Smyrna times., 1941-07-17

the savings of people interested in
buying bonds are sufficient to
cover the requirements. Under
such conditions government loans
have little effect on our economic
life. In an emergency such as the
present national defense, where
billions of dollars are involved,
the government will be forced to
buy beyond the savings of the
people. This will mean that peo-
pie will have less money to spend.
So long as this drain does not
remove more than luxuries from
our daily life, and does not i'm
pair the capital funds necessary
to the economic life of COM
munity, no great damage will
occur.
The great danger to the future
of the United States, from an eco
nomic point of view, is that under
the strain of the emergency our
government may overlook the
long range problem of preserving
the economic resources of this
country.
1t is possible to divert capital
replacement funds temporarily
but if this continues too long,
machinery and equipment will not
be kept in repair. AS result,
the machinery will lose its ability
to produce wealth, thus putting
the future income of the country
into jeopardy. .
= Only one sound conclusion can
be drawn, considering the vast
sum the government must borrow
for this emergency and that is,
that it become the patriotic duty
of every American to loan his
government every bit of savings
and every bit of additional money
he can spare. If any of us hold
out and refuse to loan our saw
ings then, by necessity, the gov-
eminent, through taxation, will
borrow the capital from American
business, whether it be the coun-
try store or the giant manufac-
turing enterprise.
Taxation is advocated by many
on the theory that it will check ex-
travagant consumption and avoid
the imitation of credit and prices.
The arguments are good but, up-
fortunately, the politicians usually
avoid effective taxation. They are
willing to tax large incomes but
this fails to check imitation. Taxa
ton of the masses is the only
way to check rapid rise in prices.
This is politically unpopular be-
cause most people fail to under
stand that taxation of rich and
poor, as well as the millions in
between, is for the protection of
everyone. The masses lose more
net income as result of infla-
ton than could possibly be taken
away from them by taxation twice
as heavy as that now being paid.
Of equal importance to the
amount and source of money for
government use, is the question of
how the money borrowed is to be
spent; that is, whether it is put
to productive or unproductive use.
To be productive it must either
increase or protect the capital as
sets of the country, if considered
only from an economic point of
view. Certainly the protection of
our country means the protection
of our assets. Defense for the
protection of such capital assets
should therefore be considered
productive. The building of new
plants and the buying of new
machinery and equipment all
come under the head of productive
expenditure. Because such ex-
penses will be so tremendous, it
is necessary that non-essential ex-
penditures be reduced to a mini
mum.
The important thing to remem-
ber in connection with the pres
ent national emergency is that all
of us can do ourselves and our
country a great favor economi-
cally by turning our savings into
defense bonds,