Detroit evening times. (Detroit, Mich) 1921-1958, 1941-01-11
in THE
NEWS
Saturday Symposium
New York, Jan. s. 1911.

New York, Jan. s, 1871.
Dear Mr.. Hearst:
I AGREE with you.
j The spokesman for the Fed
eraI Reserve System have selected
an INOPPORTUNE time for ad-
vocating transferrence Of respon-
sibility I'm monetary management
from the administration to the
banking world.
Though the domestic economic
emergency of 19SS-S4, when ex-
traordinary financial powers were
vested In the President and the
treasury. may be over. the nation
Is clearly still operating In q
highly abnormal period.
With acceleration of national de-
tense injecting new abnormal pow
ers into the situation, 1t seems
desirable to center responsibility In
the President. rather than to strip
him OF existing authority.
The need of the hour Is centraIi-
zation of authority for full speed
ahead on armament preparations
rather than to risk additional de-
lays and confusion OF counsel
through dividing responsibility. II
would be hazardous for Congress
20 redistribute financial authority
In such manner as to risk conflict
In aims and detectives between
the commander in chief OF the
army and the navy. on the one
hand. and private bankers and
members of the board of governors
OF the Federal Reserve System on
the other.
\ In the, circumstances, IL would
seem wiser for Congress 10 defer
until a more normal and quieter
time the long term question OF re-
codifying the banking laws, and
determining whether the Federal
Reserve System or the treasury
should have The ultimate power In
the financial field.
Meanwhile, the administration
should have the power TO estab-
iish fiscal policies consistent with
its objective of total defense.
During the emergency, the Fed.
eral Reserve System and private
banks can play an important and
useful role in an advisory capacity
but need not receive mandatory
power to thwart the objectives Of
the administration. which In any
circumstances will be held strictly
accountable by the American peo.
pie for results.
With the tremendous impact or
the market OF buying Of war mate.
rails by the United States and
British governments, II must be
apparent that the economic trend
will not be determined by conven.
tional credit management by the
Federal Reserve system.
4 vastly more important influ-
ence will be the volume of gov
ernmental spending and the mean,
Of financing IL.
Sober thought must be given by
the admlANstration and by bankers
10 carrying out the program with
minimum threat 10 the longer
y term soundness of the dollar.
This need runs beyond conven
tlonal monetary manipulation. ant
calls for rigorous economy In tho
non-defense expenditures Of gov
eminent, national, state and local
As corollary of this. on thu
revenue side, there Is need for q
comprehensive, scientific, and non
punitive tax program.
Needlessly oppressive and dema
gogic taxes inject a deflationar,
influence. which impairs nationa
productive efficiency.
Since the need for revenue j
e. admittedly huge, Congress mus
explore the field of productive
taxes, which can be raised with
minimum of obstruction 10 the ma
tons industry. In light OF tn
emergency, Congress with a. fresl
viewpoint. should re-eNamine tn
great revenuc-producing possibili
ties of a relatively painless, gen
erai manufacturers sales tax.
The reserve authorities tall
gravely about the potentialities o
initiation. about which the natiol