Evening star., 1935-10-06

credit or currency policies Of this
administration, but you may put 1t
down both economically and histor-
ically that every continued Govern
ment deficit has led to imitation in
some form. That is the implacable
avenger of profiigate spending in gov
ernment. Our Government today is
in large degree financing its deficit
by credits from banks and financial
institutions upon the Government
promise to pay. BY this action large
part of that credit is being manu-
factured. will not take your time to
describe the process. 1t Is a sort Of
Dervish dance, whirling from budget
deficits to Government bonds. from
bonds to bank credit, from bank credit
to more Government spending. That
is one of the Oldest and most danger
GUS expedients used by spendthrift
governments. The new banking laws
make it all easy. Governments must,
in some emergencies, finance through
the banks. But 1t must be only for
the short interval necessary to raise
increased revenues and reduce ex-
penses.
The general public mind has been
focused on the notion that imitation
consists merely Of printing press
money. There Is also printing press
credit. That is subtle daily increas-
ing danger. Already it has contrib
uted to increase the price Of the
things you buy and the cost Of living.
The present rise in the stock market
is ample proof that some people know
it. There is a place on that road
where there turks an appalling ma
tional peril. We have not reached
these extremes, but that is the road
We are travelling. The administration
may not know where they are going,
but they are taking us with them.
Let us not forget that deficits and
their resulting debts can be subtly
accumulated to volume where in
agony democracy cannot be led to
shoulder the taxes to lift them. The
tragedy is that the people at large
are lulled into the belief that these
borrowed deficits cost them nothing;
that they do not have to pay; that
the money comes out Of some indefi-
mite source without obligation or
burden to them.
Cites Germany's Plight.
Deficits and debts can be paid by
other forms in imitation. such as
printing press money-and then :ou
go down the road that led Germany
to ruin. Who paid in Germany? The
economic middle class and the poor.
The farmer. the worker, the business
and professional people-none escaped
ruin. They paid by the loss OF all
their savings; they paid until they
were reduced to a universal and un-
paralleled poverty. They paid more
than this: they paid with liberty in
the gutter, for universal poverty
created gigantic tyranny.
These indirect or direct schemes
of imitation have been the curse of the
earth since the World War. They
were one Of the causes Of our mad
speculation in 1927 to 1929. They
were the immediate cause OF the
European collapse in 1881 and the
worldwide depression And let me
say that If the history of the last
hundred years teaches anything, it
is that imitation is more dangerous to
a people than war. 1t has been the
abyss into which democracy has
fallen in these recent years. It has
been the cradle of tyranny in a
dozen countries. And they all started
by initiating bank credit.
II Is easy to overstate the dangers.
We yet have time to save any such
peril. But you will find that my view
Is mild remonstance compared to
that OF President Roosevelts own di-
rec5or Of the budget, who resigned be-
cause Of these policies.
Even If these greater dangers of in
f1ation be avoided. who will pay the
Dill in the end? Those billions Of
wasteful deficits will be paid by put
ting our hands into the pockets of you
who are young and keeping them
there all your lifetime. 1t is not only
a reduction Of your standard of liv.
ing but Of your freedom and your
hopes.
Sees No Escape.
There can be no device BY which
the people may escape paying for this
spending.
Here is where common sense cries
out to be heard. The folly and waste
must be cut out Of this expenditure
and the Federal budget balanced, or we
shall see one of these three horsemen
ravage the land-Taxation, or Repudi-
alton, or Imitation.
We are asked for constructive pro-