The daily monitor. (Mount Clemens, Mich.) 1940-1942, 1941-05-05

Beyond the best that can b done n
"poy-os-y ouoo" toxotion, The United
Stotes is going to have to borrow Q lot
of money to pay for the materials and
monpower OF defense.
Thot is whot the Treasury is under
tokino to do in selling Me new issues
of Defense Savings Bonds which ore to
be launched il onother week. Already
more than 100000 persons every
month ore buying the Governments
Sovinos Bonds at q rote OF more than
ST. 900, 600, 900 year. But il will
take six times thot much sowing ond
lending to absorb the prospective deti-
cit for l94l-42.
Does it make difference whether
the Government borrows from individ-
uois or from bonks? .
Yes. it does. A great difference. In
several woys.
One Of the most important differ
ences is in the effect on prices and in
fiction, which concerns the living OF
everyone.
Another importont difference IS in
the result as to who owns the country
otter the war is over.
To take up the infIotion question
first:
Is the Government borrows from an
Individual, the person who buys the
savings bond hos put aside for the
time the possibility Of spending that
money for some luxury or convenience
in the midst Of the national emergency.
The oct of sowing helps to thot extent
to relieve HE demand for goods in COM
petition with the defense industries ond
to conserve q buying power for the in
dividuoI which will get him probably
more for his money offer the war.
II the Government borrows from q
bonk, any Of several things is likely
TO hoppen to increase the totol ovoil-
oble amount of money in the country
and therefore to encourage the price
inflotion which consumers would like
to avoid. For example. if notionoI
bank buys q Government bond it noy
under the law issue money oooinst the
security of thot bond and lend the
money ueoin to q deposition in oddition
to the money it has lent to the Treasury.
lf the Federal Reserve Bank loaned
money to the Government it would be
J poid out to contractors and others.
most Of whom would deposit it again in
banks, tending to create new credit and
new demands for goods.
The English economist, John Moy-
nord Keynes, urged at the outbreak Of
the war q plan Of compulsory savings
by which certain sliding percentage
Of earnings by workers would be held
out as deferred woee and loaned to
the Government to be returned otter
the war. Though not odopted in form
the proposal has had considerable in
fluence in Britain.
The object Of such plan is not SOLE
ly to help finance the Government BY
having the less wealthy classes portici-
pate in financing the war it would es-
tobIish for them oIso an investment
to be repaid otter the war. The same
Characteristic inheres in the recon-
mendotion that American workers put
away q large slice of their overtime
earnings or other wor-prosperity in
come in defense bonds or other savings.
To do this will help answer the ques-
ton as to who will own the United
Stotes otter the war. 1t will not belong
to Hitler or to any combination Of oe-
oressively-minded nations. Nor will its
resources be mortooeed to small
group within the Notion because they
have supplied the emergency finances.
War savings will mean ofter-wor
security and will help preserve eco
nome as we'll as political democracy.
-Christion Science Monitor