Evening star., 1936-03-22
New Deal Changes
Its Political Outlook
BY O,oen L. Scott.

past week: 1.-THE President isn't making
enough mistakes. He is too careful about
what he says"
This comment goes far to reflect the
change taking place in the political out
look. 1t can be accepted as another sign
that President Roosevelt'S stock has been
rising-aS recognized in private COM
ment by both Republicans and Demo-
crats-in period when it might readily
be expected to decline.
Mr. Roosevelt, two months ago, found
himself in tight spot. The Supreme
Court had contributed 100000 900 to a
billion dollar blow to his budget. A farm
program, on which much reliance was
placed to hold the Middle West in line,
had been destroyed. The necessity was
at hand to raise large new revenues in
an election year. Congress showed some
signs of kicking the traces. In many
ways the internal administrative affairs
were verging on the chaotic.
Henry Morgenthau, jr., after the A.
A. A upset. admitted that the Treasury
could see little light ahead in the Gov
ernment's financial picture. Henry Wal
lace, standing amid the wreckage Of
the farm experiment, was tempted to
be bitter toward the Supreme Court.
Congress flirted with imitation. Even
Sunny Jim" Farley had trouble keeping
smile OF confidence over the political
outlook.
Yet today the picture is completely
changed. President Roosevelt, his desk
cleared was ready for his Spring vaca-
ton when Eastern floods that gave point
to his flood control projects, caused
temporary delay. Mr.. Morgenthau, after
witnessing a sensational demonstration
of investor confidence in Government
credit, set off on three-week vacation.
Mr.. Wallace has a new farm program
that he is setting to work. Congress has
forgotten imitation and is busy design
ing taxes Income tax receipts by their
size, surprised even Treasury experts.
Mr.. Farley is all confidence.
Only relief Of unemployment, with its
attendant problems and costs, remains
to cloud the Presidents immediate politi-
cal outlook. At that point the New Deal
is highly vulnerable.
But what accounts for the general
transformation from official bewilder-
ment of two months ago to the official
assurance Of today?
Much Of it is credited to skillful maneu-
vering by Mr.. Roosevelt. AS result of
the demonstration. Republicans readily
are recognizing that they face a re-
sourceful opponent who seems to know
how, on occasion. to turn a political re-
verse into political gain.
Opportunities for presidential mis-
steps have been frequent in recent
weeks. Temptation to venture on dan
gerous ground has been strong. But, as
his opponents now openly lament Mr..
Roosevelt appears to be avoiding the op-
portunities and resisting the tempta
tions.
A strong temptation confronted the
President when the Supreme Court de-
stroyed the original A. A. A. control pro-
grams. He was pressed to open an at
tack on the court, but resisted. Had he
attacked, his opponents would have had
powerful ammunition for charge that
the New Deal sought to change the
American form of government.
Instead Of criticizing the judges. Mr..
Roosevelt kept quiet and told Henry
Wallace and Chester Davis to set about
building new A. A. A. program to fill
the gap. His Secretary of Agriculture
and A. A. A. administrator, experienced
In meeting crises, Shouldered the farm
problem and left the President with no
worries on that score.
4
But that left the fiscal problem as
acute as ever. The President moved fast
to meet it.
First. he jolted Congress with an esti-
mate that the A. A. A. upset and the
soldiers bonus had put his budget out
of kilter by $1l37, 100000 even before
relief needs were met. That move stilled
the inflationists and sobered Congress-
men intent on new experiments.
Next, Mr.. Roosevelt made gestures in
the direction of economy by canceling
large Federal loan authorizations and by
frowning on new spending plans. Hous-
ing subsidies, through direct grants, were
frowned on. An appropriation for seed
loans to farmers was vetoed. Rural
electrification plans were trimmed down.
Then, to top it of, the President pulled
tax rabbit from his hat.
Opponents Of President Roosevelt
thought that he was cornered with the
problem of financing the half billion
dollar soil conservation plan of the A.
A. A.
They had lost one important issue,
that Of the high cost of living, when
processing taxes were destroyed by the
Supreme Court. But the Republicans
expected to get this issue back again
when Mr.. Roosevelt proposed new taxes
to take the place of the old ones.
Heavy thinkers in the Treasury had a
different idea. They offered, and the
President accepted. a plan to obtain an
estimated $500, ,000, 900 in added revenue
by a new-style tax on undistributed cor
poration earnings.
Instead of taxing foodstuffs and cloth
Ing to obtain funds for use In financing
farm subsidies, Mr. Roosevelt offered a
method of putting the burden on the
big stockholders of corporations.
A year ago President Roosevelt sug-
gested a graduated tax on corporation
income. scaled according to size. This
was attacked by business as tax that
| would penalize the small stockholders
in large corporations. 1t was pictured as
| a tax on bigness that hit the little man
hardest
Now the Treasury proposed tax de-
signed to put more money into the hands
of the small stockholder and to place a
1t was intended to carry over into the
corporation field the principle OF taxes
graded according to ability to pay.
Whatever the merits OF this tax from
an economic point of view, 1t was, as
one member of Congress put 1t, "the an
swer to a politicians prayer"