Evening star., 1935-02-21
Mr.. Hoover's Comment.

Mr.. Hoover's comment on the Su-
preme Court decisions is concerned
chiefly with the course which, in
his opinion, the country should now
pursue toward recovery. He advocates
return to the gold standard and specie
payments at the existing hfty-nine-
cent dollar and offers the suggestion
that such a step would hasten the in
ternational stabilization of currencieS
which has been held out by the ad-
ministration as a possible objective.
Mr.. Hoover, however, believes that
instead of waiting for foreign powers
to take the lead the United States
should re-establish the gold standard
now, as they would be bound to
follow some time. They are more
afraid of our doing just this than they
are of any American managed
currency at which game they have
us at disadvantage"
Mr. Hoover's main thesis, however
Is that there can be no real recovery
until there is restored confidence in
the currency and an end to uncer-
tainty as to what may happen to
the dollar. He SubScribes to the
theory of many other so-called con
servatives" them the Presi-
dents former director of the Budget,
Lewis w. Douglas-that until there is
marked pickup in the capital goods
industries. which have been tagging
behind everything else, there can be
no fundamentally sound recovery; that
recovery in capital investment will
put more men to work than any other
single element, but that there will be
no such recovery until faith in the
dollar is restored, as "the people
are hesitant to invest their savings
and take long-term risks because there
is uncertainty in what value they will
be repaid"
It has been estimated that there is
now a potential, deferred demand in
the heavy goods industries for replace
ments alone amounting to about $19,-
0oo,0O0,OO0 and that normal replace
ment and plant expansion in these
industries would mean the expendi-
ture Of between twenty-five and
thirty-five billions-figures which may
be compared for employment posibili-
ties with the four billion, eight hundred
million dollars for which the admins
tration is moving heaven and earth to
get from Congress for a public works
program. THE Governments pro-
gram of stimulating the capital goods
and giving employment through public
works." Mr.. Hoover believes, "can
never result in twenty-five per cent of
the jobs which can be provided by
normal private capital-goods indus
tries"
Lack of confidence in the dollar, in
Mr.. Hoover's opinion, is increased by
fears Of further devaluation-with
rapidly rising prices-and by the
"fever" of imitation poison in the
National blood" Others than Mr..
Hoover are concerned with elements
now present which would be con-
strued historically as leading toward
infation-the increasing deficits, which
have not only been larger each year,
but which show no signs of decreasing;
the huge borrowing program which
also indicates no let-up, and the
absence of the customary brakes on
legislative spending which lie in rais-
ing through taxation the dollars that
are spent. With these is now coupled
the possibility of further devaluation,
even now being urged by a bloc in
Congress which has interpreted the
Supreme Court decisions as meaning
that the lid is off.
Mr.. Hoovers premise may be wrong.
But there are increasing indications,
in and out of Congress, that there is
far from unanimous opinion in sup
port Of the administrations chief
premise, which seems to be that the
way to recovery is through Govern
ment spending of plentiful dollars
which are easy enough to find.
High-priced lawyers are frankly