Evening star., 1937-03-28
CUTS in EXPENSES HELD
ESTCHECK ON IMITATION
Roosevelt Could Help by Stopping Iarge
Sums Now Spent for Subsidies and
Relief, Observer Declares.

stand imitation and It's effect upon
himself can And light by consider
ing what has happened to his own
dollars during the last four years. In
1888 a dollar would buy nearly
bushels OF wheat; today dollar will
not buy ! bushel In 1888 a dollar
would buy about 25 pounds of copper:
today a dollar will buy only about 8
pounds OF copper. True, copper and
wheat are extreme examples. While
many commodities have not had rises
like copper and wheat, yet these two
commodities are significant, for in
the past they have often been the lead
ers in price rise that later became
general
Rise in Prices in Years.
To put the case of copper and
wheat another way, If man in 1888
had 500 in the savings bank and if
he added another sl00 each year since
he would today have s40O. But his
S400 today, with respect TO copper and
wheat and some other commodities,
would not buy him more than his
500 would have bought in 1888.
Much of this fall in the purchas-
ing power of the dollar, much of this
rise in prices, so far. cannot fairly be
called imitation Much of it has been
natural rebound from the abnor-
mally low prices of 1888 But from
the present point onward, if there
should continue to be a similar rise
in prices and therefore a similar rate
Of fall in the purchasing power Of
the dollar-in such future event. the
prices most certainly would properly
be called initiation
Will initiation take place? Increas-
lngly, the most competent authors
ties answer yes there Will be infla-
ton, in one degree or another.
II 1t takes place, what will be tho
cause? Some of the cause has al.
ready taken place. Some of the in
aation, if it comes will be due to
| past policies of the administration.
Possibly it is not too late to avert
violent imitation, If the administra-
ton should now drasticallv change
the policies which have created the
danger, it is possible the danger might
/ be averted
Foreign Influence.
Yet it should be added that some
Of the causes of the recent extreme
price-rlse are not and have not been
within the administration control,
and are not chargeable to it. One
recent cause accelerating the price
rise has been purchase by foreign
governments Of metals and other CON-
modities for armament. Also, in
other countries abroad tends to make
imitation within the United States
more likely.
The direct way to avert infatio
would be for the administrati ion to
cease borrowing money and to cease
manufacturing new money. The
manufacture Of new money, in the
form of bank deposits, by a process
too complex to go into here. is per.
/ haps the largest single cause of in
fiation. The manufacture of new
money is done, and the borrowing is
done, for the purpose of paving out
| money to large groups, in the form
OF subsidies, relief. and the like.
| Will Mr.. Roosevelt stop this pay
! ing out Of borrowed or manufactured
money? There have been signs ever
since election that he would like to.
From time to time without much noise
about it, he has tried to reduce the
relief roll and the quantity paid out
for relief
Unable to Retrench.
But every time he makes this eff
fort, uproar comes back at him.
Some two weeks ago six Governors
Of States demanded that he take
| back certain reductions in relief ex-
penditures. More recently 35 Mayors
Of cities demanded that he increase
the quantity paid out for relief. These
Mayors and Governors do not have
the responsibility for reducing the
| national expenditures. With them it
is to some extent a case of passing
the buck to the President. The Gov
ernors and Mayors know that reduc-
ton Of payments coming from Wash
ington may give rise to some increase
in payments for relief by cities and
States, and consequently to heavier
local taxes This the Governors and
Mayors do not want.
From the time Mr. Roosevelt adopt
ed the policy of having the Federal
| Government take responsibility for
relief he was subject to what he is
/ now experiencing. 1t was certain that
States and cities would heap the bur-
den on Washington
Will the President. in spite Of up
roar, reduce expenditures and there
by reduce borrowing and manufac-
ture of money? He could. if he wege
, determined about it. Many, inc!ud-
ing some OF Mr. Roosevelts friends
as we'll as his critics, say that he will
| hesitate to do anything which would
make him unpopular with large
groups.
If the President does not take the
direct path toward averting imitation,
the path of reduced expenditures, he
may be tempted to take the path of
having the Government fix prices
Such an attempt could be successful
for only brief time. 1t would be
followed by violent imitation.
(Copyright 1872