The Republican. [volume] (Oakland, Md.) 1877-current, 1939-08-10

boasts is the claim that the Roosevelt
ADMINISTRATION has cheapened money.
Of That there is no doubt Money in the
United States today is worth less than
at any time in our history. So what?
Have New Deal cheap money policies
brought about recovery, have they re-
e1uced unemployment, have they aided
che masses of people in this land?
Well. not so that it could be noticed
The country still yearns for normal
economic activity. Some 100000
.JobIess men and women are still with
us Many business enterprises remain
unable to get away from the edge Of
Bankruptcy. If the cheap money poll
g-ies have done no good, have they
gione any harm? The answer is en-
phafically they have.
As a result of the New Deal blind
cheap money folly, widows and chill
drnu find themselves in sore straits be-
.cause Of the drastic reduction in in
6errst and dividend rates. Every saw
7ngs bank depositor has had his or her
income frightfully cut down because
normal interest rates can no longer be
earned or paid. Gasping for financial
hrea1h are many endowed hospitals,
colleges, museums and other worthy
sns1jutions.
Prize Rise SOugth
The New Deal was only few
anonths old when it began its cheap
money drive by devaluing the dollar
and obtaining authirity to issue
,S3,0Do 100000 in "greenbacks" if it
SAN 1T. The objective, as stated by the
New Deal leadership, was to restore
Ehe commodity price level to that of
1926. 10 increase foreign trade, to en-
courage a revival of business enter
oril>e. restore real estate values by re
lirymg debtors Of a portion of their
Obligations, and to stimulate a broad
rjse In prices so as to quicken the bus
2ness pace.
The failure of cheap money as
price restorative is evident from the
s.art that The Bureau of Labor Stats
ms ndex of wholesale commodity
prizes. on paper dollar basis, stands
~ shout II per cent of the 1926 aver
aga, against so per cent at the bottom
s9f 7bs 1892 depression, rebound Of
ssvao smaller extent than might have
aoe1- expected from natural recupera-
gjVe forces. It's principal effect on our
EorH]gn nade has been the shipment
"a mis- countly-with a territically
qlefationary effect upon world COM
lnc5jty prices and upon world trade -
2f approximately ten billion dollars in
gold
MOL only did the New Deal deliber-
ssre1y cheaper money by its dollars de-
wal1atjun, but all of it's other policies
l1avL rended to further cheaper it.
Crushing taxation and other restric
lions placed upon private enterprise
shut otf The normal demand for invest
ananr money. The only outlet was IN
7glrchasing the bonds the Government
1asned in It's borrowing of billions. In
me absence Of private competition for
r.api1al-stifled by New Deal policies
interest rates declined to the van
lsbing point.
Savings Depositors Hit
Eor This reason every individual,
I.amlly and institution wholly or par
c19aIy dependent upon fixed income,
I3as suffered grievously. These fixed
IZuzdm-S in most cases were not large,
l1-Ur grsy small. There were, for in
salanct. 100000 men, women and
lsnijlbs.n who had accumulated a total
g9f - billion dollars in savings depos-
us winch the banks had invested al
,InDst entirely in fixed income secur-
It4ex.
jTglan there were 60,000,000 policy
hold.-rs in life insurance companies
which had total assets Of about $780,
E54EigpDy000 of which approximately IS
J2ar cEnt was invested in fixed income
securities.
sSnperimposed upon these are 1885,
;95S war veterans who are receiving
Ea.Bsb1ns and other benefits and the
A4,OD0-000 Social Security card car
rierS The thing which menaces them
Is lack Of assurance that the dollars
which the Government is obligated
&c, pay them Will not shrink in purchas-
ing power in manner comparable to
Ehe shrinkage of the German mark
when cheap money brought that ma
Eion 1o financial and political ruin.
AND then there are all of the hos =
pitfalls, charitable institutions, the co..
z,ggas, schools, universities, museums
and art galleries whose income has
4Zhriveled up under the cheap money
blight.
Before the New Deal, savings banks
generally paid per cent interest on
deposits. Since the New Deal, the in
aterest rate has been dropping. Only a