Evening star., 1934-09-03
FEAR Of POLICIES
PUT DOUGLAS OUT
Former Director of Budget
Fought With Conscience
as Long as He Could.
BY DAVID LAWRENCE.

Lew Douglas fought 1t out with his
conscience as long as he could, and
then made his decision-he could not
remain as Director of the Budget and
appear to acquiesce in what the ad-
ministration was doing when ne felt
deeply II was wrong policy and
might conceivably lead the country
to the brink of q financial disaster.
Mr.. Douglas fought another battle
once in the Argonne and came back
with a record of distinguished service.
He fought a later battle In Congress,
when he stood up against those who
would raid the Treasury under the
Hoover administration.
Last January came the first humili-
alton Of his career. He stood 1t like
the soldier that he was without q
murmur Of dissent. The episode can
be briefly related:
The President of the United States,
before joint session of Congress,
solemnly pledged that the emergency
agencies Of Government would be
brought under budgetary control just
as were the regular expenditures OF
the Government.
Pledged Coordination.
Here Is what the President said:
up to now there has been no
co-ordinated control over emergency
expenditures. Today by executive
order I have imposed that necessary
control In the Bureau of the budget
hereafter, just as in the de-
partmental expenditures, there will
be in the emergency expenditures
prebudget and a post audit.
by reason Of the fact that the
Bureau of the Budget has had no
control in the past over the various
expenditures, obliga tions and allot-
ments made by the emergency or
ganizatons, the task of preparing
the present budget has been the
most dificult one since the budget
and accounting act went into effect
in 1921. These difficulties in future
years will be substantially minimized
by the control which I have estab-
lished."
Rescinded in 10 Hours.
This pledge was publicly given on
January of this year to the entire
country. Within 70 hours 1t was re-
scinded by the President In an execu-
tive order. This placed the situation
of budgetary control exactly where
1t was prior to the delivery OF the
presidential address to Congress.
No public explanation was ever
made OF why this turn -about-face was
found necessary by the President.
Mr.. Douglas knew, Of course, that
emergency administrators had gone
to the President Immediately after
his speech and persuaded him to
change his mind.
But the issue was as clear before
the presidential message was delivered
as 1T was afterward. The emergency
directors did not want to tell the
Budget Bureau what they planned to
do with the money. They agreed to
furnish him with q weekly report
after the expenditures had been made.
AS consequence the budget direc-
tor for the last eight months has been
In ignorance Of what the emergency
agencies were planning. He mas hesi-
tated to make a public issue of it be-
cause he is very fond of Mr.. Roosevelt.
Morgenthau Took Interest.
When Secretary Morgenthau came
to the Treasury Mr.. Douglas found 1t
possible to work along with the new
cabinet oficer because the latter began
to display an alert interest in what
other agencies of the Government
were spending. 1t is apparent that
Mr.. Douglas finally came to the con-
clusion that the future of the ofice of
director of the budget was somewhat
doubtful, anyway, II q strong Secre-
tary OF the Treasury could dominate
fiscal policy, both as to revenue get
ting and spending, there would be no
need for the budget director to act
independently, and the latter might
as well be an assistant to the Secre-
tary of the Treasury.
This was not, of course, the original
concept Of Congress in creating a
Budget Bureau, but as matters have
turned out, Lew Douglas will be the
last director Of the budget. Some day
the ONCE will be merged by law with
the Treasury Department. The re-
sponsibility for fiscal policy and con-
troll of the budget will doubtless be
placed again in the Secretary of the
Treasury who, by reason of his seat at
the cabinet table. would carry more
weight with his colleagues than would
q subordinate officer OF the Govern
ment
Just Difference Of Opinion.
1t is difficult to believe that there is
anything personal In Mr.. Douglas
resignation. 1t is simply a difference
of opinion. AS for the investors of the
country. they will require some further
assurances as to budgetry control be-
fore they will erase from their minds
the unpleasant fears engendered by
the Douglas episode 1t probably ex-
plains the decision last Friday of Mr..
Morgenthau to postpone announce
ment Of Treasury financing plans for
a week or so. 1t becomes increasingly
evident that Mr.. Morgenthau will have
to bear more and more of the respon-
sibility for what the New Deal spends
and collects, its deficits and its ref
nancing problems, as the public debt
continues to grow to unprecedented
heights.