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INTRODUCTION
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A. Opening statement
1. No sectionalism in program to be presented.
2. Ideas not theoretical, as they have been gained thru contact
with large variety of businesses (Give list)
3* No deviation from sound money* in fact, program will strengthen
and preserve gold standard and sound money policy,
4* Program designed to accomplish restoration of purchasing power
of entire people, which is essential to balancing of budgets,
national, state and individual, and proper standard of living.
B. Depression due to lack of leadership in dealing with money problem.
1. In real world, no cause for unemployment.
a. People want and need everything we can supply them.
b. Production solved.
2. Problem is purely one of distribution.
a. Must provide purchasing power to use up consumption goods
produced.
3. If correction not brought about, revolution would ensue & any
rebuilding, slow and difficult, would be under a new order.
U* Leadership has delayed & now first aid measures are necessary.
5# Old economic theory must go—it has ended* Present tech. &
mach. age requires modified capitalist*.
C. Ifay has money world failed to "serve* us and has been tyrant instead?
MONEY;
1. Inflation & deflation mean fluctuating dollar.
2. Fluctuation is harmful only because of debt structure.
3. Debt .structure (and credit structure) are fundamental in
capitalistic systems, but uncontrolled operation of system
causes the fluctuations.
(l) Too much savings is one result of this uncontrolled
system.
(a) Creates excess of capital goods at exp. of
consumption goods.
U. Present high debt struct tire is result of unbalanced distribution
of wealth production.
a. Too much wealth (product of labor) diverted into capital
gpods, resulting in inability to consume over-production
except by increasing credit to consumers*
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b. When credit saturation was reached, debtors began curtailing consumption so as to have margin to apply on debts,
c* Curtailing consumption resulted in falling prices & unemployment*
d. Decreased earnings in all business required lowering of
wages 4 time, completing circle of deflation, with national
income reduced 50%
e* Fixed charges* remaining same in dollars, actually greater
than ever, leaving too little of national income to support
the population*
tP Pressure of debt structure requires economy on part of
individuals, corporations, cities and states, leading to
distress*
g» Debts cannot be supported under such conditions, hence
delinquent taxes, foreclosures, receiverships, bankruptcies
and moratoriums, all leading to break-down*
5* Government vs. non-government action*
a* Indiv* cannot resist need for economy without "going broke*.
Same with corporations, cities & states*
b* Fed* Government has power to resist thru functions not enJoyed by others, to wit*
(1) Controls gold reserve*
(2) Issue of money & credit, hence
(3) Controlling prices*
{u) Power to tax, hence
(5) Control of accumulation and distribution of
wealth production*
(6) Mobilization of all resources of the nation for
benefit of the people
(7) Example of government control of economic system
shown during war, when
(a) Enormous production and consumption maintained in spite of war waste.
(b) Profit resulting evidenced by U*S* debt to
its nationals & goods furnished Allies*
(c) No balancing of budget deemed essential*
(d) No unemployment*
(e) Ho lack of money.
6* Lack of confident* now not due to unbalanced budget, but revival
of business & employment would restore confidence & increase
profits & income so that the budget would be balanced, U.S.,
state, city & individual.
a. Efforts of B. F* C* & F* R* B* not effective, in spite of
magnitude, demonstrating futility of meeting present
situation by extension of credit alone*
b* Scaling down debt structure to meet present price levels not
desirable*
(1) Reduction of creditors9 claims would reduce buying power,
again forcing prices down*
(2) Practical difficulties enormous*
(a) Time required would indefinitely prolong the
depression*
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(b) Would require further liquidation of banks,
insurance companies and all other credit
institutions, this bringing further hoarding
and deflation, eventually forcing us off the
gold standard & bringing uncontrolled inflation.
c. Present money is adequate to support a post-war price level*
(1) Shortage is only apparent, due to hoarding & lack of
velocity* (Velocity defined: turnover of bank deposits)
(2) 1£ billion more of currency is now issued than at peak
of 1929 business*
(3) Velocity in 1929 a« vs. 1932 is U5 to 16, whereas
deposits only off 22^.
d* Our money supply, tho adequate, is failing us because of
(1) Mal-distribution, being too abundant in creditor sections
and too scarce in debtor sections, chiefly agricultural
areas*
(a) This is result of unbalanced division of
national income during years of prosperity.
(2) This mal-distribution prevents normal velocity of money
and can only be corrected by government action*
(3) With 1/3 of entire population dependent on agriculture,
it is impossible to attain national prosperity without
restoring purchasing power of our agricultural population.
D* SUifclAKT OF INTRODUCTION $ To bring about a revival of business to the
average of the post-war period, a 5-point program is offered*
1. Immediate gift to states on per capita basis of $500,000 to
relieve destitute*
2* Provide additional #2,500,000,000, or more if necessary, for selfliquidating projects & loans to cities, counties & states for
public works on liberal basis and at low rate of interest*
3* Adoption of domestic allotment plan, or similar plan, designed to
regulate production and raise prices*
Refinancing of farm mortgages on a long-term basis at low interest*
5* Permanent settlement of foreign government debts, upon a sound
economic basis*
@FedFRASER