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Show JplGENERAL r!os HUGH s' lay JOHNSON x t . lit J WIFsn X WNVS Washington, D. C. DEFENSE FACTS How much is rearmament or actual ac-tual war, or both, going to cost us: and when and how shall we pay for it? Nobody can answer acourately, because nobody can forese the course of such a war. We must have total defense. No matter what it costs, we shall somehow have to pay for it we or our children's UilUUl C1J. --CJ. wui a-o JOnNSON js that conclusion, there should be at least the attempt to let our people look in the face Df the facts. There has been none. The administration has just announced an-nounced that the war department, since July 1, has awarded contracts in excess of 4.5 billions and the navy about 4.2 billions, total 8.7 billions. bil-lions. "And for all defense purposes more than 10 of the 16 billions voted by congress to reinforce defenses have been obligated." This is confusing because the difference dif-ference between 8.7 billions for armament ar-mament and 10 billions for "defenses" "de-fenses" is 1.3 billions, for which the exact use is not specified. Some cities cit-ies are insisting the federal government govern-ment rebuild their street systems "for national defense." Several other oth-er more nearly boondoggling spending spend-ing projects are being called "national "na-tional defense." Finally, the figure 16 billions voted by congress to reinforce re-inforce defense is a floater that checks with no forthright appropriation appropria-tion I can find. This kind of reporting report-ing is pretty much razzle-dazzle. Furthermore, the report is almost meaningless, because, as quoted in the A. P. dispatch, "prospective delivery de-livery dates for most items are a closely guarded military secret? They are unlikely to be any secret to our prospective enemies. The trouble with our whole preparedness program over the past few years was the failure to let our own people peo-ple know the truth. The last war schedules are no true yardstick today, but here is the way they ran as reported by the secretary of the treasury. In round figures, 1917, 1.2 billions; 1918. 12.3 billions; 1919, 17.5 billions; 1920, 5.2 billions; 1921, 3.8 billions total 40 billions, notwithstanding that the war ended in November, 1918. What these figures prove is that reporting the placing of contracts with no information as to delivery dates, is no realistic indication of progress at all but, on the contrary, is highly misleading. They also give some idea of a rapid acceleration of the mounting cost of industrial war production and the difficulty of checking it when the necessity has passed. BLOCKING INFLATION I don't like to clutter up a column with figures, but it is absolutely necessary that our people understand under-stand the subject of government spending and inflation. The following follow-ing little table shows exactly what inflation did to war costs to all belligerents bel-ligerents in the World war. It compares com-pares what the war would have cost all if the 1913 purchasing power of the dollar had remained unchanged, or exactly how inflation worked to multiply war costs. Cost in Cur- Cost In rency "1913" Ratio Dollars Dollars Per Country (000.000 omitted) rnt U. S 26,593 12,212 217 Associated Powers except ex-cept U. S. 78,528 21,259 369 Central Powers ... 41,774 12,428 336 Total for all belligerents belliger-ents 146,895 45,899 320 This is the evil we must avoid this time. Nothing government can do in raising taxes or cutting expenses ex-penses can have a fraction of the effect to "pay as we go" and reduce re-duce the burden of war on everybody every-body compared to what it can do to prevent this curse. Remember, I am talking not merely about the increased cost of raising the armed forces. Many 1 times more billions of increased cost may have to be paid by Americans fqr the necessities of life. How can it be prevented? There are several indirect aids and one very direct control. Inflation starts with the development of shortages in various fields. In war, price is no deterrent. Defense material must be had. So frantic bidding begins. be-gins. It must be stopped before it starts, or not at all. Since shortage in the face of desperate des-perate needs is the cause, that is where the cure lies. "Priorities" provide the first aid. This means simply that some steering steer-ing committee lists the most urgent needs and says to all . suppliers: "These needs come first. Regardless Regard-less of any higher price offered, you mustn't supply anybody else until these are satisfied, except with our consent in case of hardship." This helps prevent inflationary bidding. A second aid is increased production produc-tion of the shortage items, even at the expense of loss necessitous demands, de-mands, such tilings as shifting plants, supplies, machine tools and other machinery. |