Evening star., 1934-06-17
Those New Deal Experiments

! the springs of investment. They are
not, in the judgment Of this writer,
the serious bar to investment. The
real cause of stagnant investment Is
uncertainty as to what the Govern
ment will do next.
The stock market bill is also harsh
in detail But it is directed at serious
abuses The systematic looting of the
public through security manipulation
has been a crying evil these many
years, and the Stock Exchange has
blindly refused to do its own house
cleaning. There is grave doubt
whether there is any real economic
justification for margin trading in
stocks. There is little reason to fear
that the preceding measure will de-
stroy a free securities market. and
that is all that honest American
finance should be concerned about.
The original Wagner bill was an at
tempt to give the American Fedora
ton of Labor control of all industry
The storm of protest that 1t evoked
resulted in amendments that make 1t
vague and ambiguous measure gen.
IL dAAy OC1l0kAA6 w SuSlI dllVCC ullO1llSkIl
in some form. The economist realizes
that collective bargaining is inevitable
in our present industrial order, and
he also realizes that the antiquated
and frequently anti-social craft union
is not adapted to modern industrial
enterprise. He realizes finally that q
government that surrenders to political
pressure and establishes labor ar
| rangements by coercion must be re-
sponsible for insuring industrial peace.
The impartial economist sees no i'm
mediate injury in the Wagner bill but
he does not see in the Government S
attitude any realization of the explo-
sive character of the forces it so reck-
lessly hampers with.
The relief measures and the reform
measures, despite defects of detail and
faults of administration, are generally
satisfactory by the criteria of econom-
les. The reform measures unfortunate
| ly have added to the public fears that
have diminished enterprise and re-
tarded recovery. They might we'll have
been passed to take effect exactly one
year hence. Even so, if this Govern
ment had confined itself solely to these
measures Of relief and reform, even as
passed. a grateful and inspired Nation
by this time would have been tar on
the road to recovery.
The recovery measures are, pri-
marily, the A. A. A.. the N. R. A. and
the monetary program. Judged by the
science of economics they are m-
sound. The A. A. A. is modern ver-
sion of an ancient device, the restric-
ton of production for the benefit of
/ the producers. In the popular mind
it has failed because it was unable to
restrict production. 1t did fail there,
! Of course, just as the Stevenson rubber
control failed. and the Brazilian cof-
fee control and plans for sugar and
what-not have failed.
A Tennessee Senator voting for the
Bankhead cotton act in the face OF
what he saw in the tobacco night.
rider" days is an invitation to irony
But the economist looks deeper. The
A. A. A. would have been bigger fail.
ure if it had succeeded. Depression
is failure of the productive and con.
sumptive forces to balance Recov-
| cry comes when the balance is re-
stored. 1t is brought about in part
by the low prices of depression. The
process is automatic, though painful
Restriction of production disrupts
the whole process Of recovery by di'
minishing consumption and retardine
recovery in other lines. The gluttec
market for wheat is not due to over.
production. 1t is due to the want o1
means Of the people, who are hungry
and want bread. Where, as in the
case of most of our agricultural prod.
ucts, the commodities have both q
world price and a world production
domestic restriction becomes ridicu.
lous.
Some day the A. A. A., the Bank.
head law and Secretary Wallace's
! clarion call to America to decide
whether to vacate 100,000,000 acres
will be in our elementary economics
texts, in the same chapter that tells
how the French revolutionists "abol-
ished" Sunday. The more waggish
Of the economists will comment on q
government that paid farmers not tc
produce wheat and then distributed
grasshopper poison.
The paternity of the N. r. A. is in
doubt. At last accounts it was a
child Of the United States Chamber oi
Commerce. In any event. 1t is a
problem child" with eminent spe-
cialists divided on the question OF
whether 1t is congenitally defective OF
| the victim of bad home conditions
| 1t began as a plan to have employers
in basic industries get together ard
establish reasonable conditions of pay,
hours and competition AS such IL
had the approval of economists. since
it would remedy some of the most un-
happy conditions that derive from the
bitter competition of depressed indus
| try. Economists realized that its CHIEF
value as depression cure was psy-
Geological, like the beating of pots
in China to scare away the cholera
devils, which has a genuine value ir
tempering the fears of the people.
Even in depression wages and hours
| tend to adjust themselves to the max.
imum possible employment and con-
sumption. and the dangers of arbi-
trary fixing" of wages and hours
were obvious to economists. The N
r. A. plan itself was wretchedly
drawn, with looseness of terms tha,
| permitted almost anything to happen
And almost anything did. 1t began
with an unhappy mistake called the
P. r. A. (the Presidents Re-employ.
ment Agreement), which was not pro.
vided for in the law. Its provisions
were incredible. 1t brought on mao
race to establish codes, in which all
parties-labor, employers and trades
-strove for every conceivable advan.
tage. The results ranged from the
immortal regulation that one-mar
barber shops should remain open So
hours, but the barber should work only
48 hours, to the approval of codes that
actually prohibit improvement ir
manufa cturing methods.
Out of it all emerged series Of
codes whose economic results cannot
be summarized in line. In one di-
rection it has intensified unemploy-
ment by restricting production and
raising production costs. In another
it cruelty squeezes the little employer
| In other directions il results in trade