Evening star., 1935-08-18
Who Gets Credit
for Recovery?
By OsUen L. Scott.


for the recovery that appears to be under
way, the Supreme Court or President
Roosevelt and his New Deal?
Recovery VS.. Reform Enthusiasts, those
who argue vehemently that the New Deal
has blocked recovery ever since 1892 by
stressing economic reform, are throwing
credit to the Supreme Court.
Reform and recovery enthusiasts, those
who insist that only by reform through
some degree of national planning could
recovery develop, are ready to claim
credit for the New Deal. They argue
that groundwork for the present move
was laid long before the Supreme Court
obliterated the Blue Eagle. To them 1t
Is simply evidence that the Presidents
plans are just beginning to click.
Optimism over the business outlook Is
more pronounced at the White House
and among Government economists and
private economists as well, than at any
time since March, 1888.
The stock market has been rising
slowly since last March. Retail trade is
above expectations. The automobile in
dustry has enjoyed boom and looks
forward to another good year. Home
building has started on an expanding
scale. Financial markets are becoming
active for the first time in years as
industry begins to ad Just its debt to q
lower interest basis. Farm buying has
taken a sensational squirt.
Opponents of the New Deal assert
that whatever recovery is now about to
occur will be due to the fact that indus
trialiSts and flnanciers are regainfng
confidence. The reason they are more
confident so this argument goes. is that
the Supreme Court has demonstrated its
readiness to stop experiments by the
President and Congress when those ex-
periments conflict with the property pro-
tections of the Constitution.
In addition, the election in Rhode
Island showed that people in an indus
trial State. harboring relatively large
number of unemployed. prefer dole to
care for those unemployed to the more
expensive work-relief program OF the
New Deal. And besides that. Congress,
overwhelmingly Democratic. displayed an
unmistakable desire to kick over the
traces when prodded by the White House,
Mr.. Roosevelt. however. Is preparing
to tell the country a different story.
To New Dealers it looks as though
many of their plans. started in 1888,
are just beginning to take effect in
big way. They are ready to claim credit
for whatever improvement Is occurring.
Their arguments? They are many.
But first and foremost is emphasis on
the effect Of the shift from a desperate
effort to cling to deflation and the gold
standard under Mr.. Hoover to relation
through a break with gold under Mr..
Roosevelt.
President Roosevelt entered ONCE with
an intention to go through with Mr..
Hoovers defiation That's what makes
his 1892 campaign speeches sound bit
ridiculous now.
Mr.. Roosevelt has revealed that when
he looked into the problem Of pushing
defiation to hurried conclusion, he ran
suuarely against the Constitution. There
was no power in the United States Gov
ernment to do what the French govern
ment today is trying to do-force reduc-
tions in rents, in food prices, in interest
rates. in utility charges, in union wages
and other items Of fixed cost.
Blocked from that path, the President
turned to relation.
The effort then was to borrow and
spend. to attempt to prime pumps, to do
most anything to get debated prices
higher instead of lower.
This effort was accompanied by lot
OF hocus pocus. including a campaign
of gold buying based upon the intricate
charts and calculations Of Prof. George
F. Warren, agricultural economist Of
Cornell University A silver-buying pro-
gram that has upset the economy of
large part of the worlds population
likewise is being indulged in. But what
ever the cause, prices have risen about
80 per cent from their low point and
the pressure Of deflation largely Is
relieved.
Next. the New Deal is going to talk
about the effect of its plans to help
home owners. urban and rural.
Through the billions of the Home
Owners Loan Corp. and the Farm
Credit Administration, the terrific defia-
ton of mortgage credit has been ar
rested Hundreds OF thousands Of homes
and farms have been saved for their
owners. Today investment money is
beginning slowly to flow back into
mortgages. To help along this trend,
the New Deal q year ago provided
Federal Housing Administration. Now,
a year later, its program is beginning
to function a bit.
Then there is the story Of Jesse Jones
and what he has done with the Re-
construction Finance Corp.
Mr. Roosevelt usually greets Mr..
Jones with the query: well, Jesse,
how much money did you make for
Uncle Sam today?"
Mr.. Jones, with the billions Of the r.
?. c., has bulWarked the Countrys banks,
its railroads, it's insurance companies
and q number Of its industries and is
making money in the process. His
contribution has been to help stop the
financial def1ation.
4 A&&
The A. A. A. has Syphoned nearly q
billion dollars from the cities to the
rural regions in two years. Combined
with the weather, 1t has so effectively
adjusted the supply and demand situa-
ton that farm prices are % per cent
higher than they were March 4, 1888.
Farmer income this year will be more
than so per cent higher than it was
when Mr.. Roosevelt took of6ce. Not
only that, but Henry Wallace and
Chester Davis have provided agriculture
with a highly developed piece of CROP
control machinery.
All of this leaves out N. r. A.
That New Deal creation has just about
disappeared, leaving behind few regrets.
Yet codes are credited with helping to