Letter Requesting a Study of the Problem of Idle Money.

Dear Joe:

In My Message to the Congress initiating the work of the Temporary National Economic Committee, I had occasion to say that "Idle factories and idle workers profit no man." It may equally be said that idle dollars profit no man. The present phase of the hearings before the Committee bears directly upon this problem.

It is a matter of common knowledge that the dollars which the American people save each year are not yet finding their wayback into productive enterprise in sufficient volume to keep our economic machine turning over at the rate required to bring about full employment. We have mastered the technique of creating necessary credit; we have now to deal with the problem of assuring its full use.

In the series of hearings which the Securities and Exchange Commission is to hold before your Committee, I take it that a major problem of your Committee will be to ascertain why a large part of our vast reservoir of money and savings has remained idle in stagnant pools.

Is it because our economy is leaving an era of rapid expansion and entering an era of steadier growth, calling for relatively less investment in capital goods?

Is it because of lag, leak and friction in the operation of investment markets which pervert the normal flow of savings into nonproductive enterprise?

These are questions for your Committee to answer.

I know of no more urgent ones in the country today.

The hearings before your Committee, I hope, will assume the task of analyzing the financial machine in its relation to the creation of more needed wealth. We know that the mechanism can be improved. Improvement can only be made on a basis of clear analysis. Having made that analysis, I hope that your Committee will then be able to indicate ways by which the machine may be made to function more efficiently.

We have an immense amount of wealth which needs to be created in this country. Much of it can be created through private enterprise. Some of it can properly be created through quasi-public agencies. The problem is to use our added savings and increased credit to get this wealth moving, that is, to get it now in productive enterprise; and, at the same time, to make savings available for use in all categories of private enterprise, as well as for the great and recognized enterprises which can command capital, but have less actual need of capital than many smaller but equally deserving enterprises. There is also the problem of determining how credit can best be made available for instrumentalities of local Government and for those quasi-public enterprises which must do the work which cannot be done by private enterprise.

We have developed several methods of connecting money with men and materials so as to get useful work done. We shall need to use all of these opportunities, or, if you choose to put it differently, we must meet all of the demands made on our system, if we are to have lasting prosperity. It is our task to find and energetically adopt those specific measures which will bring together idle men, machines and money. In proportion as we succeed, we shall strengthen the structure of democratic economy.,

Very sincerely yours,

Honorable Joseph C. O'Mahoney,

Chairman, Temporary National Economic Committee,

United States Senate,

Washington, D.C.