The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1933-10-11

I
the attention of the public.
Now what, we must ask ourselves,
was the idea? That depended upon
whom you consulted. Some saw
the campaign as a mere scheme to
spread work by shortening hours,
the annual cost to be financed out
of capital reserves until an increase
in the volume of business restored
profits.
Some saw it as an orderly
revolution" in which industry and
labor both would become organized
in a kind of constitutional govern
ment benevolently supervised by
the federal power. And then there
were others who looked upon the
scheme as the most direct way Of
overcoming the depression-that is,
by increasing the purchasing power
of the people through enlarging pay
rolls.
A S nearly as one can judge from
n the federal explanations, it was
the desire to increase purchasing
power which caused the administra-
ton to concentrate so much energy
on the scheme and to be in such a
tremendous hurry.
Now if this idea was sound, If you
could increase purchasing power
sufficiently in this fashion to over
come the depression, the blue eagle
campaign was worth every ounce of
energy that could put into it. For
in one fell swoop it would not only
cure the depression, but lay the
foundation of new industrial orCer.
To an administration which is COM
mitted the achievement of both of
these objects the prospect must
have been inordinately alluring.
However, the chance of achieving
recovery, as well as reconstruction,
by means of the NRA depended up
on how true it was that recovery
can be engineered by increasing
purchasing power via the pay rolls.
Unfortunately, it was not true, and
I imagine that few, if any, OF the
many able professional economists
attached to the administration ever
thought it was true.
The simplest way to state the
fallacy is to say that workingmen's
wages, particularly the minimum
wages with which the MIRA con-
cerned itself, was spent, apart from
rent, which is a small fraction, in
retail shops.
Now, the manufactured goods sold
to workingmen in retail shops are
made by the least depressed of all
the industries. The really depressed
industries, which contribute the bulk
of unemployment, do not produce
the kind of good sold to workingmen
in retail shops. Therefore, it never
was possible to cure unemployment
by relatively trifling increases in
pay rolls.
There are a number Of different
ways of proving these assertions.
They are not disputed, 1 think, by
students of the problem, however
much these students may differ on
what are the most promising REM
edies. To fix the matter in our
minds, we may say that there are
about 100000 workers outside of
agriculture.
NF these, about one third, or
" about 100000, were unem-
ployed in May. At least two-thirds
of these unemployed workers be-
long to industries which produce
goods that are not sold in retail
shops. They belong to the con-
struction, transportation, and ma
chine making industries-to what
are called the durable and capital
goods industries.
These figures show that the main
body of the industrial depression
in human terms nearly seven out of
the ten million unemployed-does
not lie in the industries which the
NRA has stimulated by increases of
pay rolls. The deeply depressed in
dustries are those which depend di-
rectly not upon the purchasing
power of pay rolls but upon the pur-
chasing power of invested savings
and bank credit. 1t is from the
placing of mortgages, the sale of
bonds, the use of corporate reserves,
and the making of bank loans that
the initial purchasing power has
come to put back to work possibly
seven out of the ten million unem-
ployed.
This now is generally recognized
in Washington and elsewhere. That
is why, within the last month, the
emphasis has been shifted from the
NRA to the expansion of credit, to
the revival of the capital market,
and the speeding up of the public
works program. Does this mean, as
some persons are saying, that the
NRA has been a failure? Far from
it, If we remember that the adj
miniStration is working both for
recovery and reconstruction, we may
say of the NRA that it's contribu-
ton to recovery was greatly exag-
gerateQ, but That as a measure OF
reconstruction it is a magnificent
achievement.
To have introduced into the vast
completely of American industry as
much law and order as these codes
promise, to have impressed upon a
whole people so many new enlight-
ened standards, to have created the
framework within which industries
con cooperate, can plan, and can
police themselves, and to have done
this in two months is very real
and substantial installment of the