The Washington times., 1935-03-19

Y
~ least until the
Low" HAney Government be-
gins to scatter currency around
more freely. By stepping up its.
distributions Of doles, relief pay.
ments, ETC., the Administration
can make things look better for,
while.
AS long as the New Dealers in.
Sist on restricting business by
their reforms" and monetary
manipulation, the only way we
can get increased employment is
to have the Government do the
employing.
So, you see, the whole thing
comes to a head in Government
spending. The big question, there
fore, is, what can the Government
use for money? Where is it to
get the funds to distribute?
Business men earn money by
employing labor and capital in
productive ways. They direct pro-
duction into the manufacture OF
goods which can be sold to willing
buyers.
But how does the Government
get its funds?
First, there are taxes. These,
however, are at the limit. The
politicians don't dare to put on
much more.
Second, some say, "Just
print notes." They say that
the Government can Substi-
tute greenbacks for its bonds.
The immediate effect would be
to crack the market for Govern
ment bonds wide open. No
bondholder will take greenback
notes for an intereSt-bearing
bond, and there would be q rush
to get rid Of bonds that would
wreck all banks, and ruin the
Governments credit.
A terrible currency initiation
would follow and end in the
disaster which overlook Germany.
Third, some say: 'WelI, let
the Government borrow few
billions nOre-what are the
banks fOr?'
Here is the way that works:
The banks are already so load
ed up with Government bonds
that they will not take any
more except under compulsion.
So it is proposed to have the
Government take control Of the
banks. The Federal Reserve banks
are now completely controlled. The
banking bill would make prac'
tically all banks subject to the
Reserve Banks.
Thus, when the Government
would borrow" from banks, it
would be borrowing from itself!
The Federal Reserve notes which
it would spend would be no better
than it's own greenback notes.
What would be the difference?
The banks are the chief bond
holders. The Government is forcing
them to take its promises to pay
at almost zero interest, and to
issue notes on these bonds. This
is getting close to camouflaged
greenbacks.
You can understand this. You
must. You must stop it, or we
will all be ruined.
A bond is government debt
(Our debit.
1t Is put in a bank, and
called an investment asset"
Then the bank issues lts
notes." backed by the govern
ment's debt!
Or, the government arrangeS
to have its controlled Reserve
banks enter an item on their
books called a deposit" This
is also Government debt (Our
debit
The Government then draws
checks on this deposit credit.
The farmers, or others, who
get the checks, deposit them in
some bank, which is said to in
crease bank deposits"
The banks then send the
checks into the Reserve banks.
The Reserve banks now receive
the checks as deposits" Of the
member banks. Such deposits
are called "excesS reserves"
Despite the banking terms, you
can understand this. You can see
that it is bad business. It is
downright juggling. The whole
thing is Government debt (our
debit.
There is no way to stop this
shell game, except to stop Govern
ment spending. And there is no
way to stop Government spending
except to let business men and
workers make real money by really
productive work.
If the New Deal goes on, infla-
ton Is inevitable. Since our cur.
rency is all credit, credit initiation
is currency initiation.
NAVAL STORES
NEW YORK. March 10 GN.sD.-Pe-