The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1933-04-07
UPWARD TREND
OF PRICES IS
SIGN OF BREAK
Roosevelt Plays DefIation
With Initiation to Bring
Business Revival.
HOPE FOR FARM GAIN
Public Works Scheme Also
Counted On to Aid
in Recovery.
BY HERBERT LITTLE
Times STAFF Writer


WASHINGTON. April 7. - The
up-trend of basic commodity prices.
now the principal symptom of a
break in the economic storm. is
credited largely by economists to
he Roosevelt administration ex-
pert interplay of deflationary and
lnhationary forces.
Other fundamental symptoms of
good times, notably a general in
crease in employment. and wages.
are absent. In fact, the most severe
single blow of the three and one
half year deflation came this month.
following the bank holiday, in the
temporary or permanent freezing of
four billion dollars in bank deposits.
Unemployment is at a new high,
the American Federation of Labor
says.
President Roosevelt's legislative
and administrative programs. rath-
er than Wall street and its stock
price fluctuations, are credited
largely with the one major symptom
Of improvement.
Tries Both Plans
In his program so far, Mr.. Roose-
welt has been juggling with infla-
tionary and defationary forces al
Tentatively, trying to make Roadway
without upsetting the boat entirely.
Some of his measures have been
frankly deflationary, through strik-
ing at spending power-$125, 00G, 900
a year IN the case of the federal
workers, and $400,000,000 in the case
of the veterans.
The cuts in veterans compensa-
ton, however, will not become eff
tectlVe until July l. Other "econo-
my measures in government -
enacted frankly to strengthen fed
eral credit-bring the total possible
direct "def1ation" close to the bill
lion-dollar mark.
But this is a small item compared
with the def1ation involved in the
three-year period, in which the ma
tional wealth has been reduced
from about four hundred billion dol
lars to little more than half that
figure. and total income from $780,
O00,O00,000 to about $4,000 900 900.
Boost Buying Power
Inf1ationary possibilities of major
Importance are found in a half
dozen different features of the
program. however. Rec
ognizing possibly that straight-out
currency initiation is something like
playing with jigsaw puzzle made
OF dynamite caps, the administra-
ton has put forward its business
and price-boosting measures in a
half-dozen different forms.s The
ultimate aim of nearly all of them
is increase of mass purchasing
power.
1t is difficult to classify or iden-
tify or appraise exactly these in
f1ationary' proposals as such. But
anything which tends to boost prices
or to create business or trade has
the opposite effect to our long CON
tinued defiation.
Hence, under the Roosevelt pro-
gram, hopes for an end to defation
may be found as follows, roughly
and approximately:
l. The pending farm bill, carry
ing $2,000,0O0,0O0 issue Of bonds to
be used in refinancing farm mort
cages, largely through exchange, so
that farmers will pay not more than
IL per cent, instead of 6 to 8 per
cent interest, and possibly on a re-
duced principal.
May Help Farmers
1t also carries a 100000. 900 r. 2.
9. increase for farm loans, end a
possible 81 00000O,00O increase in
farm purchasing power is expected
# farm prices are forced up by the
land and processing tax
feature of the bill.
2. The expected home mortgage
'efinancing bill, which probable will
carry low interest bond issue as
arge or larger than the farm issue.
also designed to increase purchasing
power by cutting fixed" interest
charges of home owners from 8 ard
to 4 or 5 per cent
The expected public works pro-
gram. expected to provide up to
s500000,000, most of which will 90
directly into the pockets of labor
and the severely depressed heavy
Industries.
Beer Revenue High
a. The pending 100000, 900 direct
relief bill, practically all of which
goes directly into purchasing power
If the unemployed.
The beer legislation bill. The ex-
act size of this rejuvenated industry
S unknown, but if it brings in the
expected SIPS 100000 in taxes at Sc
4 barrel, the wholesale price turn
over will be more than $500 1000 900
4 year
6. The Tennessee valley land utili-
zation and power bill, involving sew
sral millions more Of public works
on a -liquidating
basis, which, if successful, may tend
ultimately to cut another fixed
charge rates-of consumers
all over the country.