Evening star., 1934-01-24
c. WA. RELIEF SEEN
ENDED BY SCANDAL
Administration May Under
take Rebuilding Private In
dustries, Observer. Says. :;
BY DAVID LAWRENCE.

BY DAVID LAWRENCE.
The Roosevelt Administration has
run head-on into the first scandal of
graft and corruption. From all parts
Of the country complaints are coming
In of tmproprieties in disbursing funds
under the Civil Works Administration
and Of political manipulation in giving
out jobs.
The President has determined that
the G. w. A. shall come to an end.
The pressure to continue it has
mounted to the proportions of Nation
wide propaganda. Mr.. Roosevelt has
bear by the tail, SO to speak. If he
stops the c. w. A. there will be more
clamor and doubtless hardship for those
left unemployed again. If he continues
the c. w. A. there will be more scandals
and possibly a bigger reaction 10 the
administration than members Of Con-
gress could overcome in the elections
next Autumn.
For a distinction has to be drawn be-
tween Mr.. RooSevelt'S personal popu-
larity, which is as high as it ever has
been and the popularity of the Demo-
cratic party which label has to undergo
all sorts of local attacks. Scandals
would not enhance the reputation of
the Democratic party even though MI.
Roosevelt himself Is blamelesS.
Emergency Measure.
The President, with the best inten-
tionS in the world, started the G. w. A.
as an emergency relief measure when
industry took a drop last November
after the N. r. A. excitement failed to
bring an increase in the volume OF
business.
Since then the Federal Government
has been pumping S75 ZOO. 900 week
into the country and giving employ
ment to 100000 people. The machin-
cry was hastily devised. Little chance
was afforded to check the operation
The budget director here had nothing
to say about expenditures and WASH
ington depended on the honesty and
integrity of local administrators to take
care Of the efforts at graft.
But, unfortunately, the politicians
began getting their hands into the
operation. In some instances they in
sisted on preference to those who were
Democratic voters, and. in the award
ing Of contracts or orders for supplies
the same old pull and influence that
has been attempted here was duph-
Gated In various sections OF the coun-
try.
Official announcement has not been
made of the number Of places In which
investigations are under way, but the
Department of Justice Is busy on 1t
There will be no favorites played as
the prosecution is put under way.
The C. W. A has been a big burden
from the start. 1t raised cain with
local wage scales by paying men hourly
rates that were higher than prevailing
scales, all Of which led to unsettlement
and complaints.
Confusion on Projects.
But while the c. w. A. has been q
thorn in the side Of the Government
and has been the subject of complaint
by the N. r. A. because Of interference
with the orderly operation of codes
the real perplexity is over the number
of people on the Federal pay roll and
the confusion that arises in trying to
find sound projects for them to
The c. w. A. is not to be confused
with the Public Works Administration,
which Is under Secretary Ickes and
which has $1,000 100000 to spend. OF
the latter sum. not more than $3.50 ,OOO,-
900 has been spent. though allotments or
authorizations many times that sum
have been made. Mr. Ickes has put his
foot down on political influence wher-
ever he finds it. Whether he will be
able to stamp out local graft remains to
be seen. AS it is, very little money has
been disbursed. Some better system OF
watching expenditures will have to be
devised than the C. w. A. had. Indeed
the haste Of emergency Is the admins
tration'S excuse.
Opposed to a continuation OF the
C. w. A. are many groups who see an
endless expenditure for the Federal
Government and a disturbing effect on
ment has provided no substitute. 1t re-
fuses to amend the securities act to
permit resumption of financing. 1t
has not yet stabilized or finally re-
valued the dollar so that long-term
investment can be encouraged. And in
dustry cannot borrow from the Gov
ernment as can banks and insurance
companies. The result is that private
companies greatly in need of refinanc-
ing are stalemated and businesses which
need to replace obsolete equipment and
develop foreign markets are forced to
mark time.
May Enlarge r. F. C.
The crisis in the c. w. A. may COM
pei a further definition of monetary
policy and an enlargement of the func-
tions of the r. F. c. to take care OF
the capital needs of business. For there
are believed to be 9,500,000 persons out
of work as a direct consequence of the
collapse of the capital goods industries
for which there has been no serious
effort at relief except through Govern
ment spending for public works-a pro-
gram that is very slow in getting going
because the projects are not quickly
brought to consummation.
Private business has been seeking
credit and is willing to give the Gov
eminent first liens on its earnings, but
no machinery has yet been provided
Billions of private reflnancing and bill
lions of Government refinancing must
come in the next several months. Sta
bilization of currency and return Of
public confidence are prerequisites to
the revival of capital markets today
Scandals in the c. w. A. may open the
eyes to the aiterna-
tives, namely rebuilding of private in
dustrial projects and a revival OF private
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(Copyright 1934)