Up to last May, enough U. S. citizens to impress any politician were actively worried about two related problems: 1) the increase in their taxes, 2) the steady increase in the national debt after all the U. S. Government's tax collections. But when Hitler pushed back the U. S. frontier from the Rhine to the English Channel, these problems were swept aside by a single burning demand—Total Defense. To emergency-conscious U. S. citizens, the job presented itself as one of planes, tanks, guns, not their cost. But to businessmen and economists, one question remained: how to finance Total Defense?
Last week at Washington's Mayflower Hotel, two interested and opposed parties tackled this question. Some 50 men, bankers and New Dealers (about half & half), with a sprinkling of college professors, were guests at a forum of the austere Savings Bank Journal (which will publish the complete record next month). Host was its editor-publisher, natty, mustached Milton Whately Harrison who named Tax Lawyer Randolph Evernghim Paul of Wall Street's Lord, Day & Lord as moderator. Moderator Paul chose his sides skillfully. On business' teams, he lined up such stalwarts as Old Colony Trust Co.'s T. Jefferson Coolidge, Dime Savings Bank's Philip Adolphus Benson, Guaranty Trust Co.'s Robert L. Garner, Bowery Savings Bank's Earl Bryan Schwulst, Kuhn Loeb's Benjamin J. Buttenwieser. On Government's team, he picked such men as Jerome Frank, Leon Henderson, Ben Cohen, Lauchlin Currie, Emanuel Alexander Goldenweiser, Commerce's Richard V. Gilbert.
The question before the meeting was partly technical—partly philosophical. To start with, conferees had some figures. Over the $8,800,000,000 already appropriated for the 1941 fiscal year, defense will cost $19,200,000,000 of new money, to which must be added anything from $5,500,000,000 to $8,000,000,000 a year maintenance. Added to this was another figure : an estimate that $5,000,000,000 of the current defense appropriation will actually be spent by the end of this fiscal year. This will raise the Federal Reserve Board Production Index from August's 123 to 140 by next June. This estimate rested on three assumptions: 1) England stays in the war as a U. S. customer, 2) no inventory boom temporarily inflates production, 3) no price inflation handicaps consumption.
As an opening ceremony, up rose Boston's aristocratic Thomas Jefferson Coolidge. He was once F. D. R.'s Under Secretary of the Treasury, but his words came like a breath of fresh air from the contented '205: "You may say it is oldfashioned, but my belief is that the Federal Government should tend to national security with the utmost economy. I feel that expenditures by the Federal Government for personal security are apt to be unproductive in relation to the money spent."