, and We are
Still travelling the same road"
Referring TO the A A. A, Mill,
accused the administration of resort.
ing to sheer eXpediency" in its pro-
gram for agricultural rehabilitation
He criticized the processing tax as
placing the heaviest burden on those
least able to bear it" and compelling
the needy to finance the denial OF
their own needs"
Economically speaking" Mills said
''all it does is further to restrict the
farmers domestic market by transfer
ring purchasing power from depressed
urban CenterS.
Purchasing Power Unchanged.
"Those who tell the farmer that
restoration of agricultural purchasing
power, through any such means as
the processing tax. is bringing pros
perity to urban centers and adding to
General purchasing power, must
think he has never had the benefit of
a primary education. Adding a dollar
to the purchasing power of Jones in
the country by taking a dollar from
the purchasing power of Smith in
town, leaves the total purchasing
power just where it was before"
He warned that the policy of re-
stricting farm production will be fol-
lowed by demands from industry for
a similar policy of restriction, with
the result that total agricultural and
industrial production will have been
substantially reduced"
Since We cannot consume what We
do not produce there will be less to
consume and the standard of living
will fall. The unemployment prob
lem will have become more insoluable
than ever"