The Washington times., 1935-11-16
ULTIMATUM
TO BANKERS RKS
PROFESSOR
BY LEWIS HANEY

professor of Economics New York University
NEW YORK. Nov 16That arch inflaonist and fiat money
theorist NJ. S. Eccles, has just made speech.
ist consider hs of this whom Mr. Roosevelt has
chosen to head our banking system:
He said that Government borrowing ebt has created
chasing power"
He said that the quotations of stocks the stock
market offsets the Government debt.
He said that banks ought lend their dpoors to
anyone that wants loan.
To can the climax he said that the banks don't make the
kind of loans there demand for, the Government will In
other words bankers do not violate all the established prnc
pies of commercial banking the Roosevelt Will
them out of business.
Eccles stated his Friday speech before the bankers
venon that Government borrowing has not been be-
cause it has created deposits that is purchasing power
This is sheer inflationary nonsense
bank deposit addition to purchasing
in only two cases l. If saving and goes into bank real
money that has real value If it is business credit that
represents productive loan which into business plant
equipment, merchandise, Or payrolls
But the Roosevelt administration has merely written deposit
figures on bank books these figures the public
debt Such "deposs the kind of purchasing power
spendthrft gets by making touch!
The Roosevelt administration borrows (by getting bank
credit at the bank 1t deals the money out to consumers
They buy clothing automobiles electric rrgerators and GIN
What is the result-what is left2 Debt
The only savings deposited by people who don't get
checks And the Government spending keeps the
banks from making sound business loans Ecces talks about
"deposts where the bank loans Bank loans still
the low point of the depression.
Eccles that higher stock market quotations real
wealth. and are offset public debt piece of the
same inaonary cloth Stock prices quoted in the
paper currency which the public debt and which makes the
bank deposits does the rise stocks increase the food
and clothes and productive equipment of the nation?
Changes in stock quotations have effect the
total wealth Of country than does the printing of
money Neither adds iota to the webeng of the people
whole.
Ecces urged bankers to extend mot the type of credit you
To huf ind
demand for This virtually says don't your judgment
and experience; just give borrowers what they want.
This the Of the President has picked to
banks!
If you depositor in bank, do you like the idea Of
having deposit lent your banker who
along and says he loan? Of You
want your bank make only sound loans and to keep
Liquid" condition, so that your deposit will be safe.
Finally told the bankers eff you want the Govern
ment to out you get nyou lend the Government will
Under present monetary, financial and political conditions
and saf So Eccles tells that New Deal admnstra-
ton will keep lending That running the nation
debt
He stated that banks have bought Government paper because
there other profitable Investment and that they took this
paper like drowning grabbing life preserver. This is
absolutely true!
But the Roosevelt administration responsible for the lack
of profitable investments thus forced solvent to take
its bonds (dbt Now seeks to force them grab
life preserver in the shape of gvng borrowers they
want"
That would be the final step in initiation