The Waterbury Democrat., 1935-03-07

try failing to move into activity? !? Is it because we have no money to lend builders? Or is it be-
 cause builders see no market for new construction? Or is it be- cause lenders are unwilling to
 lend and builders afraid to bor- row?
 EXAMINATIONS
 In Wall Street they will tell you 1t is due to three reasons: The Securities Act which frightenS away bankers and corporation ex- ecutives; government interference in business; to uncertainty about the future which frightens tnves- tors.
 The first two are so much undi- luted bunk. Wall Street breaches this in order to get the Securiti ss Act, passed to protect investors, repealed. As to government inter- ference in business, in spite of all
 the talk, there has been literally no interference in business by the government. The MIRA was passed at the instigation of business and
 the administration foolishly sus- pended the anti-trus@ acts to let
 business run things it's own way. But the third reason is more valid. Uncertainty always scares the investor. Uncertainty about the value of the dollar is always enough to frighten any man who is asked to lend his money. Tho importance of introducing certain ty into the money markets by talk ing a final position on money mat ters cannot be over-stated.
 But this is not the chief reason. There is no great market for the only kinds of commercial building that are profitable. Back in tho twenties we built too many office buildings, too many hotels, too many apartment houses, too many of the better class residences. Most of the new buildings and hotels and apartment houses are in thte hands of receivers or are los- ing money heavily. You cannot ex- pect men to build hotels, apart ment houses, office buildings, thea- ters, when those in existence are losing money.
 AS for industrial building, the government itself through the MIRA, 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.
 FOCAL POINT
 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 en- terprise. 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 obsolescence, increasing popu-
 lation and changing styles. The |government could give great fill!p to residential construction by em-
 barking on a great program of
 building in the one field which Is
 not over-supplied--low-cost hous-
 ing.
 Doubtless our railroads need complete rehabilitation. This would require billions. But they are handicapped by vast and crushing debts which make 1t im- possible for them to borrow any more money to remodel their out
 worn 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.
 There are those who think re-
 covery might be hastened by re-
 building foreign trade. Unhappily that hope is chimerical. It 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 surrounded themselves, for eco fnomic and military reasons, by tar-
 if and trade walls. They will not
 let our products in.
 O~--V
 FONT OF FUNDS
 Meantime, you ask, where is all
 the money coming from which the government is using for relief, etc :? The government is borrowing it?
 In 1880 our national debt was 16 billion. Now 1t is over 28 billion. In six months it will be over 33 billion. These. are appalling fig-
 ures. From whom Is the govern
 ment borrowing this money? Chiefly from the banks. Many banks had from one-third to three fourths of all their deposits loaned to the government. The govern ment borrows the money from the
 banks. The government spends 1t. In a short time all the money is back in the banks again. And there 1t sticks until the government bor-
 rows 1t again.
 The government denounces the banks for not lending this money to individuals. But business men do not want to borrow 1t. There Is little or no demand for credit. They will not want to borrow it until they can see some profitable use for it. What becomes of all the money the government pays out il re- lief? Why doesn't 1t keep on cir cuIating? Well, Uncle Sam gives C,s&leh an far..at !, 4 exAsaN x ff ak A