Evening star., 1932-09-04
BY WILLIAM HARD.

In the view of a considerable part
Of Washington, the crisis has been
| reached in the question whether pri-
vate business will now come forward
and make adequate use Of the country's
Superabundant stores of money and
credit or, contrariwise, stand aside while
the Government plunges forward into a
! display of Government in business" on
scale never before even family ap-
proximated in any country outside
Russia
Throughout this whole calendar year
to date the principle of Government
in business" has been advancing in
| successive spectacular stages. 1t con-
tains within itself the possibility of be-
coming the main ultimate issue of the
presidential campaign. Gov. Roosevelt
has vigorously criticized President Hoo
yer for what the Governor regards as
an abandonment of 'individualism"
and an excessive employment of gov
ernmental intervention in the attempt
ed restoration of prosperity. At the
same time Gov. Roosevelt has not yet
| developed and detailed his own recipe
| for that restoration.
The Governor has spoken of many
ultimate reforms for the prevention of
| future depressions, and these sugges-
| tions of his have had large approval
among eminent economists He has not
yet unfolded his full remedies for this
present instant depression. People in
| his confidence assert that he intends to
unfold them within the next few weeks.
His campaign strategy, they say, is
| to deal with permanent problems first
and then with the problems of the i'm
mediate crisis. They say that he is
pursuing an orderly logical course in
his revealed fundamental principles,
state the application Of them to the
difficulties now at this moment press
| ing upon us.
He will state his plans for the
| resumption Of business and for the
Unemployment Of wage-earners and
| Salary-earners during the coming Fall
| and Winter. When he pronounces that
| statement, upon which he and his asso-
ciates are said to have expended much
time and thought, the critical issue be-
tween the two presidential candidates
will have been joined.
4
In the meantime the Government at
Washington has gone through the stage
| OF using its credit for stabilizing the
solvency of our banks and insurance
companies and railroads, and has also
gone through the stage OF using its
Federal Reserve System powers for
creating vast pools of new credit in our
banking reserves" and is now in the
third stage Of engaging in the direct
| financing OF great local self -liquidat-
ing works of public or quasi-public
i character.
1t Is In this third stage now because,
| IN spite OF governmental stabilization of
bank solvency, and in spite of govern
mental creation of enormous new re-
serves Of potential bank credit, the pri-
vate business of the country has shown
itself unable to carry these assured new
money resources into concrete business
activity in the production and consump-
ton OF commodities. Government has
proWded-so to speak-the water in
which business could swim. Business,
however, has not plunged into It, Gov
ernment is accordingly now doing
considerable dive into it on its own
account
1t is diving at present only into the
direct financing of construction enter
prises which have a public or quasi
public color, such as bridges and tunnels
and State-supervised housing and Fed
erally-regulated railroads This it is
uOIilS lUdIlS Gne heCOQ-
struction Finance Corporation.
X X
Just one additional possible stage re-
mains. 1t is that the Government
should use either its financial power or
its supervisory regulatory power for the
organization and stimulation of strictly
private business itself.
That fourth stage would give to the
United States the most governmental
lied capitalism in the world. 1t is not
| without its advocates. An experienced
business citizen of Pittsburgh has re-
Gently proposed a $4,000, 100000 issue
of Federal credit bonds for the sole
purpose of loans to purely private en-
ployers for the buying of raw materials
and the hiring of workmen In the re-
vival of private comomdity production
and private commodity exchange. This
plan, which has been brought to the
attention. of Washington, proceeds on
the theory that If public credit would
start the wheels of private industry
turning. then through the providing Of
employment there would be a develop
ment of purchasing power which would
itself keep them turning.
| * x Il r
That such proposals will attract large
attention in the next Congress Is alto
gether certain unless the present loans
by the Reconstruction Finance Corpo-
ration to public and quasi-public con-
struction enterprises result In resto-
ration Of confidence and a resumption
of activity in private business circles.
That those loans will have a strong
tendency to encourage private business
Is earnestly believed by such observers
as Mr.. Charles F. Abbott of the Aneri-
can Institute of Steel Construction. who
has recently conveyed his views to Pres
ident Hoover
Mr.. Abbott, on behalf Of the steel
fabricators who constitute the Ameri-
can Institute OF Steel Construc-
ton, has painstakingly listed specific
, possible lf-liquidating' construction
| enterprises throughout the country. He
! finds almost 81 ,000, 800 900 worth Of
such enterprises available for consid-