Evening star., 1934-01-01
MOLEY ANSWERS
KEYNES CRITICISM
Saws Roosevelt Has Accept
Cd Most Suggestions
Fisher Also Replies
Special Dispatch to The Star.

Special Dispatch to The star.
PHILADELPHIA Pa. January
The main trouble with the
constructive suggestions made by John
MAYNARD KEYNES in his open letter to
President Roosevelt" says Prol. KAY
mond Moley is that the distinguished
British economist doesn't realize most
of these suggestions already have been
adopted.
That is the crisp climax of the
answer made by one of the original
members of Mr.. RoOSevelts brain
trust" to the friendly but critical estl-
mate of the Presidents recovery pro-
gram that Mr.. Keynes presented In ms
"open letter" appearing in The Star
exclusively on Sunday.
Mr.. KEYNES expressed the belief that
the Roosevelt plans were putting reform
ahead of recovery. He feels the N. X
A. which is essentially reform and
probably impedeS recovery, has been
put across too hastily, in the false
guiSe of being part of the technique
OF recovery"
His letter said that though its social
gains were considerable. he could not
detect any material gains TO recovery
I'm the N. r. A. He criticized the in
crease of prices by deliberately in
creasing prime costs or by restricting
output" and he added the setback
American recovery experienced this past
Autumn was the predictable conSe-
ouence of the failure of the admins
tratiOn TO organize any material in
crease in new loan expenditure.
FavOrs Gold Standard
Mr. Keynes expressed surprise that
so little of this loan money had been
spent so far and. regarding the none
tary situation. he said: In the field
Of gold deyaluation and exchange policy
the time has come when uncertainty
should be ended" He favors devaluing
the dollar and returning to the gold
standard
Prof. Moley who. since relinquishing
the post of Assistant Secretary OF State
and his place as one of Mr.. Roosevelt S
closest advisers TO become editor of the
magazine Today. has continued to in
terpret and defend the recovery pro-
gram and has answered Mr.. Keynes in
an interview.
Agreement with most of what Mr..
Keynes said in his letter was voiced III
another interview by Prof. Irving
Fisher. who holds the chair of political
economy at Yale and who is a cham
pion of the managed dollar. He does
not agree. however, on the N. R. A. He
believes that is now helping recovery.
Prof. Willford l. King, New York
University economist while finding
many points in the Keynes letter with
which he agrees says there are some
which appear of doubtful validity.
There is no evidence that Mr. Keynes
sees the essential and planned relation
ship between the n. R. A. and the
Agricultural Adjustment Administra-
ton" said Prof Moley. His assump-
ton is that the administration has put
its major, almost exclusive attention, to
increasing the production Of manufac-
tured goods by adding workers to the
pay rolls.
Outlines Primary Points.
He misses two pointS-firSt. the
N. r. A. is not primarily concerned with
increasing production, but with spread
ing work and in balancing production
within the great fields of industry. Sec
ond, the N R A. followed the A. A. A.
and was intended to help industry to
absorb the new purchasing power by
agriculture provided by the A. A. A
The two are in balance. The President
has repeatedly pointed this out.
1T is true actual money for pubic
works Is only recently geLIlng llIO ClI :
culation In this respect, the President
has wisely steered his course between
those who would shovel money out rap
idlv. quite reckless Of either inetlciencv
or graft. and those who would spend
nothing of borrowed money on public
works at all The fact is the allot-
ments for public works are now being
used and money will pour into them at
very rapid rate.
Thus Mr.. KEYNES hope is now being
realized although it was because of the
wise caution Of Secretary Ickes that
hone was somewhat deferred.
"Mr. Keynes speaks Of the deslrapil-
ity Of devaluing the dollar at once, IN
terms of gold, and returning to the
gold standard. But he doesn't suggest
neither does he offer. any indication
that England would be willing to accept
a ratio and itself return to a gold
standard
His demand for a return to gold
ought to be likewise addressed TO MI.
Chamberlain. chancellor of the British
exChequer l suspect the answer would
be blunt refusal.
In the main. Mr. KEYNES cOnstruc-
tive suggestions are sound. The trouble
is he doesn't realize that most of those
are already adopted. The Roosevelt
program must be seen as a whole, not
one aspect of it,
Prof. Fisher read Mr.. Keynes letter