Evening star., 1934-07-29
BY OWEN L. SCOTT.

Nature ana Henry WALLACE, on the
one hand, and Senator Borah, Clar-
ence Darrow and public opinion,
on the other. are working a pro-
found change in the direction Of the
new deal. Among them they are
about to perform major operation
on the most obvious and probably the
most vital contradiction of the re-
covery progrann-that of high indus
trial prices and tagging farm prices
If Gen. johnson and the N. r. A.
are badly cut up in the process,
apparently few tears will be shed.
Yet what is about to happen may
N the end be more painful to city
populations than anything that N.
r. A. did through its boost to prices.
In fact, as a result of the coming
change, Secretary Wallace would not
be surprised to see a complete shift
in the center of opposition to the
Governments policies before another
year is out.
The chain Of events leading up to
the change that is taking place runs
back to the beginning of the new
deal experiments. At the start it
was recognized that one of the coun-
try's major economic ills grew out OF
the loss of purchasing power among
10000, 900 people living on farms. The
prices of things they sold had fallen
so much more rapidly than the prices
of things they needed to buy that a
high barrier was raised between one
quarter Of the country's population
ted
President Roosevelt promised to
correct that situation. The Agri-
cultural Adjustment Administration,
operating under Secretary Wallace,
was charged with performing the
task. An intricate machine was
created, designed gradually to bring
farm prices back to level at which
Q bushel Of wheat, or pound of pork,
or a given quantity of other farm
products would buy as much in the
way of shoes, or overalls, or farm
machinery or other things the farmer
needs, as it would before the World
War, This relationship between
prices of what farmers sell and what
they buy, based on comparative prices,
was termed parity"
But as Secretary Wallace and Ches-
ter Davis, administrator of the A. A.
A., put their farm income raising
program into effect, they were check
mated. While farmers found them
selves with more money in their
pockets. they also found that it re-
quired that extra money to buy the
same amount of goods that they for
merly could buy without it. That
development reflected the operations
Of Gen. johnson in N. r. A. He
was approving codes on a mass pro-
duction basis, and those codes in most
important instances carried With
them the opportunity for industry
to raise the prices of things it had
to sell. Farmers sensed this contra
diction between the A A. A. and its
price-raising program and the N. r.
A. with its price-raising effect as far
back as last August, when they re-
volted in the Middle West against the
Blue Eagle.
What they saw was that A. A. A.
and N. r. A. we're running a race. 1t
was a neck-and-neck affair for many
months. AS fast as farm m&prices were
brought up there would come an in
crease in the prices of things the
farmer needed.
x x
Now two things have happened to
trip up Gen. johnson and to send the
A. A. A. out ahead on the road to
parity" One is the drought which
has stepped in with ruthless destruc-
tiveneSs TO do in one swoop what the
Agricultural Adjustment AdminiStra-
ton had planned to do gradually and
evenly.
The other is the decision made by
President Roosevelt to knock the
props from under many of the price
controls allowed by N. r. A. in in
dustry. Future price fixing agree
ments. except in emergencies, have
been banned. The way now also is
opened for competitive bidding on
Government business, and Mr.. Roose-
welt has let it be known that he is
determined that competition should
be brought into play throughout in
dustry.
The attack on monopoly by Senator
Borah and the attack on N. r, A.
as promoter of monopoly by Clar-
ence Darrow admittedly struck a
popular chord throughout the coun-
try. As a consequence, the Blue
Eagle and its price-supporting poll
cieS are to be overhauled. Donald
Richberg. former N. r. A. general
counsel, now is working under special
orders from Mr. Roosevelt. seeking the
right formula for the overhauling.
\
So what the country is about to
witness. judged By the studied con-
cluSions of important Washington on
cials, is this:
There viii be pressure ON many
industrial prices The cut IN steel
prices. n textile prices. In autono-