Henderson daily dispatch. (Henderson, N.C.) 1914-1995, 1939-02-17
Best Guarantee of Peace
Is Treasury of The u. S.
Continued from Page Cne.)

paid off for it is everybody and,
therefore, nobody's- responsibility.
2. Scarcity of Private Investments:
The drastic slashing of private debt
is one major reason why United
States bond prices have held up in
the face of our wild spending orgy.
The money formerly invested in pri-
vate loans must be put to work some
where else. Much of it has gone in
to government bonds. Compare our
life insurance companies portfolios
today with 1929. The percentage of
funds invested in United States
Governments" has increased over
ten times. Naturally, this scarcity of
private securities has helped to push
up prices of public bonds.
3. Public Bonds Tax-Exempt:
Since 1929, taxes have been pushed
sky-high in the wealthy brackets
But government bonds are free from
normal tax and certain short-te
Treasury notes are even exempt
from sur-taxes. Hence, the big in
weston can get as good a return on
one per cent Treasury note as on
a three per cent top-grade corporate
bond. One of the best ways to curb
public spending would be to throw
out this taX-eXemptiOn feature. With
out it, public borrowing would be-
come difficult. If the politicians can
not easily borrow money, they will
have to spend less money because,
they cannot push taxes much higher.
4. Control of Bank Investments:
The biggest prop for public credit
SO far has been the new Federal con-
troll of bank investing since 1888.
Banks have been encouraged to buy
governments. They have taken the
lions share of the ,OOO,OOO,OOO of
new bonds. A bankers only obliga-
ton is to pay dollars. He does not
have to worry about how much food
and clothing the dollars he pays out
will buy compared with the dollars
which were deposited. AS govern
ment bonds are now exchangeable
into paper dollars, one can easily see
why bankers buy these bonds.
5. Destroying Confidence In Bust
ness: Investors confidence in private
bonds and stocks has been under
mined by attacks on business by po-
liticians; by burdensome taxes by the
fostering of labor troubles Such ac-
tons have forced huge sums of timid
capital into savings banks, trust
funds, annuities-and,f from there in
to government bonds High prices
have created the preston that Unit
ed States Governments are the safest
investment on earth. Yet, their ulti-
matevalu will depend on the ability
of business to make money in order
to pay taxes.
6. Increase In Raw Material Sup
plies: Another reason that the buy
ing power of our dollar has not de-
clined is because there are huge sur
pluses of nearly all raw materials
Since 1888, our output of copper,
cotton, wheat, ETC., has increased
spectacularly. At the same time there
have been feverish efforts by other
countries to boost their production.
For instance, the amount of foreign
cotton grown has jumped so per cent
since 1888.
7. All Nations Have Abandoned
Gold: If all nations had been solidly
on gold when the United States aban
doned it in 1888, I believe the eff
fects here would have been far more
inflationary. However, the entire
world drifted away from gold to-
gether. The government of every
major nation is today spending far
more money than it takes in. Our
fiscal policies, have been unsound
but the policies of most other nations
have been even less sound. Actually
there is more gold behind the Amer
lean dollar today than there is be-
hind the Mound the franc, the yen,
the Ira, or the mark.
8. Unsettled Foreign Conditions:
When all is said and done, the United
States and Canada are the soundest
countries in the world in which to1
invest or to live. Billions of dollars
of foreign ''fear" money have been
sent across the Misunderstanding the
biggest credit reserves in our his
tory. Indentures of loans of one Eu-
ropean country to another are now