Evening star., 1935-11-10
How Sound Is the
National Recovery?
By Queen L. Scott.


for use in the politically critical months
ahead that old query: Why change
horses in the middle of the stream? He
is supplied with highly optimistic fore
casts of business and industrial activity
for the year 1896. These forecasts are
made, not by the New Deal SoothSayerS,
but by the Governments most conserva-
tive old-line economists. They play
central part in the Presidents political
thinking, as we'll as in his economic and
legislative planning for an election year.
AS a result of this weeks voting
which was not wholly pleasing to the
Democrats-political planning is upper
most at the moment. Strategy, as shap-
ing up, calls for the following:
Claim credit for business improvement
now under way and expanding. Try to
convince voters that the upturn is due
to the Roosevelt program, rather than
to upsets of that program by the Su-
preme Court. Then raise the question
of the chances for turnabout in the
march toward prosperity that might
follow a Republican victory. All the
time play every card to hold the farm
vote.
= y
At the moment Eastern voters are
critical of the Presidents program. They
particularly are aroused by the cost of
foodstuffs and by the volume of spend
ing. Mr.. Roosevelt and his aides figure
that the increased income for industrial
workers, now in sight for next year, will
temper their resentment. The planners
figure that with normal weather in 1886,
food supplies are going to be abundant,
with prices tending downward rather
than toward higher levels.
Planning for a program of govern
mental activity to fit in with political
planning involves the following:
Emphasis on conservatiye-l looking
budget for the next fiscal year that will
offer apparent progress toward balance.
Careful administration Of new laws to
avoid too much irritation Of the groups
confronted with regulation. Request Of
Congress for few new laws of impor-
tance. unless the Supreme Court upSetS
the applicant. Soft-pedaling Of the new
pay roll taxes that take effect in 1896.
but are not to be collected until January,
1887. more than a month after the
election.
Basis for the decision to ask voters
to ride what the Democratic strategists
say will be a prosperity bandwagon dur
ing 1896 is found in latest business eSti-
mates submitted to the White House.
These predict that industrial activity
next year will average as high as during
the normal years 1923-25.
Industrial production is expected by
the forecasters to reach SO per cent
of that normal as an average. That
would mean 10 per cent more activity
than in the present year.
Farm income will be up about 10 per
cent. unless calculations are upset,
bringing the amount available for spend
ing by farmers to the highest total since
1929
The general level of prices will con-
tinue upward, tagging, however, behind
production.
Automobiles, home building steel and
railroads will lead next years advance.
But what about unemployment? Will
the number of workleSS be reduced
greatly in this process OF generating
more industrial activity? Can the coun-
try expect that the relief problem will
fade into the background carrying with
it the worry of constantly unbalanced
budget?
Extreme doubt concerning the chance
of an affirmative answer to those ques-
tions is expressed by the specialists in
that field.
Harry Hopkins, who administers New
Deal relief in its various forms, believes
the problem will continue to be as big
as at present, even if industry takes up
large numbers of the unemployed. The
reason he feels that way is that only
half of the jobless are getting help from
the Government. The rest take care
of themselves and they are the ones
most likely to be absorbed by industry
as it pushes forward.
Also Mr.. Roosevelt points to the fact
that industry has learned during the
depression to get along with fewer
workers.
He finds great significance in the
figures showing how manufacturers now
turn out more goods while the number
of workers used in the process lags be-
hind and the total wages of these work.
ers are even farther behind. In other
words, fewer workers, working fewer
hours for a smaller weekly wage, are
OuV bA6SSA S->>
things that people want.
Then what is to be done?
The New Deal tried N. r. A. codes as a
means of pushing the income OF workers
higher in a hurry so that they would
have money to buy more goods. But
Gen. Hugh johnson, as N. r. A. admin
istrator, permitted industry at the same
time to cut down or hold down pro-
duction so that prices could be pushed
higher Prices went up faster than the
new purchasing power, and SO that
experiment blew up.
New Deal economists, such as DR.
Gardiner Means, now find that their
conclusions are supported by the con-
servative BrookingS Institution, an mde-
pendent research agency that has Just
concluded a three-year study OF the
causes of the depression.
Both are convinced that the dlfhculty
lies in checks applied by business itself
to the free working OF the capltallStlc
system. Some industries. to protect
prices. plow large numbers OF workers
out into the street in what henry
Wallace, Secretary of Agriculture, de-
scribed as IAN industrial reduction pro-
gram" Others, less able to control price
try to maintain their income by pro-
ducing heavily, only to find that they
can't sell their goods because discharged
workers in other industries are unable
to buy them.
In other words, price policy is found
tn He the heart of the trouble.