The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1935-03-13

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scares the investor. Uncertainty
about the value of the dollar is al
ways enough to frighten any man
who is asked to lend his money. The
importance of introducing certain
ty into the money markets by TAX
ing a final position on money mat
tiers can not be overstated.
But this is not the chief reason.
There is no great market for the
only kinds of commercial building
that are profitable. Back in the
twenties we built too many office
buildings, too many hotels, too
many apartment houses, too many
of the better class residences.
U. S. Part Cited
AS for industrial building, the
government itself through the
NRA, has been moving heaven and
earth to prevent manufacturers
from putting up new plants or buy
ing new machinery on the ground
that we already have too much
plant capacity. Many important
codes have rules to prevent further
plant expansion.
Where is the new building to
come from? No man can dismiss
the matter merely because he can
not see what is hidden in the
womb of time and science and
enterprise. In the past the rise has
come from new forms and styles and
techniques in building and from
new industries. Shortages will soon
develop in the supply of moderate
homes-shortages caused by obso-
lescence, increasing population and
changing styles.
The government could give great
flip to residential construction by
embarking on a great program of
building in the one field which is
not over supplied-low-cost housing
Doubtless our railroads need COM
plete rehabilitation. This would re-
quire billions. But they are handi-
capped by vast and crushing debts
which make it impossible for them
to borrow any more money to re-
model their outWorn and out-moded
equipment.
A tremendous development of the
electrical age would have a great
effect. But this is hindered by the
stupid policies of high rates which
utilities persist in in order to make
profits for their topheavy capital
structures.
Foreign Trade Viewed
There are those who think re-
covery might be hasteied by re-
building foreign trade. Unhappily
that hope is chimerical. 1t will take
decades to bring foreign trade to
any level sufficient to afford us real
aid. The whole business is out OF
our hands. Other countries have
initiated our example and sur
rounded themselves, for economic
and military reasons, by tariff and
trade walls. They will not let our
products in.
Meantime, you ask, where is all
the money coming from which the
government is using for relief, etc?
Where does the government get it?
The government is borrowing it. In
1880 our national debt was 16 bill
lion. Now it is over % billion. In
six months it will be over 33 billion
These are appalling figures.
From whom is the government
borrowing this money? Chiefly
from the banks. Many banks had
from one-third to three-fourthS OF
all their deposits loaned to the gov
eminent. The government borrows
the money from the banks. The
government spends it. In a short
time all the money is back in the
banks again. And there it sticks
until the government borrows II
again.
The government denounceS the
banks for not lending this money
to individuals. But business men dc
not want to borrow it. There is little
or no demand for credit. They will
not want to borrow it until they
can see some profitable use for it.
Moneys Part Shown
What becomes Of all the money
the government pays out in re-
lief? Why doesn't it keep on cir
culating? Well, Uncle Sam gives
Smith $40. Smith spends it at g
store. The storekeeper pays it tc
Brown, his clerk. The clerk buys
suit of clothes with it. The
clothing storekeeper buys another
suit from the manufacturer. The
manufacturer buys cloth from the
wooden mill. The wooden mill buy.
wool from the farmer. The farm 81
buys new radio set. The radio
man sends the ten dollars to g
stockholder as a dividend. He may
put it in a savings bank and leave
it there.
Now that ten dollars is through
working until some one comes along
and borrows it and starts it on an
other journey by spending it. But
nobody wants to borrow it and 81
it is trapped in the bank and paSse:
into idleness.
But it must be evident that the
government can not go on borrow.
ing forever. But if the govern
ment must go on spending anC
yet can not continue borrowing in
definitely, what is to be done
This is the point toward which thC
whole confused political battle il
converging.
One group will favor borrowing
Another group will favor taxation
Another group will favor initiation
printing money. This is rapid.
coming 10 be the point Of cleavagl
about which, perhaps, the mex
presidential campaign will b
waged.