, 1935-04-18

johnson told the senate finance
committee Thursday the mistakes
OF NRA were due TO his admins
tration and that TO abandon 1t
would be like burning down your
house to get rid Of a few rats In
the attic
He freely admitted mistakes and
errors in NRA, but as faults OF ao-
miniStration and not OF the law.
The Blue Eagle was set up, ne said.
to stop the trend Of concentration
OF industrial power which was
wiping out the small man.
mo more explosive act OF deS-
truction could be committed than
to kill II now and go back 70 the
utter futility Of the system We had
here before 1885, Johnson testi-
field.
The hard hitting former cavalry
officer warned that 1t was a "fal-
lacy to contend the cold capital
istic system could not be improved
upon, and that "if we go back TO
that fallacy. the capitalistic system
Is on its way out in the very near
future
His was the final testimony In
the senate's investigation into the
operations OF NRA. prior 70 the
drafting OF new legislation.
He presented the committee an
65-page statement OF his views on
NRA and its future, together with
laborate charts TO bear out his con-
tentionS.
Most Of his statement was writ
ten IN q factful, dispassionate
vein, but occasionally he lapsed in
10 the vernacular, and picturesque,
language which made him famous
as the breakdown" head Of the
Blue Eagle organization.
The huge crowd assembled 70
hear Johnson forced the finance
committee to use the largest as
sembly room In the senate office
building-the caucus room.
Reviewing the developments I'm
industry following the war, John
son said they disclosed "a slow
and implacable disintegration OF
unregulated and uncontrolled oper-
alton thereof. as a reliable plan
for keeping our people employed
When the structure smashed in
1929" he added, 1T was not a sledge
hammer cracking I'D q solid brick.
II was the collapse Of an empty
she'll
With this collapse. and the
downward spiral which followed
Johnson said. only five types OF
concerns could survive. He named
them as 1.-THE concern with the big
war chest and q swollen surplus
the natural monopoly "the
dealers in indispensibles.' the
Sweatshop.' and "the ghoul-buy-
er and operator Of bankrupt stocks
and assets.
That is where our economic
system was trending from before
the war and to its utter and COM
plete collapse In March, 1888" he
added. This Is what happened TO
us under the antitrust acts, the
federal trade commission. and the
doctrine Of laiSsez faire and II
happened uninterruptedly and with
no relieving incident for a period
Of Is years.
Il don't know a great industrial
country that does not recognize the
necessity for taking control of this
tendency which Is going on all over
the world.
II freely admit the faults and
errors Of the NRA and will fight
as hard as anybody to correct
them. But IL was the first intelll-
gent attempt ever made by this
government to check this tendency.
I won't admit its failure Especially
I won't accede to any madness
that would remove It's control and
20 back 70 the unregulated condi-
ton OF futilitv that preceded IT,"
johnson added that I'VE have
got 70 keep control OF this economic
machine and prevent and turn
back many Of the tendencies OF
the past IS years"
Conceding many mistakes in his
administration OF MIRA. Johnson
told the senators he was "incii cd
TO agree" with the criticism by
Senator Nye CR-Indl that the re-
covery administration was presery-
ing monopolies in the code struc-
ture.
"But I do contend. and 7 think
| can show. that such faults as
arose rel due to my bad admin
istration rather than bad law, that
many IL not most OF these errors
OF mine are in process OF effective
correction.
Il am very sure that to destroy
NRA because there are these
creaky joints in its structure would
be like burning down your house
to get rid Of a few rats in the at
tic"
Summarizing the record of NRA,
johnson said Ii had succeeded In
.arresting the destruction Of the
little-felloW in business" but ne
admitted II had not fully insured
the rights intended to be granted
10 labor"
Where has NRA failed as to the
small enterprise. labor and con-
sumer?' Johnson asked.
IL think that to all IL has
brought a vast balance Of good. IN
each ii has brought some harm and
some OF the harm Is avoidable.
The little fellow has suffered from
having to pay higher wages but
he has benefited by being preserv-
cd. To the extent that he has been
hurt BY bad administration, We
must cure that.
Labor has been immensely help
90 II has been hurt by not get
ting the benefit intended by sec
ton 7 CA. We should cure that.
The consumer has been helped
by being given the power to con-
sumo at all. He was on the verge
Of losing 10.
"On the hole my conclusion Is
clean up NRA-don't destroy II.
Let us scrub our infant offspring
vigorously. but let us not throw
- - a. a. -w