Evening star., 1928-04-22
Legislation Proposed for
A prosperity Reserve
BY HARDEN CoLFAX.

One of the most interesting legis-
lative experiments yet proposed to
stabilize industry was laid before the
Senate last week In a report from It's
commerce committee recommending
passage OF the Jones bill TO create a
prosperity reserve" by the expansion
OF public works during periods of un-
employment
A fiuctuation OF 5 per cent in the
volume of business in some lines spells
the difference between profit and loss:
in many lines a 10 per cent decrease
in activity writes balances in red ink.
while a drop of Is per cent In the
movement OF general industry fairly
shouts sharp depression on a national
scale. There Is no true normal of busi-
ness, IL either advances or recedes
Average growth Of population through
the birth rate alone should make the
line OF consumptive demand tend up
ward each year.
Since early in 1921 the Federal Gov
ernment has been striving to bring
about some system of stimulating in
dustry in periods Of acute recession.
President Harding appointed confer
ence on unemployment. which report
ed that Fall. In 1923 the committee
on business cycles and unemployment
tee, under governmental auspices, has
begun a study
What Uncle Sam Is asked to do in
the Jones bill is to create an emergency
construction fund to be thrown into
the gap when private industry says,
Construction Is taken as the indicator
of general business conditions because
II is responsive to the tone of business
rather quickly.
Under this Senate bill, whenever the
value OF contracts for construction
work in any three~month period fell
10 per cent below the average of the
corresponding quarters of the preceding
three years the President would no.
tify Congress, which thereupon would
appropriate additional funds for public
works, the stabili2ation act being the
authorization for such appropriations,
These additional outlays. according
10 the terms of the bill, might aggre-
gate Sl60, 100000, of which S75,000,000
would be for highways, 1000, 900 for
rivers and harbors projects, $io,0oO,OOO
for public buildings and Sl0,4o000O
for fiood~control works. These sums
are the regular annual appropriations
made last year for the purposes named,
In other words, II IL proposed to double,
in times Of depression.e the normal eX-
penditures for public works OF the
Federal Government
The idea back Of this bill Is that
reserve of this character. thrown quick
ly into the breach, not only would give
employment 10 unskiiled labor, the iirst
class TO feel the effects Of depression,
but would reach far into other indus,
tries, through orders for materials ana
equipment The construction industry
liz directly related 10 ~ other industries
as a customer. and these others, IN
turn, would stimulate still more, thus
raising the general purchasing power
and helping restore activity In prao-
ttcally all lines excepting those OF the
absolute luxury class,
=
Incidentally Il Is believed by propo-
nents of measure of this character
which was advocated by the l0al eon~
ference and indersed by the 1923 cont
mittee. that the mere psychological ete
Iect nf having law uf this KIND 0n
tho statute books would do much 10
stabilize industry by adding to con"
fldence
II is argued, too, by the business men
Who have given thought and time 10 u
study Of this auhjeot. that ahnuld Uncle