Detroit evening times. (Detroit, Mich) 1921-1958, 1944-10-31
Says Election

By LEWIS HANEY

A wilmington, Del, reauer
asks:
isn't only part of the nations
so-called savings or liquid
assets In spendable form:
There really isn't any 100 bill
lion dollars of available purchas-
ing power on tap, Is there?"
Answer: AS l suggested in my
recent discussion of liquid as
SETS" you would have to assume
that the goods are available for
purchase Currency is little real
good if there is not plenty of
= goods.
Another limitation on the
''liquidity" of the alleged assets
or savings is the fact that taxes
are taking a larger part than
formerly.
The main drawback, however,
Is the liability of the public debt.
If people try to cash in their
bonds. the government directly
or indirectly has to buy" them
back. which merely means home
bonds or more notes issued in
the place of the bonds the gov
eminent takes back.
HOW MUCH GOODS.
Thus the whole answer comes
down to the question, how are
people 10 use their vast liquid
assets" that now lie idle, with
out bidding prices up? And II
prices rise, how much goods will
the billions of dollars" buy!
My thought is that the huge
amounts of demand deposits
and currency are "spendable."
and that the government bonds
can be turned into currency.
But as all these funds are spent
they will force prices up and
up, thus greatly reducing their
real purchasing power. Probably
the only way all the money can
be spent is to let prices rise so
that people will actually need
more money in order to buy
limited quantity of goods.
New York City asks:
"How will the election affect
stocks, particularly the steels:
IL Roosevelt Is elected, would
stocks slump?
Answer: My guess is that the
market is now discounting the
chance that the New Deal may
win the election. The betting
still favors Roosevelt. If this
guess is right, stocks would not
slump if he were to win.
In general, think that re-
CARELESS of who is elected.
stocks are going to show post
war irregularity. but eventually
reflect big postwar boom. If
Dewey were elected, there
would be less reaction, and
bigger postwar boom than il
Roosevelt were elected. This
would be due to greater conf
dence on the part of investors.
I think that the sounder steel
stocks will do somewhat better
than average.
REGULATION TREND
Another New York City
reader asks:
isn't there q strong tendency
toward extreme government
regulation of business that may
bring on naturalization of our
wealth? Isn't the Flanagan bill
to regulate the coal industry q
case In point?"
Answer: Yes to both ques-
tons. The bill sponsored by Rep.
Flanagan of Virginia is much
the same as the old Guffey Act
declared unconstitutional in
1896. 1t is a good illustration of
selfish group seeking protec-
ton at the expense of the gov
eminent" The coal industry has
much trouble with competition.
Instead of shutting down the
losing mines, however. some
coal operators and mine work.
ers want the government to pro-
rate production, limit working
hours. and raise wages and
prices, with the idea of guaran-
teeing the incomes of labor and
capital. The inevitable result
would be to unload the wasteful
operation on "the government"
Other backward industries
would get the same "protec-
ton" Total production would
shrink and standards Of living
be reduced for all of us. Even
the Russian Communists have