Evening star., 1938-04-15


can people allow the printing presses
to turn out more and more Govern
ment bonds. converting more and more
of their bank deposits into Govern
ment loans? Shall the Government
b. permitted to keep on living way
beyond its taxable income? And shall
the politicians, headed by the Presi-
dent of the United States, be per-
mitted to spend the funds OF future
generations, piling up public debt
and a Government budget each year
that already cannot be met by taxes?
1t is difficult choice to make
these times in commenting on the
Presidents program. He rightly
asks for self-restraint. He asks for
An elimination Of hate though
he has engendered more Of it than
any other President in all our history.
He asks now that the facts be CLOSED
over and the country be persuaded
to believe that pump printing is its
salvation. He ignores the alternative
programs that have been suggested
to him. the great constructive plans
that have been on his desk for months,
but which he refuses to put into opera
tlon because it would mean a confess
sion OF error and, mistakenly as he
thinks, loss Of Democratic seats
this autumn in the congressional elec-
tions.
Further DevaluatiOn Feared.
The patriotic duty Of the moment
Is not to accept MI. Roosevelt's pro-
gram but to point out its fallacies. To
prevent the American dollar from
being devalued again, to prevent the
paper money OF America from run
ming the course that the German
mark travelled in 1923 is the essence
OF public responsibility for elected
officials irrespective Of party.
This public debt OF the United
States, Federal, State and local, now
has passed the 55.000,0 900, 900 mark,
q record for all times. The only way
this debt can ever be cut down Is by
receipts from taxation, and already
prohibitive percentage Of the ma
tional income is being taken for taxes,
Mr.. Roosevelt never said a word in
his message about the frightful eco
nor1ic effects caused by the pay roll
taxes. He never mentioned the enor-
NOUS bank deposits-Some $59,000,-
600, ,000-which now exist, and yet he
says there is not the necessary ability
to buy the goods being produced
Capital in the form Of savings Is
stagnant in utter fear.
Governments like individuals or pri-
rate business enterprises cannot in
definitely borrow to meet deficits
Governments can cut dollar in half
and force people to accept any none
tary unit issued. But no government
has ever found way to compel human
beings to value paper currencies in
terms OF goods at fixed point. The
government Of France In the latter
part OF the 18th century tried the
gulllotine as a means Of holding prices
down, but bootlegging resulted.
Arguments Advanced Before.
Virtually every argument being made
today for pump printing" WAS made
at the time OF the French imitation
from 1889 to 1893. II was contended
that times were different than they
were in previous depreasions that
government issues We're sood because
they were based on land, the safest
OF all assets" II was urged that a
little "pump-priming" would not be
hurtful but would be helpful All
sorts OF allbiS were worked up and
every reason but the sound economic
reason was accepted by the people who
were misled by the politicians in the
national assembly. Although at first
only 40O,000,000 units of CURRENCY
were issued, the constant demand for
more and more pump printing" to
keep business going finally led after
f1ve wears to total of $500. .O0O, 900
units and then the printing presses
were stopped and the plates burned,
but not until riots by the common
people to get food had indicated the
folly OF the whole economic insanity
which had brought on the pump
priming" policies.
The recent experience of Germany
In postwar days is even more perti-
nent. Gradually as the Berlin govern
ment issued more and more paper
money, prices rose until weeks SAL
ary or wages would not buy a loaf
OF bread. The hardships fell on the
small wage Garner, on the fixed income
recipients like school teachers, citv
and state employees and a host of
others who could not get their income
Increased fast enough to keep pace
with the rising prices.
Where is the similarity todayp
There Is today no opportunity to ex-
change paper money for gold. The
bonds issued by the Government are
virtually forced on to the banks which
Use the citizens deposits for that pur-
pose. There is no limit on the amount
of bonds issued and no means of re-
deeming the bonds or paper currency
for gold. In time, when there is an
irredeemable currency, there is issued
what Is known usually as fiat money,
the principal characteristic of every
imitation in history.
Dilutes Strength Of Bonds.
Most people think that merely print
Ing more money helps business, but
what they do not see is that every
issue OF four or five billion dollars
more Of bonds merely dilutes the
strength Of the existing Issues Of
bonds. Finally comes the day of reck-
oning when debt must be repudiated in
whole or in part and when the people
will not accept paper money unless
they can freely exchange 1t for gold.
To take care OF persons needing
relief Is essential. Of course. 10 lend
money for reimbursable processes as
when certain housing loans are in
sured or underwritten is sound use