Evening star., 1933-05-14
The Reconstruction Legislation.


According to present information, the
administrations major plan for revital-
1zing purchasing power by launching
huge public works program in CO.
ordination with renewed industrial ac-
tiHty, encouraged by industrial self
regulation under Government super
vision. will be laid before the Congress
and an interested public within the
next few days
This legislation will presumably COM
plete the more important parts OF the
Presidents recovery program. for which
he called Congress into extra session
shortly after his Inauguration. 1t Is
by far the most important part OF the
program, and its effects will probably
be more widely distributed than any
Of the recovery plans which have pre-
ceded it. It means a definite and Wig
orous attempt by the Government to
spend itself out Of the depression
by making work available. 1t is un-
precedented in what it sets out to do;
but that fact, of course, loses some
Of its significance by reason OF what
has gone before. These are the days
for smashing precedents right and
left.
While the details Of the legislation
may not be completed before next week.
enough about its broad outlines are
known to indicate that it will contain
four major features.
1. It proposes, in the first place, to
spend an amount now estimated at
$4,000. 600. 900 on public works; this
sum to be in addition to about $780,
100000 for certain "non-budget appro-
priatiors," including the half billion
dollars carried in the relief bill and
other sums for the refnancing Of farm
mortgages. etc. The total expenditures
under the bill may exceed five billion
dollars.
2. In addition to the public works
employment feature. it provides means,
the scope Of which has not been
authoritatively made known, for en-
couraging industrial activity and ex-
pansion under industrial self-regula-
tion"-which presupposes the valida-
ton of agreements in industry now
impossible under the antitrust laws
but with close Government supervision
of this self-regulation.
8. 1t will carry some plan for financ-
ing, outside of the Federal Gov
ernments regular budget the huge
expenditures which are proposed. There
have apparently been all conceivable
suggestions by the Presidents many ad-
visers on this point, the suggestions
running from the use Of infiationary
powers provided in the recently en-
acted farm law to the issue of bonds.
The bill may leave the whole matter
up to the President, and without speci-
flying any course of action, permit him
to choose the method that under con-
ditions seems most feasible.
4. The bill must, however, establish
@ definite method of providing the in
terest and amortization payments nee
essary to retire whatever the outlay is
to be on the public works and other non
budgetary relief expenditures. 1t is here
that the President is obviously faced
with one of the complex features Of
the program The latest indication
Is that general industrial sales tax,
or special e-employment tax" has
been selected from those previously
suggested, these having ranged from a
s'breakfast table tax which would lay
special luxury taxes on coffee, tea,
cocoa. etc. to boosting OF income
taxes or a broadening of the base OF
income taxes. If the sales tax has been
adopted, as reported, the administration
has probably chosen the most popular
way out Of its dilemma and probably
the most efficient way cut as well. De-
spite the defeats of the sales tax in
the past, recurring circumstances have
demonstrated that it represents the
most practical tax expedient now avail
able. If the rate of something over
one per cent is adopted, the tax would
presumably yield in excess of the $780,
O0o, 900 year which the administra-
don must have as carrying charges
for the relief outlays.
The legislation carrying these fea-
lures might be expected to bring out
the most severe test of the Presidents
leadership in Congress so far encount-
cred. But there has been nothing to in
dicate that this leadership has lost force
or In any manner been weakened. The
President is riding the crest Of wave
of popular confidence and support that
will carry him far