Detroit evening times. (Detroit, Mich) 1921-1958, 1943-06-26
Flood ofCash
Feared finder
For Initiation
New Deal Is Attempting
Impossible Controls
BV ARTHUR CAPPER
q. y. senator FROM Kansas
special 70 THE DETROIT TIMES

RMED forces, Allies, civil
isnS-these must have food.
The time is coming when Con-
flicting administration policies,
and divided administration au-
thorities, in the field of food
production. should be unified TO
get food production.
do not believe the p-iCe
subsidy question will be Sett,ei
definitely for some time TO come.
The President says frankly
that $2,00O00C,000 year on
food subsidies is a small amount
compared 10 the $l00,0000OO-
900 being expended from the
treasury in other ways TO WIN
the war.
With the advent of war. gov
eminent expenditures jumped
from around S10,000.O00,000
year TO a pres rate of
approximately 100000, 100000
year.
That additional $4,000. 000,-
600 of government spending
goes for the purchase of goods
that formerly went largely into
production of goods and COM
mOdltleS for civilian conSump-
ton. And also il went into the
pocketbookS of workers in war
industries, and TO producers OF
commodities.
At the same time critical war
materials have been taken out
OF the market. so far as civil
ianS are concerned.
Factory pay rolls have dou-
bled in less than four years.
The supply Of goods TO be pur-
chased by civilians has been
reduced close TO 40 per cent.
Will be cut in half by the end
OF this year,
ONE result has been thai bank
~ accounts in the United
States now total about $780,
00O,00O,OOO.
That rs twice the amount in
the bank deposits IN the year
1929
There also is total of
around $l5.000,OOO, 1000 in cur
rency floating around the
country.
That is three times the
amount OF money that was in
circulation five years ago.
Now in spite of the scarcity
OF goods TO buy. in spite of all
rationing. in spite of huge in
creaSes in taxes, the sheer force
of this huge amount of spend
able money, potential purchas-
ing power-what might be
termed excess money-the
sheer force of this much money
faced with small amounts of
goods in the market, has forced
prices up.
Part of the background for
this situation, with its terrific
explosive infiationary force, is
the original governmental poll
cies pursued.
On the ground that So-called
social gains must not be lost
because Of the war, the admin
iStration has tried to follow
what seems to me an impossible
policy.
IL was decided to hold down
rices-laudable enough.
But at the same time il was
decided TO allow wages 10 go up
also laudable, taken by itself.
The President asked, finally
demanded with time limit set,
that Congress give him power
TO control prices.
But at the same time il was
insisted that Congress make NJ
attempt TO control wages. The
matter of wages would be ham
died by the Executive and the
labor leaders.
Now it is basic that produc-
ton is labor applied 10 raw ma
terialS.
The policy followed meant
that labor costs arose. That
meant production costs arose.
But government said tha.
prices must not rise, 10 meet
increased wages and increased
production costs.
And remember that at the
same time the amount of goods
that could be purchased with
the increased money in the
banks and in the pockets has
been growing constantly less
and less.
Now it is proposed to increase
the inflationary forces of excess
money and decreased supply OF
goods by substituting prices and
wages with borrowed money
from the treasury of the United
States. The professor gets a
subsidy. Labor gets a subsidy.
The farmer does not get SUBJ
sidy.
l maintain that this will still
further increase the purchasing
power of the nation as a whole,
and will also tend TO cut down
production. That is why Con-
gress and the farm groups are
opposed TO the subsidy program.