Evening star., 1939-01-17

| ~ AN1 WAN 0k<SAS AeASV AAA644U AL VI
third of the total national income
spending, In fact, more than twice
each year the total value Of all the
products that come from the soil
and under the ground-all the prod
ucts OF the farm, the products of
the forests, and the products of the
mines-those things that replenish
and add to the wealth of the Nation.
But even that is not all. Public
spending has been firmly entrenched
in every nook and corner of America
Governmental extravaganza has be-
come habitual, as spending feeds on
more spending, and the Nation faces
the danger of larger and greater
appropriations. The menace of con-
tinued deficit spending, now firmly
rooted, may be worse evil than
what has already been done.
Policy Held Tragic Failure.
1t is my considered judgment, in
the light Of the facts, that pump
priming has been a tragic failure;
tragic in that our unemployment is
nearly as great as before, and tragic
IN the constant increase in the num-
Der of those on relief, and even more
tragic in contemplation Of the bur-
dens that will be placed upon us and
upon future generations.
In recent letter censuring me
because of speech I made In Bos-
ton condemning waste and extrava-
gance in Government, the Hon. Mar
rlner S. Eccles, chairman Of the Fed
eral Reserve System. announces and
advocates a new spending policy
one that will make deficit spending
contribution to the purchasing
power Of the country, one that may
make deficit spending a part of the
regular expenditures of our Nation.
The President. in his message to
Congress on January 3, adopted. in
substance, this new fiscal program,
and thus 1t becomes the policy of
the administration.
The Eccles' program is that the
budget of the Federal Government
cannot be balanced except by the
restoration Of national income. He
proposes to attempt to restore the
national income by more pump
prlmlng. The plan is that when an
$4,000 100000 national income is
gained the budget will automati-
cally balance itself by increased tax
yields without economy or retrench-
ment. We are to continue to bor-
row and spend until this $8O,OOO.-
100000 national income is secured,
regardless of how many years it
takes and how. much more debt will
be incurred. Neither Chairman
Eccles nor the President guarantees
or predicts when this national in
come of $4,000 100000 will come.
am duly sensible of the scorn
with which Chairman Eccles ridi-
cules my devotion, as he expressed
1t, to the time-old virtues of thrift,
frugality, self-reliance and industry
1t IS quite true that I do not agree
with those who regard thrift as a
vice or a mistake. or who regard
spending for spending's sake as the
highest virtue and wisdom. still
agree with the philosophy of the late
VIII Rogers, repeated often but not
often enough, that I'VE ought not to
spend money we haven't got for
things we don't need"
I do not believe prosperity is born
OF debts and takes. I do not believe,
as Chairman Eccles does, that the
Government can borrow money and
purchase prosperity. There is, of
course, a temporary stimulus given
to business by spending borrowed
money, but genuine prosperity can
only come from the productive in
dustry of the citizens of our Re-
public To me it is utterly fallacious
to attempt to justify the huge in
crease in the Government debt by
the statement made by the President
and Chairman Eccles that the total
OF all debts, public and private, is
no greater now than in 1929. In
stead of being reassured by this
statement, it is to me alarming to
know that the very thing that was
one OF the chief causes of the crash
OF 1929 still exists today as a poten-
tlal evil-to breed another depres-
sion. The fact is that the national
income of the United States is to-
day Is per cent less than it was in
1929. and If the total of all debts Is
the same, then these debts must be
paid out of an income that has
shriveled Is per cent.
Eccles' Theory Called Unsound.
The contention of Chairman
Eccles that the same general eco
nomic considerations apply to both
private and public debts is to me an
utterly unsound economic theory. A
private debt incurred in business is
intended to be productive, a public
debt is not. A private debt is con-
tracted for expansion and to give
new employment. A steadily in
creasing public debt means wasteful
Government expenditures which
pile steadily increasing tax load
on the backs of the public and
makes it more difficult for men to
get off of the relief rolls and on to
the pay rolls.
In our Government of checks and
balances, the check on excessive
spending comes from the tax-con-
scious citizen who can see where his
tax money goes and criticizes its use.
Spending by increasing the debt pre-
vents the taxpayer from being con-
scious of the tax burdens to be i'm
posed upon him later.
A private and a public debt are
essentially different in that private
obligation is the obligation of those
who make it, whereas public debt
is first lien on every acre of land,
on every house and home. on every
piece of property, on every service
that is rendered, on every transac-
ton that is made.
When our leaders tell us, in justi-
fic9t'on of the constantly mounting
public debt, that today the total of
all Indebtedness is as much as in
1929, frank admission is made that
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