(2 of 3)
Then the technicians went to work. For seven and a half hours they compared decimal points : provisos for excess-profits-tax bills, Canadian taxes, similar economic brain-crackers. They also discussed English Economist John Maynard Keynes's plan for curtailing workers' current wages by giving them a prior mortgage on postwar consumption. This evoked as clear a statement of the anti-New Deal position as the meeting produced. The evoker: Guaranty Trust Co.'s Garner, who said: "You are going to have to pay back the fellows from whose wages you get the money. Who is going to pay them back? The Government? Well, who is the Government? Where is the Government going to get the money? ... I believe we ought to figure on paying for the maximum amount that we can as we go along."
Against this, the New Dealers argued that defense is causing industrial expansion by private capital as well as by the Government, is piling up more & more national income and, therefore, a bigger & bigger reservoir of savings to finance the expansion. Furthermore, said the New Dealers, taxes always cut consumption. Why tax, then, until consumption has increased to the point of full production, full employment (which they estimated at around 170-180 on the FRB index)? They rejected the "fetish" of a balanced budget, preferring a balanced economy instead. But when full employment is reached, and a choice between guns and butter must be made, the New Dealers would plump for guns—i.e., consumption taxes. By 10 p.m. they had talked Leon Henderson to sleep under a picture of Thomas Jefferson. Then came the fireworks.