“BALANCED ABUNDANCE.”

Manawatu Standard, Volume LVII, Issue 182, 3 July 1937, Page 9

“BALANCED ABUNDANCE.”

HARD FACTS TO FACE. Speaking at the 119th dinner of the Economic Club in New York recently, Air H. A. Wallace (Secretary of Agriculture) asked the business men of America if continuing high taxes on income and surpluses to promote ‘balanced abundance” would not be better than to permit the recurrence of another depression. “Balanced abundance” is a term hard to define (says the Dry Goods Economist in comment), but judging from many of the speaker’s statements it means taking from business < and employed persons, through taxes, ’ an amount of monev which, when distributed by the Federal Government, will materially raise the amount of spendable money for the lower onethird of our population. Let us grant that this would be a desirable object of attainment. Let us even assume those taxed are willing _to carry this burden in order to broaden the inlying opportunities of those with incomes now equal only to the mere necessities of life. But, how can this prevent a recurrence of a business depression ? Isn’t it true business “dips” are the result of over-confidence, which lends to an over-extension of credit? This over-extension in turn brings about an unbalanced condition between capital goods and consumer products —then comes the crash. Such is the belief of the best economists of the world. Will not “balanced abundance” tend to breed over-confidence ? Will it not brill" to the credit world more people willing to gamble on their future than ever before in our history ? Tf “balanced abundance” continued long enough, practically every American family would have its spendable ronrip- mortgaged for at least a year in the future through instalment buying And thus, “balanced abundance ~.,”,1.1 vtcpTiore the stage for the greatest depression of all times. Secretary Wallace also proposes heavy taxation as a prevention of, excessive speculation. We assume he meant on the part of business men and those citizens whose incomes afford them money above expenses. Isn’t it true all business is speculation? W r e recall the time when putting savings or profits into street railway bonds was considered to be the most conservative of investments, jodav street ears are fast disappearing from the thoroughfares of American cities and those former safe bonds, in manv cases, have become mere pieces of paper Yet, bad business men and private individuals with profits or savines been prevented from such investments bv ‘taxation at that time, transportation would have been sot hack several generations. The evolution nf living demands building the new only to tear it down when a better method presents itself. Is this the kind of speculation the secretary has in mind? If so. “balanced abundance” may build a broader base of spenders, but there may be no superstructure to put on it. Without money to use in speculation on future business can there be progress? Isn’t it fair to assume the people to whom money Irom taxes is given will indulge in‘speculative adventures in equipment or personal wants? And isn’t speculation oil the ability tc pav from future income just as dangerous as speculation oil profits from business ventures extending into the future?