Evening star., 1938-10-09
Easy Money
Plaques President
By OWEN L. SCOTT.

once Congress gets back. The White
House at last finds itself on the defensive
against ideas planted by its own idea men
during the past five years.
Bootstrap-lifting is the central theme
of each of the latest and most popular
ideas. All involve the promise Of free
and easy money.
Senator Key Pittman, chairman of the
Senate Foreign Affairs Committee, is
thrilling cotton belt Congressman with
the idea Of trading American cotton for
foreign silver. His idea Is simple. Sena-
tor Pittman would simply offer 10 pounds
of American cotton for an ounce of for
eign silver. Then. against the foreign
silver he would issue dollars using those
dollars to pay cotton growers 1873 cents
pound for their cotton. Thus, the for
eigners would have the cotton, the Gov
ernment would have the silver and the
cotton growers would have a prosperity
income Presumably everybody would be
happy.
This Is exactly as simple as perpetual
motion. Like dollar devaluation and sill
yer buying-two experiments of recent
years-it springs from the idea that there
Is magic in gold and silver Nobody takes
time to figure out what foreigners would
do with millions of bales of cotton over
and above the amount that they now are
able to use, or what the United States
eventually is going to do with gold and
silver when all of the worlds supplies of
those metals are stored underground in
Kentucky or in the new silver vaults at
West Point.
Yet that typeIof money magic is only
one of the many varieties now generating.
A group of Southern Senators is pro-
noting the further idea that the Govern
ment should start issuing new currency
against existing reserves of metal and
should keep on issuing currency until the
price OF cotton reaches 18 cents a pound.
Congressman, developments show, are
just waking up to the fact that gold and
silver now on hand can serve as the base
for SIS 900 900 900 in new currency over
and above the six billions now outstand-
ing. This vast currency expansion can
occur without even so much as an amend
ment to an existing law.
With voters crying for one type of sub
sidy after another, all eager to get some
thing for nothing, Congress can hardly
be expected to overlook the opportu-
mites that past New Deal policies have
opened up
Most numerous among subsidy ideas
are the old-age pension plans sprouting
with such remarkable vigor that both the
White House and the Treasury already
are becoming frightened.
The "$30-every Thursday" idea in Cali
fornia and the "$25-every Tuesday" idea
in Kansas are Just symptoms of the
strongest single political force now loose
in this country. Republicans of Massa-
chuSetts have agreed now to work for
vote on the Townsend $780, month old
age revolving fund plan. Republicans
swept Maine on the same issue. Candi-
dates for Congress of every stripe and
in every corner of the Nation, are going
on record in favor of old-age pension
schemes that involve money manipula-
ton
Most modest of all of the ideas is that
the Federal Government should guaran-
tee $50 month to all persons over so
years of age. This idea calls for $50 a
month, not $50 a week. Yet. the Govern
ment's experts advise, to pay $50 each
month to every person over 60 years of
age will cost $4,000. 900 900 year to start
with, and this cost will rise rapidly
toward $4,000 600 900 owing to the rising
proportion Of old people in the popula-
ton
Old-age pensions, even on a modest
basis, involve vast numbers of dollars
Congress naturally likes the idea of CIV
ing away lot of money. but its members
hesitate to provide ways and means of
raising the money needed to make pay
ments. This same tendency toward gen.
erosity-with borrowed money-iS re-
hected in farm subsidies and unemploy-
ment subsidies and subsidies of various
other kinds
The result is that President Roosevelt
and his aides actually are worried over
what is going to happen when the exist
ing social security law is opened for
amendment in 1889. The fear is that
old-age pension advocates will make
holiday of their opportunity, emasculat-
ing the present program, based upon the
idea of having pensioners bear part of
the load during their working years, and
substituting for it some simple plan to
hand out cash to old people without pro-
viding a source for that cash.
1t is this growing tendency to work
magic with borrowed or printed money
that caused one of the Governments
most astute and far-Seeing economists
to remark:
There is coming to be grave danger
that the economy of the United States
will be severely strained, If it doesn't
crack up, on the refusal of officials and
of people generally to distinguish between
money as an end in itself, and money as
merely a mechanism to facilitate the ex-
change of work for goods. Work and pro-
duction provide the Nation with its real
income The false idea is spreading rap
idly in this country that, If there just is
more money floating around-whether
that money is printed and handed out
or is the end product of work-all will be
we'll That idea can wreck the country"
Ideas that are getting broadest political
support in this country are not ideas de-
signed to produce balance in the eco
nomic set-up that will permit more peo-
pie to go to work producing goods and
services of benefit to the Nation, but,
rather, they are ideas designed to solve
the problem of how to make a living
without working.
Most OF these ideas revolve around the
use of borrowed dollars or dollars that
are created out of thin air through one
of the many kinds of available money
magic. If farm subsidies can be paid
through an exchange of silver for cotton
or wheat on an artificial basis, or old-age
pensions can be paid by the simple proc
ess of turning on the printing presses, or
w. P. A. jobs can be created by general
ing more and more credit, there is no
reason why Congress should not decide
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