Evening star., 1935-02-24
Congressman Worried Over Wobbliness
In the New Deal Recovery Measures

farm purchasing power. But higher
prices for fQodstuffs, giving farmers
q bigger income, simply mean that
the city workers who pay those prices
have less to spend for other things.
Both N. r. A. and A. A. A. are
based on the idea that recovery can
be achieved by making goods scarce
and higher priced. They lead to the
unique conclusion that a drought or
an earthquake, or any other "act OF
God" that destroys or cuts down pro-
duction, really Is q blessing rather
than a calamity.
It can be said Of those running
A. A. A. that they realize the country
cannot recover by stimulating scarcity
instead of abundance. but so long as
stimulated scarcity is the national
policy they are devising machinery to
get the farmer his share Of the coun-
try's income.
The 5e.o6-cent dollar. Attached to
the agricultural adjustment act was
a section giving President Roosevelt
authority to cut the value Of the dol
lar in terms of gold by as much as
so per cent, and to print $4,000, ,00o, 900
in new greenbacks.
Congress later gave the President
power to buy silver at rising price
In an effort to build up the country's
silver supplies and to stimulate trade
with the Orient.
Mr.. Roosevelt has used the power
to clip 40 per cent from the gold
value OF the dollar and he has used
the power to buy silver. What has
been the result?
A huge stock of gold has piled up in
the Treasury. A further barrier has
been raised to foreign trade. The
President and Congress have drawn
a rebuke from the Supreme Court for
repudiating the nations written agree
ment to pay its obligations in gold.
But the trade revival predicted by
advocates Of the gold policy has not
followed.
AS for silver purchasing, spectators
have been enriched and bounty has
been offered mining States. But In
place of q revived trade with China,
that trade actually has declined and
the Chinese have been forced to un-
dergo a period of deflation because
the United States was buying up the
silver that serves as a base for Chinese
currency.
FIJI. A.-when private construction
failed to revive as anticipated, the
New Deal brought forward the Federal
housing act, creating the Federal
Housing Administration with power
to insure mortgages and loans for
repair work.
The idea was that by adding to the
safety Of mortgage loans the Govern
ment could attract private investment
to the field of home building.
Nearly six months after this plan
was put into operation, total insured
repair loans amount to about $40 ,00o,-
600, with the number of insured mort
cages negligible.
Not only that, but the leading au-
thority on building activity reports
that in January the volume Of private
building contracts was little more than
one-third Of the volume in January,
1884. Construction today actually Is
about at the lowest level Of the de-
preston.
Tariff bargaining. To help break
down trade and currency barriers now
sitting trade among nations, Congress,
at the urging Of President Roosevelt,
authorized the White House to enter
into reciprocal trade agreements with
other nations. It gave the President
power to lower tariffs as much as so
per cent in bargaining with other
countries.
More than six months after this
power was given, total results include
two trade treaties-one with Cube and
another with Brazil. A number Of
other agreements are in the mill. but
so much clamor was raised over q
tariff reduction on manganese in the
Brazilian agreement that officials
wonder whether Mr.. Roosevelt will be
ready to adjust tariffs on other more
important commodities.
The foreign trade of the United
States continues badly out Of balance,
with exports far ahead Of imports.
This complicates the problem Of pay
ment by foreigners for goods bought
within the United States. The VOL
un1e Of trade fell sharply In the past
month.
Faced with uncertain success in
many Of the major policies of the
New Deals first two years, President
Roosevelt is turning to new recovery
plans.
His 5000, 900 900 works program is
designed to take the place Of P. w. A.
and Of the Federal Emergency Relief
Administration.
His program Of social security, in
cluding old-age pensions and unem-
ployment insurance, Is designed to re-
lieve in part the pressure Of unem-
ployment.
His banking bill Is intended to
tackle the problem Of credit expansion
from q new angle.
But Congress, faced with demands
from home for panaceas that will
bring q sure-fire cure for the depres-
sion in q hurry. definitely has become
restless. The Presidents strategy ap-
parently Is to try to keep It from be-
coming reckless.
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