Evening star., 1934-09-16
Pump Priming Is Not Working Out
To Lift Country From Depression


traitor of emergency relief.
There apparently are two principal
views of the situation held by OFF,
cials in Washington, One, expressed
by Senator Robert M. La Toilette, and
supported by a considerable number
of officials, is that the rate of spend
| ing has been too slow. He wants
fund of 10 billions. Another, ex-
pressed by officials who don't like to
be quoted, is that the principle of
administration was wrong.
Early in the experience Of the Pub
lie Works Administration, Prof. James
Harvey Rogers. one of the Presidents
advisers on money policies, expressed
the belief that P. w. A. was making
mistake in supporting high wage
and high price level in the con-
struction industry. This thought was
echoed by other economists.
Now there Is continuing stagnation
throughout the private construction
field, and P. w. A. is blamed. 1t is
charged with serving to maintain an
artificial scale of prices, both in wages
and materials, that has discouraged
revival of building and has caused
the use of large part of the vast
public works fund without getting re-
suits commensurate with the outlay.
X X y r.
Those who believe that administra-
tion has been responsible for the dis
appointing results from P. w. A. ex-
penditures express the opinion that
this Government-sponsored work
should have been carried on at wage
rates that would have provided an in
centive to the workers to seek private
employment in preference.
Instead, the rules of P. w. A., which
really were ordered by Congress, OBJ
ligated the payment of wages at a
minimum of from 40 to SO cents an
hour for unSkilled workers and from
81 an hour to $120 an hour for skilled
workers. But this was just the mini
mum. In addition, wherever union
valling," or union, scale was to be
met. Frequently the union rates were
a hangover from the days of boom
times in the construction industry.
They were principal barrier, along
with high building material and high
financing prices, to a revival of build
ing, in the view of those who are
critical of the P. w. A.
The result is that high wages are
being paid on Government-SponSored
jobs, but there are relatively few Jobs.
At the same time private construction
is stagnant in the face of the wage
and price levels, supported and kept
from declining by the Government.
About three months ago, President
Roosevelt recognized that situation.
and by an executive order suspended
the Davis-Bacon act, which requires
the Federal Government to pay the
prevailing" rate of wages on con-
struction projects. A week later, with
out explanation, Mr.. Roosevelt revoked
his earlier order and the act went
back into effect.
AS seen by those who are critical of
P. w. A. policy, the question at issue
really is whether building tradesman
and a building material manufacturer
really is better off with high price
and little or no work. or lower price
and more work. Incomes of wage
earnerS who might be interested in
building homes for themselves are re-
ported to have declined during the
depression by 40 to so per cent. Build
ing costs have declined scarely 25 per
cent. The result is that there is a
barrier between the prospective builder
and the laborer and material man
that is not easily scaled 1t is bar
rier supported by Government action.
AS the critics of this situation, many
of whom are in high official position,
see this whole picture, either most
wages and most prices in other lines
will have to rise to meet existing costs
in the building industry, or there will
be continued stagnation. This means
that the great mass of unemployed,
who are crowded into this field, would
continue to be unemployed. Public
works, on the basis of a years expert
ence, will take up little of the slack.
copyright, 1934)