Evening star., 1950-04-30

QUIZ % SOLlOO1b0C14G A11AR44COAJ
whether or not there is a place
other than Government bonds in
which to store their wealth.
OF course, the historic store
house of wealth to which money
takes flight in times of economic,
| political and social strife. such as
usually follows great wars, is gold.
But, rightly or wrongly. the Amer
lean people are prohibited by law
from owning gold.
All well-trained Communists
know that one of the easiest ways
to wreck capitalism is to debauch
the currencies of capitalistic ma
tions. They also know that the
easiest way to accomplish this is
to. in one way or another, force
capitalistic nations into spending
themselves into destruction. For,
as they we'll know, excessive spend
ing always gives rise to deficit
financing which,. in turn, has the
effect of destroying the value of
the currency of any nation whose
government fails to impose taxes
upon the people or else reduce
expenditures, but instead resorts
to deficit financing as a means
of obtaining revenue.
Germany's Plight Recalled
Indeed, many believe Russia S
policy which has forced us to arm
not only ourselves, but also Eu-
rope, has just such an objective.
That the Federal Government is
now embarked upon a program
which calls for spending hugely in
excess of revenues is common
knowledge. Recently, Senator
George of Georgia, chairman of
the Senate Finance Committee,
estimated that spending in the
1949-50 and 1950-51 fiscal years
will aggregate about $14 billion in
excess of revenues. If this were
an isolated case no one would be-
come alarmed. But since the Fed
eral Government has been in the
red in 18 of the last 20 years, and
since the fiscal years of 194o-50
and 1950-51 promise to be periods
OF high business activity which
should yield the Federal Govern
ment revenues greatly in excess of
expenditures, thoughtful people
are becoming more and more ap-
prehenSive regarding the future
value of the dollar.
Soldiers returning from the last
war listened to stories of the Ger
man and French people regarding
the destruction of their once val
liable currency following First
World War. For example, one
heard from German youth the
story of 30-year endowment in
surance policy taken out by his
father which had a maturity value
of $4,000 marks roughly $12,500
in American money! and which
was paid off in 1922 by the insur-
ance company with single
postage stamp.
Fears About Insurance
incidentally, it is estimated
that the insurance companies in
the United States carry 191 mil
lion insurance policies having
maturity values aggregating $213
billion on which they collect an
nual premiums aggregating $6.8
billion. That this vast store of
claims upon wealth is jeopardized
by the present deficit financing
policy of the Government, increas-
ing numbers of people are coming
to fearD
Another American soldier in
France was told by an older-gen-
Grafton Frenchman that today it
required 100 francs to buy what
one franc would buy in 1914.
Indeed, the soldiers who went to
Europe know that the destruction
of the value of the German mark
and the French franc which fol-
lowed World War I was brought
about by neoessitous circum-
stances arising out of economic
political and social confusion, not
wholly unlike that which prevails
in the United States today. They
know that conditions forced the
governments of those countries to
adopt policies which gave rise to
excessive spending which, in turn
called for the printing of vast
quantities of paper money and
that this policy brought about a
destruction of the value of the
franc and mark. They are Won
dering if the dollar is today sim
ilarly threatened.
These men are asking monetary
experts to tell them whether or
not the United States is headed in
the same direction. And, if the
answer is yes" they want to know
what can be done to reverse such
a trend toward destruction of the
value of the dollar.
To the first of these questions
most experts regretfully answer
yes. To the second one. all advise
that spending and revenues be
brought into balance. Some ad-
vocate achieving this by increas-
ing taxes: others contend spending
should be cut; still others ad-
vocate increasing taxes and de-
creasing spending.
In view of the fact that the Con-
stitution grants (and the Supreme
Court fully conf1rms) to the Con-
gress the power to coin money
and to fix the value thereof, ii
would appear that the people must
rely upon the Congress to exer-
else great self-restraint, and in
general maintain a high caliber
of virtue and integrity, if the
Federal debt is not to mount to
astronomical heights-a develop
ment which we all know would
have the effect of destroying the
value of the dollar. although that