PAGE SIX
UNIVERSITY DAILY KANSAN, LAWRENCE, KANSAS
SUNDAY, JANUARY 12, 1941
The Kansan Comments -- EDITORIALS BOOKS LETTERS NOTICES
But there is a less generally recognized consideration of perhaps greater importance than any of the above: one which is the more challenging because we are given to believe that our present national program has the preservation of the democratic way of life as its objective. This consideration is the fact that when the war is over we shall be faced with a condition of affairs which will menace that democracy for the preservation of which we are at present embarking upon a program of sacrifice. All modern great wars are followed by serious depressions which result from the economic distortions caused by such wars. We may consider the relation of this fact to the government's contemplated program of inflationary deficit financing.
The proposed federal budget for the fiscal years 1941 and 1942 is calculated to produce a total deficit of over 15 billion dollars. In addition, the administration apparently proposes to make "loans" of war equipment to Britain in the amount of at least 10 billions. Allowing a salvage value for this equipment of perhaps a billion dollars (a very generous estimate) the net debt of the United States will be increased another 9 billions by this maneuver. That will make a deficit of 24 billions as a result of two years of financial operations. Added to the present figure, it will move the national debt up to about 70 billions. And this isn't the end of the story. The budget estimates are based on present prices. Inflation will mean that the estimates must in due course be revised upward. Let us be conservative and assume that the upward revision necessitated will be no more than 50 per cent. Our 24 billions then becomes 36 billions, and our national debt over 80 billions.
What will this inflation bring about? It is perhaps not necessary to spend much time elaborating the fact that rising prices will hurt public utilities, insurance companies, trust funds, bondholders, salary receivers, wage earners and all the other interests in our society which depend upon relatively fixed incomes. Nor is it necessary to dwell long upon the fact that rising prices will cause labor trouble throughout the land. These things are more or less obvious, and do not call for extended discussion.
So far it has been assumed that this country will be able to keep out of war. It seems almost inescapable that the American trend in the direction of ever closer military relations with Britain will force Germany to declare war on the United States. The precise effects upon our national debt of such a development cannot be determined even by resort to clairvoyancy; but it seems inevitable that the debt would move well beyond 100 billions and might even reach 125 billions if the aggravating effects of inflation are included.
The recent budget speech pointed out that the mere level of the debt was of no particular significance, so long as the development of our resources kept pace with the rise in annual debt charges; and further indicated that the rising national income resulting from the defense program would make the carrying of the debt charges a task of no great difficulty. This is perfectly true, so long as war prosperity lasts. But when the war is over, then what? If we had become a belligerent, we would in all probability emerge on the victorious side. But what of it? The depression which would in due course follow would almost certainly be the greatest in history. It is conceivable that it would reduce our national income to 40 billions. At the same time we would be faced with an annual debt charge of perhaps one fifth of that income. Added to this would be the cost of an enormous public works and relief program.
Could democracy prevail under such conditions? Extravagant borrowing, extreme inflation and depression was the sequence of events which produced Fascism in Italy in 1922 and laid the groundwork for the Nazi political triumph in Germany in 1933. It produced a strong Fascist tendency in French politics, which helps to explain the ease with which France was recently overcome by Germany. The same sequence of events will probably produce the same results in Britain after the war, even if she is helped to victory by the United States. Realization of this fact is one important reason why Britain is so anxious to throw a part of the financial burden of the war on this country. Just how far America will be forced to go on the road to dictatorial government is problematical, but there will certainly be a distinct tendency in this direction. Come what may, it is indeed strange to hear a policy which, according to the testimony of recent history, leads to an absolutist type of government, described as a method of preserving "the democratic way of life." Such a contention would be merely amusing if its implications for all Americans were not so serious.
DEBT, INFLATION, AND DEMOCRACY
By Peter Palmer
Instructor in Economics
The spending spree of the last eight years has not caused the inflation expected by wise men of the East. Apparently this is because it began at a time when the reserve productive capacity of this country was very great, with the consequence that production could expand to meet the debt-created expansion of purchasing power during the period in question. It is hardly likely that such a condition will persist much longer, especially in view of the recent substantial increase in the rate of government expenditures in connection with the defense program. It seems therefore highly probable that productive capacity will begin to lag behind the expenditures of the government. This will mean inflation.
PATTER★
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OFFICIAL BULLETIN
UNIVERSITY OF KANSAS
Vol. 38 Sunday, Jan. 12, 1941 No.69
Notices due at Chancellor's office at 3 p.m. on day before publication during the week, and at 11 a.m. on Saturday for Sunday issue.
CHRISTIAN SCIENCE ORGANIZATION: Christian Science Organization will hold a regular meeting Tuesday afternoon at 4:30 in the Pine room of the Union Building. All students, graduates, and faculty members are welcome.—Patricia Neil, secretary.
MEN'S STUDENT COUNCIL: There will be a meeting Tuesday evening at 8:00 in the Pine Room.-Jim Burdge, secretary.
NOTICE TO ALL STUDENTS: Dr. E. T. Gibson will be available for personal conferences at Watkins Memorial Hospital on Tuesday afternoons from 2 to 5. Appointments should be made at the Watkins Memorial hospital.-Dr. Ralph I. Canuteson.
W. S.G.A.: W.S.G.A. Council will meet at 7:00 in the Pine Room tonight.-Doris Twente, secretary.
ROGER WILLIAMS FOUNDATION: (Baptist) 9:45 a.m., Sunday, important business meeting of the University Class. 6:30 p.m., there will be no meeting at the student center, on account of the "Dad" Elliott union meeting at the Union Building. Please attend.-Stanford Splitter, president.
WOMEN'S GLEE CLUB: Women's Glee Club will hold tryouts for new members at 4:30 Tuesday in room 306 Frank Strong hall- Irene Peabody, director.
PHI CHI THETA: Phi Chi Theta Initation at 3:30 p.m. in the Old English Room Tuesday.—Marjorie Neumann.
How Does This Look As Grad Seal?
The University alumni have decided that it's about time they were having a seal to adorn their letter heads, magazines, and other literature of the organization.
Frank Cooper, '26, a Kansas artist has submitted a seal for approval or disapproval as a means of setting persons to thinking about the idea.
Seek out the most minor details.
Should such a sketch have people in
Cooper is the artist who drew the homecoming cartoons and other sketches for the Graduate Magazine. His sketch is by no means final and students, faculty members, and alumni are asked to criticize it.
Think of some inscription whether in English, Latin, or Sanscrit that will present the idea of unity of many for the alma mater's advancement and give it and your ideas to Fred Ellsworth, secretary of the Alumni Association.
it? What shall be on the scroll at the bottom?
ROCK CHALK TALK
Betty Jeanne Hess, Kappa, came into her geology lecture late on Thursday morning. Dr. W. H. Schoweh had already begun to talk.
But he stopped when Betty came in the door. About 90 student heads turned to stare. When Betty had to walk around the room to her seat, the boys on the back row accompanied her steps with the woo-woo whistle.
As much as a brunette can blush, Betty did.
Waiters at the Jayhawk are acquiring "New Joisey" accents. Especially Grant Gray, who sounds like a big city problem child gone wrong.
His old friends, who remember him as a town-painter-red, are smiling.
Bill Baisinger, Phi Delt here who was graduated in law last spring, was recently appointed justice of the peace at McPherson, where he has been practising.
His old friends, who remember him as a town-painter-red, are smiling. When he performed his first marriage in his new capacity, he did not know how much to charge the couple. Finally, to the surprise of the rest of the office, he asked—and got—ten dollars.
Outsiders don't all know it, but the secretary of Battenfeld hall, Bob Collett, is also a writer of human interest yarns. Every month he writes a long letter to the Battenfelds in Kansas City, telling them how things are going here and describing some of the funny incidents that happen in the hall. He also keeps a diary of daily goings-on. Something like Pepys or Mrs.F.D.R.
Writing chummy letters to movie stars is a hobby of Bill Hogle's. His atest is a sweet message to Betty Grable, signed just "Bill."
Friday morning Marjorie Owen, Chi Omega pledge, was chagrined when a student on campus for the music clinic came up and asked, "What high school are you from?"
This is another one of those nights when we do not have the Sophomore hop.