The Ely miner. [volume] (Ely, Minn.) 1895-1986, 1936-08-27

ciNoSS tiiot JOO NCiAASs aAStNS
cake and eat it toe.
If I should attempt to analyze the
situation in the light of personal
equation I think I might properly
say that if I 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 spent that
$3.50 and had no other resources,
l 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 I am just one individual,
I entertain considerable fear about
those recoverable assets in another
respect. For some reason-and
think I can state it doubt that
very large portion of those recov-
cradle assets ever will be collected.
/ have a bunch that in the next
fifteen or twenty years the bulk OF
those debts which the Roosevelt ad-
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.
recall that the late Albert c.
Richie, four times 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, ZOO, 900
of war loans made to European ma
lions.
It is 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
I 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 I 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 uSLlOl1 l. 1lioilSS III PS-
ration carries those loans on its
books and counts them still as val
id. But 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 good
many thousand forecloSed proper
ties on its 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 to which
the home owners have obligated
themselves.
A more striking illustration, il
| 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 wher
they call for cancellation of the
loans?
While the bonus for the ex-serv
ice men is a dead issue, every one
knows how representatives and sen
ators capitulated d the demands o.
the veterans lobby. Picture fol
yourself, if you will, how much
| stronger the demand will be wher
a whole community sets up how
to have the funds it has borrowed
from the federal government final
ly declared to have been just gift
and not a loan.
There is yet another phase tina
relates back directly to the recov
cradle assets. 1t is the question o
taxation.
Some far-sighted men in politic'
believe that, regardless of the out
come of the Novem
IFeotCt Der electlonS, ther'
Economy will be a wav
| of economy SWEEP
over this country. They hold to tn
conviction that the country is be
coming tax-conscious and that soon
! er or later the bulk of our citizen
are going to realize the staggering
burden to which they have bee
committed by the spending spre
of the Roosevelt administration
When they do, of course, the re
action is foreordaineo. The Amer
can people always have taken tn
bit between their teeth and hav
dealt definite blows in carrying on
their desires regardless of the sut
. iect of their wrath. Those VIII