Evening star., 1935-06-23
s.PUMP PRIMINC"
BY Owen L. Scott.

been tried and found wanting.
The heart goes from the New Deal
with this development. AS O twin to
N. r. A., pump printing was offered as
the basis for O planned recovery"
President Roosevelt originally placed his
reliance on that combination.
But the Supreme Court killed N. r. A.
codes. Actually, they had proved in
effective in achieving their objective long
before the court acted. How ineffective
is demonstrated by the absence of broad
repercussions since their DEATH, This
readiness of the country to accept so
casually the death of the Blue Eagle
provided the White House with one Of
its big recent surprises.
The end of pump-priming is far less
dramatic. Its passing is being heralded
from no housetops- The event, in fact, Is
obscured by the fanfare over the COM
ing expenditure of $4,000, 900, 600 for
work-relief and by developments attend
ing the end to N. r. A. codes. Yet
the demise Is none the less real.
What was pump printing? Where did
it fit into the New Deal? An explana-
tion may be found In the comment
going the rounds here. Thus the talk is:
Harry Hopkins has come out on top.
Harold Ickes loses. Mr.. Roosevelt de-
cides to spend his billions for relief,
not for pump printing. The country is
getting a new C. w. A, called by another
name. That means an end to the
thought of Government t-generated re-
covery, produced by printing the pump
of private industry"
Pump printing as national policy was
sold to President Roosevelt in a big
way by John Maynard Keynes, British
economist. But previously, Herbert
Hoover and others had urged the Use Of
public works to take up the slack dur
ing periods of depression, thereby slim
ulating recovery.
To give the plan a whirl, Congress, in
June, 1888, authorized Mr.. Roosevelt to
spend 5000. 900 900 in priming the pump
Of private industry through large-scale
public works. This fund was to serve
as a companion recovery plan with the
National Recovery Administration.
Codes, drafted under N. r. A., sup
poSedly would spread work in industry,
set minimum wages and end cutthroat
competition. Millions of the unemployed
were to be taken care Of in this way.
Then p w. A, with its billions, was
supposed to move into action along an
other front. The mass of the unemployed
was in the heavy industries, like con-
Struction, mining and machinery max
ing. Mr.. IckeS, as P. w. A. admins
traitor, set out to pour billions into the
construction industry, with those bill
lions to stir up activity all through the
economic machine.
The plan had nothing to do directly
with relief. There was no provision for
care of the unemployed Rather the
billions were to go into private industry
directly. AS the money went out to pay
for the construction of buildings and
highways and huge dams, private in
dustry was supposed to add to its EN-
ployment, both to do the actual work
of construction and to provide the mate
rails and the machinery.
As employment increased, so the
theory was, relief rolls would 60 down,
taxes would go up, Government income
would balance Government outgo, in
other words the pump would be primed
the country would forge ahead, the de-
preston would be left behind.
But what actually happened?
Mr. IckeS, as public works administra-
tor, had difficulty spending the money.
Plans were slow to take shape. Delay
followed delay. When the spending did
speed up. the number of jobs provided
was small in terms of dollars paid out.
Relief rolls, instead of going down, as
expected, went up. Private construction,
instead Of expanding as expected, con-
tracted. Government billions actually
served to maintain high costs of con-
struction by putting a bottom under
relatively high building trade labor
wages and under building material
prices.
To meet that situation, President
Roosevelt in the Winter of 1884 Gre
ated Civil Works Administration.
c. W. A., like p. w. A., provided work
with Government money. But there
was paid directly to create jobs on Gov
ernment work. The idea primarily was
to provide jobs as cheaply as possible,
not to prime any pump and thereby
lead indirectly to recovery.
Under P w. A, workers came through
regular employment channels and
worked for private contractors. Under
C. W. A., they came directly from relief
rolls or from the ranks of the unem-
ployed and were working for the Gov
ernment.
Now the time has come to spend an
other $4,0O0,00O,o00 of Government
money.
Mr.. Roosevelt was confronted with the
question: Should this money go in
large par: to Mr.. Ickes to be used in
financing large-scale public works,
where wages would be prevailing wages
and each job would cost about $2,500
year? Or should this money go in
large part to Mr.. Hopkins to be used
in creating direct jobs for persons on
relief rolls at q cost of about 81 ,140 per
man year?
vital point was at issue? Why?
Because to turn from Mr.. IckeS and
pump -priming would be to admit that
hope had been given up of recovery
through Government spending. To turn
to Mr.. Hopkins and direct unemploy-
ment relief would be to admit that the
resources of the National Government
henceforth must be used to carry the
load of unemployment as continuing
problem.
The President, up against the neces-
sity for decision, turned to Mr.. Hop
kins and away from Mr.. Ickes. In turn
ing he backed away from the pump
priming theory of stimulating private