Evening star., 1934-05-20
REED DEFEAT OF PINCHOT
IS HELD MISINTERPRETED
Both Candidates Declared Mislnder.
stood and Senator's Victory Not
Believed So Far Reaching.

much Digger CdSk lIldll Illc OllC tilde
the Russian government has under
taken.
And how is it discharged in Wash
ington? In practice the initiative In
industrial commodity controls Is not
taken by the Government at all, but
by the industries themselves. We do
not have national planning. We have.
at the most, fragmentary industrial
planning. industry by industry.
For instance, the cotton textile in
dustry is now planning a curtail-
ment of running time A project is
being circulated in the industry for
perhaps closing the whole industry
down for week month for several
months. Demand is declining a bit,
it is said, and prices are not salts
factory. Therefore a drastic curtall-
ment is suggested, and the cotton tex
tile code authority will perhaps pres
emily carry the suggestion to the cot
ton textile code administrator in the
N. R. A.
Industry in Best Position.
That busy official has usually gone
along with the cotton textile code
authority's suggestions. 1t is the in
dustry, and not the harried and hur-
ried administrator. that has been in
the position to make the best studies
and to find the best arguments for
the curtailment.
But now note! This curtailment
will curtail the running time OF the
low-cost cotton textile mills, which
can produce cloth the most cheaply,
equally with the running time of the
high-coSt mills, which produce cloth
the most expensively. Hence. 1t is
obvious that this sort of planning
tends not toward lower prices and
a wider market. but toward higher
prices and a narrower market. Which
is not entirely to the interest of the
consumers.
1t is obvious also that this sort of
planning, through mitigating the
competition between the low-cost
mills and the high-cost mills. tends
to check the possible desire of the
high-cost mills to cheaper their pro-
duction through installing new and
better machinery. In other words,
it tends to reduce orders for what
the economists are now calling dur
able goods"
The same tendency is brought into
being when fixed quotas" of pro-
duction are "allocated" to all Of the
petroleum refineries in the petroleum
industry or to all of the lumber mills
in the lumber industry. When every
industrial plant can be sure of at
least some business, and when it is
no longer threatened with competition
which might altogether eliminate it,
the pressure upon it to improve its
processes through new improved ma
chimes is most certainly weakened.
Tendency to Diminish Purchase.
Any type of capitalistic planning,
therefore, which merely adjusts pro-
duction to consumption" by universal
curtailments or by universal quotas
and ALLEGATIONS will tend to diminish
purchases of new durable goods" and
will tend actually to accentuate un-
employment in the durable goods in
dustries.
Yet it is precisely in those ir dus-
tries that our most disastrous unem-
ployment today exists. Our chief
problem in the restoration of employ
ment is precisely the problem of Sc
curing orders for the firms in the
durable goods industries. I venture
to think it clear that our present
type of planning is not Fastening the
securing of those orders, but in fact
retarding it.
The potential existence of such
orders for such firms on a large scale
is undoubted and undoubtable. Many
we'll informed men in the cotton
textile industry believe, for instance
that more than half of the machinery
in that industry could be replaced
by better machinery to the indus
try's positive advantage. The best
studies made of all industries COM
bined would seem to indicate that the
gigantic sum of S30,000,000,0 900 could
be spent on new factory mach
inery with profit 1t is also believed
by the ablest students of the railroad
situation that the thorough modern
izing of our railroad system would
require an expenditure which, even if
kept within the limitations of the
most judicious prudence. would run
to at least $4,000, 100000.
Courses Open.
Now it is manifestly open to the
Republicans to say:
All planning is hocus- -pocus, and
we promise you to abolish it.
On the other hand, it is also open
to the Republicans to say:
Every government in modern times
has an unavoidable responsibility for
the economic welfare of its people
| The methods through which it meets
this responsibility constitute planning
whether we live the word or not
We propose to abolish the Democratic
planning which abridges competition
and which thereby abridges the dur
able goods developments which can
give the country its next prosperity
But we will accelerate these durable
goods developments by every method
of planning at our command. And
If private finance is inadequate to
the task, we will put public finance
into it. We discard a planning OF
scarcity but we embrace planning OF
abundance.
My guess is that at the pinch the
Republicans will say something oi
that latter sort, or else the Democrats
will beat them to it and stay ir
Office.