Montgomery County sentinel. [volume] (Rockville, Md.) 1855-1974, 1936-08-27
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National Topics Interpreted "a 17I6S
by William Bruckart T1IITNTEM
National kSne1TTaT

inclusion in Secretary Morgenthau's
letter of reference to the recover
able assets as one of the reasons
| why no new taxes will not have to
be levied. Some critics have stated
boldly that the White House state
rnents on the recoverable assets
cannot be justified. Their assertion
is that if the Treasury properly in
cluded recoverable assets as thing
to be used in. offsetting the public
debt, then by the same token those
recoverable assets, or repayments
OF them, cannot be used to reduce
the tax burden. In other words, the
money represented by those assets
cannot be spent in two different
ways. Either it must be used to
retire public debt or it must be
used for current spending by the
administration. It seems to be SIM
ply a refusal to believe the old
adage that you cannot have your
cake and eat it too.
If should attempt to analyze the
situation in the light of a personal
equation I think I might properly
say that if ! loaned $500 to a
friend and at the same time if I
borrowed $500 from a bank, I
might properly say the $500
loaned to the friend could be used
to pay off the bank loan. So far,
so good. But if the friend repaid
$3.50 to me and I spent that
$3.50 and had no other resources,
can't quite figure out how / would
pay the bank the $500 I had bor-
rowed from that institution.
Although perhaps my worries as
an individual about government
policies may not be very important
because / am just one individual,
I entertain considerable fear about
those recoverable assets in another
respect. For some reason-and I
think I can state it, doubt that a
very large portion of those recov-
cradle assets ever will be collected.
1 have a bunch that in the next
fifteen or twenty years the bulk of
those debts which the Roosevelt adj
ministration counts as repayable
will be cancelled or defaulted. In
either event, I think see how poll
tics is going to play an important
part and I am convinced further
that Mr.. Morgenthau and Mr..
Roosevelt as well, if he shares Mr..
Morgenthau's belief, is overlooking
that very vital influence when he
holds these loans as likely to be
| repaid.
I recall that the late Albert C..
Richie, four times a Democratic
governor of Mary
Default land, predicted that
Likely the money loaned
for the various pur-
poses outlined above, would never
be paid back. Indeed, Governor
Richie, who was very practical
man and who thoroughly disliked
deluding himself, used the word
Reputation" in connection with
these debts. He said they would be
handled just like the $11 1000, 900, 900
of war loans made to European ma
tons.
It is a noble thought, of course,
that the loans will be repaid, yet it
is quite apparent that a cancella-
ton drive is already under way. I
think most of those who do me the
honor to read my column will re-
call that more than a year ago
l directed their attention to the re-
duction in interest rates which con-
gress had ordered on many of the
loans. That is simply the first step.
Cancellation proposals, undisguised,
are bound to follow.
Unless am mistaken, the astute
Jesse Jones, chairman of the Re
construction Finance corporation
and a man who never kids himself,
already has kissed good-by to many
of the millions that have been
loaned by his agency. Of course,
the Reconstruction Finance corpo-
ration carries those loans on it's
books and counts them still as val
id. But I am of the opinion that
Mr.. Jones probably regards those
items as dead debts.
But to go further with the idea of
cancellation, it takes no stretch of
the imagination to say that the
Home Owners Loan corporation,
for example, will soon have a good
many thousand foreclosed proper
ties on it's hands. 1t takes no more
Imagination to say that politicians
who have ridden into office with
promises to help those people
whose homes have been foreclosed
will carry out their promises by
further voting interest reduction or
curtailment of principal.
A more striking illustration, it
seems to me, can be found in the
case of the loans to states, cities
and towns. Who among the poll
ticians is going to have the courage
to resist the tumult and the voting
of their constituents to avoid in
crease in their local taxes when
they call for cancellation of the
loans?
While the bonus for the ex-serv-
ice men is dead issue, every one
| knouS how repreSenf afivac ond con,