The Western news. [volume], October 12, 1933, Page Page Seven, Image 7

About The Western news. [volume] (Libby, Mont.) 1933-current

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National Topics Interpreted
by William B ruckart
Washington.—The President lately
has been stressing the necessity of
providing credit.
More Credit loans of money to
those who want to
do business but who
haven't the resources after four years
of the depression to get going again.
Jesse Jones, chairman of the Recon
struction Finance corporation, has
made several speeches urging that the
banks make loans freely to the butch
er. the baker and the candlestick mak
er. From elsewhere In the govern
ment, there is the cry that more credit
shall be provided, credit here, credit
there, and credit otherwise. All of
which has moved observers here to in
quire, "whither goest thou. Uncle
Sam?"
Students of finance and economics
who are regarded as knowing their
oats tell me that there must be liberal
use of credit at any time In this coun
try. It seems to be the system we
have built up. Now. more than ever,
I am told, is there a necessity for lib
eral terms to borrowers. They predi
cate their views on that which is the
fact, namely, that In every' community
there are businesses that would like
to get going again on something like
a normal basis If they had the re
sources. These resources, however,
have been depleted by four extremely
difficult years, and consequently the
business men have to proceed slowly.
But the continued shouting that
there must be credit has more to it
than just the fact that money ought
to be loaned. The economists admit
frankly that other factors must be
considered. In the first Instance, when
the banker of your community makes
a loan, he loans your money that has
been entrusted to his care In the form
of deposits In his bank. In the sec
ond place, the business man who bor
rows Is taking a risk, for he has to
put up collateral security with his note
to the bank, and needless to say that
collateral is always sufficient to Insure
the bank against loss. So, If the bor
rower falls to make a profit on the
money he borrows, or If he makes a
bad guess on the Investment of that
money, and loses, he not only loses
the amount borrowed but his collateral
as well. So, even If he has the re
sources to put up the required collat
eral, he is going to think twice before
he borrows.
Summed up. therefore, the question
of private credit or private loans on
liberal terms is not limited to the
banks by any means. In other words,
you can lead a horse to water, but you
can't make him drink. In this case,
sometimes there Is no horse to lead
to water and sometimes there is no
water when the horse gets there.
• • •
But let os turn to a consideration of
government credit. The government
Is putting out money In a dozen differ
ent ways and it is using the semi-gov
ernment agency,the federal reserve sys
tem, to put out other money. Yet the
same factors are influencing that situ
ation as thoSe that are at work in the
field of private finance.
When the federal reserve system
was created during the administration
of President Wilson, one of the dreams
of its sponsors was that It would make
credit easy, that it would provide
money when business needed it. This
has been found to be true. Banks that
are members of the federal reserve
system have the privilege of discount
ing notes they have taken from their
business-house customers, with the
federal reserve banks. What they do
actually Is sell that note to the reserve
bank and get cash for it. but they
agree to take It up in a specified time.
It Is almost like borrowing from a lo
cal bank, except that the transaction
Is between two banks Instead of be
tween an individual or a corporation
and the local bank.
• ♦ «
The federal reserve bonks are oper
ating now on what is known as an
easy money policy.
Easy Money They are loaning
money to the mem
ber, banks on dis
counts at a very low rate of Interest.
In addition, the reserve banks are en
gaged in open market operations un
der which they are buying United
States bonds and treasury notes at
the rates of about fifty million dollars'
worth a week. The theory of this is
that the reserve banks, having an elas
tic stock of money, will put out cash
every time they buy one of those gov
ernment bonds which are acquired
wherever they can be bought That
has put out cash, but from what the
financiers tell me the release of that
currency has not resulted in banks
loaning additional funds to their cus
tomers for the reasons outlined above.
Since there has been no swarm of bor
rowers at the bank windows, the cash
that has been put out by the reserve
hanks simply has found its way hack
Into the banks as deposits. What
then? The banks have taken that
cash to pay off whatever debts they
have at the reserve hanks and have
taken their customers' notes back
to hold them until they mature. Which
is perfectly natural, because the hanks
can earn a profit only from the Inter
est they receive on loans, and It/the
customer paid 6per cent and the bank
discounted that note with a reserve
hank, it would have to pay a part of
that 6 per cent ns Interest on its bor
Demanded
Policy
rowings from the reserve banks.
Hence, with the note back In Its pos
session, the bank gets all of the Inter
est
• • •
Now, as to the loans that are being
made by the Reconstruction Finance
corporation, the Department of Agri
culture, the Farm Credit administra
tion, the Federal Home Owners' Loan
corporation, and whatever other
agency there may be, it is the same
old story. None of them can loan
unless the security is ample. That Is,
a farmer cannot borrow unless he has
a farm which he can mortgage or a
growing crop or some work stock, and
the city man cannot borrow unless he
has a house which he can .mortgage. If
it were not that way, the government
would be putting out money without a
chance of getting repaid unless the
borrower wanted to do It. It takes
no fortune teller or soothsayer to fore
see where that would lead and what
it would amount to in the end. It
would simply be taking money paid
into the federal treasury by taxpayers
and virtually giving it away. Obvi
ously, soon the taxpayers would quit
paying it in.
And having mentioned the taxpay
ers, I gather from conversations with
unbiased observers here that the tax
payers are due for a tremendous shock
anyway before this recovery plan la
completed. The expenditures are so
vast and in so many ways that it ds
difficult, if not Impossible, to tell how
much the thing Is costing. Of course,
as I see It, If recovery takes place and
there Is prosperity abroad In the land,
nobody Is going to object so much.
On the other hand, If the methods em
ployed by the Roosevelt administra
tion fall to bring complete recovery
and the country has to worry along
for awhile In the same condition It
now is, then It appears quite obvious
that the taxpayers are going to raise
enough cane to rout some of the public
officials out of their jobs.
• • •
Secretary Wallace's plan to buy up
about six million pigs weighing less
than 100 pounds and
Wallace Plan one m 1 1 1 I o d sows
Half Success about 10 farrow - as
a means of cutting
down the hog surplus and forcing
prices higher appears to have been
only about half successful. Or, to say
it another way, the program failed.
Department experts won't say why It
failed, but there has been a good deal
of discussion in the Capital that the
secretary's plan missed fire because It
did not take into consideration the
practical, the human side, of the
equation. It was a beautiful theory.
I think the secretary ought not to be
charged wholly with it, however, be
cause It had Its inception in the minds
of certain men who claim to be lead
ers In agricultural thought who put
their heads together with some of the
professors who are so numerous
around Washington. Of course, the
program became the Wallace plan as
soon as he approved It
Prom divers sources, I get the infor
mation that farmers In many sections
of the country held off marketing their
pigs and their sows, even with the
premium the Department of Agricul
ture was paying, because they wanted
to wait for those higher prices that
the Department of Agriculture said
would come. Quite obviously, they ex
pected the little pigs to grow up, and
when they became bigger pigs and
prices were higher, there would be
bigger amounts of money.
The net result of the whole show
was that the Department of Agricul
ture put out only about $22,000,000 In
Its pig program, whereas It had esti
mated that there would be approxi
mately $50,000,000 expended. A part
of the total paid out went to the proc
essors, such as the meat packers and
butchers, as compensation for the
work they did. The country's hog
population was reduced by the extent
of about four million pigs, while In
stead of one million sows being bought
and killed, there were not more than
one hundred thousand.
• • •
Notwithstanding the failure of the
program to buy pigs and sows, the
outlook for hog sup
Expect Lower plies In the principal
markets during the
forthcoming market
ing year is for lower shipments than
in several years. The marketing year
ending October 1, 3933, saw roughly
47,250,000 fiead of hogs slaughtered.
That total, and it is fairly accurate
because ferlerai inspectors see all of
the hogs killed, was the largest In
four years. But the marketing year
Just now starting gives every Indica
tion of a considerably smaller ship
ment and slaughter and that probably
means higher prices, according to the
Shipments
experts.
The relationship between hog prices
and corn prices has been unfavorable
for hog production In the last three
months, and the prediction from the
Department of Agriculture Is that this
condition will continue for probably a
It Is to be assumed that this
year.
will result in a smaller pig crop this
fall than is usual, although since the
plan to buy pigs failed to materialize
into satisfactory results, I do not see
how the experts can guess the dimen
sions of the pig crop,
©. an, Wsstsm N«»ip«!»r UnH»,
Covered Bridge Era Passing
Requirements of Modern Transportation Doom Pictur
esque Old Structures So Long Landmarks in
Vermont; Many Date From Revolution.
Well In the foreground of the
rugged scenic beauty of Vermont are
the covered bridges, which lead many
roadways over turbulent streams and
link the Green mountain past with
modern transportation. Thousands
of motorists who have passed
througn the state will remember the
rumble from floor planks which
echoed Into the roofed spans, as they
passed from sunshine Into gloom,
then out again into the sunlight.
These quaint structures often served
as landmarks, some dating hack to
days of the Revolutionary war.
Previous to 1927 there were be
tween 500 and 600 bridges of the cov
ered type In Vermont. The flood of
that rear, however, destroyed more
than half of them. Today there are
only 240 remaining Approximately
fifty have been replaced with mod
ern structures during the last six
years.
The Vermont department of high
ways. being aware not only of the
picturesque appeal of these ancient
structures, but of the sentiment at
tached to them, has shaped a policy
to retain as many as practical from
an engineering standpoint. However
increasing volumes of travel and
mounting traffic speed have necessi
tated the removal of some of these
spans, especially those on main-line
highways.
Almost all of the covered bridges
have exceptionally strong trusses, but
the floor systems are usually too
weak for heavy motor traffic. It has
been reported In state-wide surveys
Often times new floor systems may
be Installed without great expendi
ture, It has been found, but the chief
locations of aérions disintegration
are at the ends of the structures,
where wood supports have been In
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contact with earth. In a number of
cases, it has been discovered, that
disintegration has progressed to such
an extent that the bridges must be
rebuilt. These structures are, of
course, very old and as time goes on
more anci more of them will become
unsound.
The principal reason stressed for
the replacing with modern, rpen
structures is the guarding of traffic
safety. The old bridges were built
during tiroes when traffic was light
and slow In almost every instance
they were constructed at right angles
to the streams which they crossed,
with the result that dangerous,
sharp-angle turns existed at each
end of the structures This togeth
er with the fact they were narrow
and often low-arched, made many
unfit to meet the requirements of
modern travel
Pride in these covered bridges has
become deep rooted in the state, how
ever, and when safety requirements
are fulfilled the spans are not re
placed unless the expense connected
with necessary repairs or mainte
nance becomes prohibitive or loca
tlon or design cause traffic hazards
which cannot be remedied.
An Important move toward the
preservation of the bridges was made
by the Vermont legislative assembly
this year, when a law was enacted
which specified that the state might
pay two-thirds the cost of mainte
nance on state aid roads.
Although there Is distinctive at
tractiveness to the covered bridges,
traffic experts now declare that their
days are numbered According to
unofficial figures motor travel In Ver
mont this year has established a new
peak, and an increasing Interest has
been evinced by motor vacationists
throughout the nation to tour the
Green mountain territory. With these
facts ft. mind, road builders have as
serted that in order to meet ever
mounting traffic conditions, main line
cowed bridges will have to be re
placed in the futile Yet there will
be a great many on secondary and
town roads which will continue to
support traffic and which will be pre
served as long as possible. However
as no covered wooden bridges are
now being built, there will come a
day when these types of structures
will become extinct, as far as Ver
mont is concerned.
Skyscraper Found to
Have Its Disadvantages
The aimless way in which sky
scrapers have been crowded together,
not only in New York, but in other
cities, is causing-rhuch congestion
For that reason, in the opinion of
Flavel Shurtleft, secretary of the na
tlonal conference on city planning,
the skyscraper is having the fight of
its life to Justify the enormous cost
with which it has burdened the tax
payers for traffic facilities.
"Skyscrapers have been generally
accepted on this side of the Atlantic
as both necessary and desirable."
writes Mr. ShurtlefT in Progress Mag
azine "Theoretically, the height of
buildings is Immaterial, except that
height Is deprecated when It creates
excessive bulk In relation to the traf
fic capacity of the area.
"Even in Texas, where land la so
abundant and cheap that ten acres
are allotted to one steer for pastur
age, at least four cities boast home
made sky lines, which are assumed
to be the hallmark of metropolitan
distinction,
dudes five buildings of more than
twenty stories In height, housing
thousands of tenants on less ground
than would suffice to nourish one
steer elsewhere In the state."
Houston's skyline ln
Aye, That'« the Rub
"How much would you give for
hair like mine?"
"How much did you give?"
Inspiration to All in
Really Spiritual Life
Something was said in my medl
tatlons a few weeks ago of the art
of living, of which so many people
k^-ow so little, a writer In the Indian
apolls News comments. It is one of
the greatest of the arts, and also one
of the most difficult. Strong, clean.
, pure, beautiful and self-denying llv
ing is a supreme work of art and, as
such, an inspiration to all who come
and especially those who live within
the sphere of Its Influence. Delight
as we may. and should. In a superb
literary style. It Is after all. the su
perb life—and it may be superb, no
matter how humble—that exerts the
greater Influence. Is this also **th*
gift of God"? Very obviously not
Such a life Is the expression of char
acter, and character Is the fruit oi
self-culture, self-renunciation and
self-discipline. Its cost of produc
tlon, measured In pain, sacrifice, snf
fering and hard work, is enormous
and yet so great is the result—char
acter—as to be worth all It costs
Perhaps there are few of ns wbe
have not known people who lived
nobly, seriously and yet Joyously, uu
aware of their own goodness. We
have also known people who were
selfish, flighty, without dignity, de
void of any sense of responsibility
for the outcome of their own life or
the lives of others. The first class is
made up of serious artists In the dlf
ficutt art of living. In the secom
class are the botchers—and there are
many of them. The most hopeless
folk are those who would and do dl
vorce beauty and morality and hold
that they are natural enemies. Such
misguided and misguiding souls know
■little or nothing of "the beauty of
nollness "
Poplar Lasted Long
Water does not always cause de
cay of wood, as Is shown by the fact
that a bell tower In Venice was ballt
on poplar piles In 900 A. D„ and
these plies needed only re-enforcing
to be used when the tower was re
built a few years ago.—Kansas City
Times.