The Daily Alaska empire., 1936-05-07

III the critics. Take for example Russell C. Leffing- we'll partner in J. P. Morgan & Co.,, and former As sistant Secretary of the Treasury. In recent ad- dress before the American Academy of Political Scl- ence, MT. Leffingwel said:
 The government that seeks to balance its budget by deflationary policies defeats its ob- feet burns the candle at both ends, increases it's expenditures and reduces it's income. Exploding the current creed of Gov. Ali M. Lan- don, Senators Arthur Vandenberg and L. J. Dickin- son. Col Frank Knox and MT Hoo>er that balancing the budget is cure-all and end-a of the depression the New York banker asserted
 If there be any one inclined to over simplify the problem to find a happy solu- ton by simply saying balance the budget let him bear in mind this paradox-a Gov ernment cannot balance its budget by edlct it cannot extract blood from stone nor gains revenues by deflating the national economy.
 Continuing his clear and forceful exposition of the economic philosophy upon which the Roosevelt New Deal is founded the famous New York banker said:
 As long as unemployment here at home continues to be great and Government aid vast scale continues to be necessary, there ought not to be any reverSon to defla- tionary policies. The greatest paradox of Government finance is that fiscal and mone- tary policies must be such as to increase and not reduce the income of the people if the budget is to be balanced Deflationary fiscal and monetary policies reduce incomes and increase the burdens thrown upon the State for relief and public welfare.
 Low rates of interest must be maintained by Treasury policy and Federal Reserve policy if there is to be recovery and balanced bud get Any premature effort to make money dear, in apprehension of imitation which mt ayict Iril dnfe f. retarding recovery increasing unemployment, reducing income and increasing the need for Government relief.
 A private business man may, if un- restrained, by motives of kindiness and good will and social obligation hire and fire as he pleases. raise prices and reduce expenses, curta his business wind it up if it runs at a loss. Government cannot do that Government is the residuary egatee of all the successes and failures of all of us Govern ment must keep itself going and keep its peo- pie going too. Government balance it's budget only by enriching its people not by impoverishing them
 Government must intervene 70 relieve the suffering of the people It is intolerable in the modern world with it's elaborate mechan- ism of trade and finance, its highly indus tralized and mechanized economy that people should be left to starve to endure privaton almost than starvation
 Demolishing the gold standard fetish and the half truths of Old Guard orators as to the mounting public debt having endangered the public credit, the Morgan partner asserted with increasing forcefulness
 It is intolerable that the monetary mech ansm, evolved for the sole purpose of achiev- ing stability and human welfare, should be permitted again to run amuck as it did from 1929 to 1883. It is archaic supersti- tion that money is stable if its value remains fixed in gold only, while prices collapse more less generally to the point of bankruptcy they did in that tragic period.
 Let not be unmindful of the depth of the economic despair from which in three years have emerged, of the vital neces- sity of Government action along those lines however critical may be of the extent and manner in which public expenditures have been made or of this and that phase of monetary policy.
 Comparing the increase in the national debt iron Is and one-half billion dollars in 1880 to 30 and half billions during the five years of depression Leffngwe reminded his audience that the deb than 25 billions in little less than two years" and concluded:
 The credit of the United States and the resources of the American people great that the financial risks involved now, after five years of mounting public debt quite remote.
 Matrmony apparently mad quieting influ'