Evening star., 1934-12-16
BY OWEN L. SCOTT.

Wanted, at the White House: A
new superbrain trust to unscramble
and coordinate the plans Of the late
lamented ordinary brain trust.
The Nation need not be surprised
if some time soon q notice to that
general effect Is reported in the news
papers. 1t would be induced by the
now obvious fact that, one by one,
the best laid schemes Of the New Deal
are going awry. This apparently Is
the inevitable outcome when an ir-
resistible economic theory meets an
immoyable economic fact.
The latest of these collisions to come
forcibly to notice involves one Of the
most irresistible Of the New Deal
theories. The theory Is that wealth
can and should be distributed more
widely, with less going to the already
rich, more to those Of small incomes.
The N. r. A., the A. A. A., the P. w.
A., among other alphabetical agencies,
were created to reverse the trend to-
ward wealth concentration and large
profits.
So much discussion surrounded this
theory that industry became frighten-
ed. DR.. Rexford Guy Tugwell. as
leading brain truster, was pictured
as a man who would destroy the
profit system. The Blue Eagle came
under attack as an agency to divide
I'D wealth. To Offset the alarm PreSi-
dent Roosevelt and members OF his
cabinet felt it necessary to reassure
business men that profits were not
to be destroyed under the New Deal.
&k +
But what are the facts? Is there
anything to show that wealth now Is
being divided up more evenly?s
Hardly. On the basis Of careful
scrutiny of 1888 income tax figures,
made public December 10 by the
Treasury Department, big industry
and the wealthy have little cause for
concern over the trend. Many OBJ
servers had suspected as much, but
until these figures were published
there was little tangible proof.
The facts are these:
In the first year of the New Deal
one-third more corporations reported
net earnings than in the lowest de-
preston year, 1882. These CORPORA
tions reported 1888 earnings IS per
cent larger than the year before. That
suggested no threat to the profit
system.
Besides, the gain in earnings was
concentrated in the manufacturing in
dustry and in the trades. This TACT
pointed to N. r. A. code policies OF
price fixing and production controi
as having an influence In making
some industries more profitable, while
others. confronted with higher wage
costs under the codes, lost money.
The trend toward increasing profits
has continued during the second year
of the New Deal. The National City
Bank of New York reports that for
the first three quarters OF 1884 corpora
tion profits amounted to q return OF
81 per cent on capitalization, as COM
pared with 2.8 per cent IN 1888.
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But that is not all. There were
more evidences Of wealth concentra-
ton In reports on individual incomes.
As all readers Of newspapers have
learned. 46 individuals earned more
than ST 900 900 in 1893 as compared
with 20 in 1882.
In addition, during the initial ex-
perience with N. r. A., total wage
and salary payments, instead OF IN
creasrng, decreased more than haf q
billion dollars, as compared with the
hottom year of the depression. From
the pool of money paid out to wage
earners and salaried people, larger
amount went to persons receiving
SIS, 900 and above, while Sharply
decreased amount went to persons
earning under $4,000 Most OF this
decrease was in the class earning
under $4,000. There was no sign Oh
wealth distribution in this accounting.
Yet. even so, If the Federal Govern
ment should conf1scate all the income
of individuals receiving above $4,000
a wear. it would barely be able to pay
the Federal deficit Of about four BILL
lion a year. And If this money were
divided up among the estimated 49,
600 900 gainfully employed persons, 1t
would provide each with only 500 a
year additional income.
The conclusion seems to be that,
in the case of N. r. A. at least,
theories did not work out according
to blueprint specifications when put
into practice.
X 4 -
But there were other matters that
were to be Strengthened out under the
plans advanced by those shaping ma
tional policies.
OF course, one was the pump-prim-
ing program Of the Public Works Ad-
minisFation, with $500, 900, 600 to
spend. The more p. w. A. spent, the
more evident the contraction Of pri-
r. l,,,ildin0 Whv WAS this 10? An.