Evening star., 1932-04-16
PAY Cutting and Recovery.

In the muddle over cutting govern
mental salaries by hook or crook the
House Economy Committee seems in
danger of working itself into the state
Of mind where 1t will lose sight Of the
woods Of this depression because of the
saplings with which it is for the time
being engaged.
Granting that the capable members
Of the House Economy Committee are
motivated only by sincere desire to
make the best Of what is, in any case, a
thankless job, the business of cutting
governmental pay has been allowed to
assume proportions out Of all sensible
relation to its Importance. 1t is out OF
all sensible relation to the great con-
structive undertakings that have been
possible through bipartisan and un-
selfish cooperation of our leaders in the
executive and legislative branches of
the Government.
The exaggeration of the effect of gov
errmental pay cutting has been made
on the side of its effectiveness as a step
in budget balancing. 1t is impossible to
overemphasize the hurtful effect Of this
backward step on national recovery.
Governmental pay cutting would be the
antithesis of everything that the Gov
ernment has so far done in its con-
structive efforts to revive faith and
business.
Among these efforts have been the
creation of the Reconstruction Finance
Corporation, the Glass-Steagall legisla-
ton, the anti-hoarding campaign. Eu-
gene Meyer, governor of the Federal Re-
serve Board, has outlined to the House
Banking and Currency Committee what
may be one of the most important Of all
these various moves-the Federal Re-
serves decision now to increase the vol
ume and the rate at which it is buying
governmental securities, these purchases
in the last week having reached total
OF 500 900 o00 four times as great as
the weekly purchases of recent date.
These steps are part Of a carefully
considered program first to stop def1a-
ton and to meet serious situation re-
garding banks; second to bring money
out of boarding; third to begin the
careful pumping of currency into banks
for expansion Of loans and paying off
Indebtedness to the Federal Reserve.
Mr.. Meyer explains that there is always
q lapse of time between the entry of
money into banks and its effect in the
stimulation of business.
But are We now to counteract lot
of what has been done by shaking the
confidence and hitting the buying power
of the public by reduction of salaries
in Federal establishments? The Fed
eral Government should be watching
for the first opportunity, as continual
tion of steps already taken, to begin
creating work. A widely advertised
move on the part of the Government at
this time to reduce salaries and to
withdraw as far as it can into its shell.
proclaiming to the Nation and to the
world at large that it believes in cut
ting down the wage standard and pur-
chasing power, thus adding to the vi
cious circle Of unemployment is moth
ing less than following the same old
suicidal policy that is exemplified on
every hand.
The aim of the Federal Reserve is to
encourage and stimulate an upward
swing Of prices. That is everybody S
aim. How can such trivial business as
saving less than hundred million dol
aars out Of the pay of small-salaried
employees be considered as consistent
with this aim-as anything but de-
structive of its purpose? The Wall
Street bears have done enough damage,
and there is nothing TO be gained by
rearing a new brood in Congress.