Evening star., 1936-02-03

half lf-billion-a-year farm bill Is to duck
the taxation responsibility entirely by
being for any kind of imitation to pay
the bill.
1t is an especially inpiting es-
cape, because they all kno,D green
backing ,0iH never become laD.
any,UGy. If the Senate does not
kill it. the President ,piu.
Consequently the inflationary
whoopee you have heard so far is only
hint of what you will hear shortly
The din will be terrific. Yet there will
be no greenbacking, at least not at
this time and not in this way.
Little Sincere Belief.
The ultimate proof of it lies in the
fact that there is very little really sill
cere congressional belief in money
manufacturing as an economic policy
This is true even among some OF the
men whose names are now current IN
the papers as demanding 1t.
They will not admit such thing
of course, but they have betrayed their
personal distrust in their own program
in various ways. For instance, they
recently abandoned that feature of the
original bonus bill. although the orig
inal bill was the best legislative kite te
tie their printing presses to.
The fact is the leading liberals In
Congress hdue come around to the
conclusion that destruction OF Gov-
ernment credit will hurt the poor
far more than the rich. The sky
rocketing OF prices and chaotic
finances would also hurt the farmer,
as they see it. They do not really
irnnt it.
There is more bookkeeping profit
in further devaluation than most
people have suspected. President
Roosevelt's original devaluation was
roughly 40 per cent. It brought him
a theoretical gold profit Of $780,
100000.
But that was based on four billion
dollar gold stock. Now there are 10
billions.
The law permits him to shave only
9 cents more out Of the dollar, but
that would amount roughly to II per
cent of a gold holding of 10 billions.
Consequently, he could get a theo-
retical profit of about 100000, 900
out of what would appear to be a
small depreciation. 1t would, how
ever, not be enough to pay the bonus.
Show Ignorance Of Money.
Congressman who are talking about
issuing money against the old gold
profit or any new one, however, are
merely showing their ignorance Of
money.
II the Treasury did issue money
against this gold, 1t would come right
back into the banks the next day and
aggravate the condition Of excess re-
serves. In other words, 1t would only
widen an existing financial wound.
That would be without benefit to
any one.
If the Treasury wanted to use the
gold for the purpose Of paying out
cash, all it would have to do is to
transfer the gold to Federal Reserve
banks and issue checks against 1t.
That would save printing expenses.
The Treasury has already been
following handler method of han
ding its so-called profit. 1t has
used a very small part of it to re-
tire debt, establishing the bulk OF
it in the dollar stabilizatior fund.
The general understanding on the
inside all along has been that this
bulk uould also be used for debt
retirement U1en sterilization
agreement is reached sOith foreign
countries.
The cloak rooms understand that
the Democratic leaders had an UNDER
standing with Chairman Nye Of the
munitions Investigators before giving
him $1,000 more to wind up his in
vestigations. There will be no further
effort in the committee to make broad
interpretations to the evidence, such
as Senator Nye's observations about
Woodrow Wilson's wartime testi-
mony.