Events and Trends of the Week: Broadcast over Stations of the National Broadcasting Company

By Upton Close

This title is part of UC Press's Voices Revived program, which commemorates University of California Press’s mission to seek out and cultivate the brightest minds and give them voice, reach, and impact. Drawing on a backlist dating to 1893, Voices Revived makes high-quality, peer-reviewed scholarship accessible once again using print-on-demand technology. This title was originally published in 1942.
This title is part of UC Press's Voices Revived program, which commemorates University of California Press’s mission to seek out and cultivate the brightest minds and give them voice, reach, and impact. Drawing on a backlist dating to 1893, Voices Revived

• Language: English
• Publisher: University of California Press
• Release date: Dec 22, 2023
• ISBN: 9780520351967

Book preview

EVENTS AND TRENDS

OF THE WEEK

By UPTON CLOSE

A Broadcast over Stations of the

National Broadcasting Company

DECEMBER 26, 1942

[Mr. Close is not connected with the University of California,

and his opinions are his own. The University distributes these

scripts in cooperation with the National Broadcasting Company

and a group of winners of the Army-Navy E.]

PRINTED AND DISTRIBUTED BY THE UNIVERSITY OF CALIFORNIA PRESS

BERKELEY AND LOS ANGELES, CALIFORNIA, U.S.A.

Events and Trends of the Week

December 26, 1942

ONE OF THE nice things about coming home is getting one’s mail. • —Not all of my mail is nice, I hasten to admit, but it is all worth while and interesting. One gentleman, an auditor, takes me to task for thinking out loud about money; he feels that should be left to auditors and other professionals. Of course, the auditors will have the final say. I know when I am licked.

My professional correspondent points out that, as most everything used as money among us today comes into existence as a debt, it is impossible to pay any sum as it comes due except by creating a new debt, larger by the amount of interest called for. Heroes will be made in this war, he says, and will be mostly forgotten when the debts we are making will still be with us. Debt has its own kind of vicious immortality under the debt-money system.—Well, I’ll probably get fifty letters now from fifty different professionals, and no two will agree, but I still think we nonprofessionals have got to do some thinking on how we are going to finance this war and then get back to peacetime production without panic, come the armistice; and if you’ll bear with me I’ll continue thinking out loud a bit further.

Last week I convinced myself—and you, too, I trust—that war, being destructive by its very nature, is not a moneymaking enterprise unless we plan to take valuables out of those who fall under our power. This we have proposed not to do, and I trust we will stick by that resolution and see that our partners stick by it, too, or else we shall merely be arranging for the next war, and all our present sufferings will merely further bear out the cynical observation of the old German philosopher, that man learns from history that he learns nothing from history. Anyhow, I doubt if the outside world will have many valuables worth taking by the time we get it into our power.

Let us begin, then, with the premise that although war economy and war finance may redistribute our wealth and put some of it in hands which have not held it before, war itself certainly cannot add to the sum total of that wealth. The only things that can add to the sum total of our wealth are work and production. Production used for war is used up. Since somebody called the taxpayer has to pay for the materials and labor, the taxpayer and his nation are that much poorer even though the class known as skilled labor is temporarily flush with money. Big industries work day and night and executives get good salaries, but neither industries nor executives know as yet whether they are as flush as they were before, because they have so much capital tied up in materials, under the orders of many different government bureaus, and because of multifarious, conflicting tax levies and laws for recapturing profits. Meanwhile, small businessmen and many farmers know that, instead of making money out of the war, even temporarily, they must commit patriotic financial hara-kiri. Industries, executives and workers alike, must run the tremendous risk involved in getting back to consumer production and marketing when the forced demand for war goods is over.

Now, setting aside all highfalutin theories of money and debt, it seems to me that the first thing for me to get into my head and you into yours is that we are not storing up for ourselves long, luxurious vacations in Palm Beach even if we are faithfully putting away, as we must, sheaves of interest-bearing bonds. Our government is just another word for ourselves in the aggregate. In the end a people cannot get the better of their government in a business deal, any more than they can get the better of themselves, and a government used by one class to get the better of another class eventually collapses and unloads misery on all classes. History has taught us that again and again.

We are a group of people in an all-out fight, and we have got to look at our little individual shares in war finance as our necessary individual contributions to our own survival rather than as the purchase of a soon-to-arrive lay-off time of luxury and ease, despite all the well-intentioned sales methods of our bond-selling Treasury Department. When an American buys a war bond he is turning that much of his muscle and brain into the job of fighting, as any man worthy the name of citizen and patriot should. When he takes in return for his contribution a piece of paper promising interest, he is simply pledging himself and his fellow citizens to cooperate in enough future peacetime production to restore the enormous losses of war, plus enough more to pay the interest. There is no one to pay us back but ourselves, and there is no way for us to pay ourselves back except through more productive toil. We are not buying a share of now-existent wealth; we are signing up for a joint share in the future national enterprise of creating more wealth through labor and production.

The idea that a war bond is present negotiable wealth causes the heedless cashing in of many payday-bought bonds as soon as the sixty-day limit on their cashability permits, and this cannot go on or our Treasury will not know where it stands. Responsible men recognize that it must be checked by patriotic public understanding of the nature of war finance, and perhaps, too, by a change in the terms of cashability of the bonds themselves.

Our model shipbuilder, Mr. Henry Kaiser, in his spirited address before the National Manufacturers’ Association, recognized that industry must now lay plans to keep labor occupied and to provide consumer goods during the changeover from war to peacetime. He suggested that war bonds be accepted now as down payments on automobiles and other goods.

This particular scheme runs into sales and marketing difficulties. New models and prices would have to be accepted by the public more or less sight unseen. These difficulties would exist in spite of the high prestige of well-known trademarks. They would be the greater if certain government pressures to break down trademark distinctions were to succeed. It would be difficult to apportion orders fairly to competitive makers and dealers. We could hardly do it the way Hitler did when in 1939 he had his Germans put downpayments on motor cars to be delivered after he had taken Europe. But, aside from these marketing difficulties, Mr. Kaiser’s proposal, it seems to me, ignores the fact that if war bonds begin to be turned in promiscuously for goods, then war bonds become to that extent money, and the Treasury, instead of having put out notes to be retired in orderly fashion as the country restores its wealth, would in effect have been printing money. To that extent we would have inflation, and our present dollars and everything valued in dollars would correspondingly depreciate.

But the dangers of the Kaiser plan exist at present with war bonds cashable on demand—at least, if I am to believe one of my sons who was a defense worker and is now a soldier. Our soldier boys are buying their monthly quota of bonds, too. My son says that the boys in uniform as well as the boys and girls in overalls who receive 10 per cent or more of their pay in bonds are going to take well-earned vacations rather than toilsome jobs when the war is over, if their bond savings can be used that way, and if they are not educated in the fallacy of such plans. To quit work and live off our paper, come peace, would assure postwar inflation and bankruptcy in double-edged fashion. For it would present the Treasury with demands for currency to cash bonds—demands impossible to meet save by printing more paper money than this country has ever seen, and it would rob the nation of the only asset through which it can possibly pay itself back, namely, work and production.

Rough figures on national finance given me by responsible bankers are these: We shall have to lend our Treasury in all—which means promising ourselves to repay ourselves—between a quarter and a third of a trillion dollars by the time the war is won; that is, 250 to 300-odd billion dollars in loans in addition to severe taxes. Only by continued work and production on a scale even larger than our war-production effort can we pay ourselves, over an extended period of time. Meanwhile, the only sound way the debt can be carried is for us citizens to buy and carry the bulk of it as individuals, and not leave that buying and carrying to our banks and insurance companies and Federal Reserve system; for we must keep these financial agencies of ours fluid to care for our personal emergencies and for the huge job of changing industry and commerce back to peacetime production and marketing. The Treasury’s net deficit runs about 5 billion dollars a month, leaving more than 50 billion dollars a year to be absorbed, and bankers tell me that to be fair to our finance institutions we citizens must as individuals take 30 billion dollars yearly of this debt, leaving not more than 20 billions for the banks. The most unpatriotic and damaging thing of all is hoarding in safety deposit boxes and socks, since it ties up our present circulating currency in addition to depriving our war budget of needed help. My banker friend, Mr. V. J. Wilson, Past President of the Youngstown Chamber of Commerce, guesses that at least 5 billion dollars of our 14 or so billion dollars of circulating currency is lying, worse than useless, in idle hoards. I have heard elsewhere that a sizable quantity of that total comprises the treasure chests of labor unions. This withheld currency can do the hoarders no selfish good, since it can be only just as valuable as any other paper signed by the U. S. A.

I have seen hoarders in countries going into inflation transferring their hoards or using them to sell their country short; but there will be no country left to which to transfer hoards if United States credit, the world’s most substantial, ever hits the rocks, and I think any attempts at short selling will get short shrift.

The credit of the United States Treasury must rest upon two things: first, the temper and morale of us, the American people, that is, our willingness to do the necessary jobs ahead; and second, past performance. The historian will generally agree to Secretary Henry Morgenthau’s comment on past performance contained in his Field Memorandum No. 451, dated November 3: In all the one hundred and fifty-five years of this country’s existence and despite the vicissitudes of peace and war, the United States has never defaulted in the payment of its obligations when due. I would say that the next Congress does face the necessity of clearing up the tangled and double-edged features of the Renegotiation of Contracts Act, in order to keep our government’s record for living up to its pledged financial word spotless and clean. Let us believe that our Congress will vindicate Mr. Morgenthau in his proud statement.

Particularly does our Treasury ask that hoards of metal coins, from baby’s banks to silver-dollar-inlaid floors, be turned in now. To keep them would be adding the crime of depriving our fighters of essential metals to replace coins.

Let me conclude by returning to the constructive main thought of shipbuilder Kaiser’s address. American life is built on industry. There’s no getting away from that for either worker, boss, or farmer. The prosperity of industry, and hence of all of us, must spring from the genius for organizing and producing among us. That American genius must be left free enough to operate, while at the same time it is held to its responsibility of keeping the American people provided both with well-paid work and with products to be bought with such pay, as soon as the war is over. Many new frontiers are waiting to be opened in methods and products.

For all of us as a nation is the philosophy that the less we weight our craft with hoarded interests and doctrinaire theories, and the more we rely upon our wits and toil, the surer we are to float on the turbulent tide of the war’s aftereffects, whereas anchorage to fixed notions of either wealth or reform will surely draw us under.

Finally, as pertaining to rationing and financing alike, let me quote this profoundly patriotic statement written me by a Denver woman: "We cannot equalize the burdens of war any more than we can equalize human suffering and happiness. It is the doing of my share, however big or little, that counts—not that my share shall be equal by a hair’s breadth to my neighbor’s."

Our E-Winner producers generally took Christmas off in def erence to Mr. Donald Nelson’s kindly suggestion, and I know they enjoyed it, although I know that many were willing to work on Christmas, including the expert mechanics of Mr. Hawley’s Northern Ordnance plant, who worked through Thanksgiving Day—and got an extra Thanksgiving present for it. These men know that enemy submarines do not grant a gunless transport reprieve on even the most sacred holidays. Christmas Day here in Los Angeles, I met workmen who are so anxious to win the E for Excellence pennant for their plant that they voluntarily worked until noon yesterday and went back to the job at midnight. I’m going to break our rule to mention plants only after they have won their pennants, and wish the bosses and men of Cannon Electric Development Company quick realization of their desire; and with this spirit I know they will soon be members of the honor fraternity of American Industry, the proud bearers of the pin that reads E— the E for Victory.

EVENTS AND TRENDS

OF THE WEEK

By UPTON CLOSE

A Broadcast over Stations of the

National Broadcasting Company

DECEMBER 19, 1942

[Mr. Close is not connected with the University of California,

and his opinions are his own. The University distributes these

scripts in cooperation with the National Broadcasting Company

and a group of winners of the Army-Navy E.]

PRINTED AND DISTRIBUTED BY THE UNIVERSITY OF CALIFORNIA PRESS

BERKELEY AND LOS ANGELES, CALIFORNIA, U.S.A.

Events and Trends of the Week

December 19, 1942

LAST CHRISTMASTIME, war came to America; this Christmas will I 4 go down as the time when war came home to America. The extent to which war is coming home to America was highlighted this week by acute food shortages in various areas, by the gasoline crisis on the east coast, and by the resignation of Leon Henderson from the position of National Price Administrator. So far as Henderson’s stepping out represents the loss of an honest, fearless administrator who refused to be bullied, the American people have nothing to compliment themselves about. So far as the replacement of Henderson may prove to be realization on the part of American leadership that necessary deprivations can be accomplished in the democratic and American way rather than the dictatorial and bureaucratic way, the American people and the war effort will have gained by the change. The American public will watch very keenly and wait knowingly to see whether or not the successor to Leon Henderson be a fit man, truly representing an advance in understanding of the people by government and popular confidence in government by the people.

The American people are a willing people and a reasonable people, and what must be done in the way of sacrifices can be done in America just as completely as it is being done in other lands. Already, we are into war scarcities that have become inequalities of scarcity. The American people want true democratic rationing which will come as a relief to the inefficiencies and inequalities which now baffle and irritate and discourage them.

True rationing means saving plus distribution. To get real saving by rationing we must eliminate the patent wastes that are being caused by the first restrictive edicts. Rationing that is scientific and yet considerate must overcome and smooth out the absurdities of bureaucratic literal-mindedness and red tape which make it necessary to run tires the more in order to meet the check-ups on tires, or to use gas in order to go and get one’s quota of gas, or to increase the shortage of man power by hiring many clerks to fill out blanks about man power, or to burden the already overwhelmed transportation system by making it necessary for executives to rush to Washington every few days to straighten out some routine or auditing matter. These days, they have to take an extra clerk along just to stand in line and buy tickets so that the executive can travel at all—which further burdens the railroads.

There are yet more serious ways in which our rationing attempts to date have been stumbling over their own feet. For instance, our rationing of man power—or, to be more exact, our failure to ration man power—has caused menacing reduction of vital food products for our soldiers, our people, and our allies.

I have seen, in the past week, hundreds of high-producing milk cattle driven into slaughter pens because there were no men or women to milk them, and yet, in near-by cities, I have seen various industries operating under the materials plus labor plus fixed profit system, carrying more man power on their payrolls than they actually needed in order to hold their own under the present warproduction system. I have seen stockmen denuding great ranches of beef cattle because the local gas rationing made it impossible for ranch trucks to patrol the range and tend to the feeding and salting and look after the water holes and the line fences. Baffled dairymen think it better to kill milk cows for beef at present high prices on the hoof than to let cows sicken and die from caked udders; it seems better to the stockman to let his range grass wither on the range than to let his cattle run through broken fences; and it seems better to the agriculturist whose tenant farmers have left, and who cannot get machinery to take their place under an allotment of twelve tractors per county, to let his black loam lie fallow. But all these are irretrievable losses to a nation which can win its most grievous war only by saving rather than by wasting.

The public wants true rationing, to smooth out these things. Also, it wants rationing to get past an initial and infantile period of favoritism. The gas rationing board of Amarillo, Texas, brought one such matter to a head. It is composed of nearly fifty men of substance whose time could scarcely be purchased and yet who gave one solid week in joint session to endeavoring conscientiously to untangle and interpret the rationing orders from Washington and fit them to local conditions. Its members and subcommittees continued to give two hours a day to hearings of individual cases. But this conscientious rationing board could not see that Federal farm loan agents were entitled to unlimited gas while the farm loan agents of private banks and insurance companies which have put their whole nest egg in war bonds were limited to A cards. When the Federal agents appealed over their heads, the local board said they would * ‘grant exactly the same ration of gas to the private company agents as the higher authority granted to the Federal agents. The matter was then compromised. But this board and many other boards have not yet been satisfied in their questioning why professional labor organizers must receive unlimited gas cards in a labor market that is frozen as to wages and jobs anyway—while the laborers who support union officials and professional men and businessmen and ranchmen must get along on A" cards or 3100 miles a year. Nor do ranchmen, businessmen, and bankers see exact justice and equality in the multifarious audits that are required of their funds and the pressure brought to bear on companies and workers to purchase War Bonds up to the hilt when labor-union chests may lie at the will of a few men on deposit or even in safety deposit boxes, unaudited and unused.

Not only must rationing be made consistent with itself, but rationing must be made consistent with other enterprises of government, such as man-power mobilization, financing, social security and humanitarian programs; and they likewise must be made consistent with rationing. For instance, the Federal marketing and distributing organization under Secretary of Agriculture Wickard must add to its already vast operations those of providing food for the armed services and occupied territories and the stupendous program of feeding Europe under Administrator Lehman. In the face of both food and man-power shortage, this organization is still buying and distributing tens of thousands of tons of food free or at less than cost to our own impoverished citizens and their children, and I am told the program is not diminishing. That’s the penalty, said one administrator to me, that we are paying for several generations of neglect of the tenant farmer and the creation of a class undernourished and incapable of productive labor. Even if many of its adults can find and do work, we must still feed the children of this class—and they run eight and ten to a family. Yet I find that whole sections of the country have been denuded of our former tenant class, so many have left to obtain well-paid work in the cities, and probably the best incentive to such reform in habits and thinking as is necessary to make workers out of many who have never worked before is the absolute need to earn their own livings. We come up against the necessity of eliminating whatever political expediency may survive in this program, and we come starkly against the question of whom it is first necessary to feed in this crisis—remembering that, if the strong among us fail, there will be no one to extend charity to the weak.

Rationing, if it is to accomplish the purposes of rationing, which are saving of national substance plus even distribution, requires two things: one, brainy and fearless administration; and the other, full and hearty and willing public support. The second will largely depend upon the first.

Now, I want to do some thinking out loud with you about war financing. I don’t know anything about financing, but I’ve got to start thinking about it just as have you, because the two chief ways in which the war comes home to every one of us that is not packing a gun is rationing and financing. The first, rationing, is in essence just saving and providing materials for fighting the war, and keeping ourselves going the while. The second, financing, means keeping the credit of our nation and its business and banks and citizens on an even keel while we are sending all the substance and man power of the country above bare subsistence into the war.

There are two ways of thinking about war finance, one fallacious and one real, just as there are two ways of thinking about rationing control—the dictatorial way and the American way. It seems to me that the basic and real way to think of war finance is to begin with the truth that no people can look upon war as a profitable business unless they expect to build and exploit empire out of war—and even then a war profits only a favored class of the generation that survives the war, and not the generation that fights the war. The promise of Hitler to his people that they would profit from war is what led the German people into this war, and we intend to see that their hopes of such profit are completely dashed. Certainly, Americans cannot build upon a similar fallacy.

It seems to me that the basic fact of war financing is that the ultimate amount a nation can put into the war is the amount it squeezes out of its substance and toil, minus the amount it uses to live on for the duration. When the people of that nation take war bonds or any kind of paper in return for their work or investment returns, instead of demanding food and automobiles and goods and services or the currency that buys such things, they are providing an orderly way for squeezing out of their substance and toil what is needed for fighting. When they promise themselves interest on this wealth that is provided from their substance and toil consumed in war, they are merely promising and pledging themselves to added efficiency and productive capacity after the war—for there is no one to pay them back except themselves, and there is no way for them to pay themselves back except through the continuation of production through toil.

To buy war bonds with the thought of cashing them before the war is over, or primarily with the thought of making money out of the desperate need of our country—which, after all, is just the desperate needs of ourselves—is false reasoning. Attempts to make that false reasoning look true one way or another will merely be steps into inflation. Inflation might make the bonds bring profits to us in dollars, but it would make the dollars worth correspondingly less, and at the same time would subject us to the great extra loss of making all properties we now have valued in dollars also correspondingly less.

I want to think out loud about this a bit further next week with you at this time. But this week, as Uncle Sam needs the greatest Christmas present of his life in the shape of the present $9,000,000,000 war flotation, let us think through to the fundamentals: that if we buy war bonds, as has been happening on a large scale in many industrial centers, only to sell them during the crisis, we are not really helping, and if we individual citizens leave the buying to the banks and insurance companies, as we have done at the ratio of about ten to one to this date, we are not saving ourselves anything, since it is our money, after all, that is in the banks and insurance companies, and to make them put all that money into one kind of security tends to paralyze our economic muscles. And further, to buy war bonds while neglecting to pay income taxes, as it is feared so many will do, or to sell bonds in order to pay taxes, doesn’t help the government finance the war at all, since the Treasury comes short on one account as much as it comes long on another.

What stands behind bonds or greenbacks or any paper that says U.S.A. on it is just the credit of the United States Government, the greatest government on earth, and what stands behind the credit of the United States Government is just the faith of each humble citizen in his government and country and his nation of fellow citizens.

And that is the Christmas message of the Northern Ordnance Company, and its fellow Army-Navy E winners, bosses and workmen both, to all you good listeners to our E for Efficiency program.

And since it is two weeks since we had our last program, owing to the last big football game of the season last Saturday, I have the pleasure of announcing that twenty American plants from Los Angeles here to Philadelphia got new Army-Navy E awards during the week ending December 12, and eighteen more received theirs this past week. Now that I am back in sunny California, I want to close with a little story about a new California-made E product for winning the war. It is the Mustang—not a horse, but a plane—made by the North American Aviation Company. You’ve heard about it before, but this report on its performance is brought back by Major Thomas Hitchcock, youngest member of the Lafayette Escadrille in the First World War. Over there they call it the Silent Death, and it flies high and low, and its speed and ordnance are both so superior and new that they are military secrets. Major Hitchcock saw it come in so fast that at times German pilots never knew what hit them. Wings, and guns on wings, shall be our salvation—and these are Efficiency Wings with deadly guns—turned out by the E workers who are the Phi Beta Kappa Society of American industry.

EVENTS AND TRENDS

OF THE WEEK

By UPTON CLOSE

A Broadcast over Stations of the

National Broadcasting Company

DECEMBER 19, 1942

[Mr. Close is not connected with the University of California,

and his opinions are his own. The University distributes these

scripts in cooperation with the National Broadcasting Company

and a group of winners of the Army-Navy E.]

PRINTED AND DISTRIBUTED BY THE UNIVERSITY OF CALIFORNIA PRESS

BERKELEY AND LOS ANGELES, CALIFORNIA, U.S.A.

Events and Trends of the Week

December 19, 1942

LAST CHRISTMASTIME, war came to America; this Christmas will I 4 go down as the time when war came home to America. The extent to which war is coming home to America was highlighted this week by acute food shortages in various areas, by the gasoline crisis on the east coast, and by the resignation of Leon Henderson from the position of National Price Administrator. So far as Henderson’s stepping out represents the loss of an honest, fearless administrator who refused to be bullied, the American people have nothing to compliment themselves about. So far as the replacement of Henderson may prove to be realization on the part of American leadership that necessary deprivations can be accomplished in the democratic and American way rather than the dictatorial and bureaucratic way, the American people and the war effort will have gained by the change. The American public will watch very keenly and wait knowingly to see whether or not the successor to Leon Henderson be a fit man, truly representing an advance in understanding of the people by government and popular confidence in government by the people.

The American people are a willing people and a reasonable people, and what must be done in the way of sacrifices can be done in America just as completely as it is being done in other lands. Already, we are into war scarcities that have become inequalities of scarcity. The American people want true democratic rationing which will come as a relief to the inefficiencies and inequalities which now baffle and irritate and discourage them.

True rationing means saving plus distribution. To get real saving by rationing we must eliminate the patent wastes that are being caused by the first restrictive edicts. Rationing that is scientific and yet considerate must overcome and smooth out the absurdities of bureaucratic literal-mindedness and red tape which make it necessary to run tires the more in order to meet the check-ups on tires, or to use gas in order to go and get one’s quota of gas, or to increase the shortage of man power by hiring many clerks to fill out blanks about man power, or to burden the already overwhelmed transportation system by making it necessary for executives to rush to Washington every few days to straighten out some routine or auditing matter. These days, they have to take an extra clerk along just to stand in line and buy tickets so that the executive can travel at all—which further burdens the railroads.

There are yet more serious ways in which our rationing attempts to date have been stumbling over their own feet. For instance, our rationing of man power—or, to be more exact, our failure to ration man power—has caused menacing reduction of vital food products for our soldiers, our people, and our allies.

I have seen, in the past week, hundreds of high-producing milk cattle driven into slaughter pens because there were no men or women to milk them, and yet, in near-by cities, I have seen various industries operating under the materials plus labor plus fixed profit system, carrying more man power on their payrolls than they actually needed in order to hold their own under the present warproduction system. I have seen stockmen denuding great ranches of beef cattle because the local gas rationing made it impossible for ranch trucks to patrol the range and tend to the feeding and salting and look after the water holes and the line fences. Baffled dairymen think it better to kill milk cows for beef at present high prices on the hoof than to let cows sicken and die from caked udders; it seems better to the stockman to let his range grass wither on the range than to let his cattle run through broken fences; and it seems better to the agriculturist whose tenant farmers have left, and who cannot get machinery to take their place under an allotment of twelve tractors per county, to let his black loam lie fallow. But all these are irretrievable losses to a nation which can win its most grievous war only by saving rather than by wasting.

The public wants true rationing, to smooth out these things. Also, it wants rationing to get past an initial and infantile period of favoritism. The gas rationing board of Amarillo, Texas, brought one such matter to a head. It is composed of nearly fifty men of substance whose time could scarcely be purchased and yet who gave one solid week in joint session to endeavoring conscientiously to untangle and interpret the rationing orders from Washington and fit them to local conditions. Its members and subcommittees continued to give two hours a day to hearings of individual cases. But this conscientious rationing board could not see that Federal farm loan agents were entitled to unlimited gas while the farm loan agents of private banks and insurance companies which have put their whole nest egg in war bonds were limited to A cards. When the Federal agents appealed over their heads, the local board said they would grant exactly the same ration of gas to the private company agents as the higher authority granted to the Federal agents. The matter was then compromised. But this board and many other boards have not yet been satisfied in their questioning why professional labor organizers must receive unlimited gas cards in a labor market that is frozen as to wages and jobs anyway—while the laborers who support union officials and professional men and businessmen and ranchmen must get along on A cards or 3100 miles a year. Nor do ranchmen, businessmen, and bankers see exact justice and equality in the multifarious audits that are required of their funds and the pressure brought to bear on companies and workers to purchase War Bonds up to the hilt when labor-union chests may lie at the will of a few men on deposit or even in safety deposit boxes, unaudited and unused.

Not only must rationing be made consistent with itself, but rationing must be made consistent with other enterprises of government, such as man-power mobilization, financing, social security and humanitarian programs; and they likewise must be made consistent with rationing. For instance, the Federal marketing and distributing organization under Secretary of Agriculture Wickard must add to its already vast operations those of providing food for the armed services and occupied territories and the stupendous program of feeding Europe under Administrator Lehman. In the face of both food and man-power shortage, this organization is still buying and distributing tens of thousands of tons of food free or at less than cost to our own impoverished citizens and their children, and I am told the program is not diminishing. That’s the penalty, said one administrator to me, that we are paying for several generations of neglect of the tenant farmer and the creation of a class undernourished and incapable of productive labor. Even if many of its adults can find and do work, we must still feed the children of this class—and they run eight and ten to a family. Yet I find that whole sections of the country have been denuded of our former tenant class, so many have left to obtain well-paid work in the cities, and probably the best incentive to such reform in habits and thinking as is necessary to make workers out of many who have never worked before is the absolute need to earn their own livings. We come up against the necessity of eliminating whatever political expediency may survive in this program, and we come starkly against the question of whom it is first necessary to feed in this crisis-remembering that, if the strong among us fail, there will be no one to extend charity to the weak.

Rationing, if it is to accomplish the purposes of rationing, which are saving of national substance plus even distribution, requires two things: one, brainy and fearless administration; and the other, full and hearty and willing public support. The second will largely depend upon the first.

Now, I want to do some thinking out loud with you about war financing. I don’t know anything about financing, but I’ve got to start thinking about it just as have you, because the two chief ways in which the war comes home to every one of us that is not packing a gun is rationing and financing. The first, rationing, is in essence just saving and providing materials for fighting the war, and keeping ourselves going the while. The second, financing, means keeping the credit of our nation and its business and banks and citizens on an even keel while we are sending all the substance and man power of the country above bare subsistence into the war.

There are two ways of thinking about war finance, one fallacious and one real, just as there are two ways of thinking about rationing control—the dictatorial way and the American way. It seems to me that the basic and real way to think of war finance is to begin with the truth that no people can look upon war as a profitable business unless they expect to build and exploit empire out of war—and even then a war profits only a favored class of the generation that survives the war, and not the generation that fights the war. The promise of Hitler to his people that they would profit from war is what led the German people into this war, and we intend to see that their hopes of such profit are completely dashed. Certainly, Americans cannot build upon a similar fallacy.

It seems to me that the basic fact of war financing is that the ultimate amount a nation can put into the war is the amount it squeezes out of its substance and toil, minus the amount it uses to live on for the duration. When the people of that nation take war bonds or any kind of paper in return for their work or investment returns, instead of demanding food and automobiles and goods and services or the currency that buys such things, they are providing an orderly way for squeezing out of their substance and toil what is needed for fighting. When they promise themselves interest on this wealth that is provided from their substance and toil consumed in war, they are merely promising and pledging themselves to added efficiency and productive capacity after the war—for there is no one to pay them back except themselves, and there is no way for them to pay themselves back except through the continuation of production through toil.

To buy war bonds with the thought of cashing them before the war is over, or primarily with the thought of making money out of the desperate need of our country—which, after all, is just the desperate needs of ourselves—is false reasoning. Attempts to make that false reasoning look true one way or another will merely be steps into inflation. Inflation might make the bonds bring profits to us in dollars, but it would make the dollars worth correspondingly less, and at the same time would subject us to the great extra loss of making all properties we now have valued in dollars also correspondingly less.

I want to think out loud about this a bit further next week with you at this time. But this week, as Uncle Sam needs the greatest Christmas present of his life in the shape of the present $9,000,000,000 war flotation, let us think through to the fundamentals: that if we buy war bonds, as has been happening on a large scale in many industrial centers, only to sell them during the crisis, we are not really helping, and if we individual citizens leave the buying to the banks and insurance companies, as we have done at the ratio of about ten to one to this date, we are not saving ourselves anything, since it is our money, after all, that is in the banks and insurance companies, and to make them put all that money into one kind of security tends to paralyze our economic muscles. And further, to buy war bonds while neglecting to pay income taxes, as it is feared so many will do, or to sell bonds in order to pay taxes, doesn’t help the government finance the war at all, since the Treasury comes short on one account as much as it comes long on another.

What stands behind bonds or greenbacks or any paper that says U.S.A. on it is just the credit of the United States Government, the greatest government on earth, and what stands behind the credit of the United States Government is just the faith of each humble citizen in his government and country and his nation of fellow citizens.

And that is the Christmas message of the Northern