Evening star., 1932-01-20
A Vicious, Unsound Plan.

A Vicious, Unsound Plan.
The soundest arguments so far ad-
vsnced for slashing Federal pay are
based on reasoning that follows this
general line Of thought; The budget
must be cut EXtravagant spending
must stop. States, municipalities and
industrial concerns have reduced sal
aries. Common labor is being paid 81
a day on the Eastern Shore Of Mary
land A farmer who is having hard
time making both ends meet on his l6O
acres Of land In Indiana regards with
jaundiced eye the rural mail carrier
who works three hours day and re-
ceives S2,100 a year. Letters to mem
bers of Congress are demanding that
the salaries of Federal servants be cut
to tighten the load on the backs of the
taxpayers.
The soundest arguments 50 far ad-
vanced for creating the two-billion-
dollar Reconstruction Finance Corpora
ton, now about to go to work, are
based on reasoning that follows this
general line of thought: One of the
chief causes of the present business
depression is lack of confidence. Lack
Of confidence has affected the market
ability of sound securities, tying up
money. Liquidate some of this frozen
paper, put the Government on record
as standing squarely behind good
securities because of its faith in the
future of the Nation, and the cash Will
be furnished with which to meet
emergent demands, confidence will be
restored and such confidence will act
to bring boarded money out of safe
deposit boxes and out of stockings and
to start the stream of liquidation that
will ultimately relieve our present diff
culties."
1t is, of course, impossible to find
any degree of consistency between these
two lines of thought. Either the pro-
posal to cut salaries to relieve the
stringencies of the depression or the
theory underlying the creation OF the
Reconstruction Finance Corporation is
all wrong. Both cannot be right.
For 1t is a commonly accepted fact
that nothing could be done by the
Federal Government at this time more
surely destined to blast confidence, in
crease boarding and blight hopes for
an immediate turning point in the
downward swing Of depression than to
put into effect a widespread reduction
in Federal salaries. 1t would signal
widespread reductions elsewhere. 1t
would be the straw to break the camels
back for those courageous employers
who have stretched every effort to
maintain salary levels. 1t would be
interpreted as notifying the country at
large that the Federal Government is
setting the pace in move to cut
wages, the vicious results of which have
been generally and repeatedly deplored
of this administration.
Those who believe that reduction
in Federal pay would call only for
personal sacrifices on the part of the
Federal employees directly affected, or
would merely serve to reduce Federal
expenditures by sl00000,O00 or $780,
900, 000-whatever it may be-are not
looking beyond the ends of their noses.
They could as well assert that taxes
are borne only by those against whom
they are levied and that nobody but
the actual taxpayer feels the result of
higher taxes.
The fact is that for every hundred
thousand men and women on the Gov
eminent pay rolls who would be di-
rectly affected by salary reduction
there would be hundreds of thousands
of others-includlng the farmer who
jealousy regards the postman - indi-
rectly affected. Cut the Federal pay
roll ten per cent, and the billion dol
lars or so spent by these Federal en-
| ployes every year will be cut ten per
cent, and the workers in commerce and
industry, whose livelihood depends upon
that ten per cent will be thrown out
of work, along with others who will be
forced out by fear and loss of conf
dence on the part Of their employers.
Is the Federal Government to SCI
up a two billion dollar corporation to
restore confidence, and then knock
confidence into a cooked hat by start
ing the salary-slash ball rolling? Is
the farmer who owns 100 acres of land
and enyies the postman going to bt
able to pay his taxes any quicker when
the postmans salary is cut ten per
cent?
These questions must be answered
specifically and definitely before the
Congress can in prcpriety or consist
ency inaugurate a salary -slashine
program.