Evening star. [volume] (Washington, D.C.) 1854-1972, 1934-04-11
EFFORT TO RETARD
RECOVERY IS SEEN
New Deal Policies Aimed at
Preventing Boom, OBJ
server Says.

server Says.
BY MARK SULLIVAN.
One objective of the Writ mvestiga-
ton is to discover whether any one
in the administration is engaged in
activities likely to "thwart the plan
Of national recovery" This phrase in
the House resolution is ambiguous.
Understanding of 1t and of the whole
situation will be helped by realizing
that the administration has two OBJ
jectives. One Is business recovery in
the ordinary sense. The other. objec-
tive, as expressed by President Roose-
welt in his message to Congress Jan
uary 3 Is to achieve "a permanent
read1ustment of many of our
social and economic arrangements. :"
what the average man understands
by the phrase national recovery" is
business recovery in the ordinary
sense, meaning increased volume Of
business. increased employment, and
increased prof1ts-in short, q resump-
ton OF what We all regard as normal.
This Is what the average man thinks
OF as recovery" and this suspect is
what the average man wants.
There can be no doubt that MANY
OF the steps taken for the administra-
tons second objective. permanent
have the effect of
slowing down recovery as the average
man understands the latter word. In
deed. some of the administration
measures are taken with the frank
purpose OF retarding recovery.
To Avoid Depressions.
AS a part OF the administration
ultimate objective, permanent re-
adjustment. they hope to avoid re-
currence OF alternating boom and de-
preston. Consequently they are be-
ginning already to prevent the boom
that might be expected to occur four
or f1ve years from now. With this
purpose. many Of the administration s
proposals are designed to put checks
on the processes through which busi-
ness expands and prices rise.
The pending bill for control of ex-
changes aims to bring it about that,
speaking broadly. the owner of a bond
or OF share of stock shall not be
able to borrow on it more than 40 per
cent OF its value. Undoubtedly this
would tend to avoid future booms.
Also. however, it tends to check re-
covery right now by preventing the
expansion Of credit
This attempt by the Stock Ex-
change bill to prevent expansion Of
credit runs directly counter to several
other measures which. being primarily
designed for recovery, aim to expand
credit. The contradiction between
the almost frantic efforts by r. F. C.
and by the President himself to ex-
pand credit. and on the other hand a
stock exchange bill designed to re-
strain credit-this is but one Of sew
eral contradictions which caused
Walter Lippmann to describe a large
area OF the administrations program
as the economy Of Bedlam."
Preventing Expa nsion.
Some fundamental features of N. r
A. are designed for the frank pur-
pose OF preventing expansion of bust
ness. Several N. r. A. codes make it
a crime for business man to expand
his plant by adding a single machine
without first getting permission from
the code authority This is true of
the textile. carbon black. glass manu-
featuring and several other codes.
Ofhcially this provision is called the
'prohibitive" or permit" clause. In
the slang group up about N. R. A.
it is called the birth control clause"
because. obviously. it stiles initiative.
II an inventor or any one else wishes
to enter one of the businesses held
down by permit clause" he cannot
do SO without consent of the others
already in the business. The broad
frankly held by the admin
istration is that every industry in the
country shall be forbidden to expand
until such time as consumption has
caught up with the plants now exist
ing. Whatever merit that philosophy
may have, it certainly operates as a
drastic check on enterprise, and there
fore on recovery.
Conspiracy Doubted.
If by national recovery" we mean
business recovery in the ordinary
sense, then undoubtedly these and
other measures Of the administration
have a tendency to "thwart"> it.
These steps of the administration
however. are as far as possible from
being a conspiracy. They are per-
fectly open. They are an avowed part
OF the administration program. What
the committee investigating DR.. Writ
will wish to know is whether any one
in the administration is. so to speak,
willfully and furtively trying to ham,
string" business recovery.
One does not need to be a radical
to realize that prolongation of the
depression, postponement of normal
conditions, would make it easier to
bring sbout adoption of the measures
for what the President calls per
ton as the country gets back to
normal conditions and the people to
a normal state of mind, in that de-
gree will the country be less sympa-
thetic to radical innovations. What
has made the new deal legislation
possible at all is the fact that it was
put forward at time of acute dis
tress. The present hating attitude
OF Congress toward Mr.. Roosevelt,s
proposals is proof that as business
improves the willingness to accept the
new deal diminishes. No doubt there
are among the radicals in the admin
istration some SO ardent that they
would regret the business recovery,
which would make radical changes in
society impossible. If any Of these
have committed an overt act toward
retarding recovery, doubtless future
developments before the present inves-
tigating committee will bring it out.