Document g2krbeVgepwXE6dVwEjvEwemV

More Cheering Facts We also have much more ready cash now than in 1929. Today individuals and corpora* tlons hold a total of $269 billion in cash or its equivalent which is almost twice as much as the portion of private short*tenn debt' (about $140 billion) that Is subject to sudden demand for payment. Many students of the subject cite the rela* tively low cost of carrying our debts and the large volume of cash on hand, and reach the comfortable conclusion that our debt burden is nothing to worry about In further support of this view, they emphasize the fact that no important part of our debt is owed abroad. Hence, they reason there is not the danger, so . conspicuous in Britain since the end of World War II, that our economy will be upset by the necessity of making^heavy debt payments to other countries. Some Dangers of Present Debt However, the nature of our debts presents dangers that it would be foolish to ignore. This is true' of both the debt of $267 billion owed by the federal government to its citizens and the $330 billion in private debts owed by some citizens and corporations to others. Public debt can be a dangerous kind of debt because government has the power to print money or to create its equivalent by expand* ing bank credit Of the $215 billion that the federal government borrowed during World War II, over $90 billion was borrowed from banks. This was the largest single contributor to the inflation of prices that since the war has robbed the dollar of about half of its pur* chasing power, and thereby robbed the buyers of government bonds of about half the pur* chasing power these bonds were supposed to represent. If, as is quite possible, a new .emergency should again require the federal government to. borrow heavily while its debt remains so high, it is doubtful that the public would be avid to buy its bonds. Hence, the government might again be forced to resort to the infla* tionary process of relying on bank credit. Private debts can be dangerous if the people take on hew debts* more rapidly tjf! justified by the growth of business or ability to repay. Last year bank loan?1 increased by the imposing sum of about;! billion, which represents an increase of4 11% in total loans outstanding. This isijj, twice as much as the increase in the voS . of business over the same period. Installt credit for consumers increased by $3 last year, again an increase in debt twice as great as the increase In Ihuu volume in the fields where the credit^ used. It is also the fastest rate of such gro> in our history. V Constructive Use of Credit So long as the expansion of credit doe? more than keep pace with expansion ini volume of business, the expansion is constrw tive. Also, when credit is expanded to atqul resources and equipment that will enlarged volume of business a little later, that usej clearly constructive. But .when private cire< expansion begins to run ahead of busme^ growth, H is time for us to be heads up. Si credit expansion courts price Inflation. It ajft creates a forced draft under business so tbit!] if credit is cut off, there may be apatafuJft drop. Jf To give a summary answer to the question!] Is the level of debt in the United State* danger to our prosperity? -- the answer seeiruj to be, "Not at the moment" We owe nothl abroad. The interest burden on present dcWj is relatively small, and we appear to have iwj resources to handle the short-term debt Yet| both the total amount of debt and the recent] rapid increase in total private debt, especially the latter, .are enough to signal for cautioijH We need restraint on the part of business anjg consumers to avoid expanding private borrows ing at an excessive rate. The federal debt needfj to be reduced and put in more manageably, form. If these things are done, we can proceed; to build a sound prosperity. MtCraw-Hill Publishing Company. ^ r PETRO VWU DO FOR YOU: MFAF: ! [tOW-FIRST COST Oj'iMustriat oil burners are designed end built to _jffifof^tho firing of your present boilers. This means g3foou;ulve substantially on initial Installation costs-- Wtpjpy.the efficiency,' (he dependability, end the complete njGmjtlc operation that has been traditional with Petto hgwrs'for over 50 years. flame control it is extremely flexible In following fluctuating steam demands. If yours is a problem of "high and low" steam requirements--than a Petro burner is your answer. It follows (he load without hesitation, and throttles down to a steady low burning rate ifdesired. ERFUEL COSTS IRns'otl burner's economy is unchallenged. You save Jglwsyi:; p)m, you save on Awl cost, because heavy oils SSkjjjj* per gallon and have higher heat value. And gm/s Petro burner la designed to burn these low-eoit, SgtticJi heavy oils with complete dependability. Whether TS/Wh thick or thin a Petro feed* it.steadily under jgji^utoinatic control. You get more efficient firing. LOWER OPERATING COST5 Petro Industrial Oil Burners are completely automatic. They require a minimum of supervision. Boiler rooms stay clean. The simple, tturdy design of the Petro burner end its easy accessibility reduce upkeep to a minimum--save you money year after year. Leading heating contractors everywhere recommend UNUSUAL FLEXIBILITY Itori* toother Petro value. Under automatic modulating and install Petro oil burners. See your contractor, or mail coupon below. ^jflNDUSTRIAl.COMMERCIAL, RESIDENTIAL--An o.l b^urnor ____ 7eTRoTj5M W.Toftb Sc,"Cleveland, Ohio. Please tend me the Petro catalog of commercial.industrial oil and gaa-oil firing equipment. roars of taouerwup * . Ajrfnmatlc Htaliag ml tmnr fqirfpm.nl gijCN 1933