Evening star., 1935-01-30
|CO[BY DEN0UNCES
NEW DEAL folly
Says Constitution and Rec.
oqnized Economics Have
Met Crises.

undertakings. Bainbridge Colby, Secre-
tary Of State under Woodrow Wilson,
told the American Coalition Of Patri-
otic Societies at q meeting last night
at the Carlton Hotel
Assailing the "jaunty" acceptance by
the House of the requests Of the ad-
ministration. Mr.. Colby sharply criti-
cized passage by the House Of the
Presidents new public works bill, de-
claring there is no parallel that he
can recall for the frivolous irrespon-
sibility Of that branch of Congress.
Apparently the Supreme Court
must speak again and often before the
playboys Of the New Deal realize that
there is an American system of Gov
eminent. and before reason and SAN
ity resume their sway In our national
life" he said
In his speech, which was broadcast
over a Nationwide radio hook-up,
Colby stated the Constitution is the
most American thing about America.
Has Met All Crises"
The Constitution, he said, has met
all crises in the history Of our coun-
IAy dIio II Will dSdlh. ne fTcSlOcnI
is sworn to uphold the Constitution.
The courts are sworn to obey 1t and
apply it. How can 1t fail?"
Warning that I'VE must watch our
step on this subject Of economics and
economists" the former cabinet off,
Ger said too many Of the so-called
economists of today are young men
without any adequate experience or
| observation; extreme idealists who
recognize no law but their own wishes:
publicity seeking schemers, who adopt
any notion or doctrine that is new or
has popular appeal: men who are re-
tanned by special interests, which may
include farm groups and organized la
Dor. as well as corporations.
Economics. he said, is made up of
a very real body of time-tested princi-
| Piles. which can be denied or violated
easily. but their vindication is GER
tain and usually not long delayed
Economies in its field rules the
affairs Of men,"
Recovery Confused.
Recovery is wandering about in an
impenetrable maze of currency legis-
lation. the meaning Of which no man
knows" Colby declared Juggling,
reputation, conflscation and debase-
ment have been enacted on the theory
that they will raise prices. improve
J foreign trade, revive agriculture,
equalize debt burdens and end depres-
sion. They will do nothing of the
kind"
| "Tbs covsrnr,apt hoe cor,rittad
the error Of assuming that the de-
preston can be cured by manipulat-
ing the currency" Colby said 1T
has fallen into the error Of believing
that there is a shortage Of gold. 1t
has adopted the erroneous notion that
juggling the price OF the American
dollar in foreign exchange will re-
store agriculture prices.
1T has surrendered to the hoary
error that imitation relieves the bur-
| den Of the debt-ridden. 1t mistaken
ly assumes that the artificial creation
Of credit will revive investment. and
| it is in the firm grip of that ancient
| ard most obvious of errors, that arti-
fetal price raising causes recovery.
Says Error Suspected.
"The wisdom Of the world knows
that these are errors and I think
I that in some quarters of the admins
tration also the fact is beginning to
be suspected"
History shows us, he continued, that
'fnflationary tinkering with the cur
| rency" retards and precludes re-
| covery and that currency manipula-
ton helps neither the poor nor the
unemployed nor the debt-ridden.
I'VE. the most powerful Nation
on earth, with the most varied indus
trial life and the most complex flnan-
cial relationships, do not know what
| money system we have now and even
less do we know what system we will
have a month from now"
The picture revealed to our eyes to-
day, the speaker said. Is that of a con-
fused Government trying to travel
three roads at once-one leading to
relief, another to reform and the
third to recovery.
But the third, which Is vital to the
other two. Is being blocked by an in
comprehensive hostility to business,
individual enterprise and the restora-
ton of that confidence. which is es-
sential to the flow of capital into pro-
ductive undertaking." he declared.
Competition by United States Scored.
1.-THE securities law has discouraged
investment and stifed the legitimate
sale of securities with which to raise
needed capital for business revival"
he continued. THE A. A. A. and the
N. r. A. have reduced production:
the P. w. A. has curtailed the demand
for private financing; the Federal Re-
serve has been stripped of its power
to control credit and prevented from
contributing to q revival of confidence
and renewal of the general extension
of credit; the r. F. c. has gone into
the banking business on such O scale
that its vast loans over the whole area
of industry and finance have absorbed
a large part Of the existing market for
bank credit.
Government financing has become
winning competitor for what busi-
ness there is"
The emergency relief appropriation
act for 1885, he said, marks new
ehLTc III tllC UiOud biahto Va POWOA
to the President and must be weighed
in the light Of its effect as de-
parture from and subversion Of the
American system Of government. He
added:
1t means an abdication by Con-
gress of its proper duties and respon-
sibilities in an almost limitless field
Of legislation.
It means the complete control by
the President of the expenditure OF o
sum greater than the total annual cost
of the Government under normal con-
ditions.
"Step to Dictatorship"
It contemplates no legislative
guidance whatever in the determine
tion of policies which, under our es-
tablished practice, are matters for the
standing committees Of each branch
of Congress.
It is clearly a step toward Dictator
ship. in which the deliberative body