The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1935-07-09
Trends
Morgenthau Throws
Straw to Sound
Money Group
BY VINCENT LYON
Times Financial Editor

HI Souhu money Ooyo' VINO
Il have viewed with growing
alarm the rising tide of the public
debt. we're given an opportunity to
grab at a straw yesterday. Whether
they will accept 1t is another ques-
ton as 1t was rendered b. Secre-
tsry Of the Treasury Morgenthau
in testimony before the House
WAYS and Means Committee on the
proposed tax measure-an open
wound in itself to them
The Treasury chief took some Of
the wind out Of the sails Of the
opponents Of the Administration
money program when he suggested
that the government should now
adhere 10 a dual course. This road.
he believes. should consist Of
whiting down the rate Of borrow
ings and gradually lessening the
national debt.
Novelty being an often used de-
vice Of Mr. Morgenthau. he is fol-
lowing style with his idea of Just
how the double program can be
brought about. His idea is that
The proceeds Of the new taxes,
when as and if levied, should be
placed in a special drawer of the
Treasury and kept there for cut
ting down the debt He would out
law the use Of the revenues for any
new types Of expenditures by the
government.
/ Under this system the Treasury
- would then have a third re-
serve cash drawer At present there
are tUo-one for the profit realized
on The boost in the price of gold
from S2O67 to S35 an ounce and
the other resulting from silver
seigniOrage. These funds are
great asset of the Treasury and it
Is not the intention to have them
tapped ny pOrk-barrel politicians
Mr. Norgenthau said 1t was his
conviction that it would be perilous
10 regard any part Of the revenues
derived from the proposed tax pro-
gram as available for new types of
expenditures or justifying any in
crease over carefully budgeted
plans for Federal OUTLAWS. Further
more. he expressed the belief that
Congress would be receptive to
such sound procedure.
President Roosevelt's sentiments
toward the public debt we're re-
echoed when the Secretary deClar-
cd that there are times of emer-
genCv when the Treasury must fl
nance expenditures in excess Of in
come by borrowings which increase
The public debt. But. he added.
when such emergency is passed the
nation should cease such activities
and dedicate itself to the purpose
Of pairing its obligations.
THE prologue and epilogue 10
= two scenes in Frances rapidly
moving money drama have been
written. one was for show that
has already transpjred-one which
had the entire financial world
holding tight TO their seats in
great expectancy The other is for
the Hbretto which is not yet fin
iShed
Writing Of the epilogue was in
connection with the fight of gold
from the country late in May and
carly in June when formation and
collapse Of Cabinets followed each
other by hours To stem the flight,
which many thought might tear
the European bloc from its gold
moOrings. the Bank of France sue
cessively hiked its discount rate
from @. to per cent. Last week
the second step in the downward
trek was taken when the rate was
lowered from 5 to 4 per cent.
The prologue has to do with the
Observance on July IA OF Frances
tempeStuouS holiday-BaStile Day.
Timid Capital. the bane of govern
ments. has begun to fee the
country in anticipation of disturb
arceS on the nations independence
anniversary. The outward ship
mont Of funds has brought about
some whiting in the francs value.