Evening star., 1933-03-05
BY EARNEST X. LINDLEY,
Author Of Franklin D. Roosevelt


since the Civil War has been confronted
at its outset with such formidable
array of problems demanding immediate
and decisive action. Reorganization OF
the Federal administration with dras-
tic economies, the imposition OF new
taxes, aid for the farming and rail-
road industries, repeal of the eighteenth
amendment, unemployment relief-these
are only few of the domestic diff
culties with which Mr.. Roosevelt must
come to grips at cnce.
The war Cebtor nations are waiting
at his door, and upon his handling OF
them may depend his success in deal
ing with the vital problem OF effect
ing a truce in the international eco
nomic warfare inherited from the World
War, but intensified during the depres-
sion years by embargoes and quotas
superimposed on high tariffs and the
manipulation and depreciation OF cur
rencies. The critical Far Eastern stu
alton involves embarrassments and
dangers for the Roosevelt administra-
ton which may surpass those which
the succession of events leading to the
Boxer uprising imposed upon President
Mckinley. Cuba is under economic and
political strains which threaten to make
it for Mr.. Roosevelt what Mexico was
for Mr. Wilson and Mr.. Coolidge.
The underlying note as the new ad-
ministration moves into action Is recog-
milton of the necessity for speedy action.
The Democratic program, as outlined
in the party platform and in Mr.. Roose-
velt's campaign speeches, contains sew
eral long-range proposals. In this
category fall banking reform, regula-
ton of the security markets, the strict
er regulation of public utilities, the
Roosevelt conservation program in its
broadest sense. including the develop
ment under public auspices of water
power resources, flood control, reforesta-
ton of submarginal lands and the
movement back to the land of surplus
population in the industrial centers.
But to a degree unprecedented in many
years the Democratic program Is OF
necessity not long-range program, nor
even four-year program; 1t IS nine
month program. 1t is not exaggeration
to say that by the end of the year Mr..
Roosevelt must translate his most i'm
portant pledges into action and that
they must improve the economic condi-
tion of the country; otherwise he will
have to turn to more drastic measures" !"
Debt Problem Faced First.
Perhaps the most pressing central
problem before the new administration
is TO put the price of commodities and
the burden of old debt somewhere
near parity, or at least in workable re-
lations hip with each other. The present
slackered economic life of the country
at a low price level cannot sustain the
gigantic overhead debt piled up at q
higher price level The processes of
deflation have eroded this mountain Of
debt, which, according to prelimi-
nary estimate of the National Industrial
Conference Board, was at a peak Of
S154 ,761 000,0 in 1929. They eroded
it until they were attacking the basic
strata: Railroad bonds, first mortgages
on farms and urban real estate and
the obligations of public agencies. The
process had to be, and was, checked
under the Hoover administration by the
generous use Of Federal credit.
While brake was applied to the de-
fation of debts, the price level con-
tinued to fall. Partly because OF the
overhead of debt the price of manu-
factured articles fell roughly only half
as far as the price of commodities. The
result in the case of the farming indus
try of the country was an $4,000, ,000,-
600 debt, largely incurred when the
general price level was twice as high as
it is today and when the price OF farm
products was four times what it is now.
in other words, the farm creditor lent,
roughly, only half Of what is now owed
him, in terms of power to buy finished
goods: and the farmer owes -FOUR times
as much as he borrowed, In terms OF
farm crops. -
The farmers share OF the public debt,
which he pays through taxation, Is
;Io,-1 terms
CROPS than when the public debts were
incurred To greater or less degree the
same disproportion between debt and
current income runs through the entire
economic system. Either the burden
of debt must be reduced or the price
level must be lifted. This, to all ap-
pearances, is the year when the read
iustment must be made, or at least
substantially begun. The rising demand
in Congress for imitation OF the currency
through reconciliation OF silver, re-
duction of the gold content of the dol
lar or the simple use Of the printing
presses is a reflection OF the crltlcal
nature of the problem and the necessity
for prompt action.
Pledged to Sound Currency.
The Democratic program does not
contemplate resort to the bold expedient
of imitation. In fact. Mr. Roosevelt is
pledged by his platform and by MS
speeches to the preservation OF a sound
currency at all hazards. He Is COM
mitted instead to multitude OF spe-
cific remedies for specific aspects OF the
general problem of bringing debt ana
the present price level into supportabie
relationship to each other. He is COM
mitted on one side to the general policy
of reducing debts in an orderly manner
and On the other to an experimental
attempt to lift the domestic price OF
farm products. He is committed also
to the worldwide attack on the same
basic problem through the review OF war
debts and the forthcoming world eco
nomic conference. where the return OF
the principal nations to the gold basis.
the revival of world trade through tarln
agreements and the possibilities OF
worldwide limitation OF the production
of such basic commodities as wheat,
sugar and copper are high on the
agenda.
The Roosevelt program for the in
ternal debt may be divided into Two
main branches: The reduction OF prin-
cipal where it Is necessary. to be ia
cilitated by voluntary agreements among
creditors; and the reduction OF interest
rates. The bankruptcy bill before the
last Congress was designed to ease and
hasten the orderly liquidation OF top
heavy parts of the debt structure. The
lowering of interest rates is an integral
part of the Roosevelt program for the
farm problem and for rehabilitation OF
the railroads. It will undoubtedly be
carried forward, too, in the refunding
of the refundable portions Of the ma
tional debt as well as In lowering Of
interest rates by the Reconstruction
Finance Corporation and in continual
ton of the general easy-credit policy
instituted by the outgoing admmStra-
ton.
Committed to Trial Of Plan.
On the other side of the picture Mr..
Roosevelt must put into execution the
scheme for artificially lifting the do
mestic price Of basic agr1cuitura! CON, com,
and embodied in the domestic allot-