The Waterbury Democrat., 1938-11-29


 adequate gold re- serve, with foreign trade ruthlessly cut, with capital investments dry ing up, how does she manage to operate?
 The answer Is reasonably plain. In 1883 Germany found herself in much the same position as we found ourselves. Hitler came into power about the time Roosevelt did. Both adopted the plan of raising funds by heavy borrow ings. In six years. Roosevelt bOr- rowed nearly 20 billion dollars; Hitler borrowed 10 billion. This latter figure is a minimum esti- mate. It may be as high as 12 1-2 billion. This is an enormous fig ure for Germany-prOpOrtionately greater than the United States. Of course this has supplied and con- tines to supply a continuous flow of fresh funds into the economic system.
 But Hitler and Roosevelt adopted very different financial plans from this point on. Hitler begged both prices and wages at the point at which he found them in 1883 Roosevelt announced his intention of doing everything in his power to raise both prices and wages. TAX. TAX,
 TAX
 Then Hitler proceeded to tax. He taxed everybody, from the lowest workman to the richest capitalist. He literally drained everyone. Thus when Roosevelt borrowed a billion and spent it, it went into private hands and remained there. When he wanted to spend more money he had to borrow another billion. When Hitler borrowed billion it went tr1- to private hands and there he in- mediately recaptured it by means of drastic taxation so that he got it back and had it to spend again.
 We need pursue the comparison no further. Hitler thus kept the spending power of the people at the lowest point by keeping wages down, but he spread the income over a larger number of people Soon there were no unemployed because all had work-work in the armament plants supported by this enormous borrowing and tax ation.
 But these people have little tc spend even out of their low wages and high profits, because the gov- ernment withdraws it all from them by taxes. All this requires an immense amount of regulation of the minutest variety.
 But one effect of this is slowly to dry up all capital investment. The business men. can make large profits, since everybody is em- ployed and wages are low, but he is allowed to keep so little of his profits that you cannot imagine him investing any of what he does retain to make further profits which will do him so little good. Therefore, investment ends. And as investment comes on an end the government must step in to supply its place by government | supported industries. The effect of this will be gradually to ex- tinguish the capitalist system en- tirely and thus what started out to be a last-ditch fight to save capitalism, ends by growing into a collectivist state. But it is a collectivist state built upon the complete appropriation of the cap- italist and middle classes without correspondingly emancipating the worker. It has in it the seeds of distintegration not only because of its economic weaknesses, but be- cause of its political weaknesses, for presently all classes will op- pose it.
 VIOLENCE PLUS SCARCITY EQUALS CRACKUP
 On the purely political side, the regime is founded on violence and scarcity. The scarcity is bound to increase, and with 1t the discontent The German Is person accustomed to a better life, unlike the Russian who never had anything. The Ger man stomach becomes a factor in the equation. But also the men at the top inevitably will fall out. AL ready there has been one falling out and one bloody purge. There will be others. No revolutionary regime based on brutal violence has ever escaped the quarrels of the leaders.
 These two factors, plus the spiritual forces at work-the re- sentiment of Catholic and large numbers of Protestants. added to the economic factors-makeS the crack-up of the regime inevitable. No one, of course, can put his finger on the date of the crack. But it must come.
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