Evening star., 1936-11-23

10r granted tIldJ MI. HOOSeFelt was
never fully understood either by his
critics or by many of his somewhat
conservative minded supporters, espe-
cially in the South, who keep on as
suring their friends that the Presi-
dent is at heart conservative and
means to turn to the right.
In the weeks that have followed
the election there has been a sort
of I-told-you-so feeling expressed by
the moderates or conservatives in the
Roosevelt ranks who have pointed to
the exodus of Undersecretary Tug
well Of the Agricultural Department
as corroborative proof of the correct
ness of their analysis.
New Laws in Prospect.
1t is the duty of a Washington
correspondent to report conscientiously
what is going on, whether he person.
ally likes the goings on or nc. To
say, therefore, that America is about
to enlarge her experiment in controlled
economy and that the next session of
Congress will see the enactment of
several new laws to carry further the
detectives of controlled economy is
merely to record the truth, pleasant
or unpleasant as it may be, depending
on whether one looks on the Roosevelt
victory as the end of fight for SIM
pie progressivism or the beginning Of
a surgical operation on the capital
istic system.
There is no clearer example Of this
than in the comments being heard
about DR.. Tugwelrs resignation. The
Joy with which the resignation has
been received in certain conservative
quarters indicates that they have
learned nothing from the election re-
turns and that they are about to
continue to drift in an atmosphere Of
wishful thinking and hoping that
maybe the New Deal is going to let
up on them after all.
have disagreed with many of DR..
TugwelIs policies and doctrines. but
! respect his point of view and be-
lieve that if controlled economy did
happen to work out successfully peo-
pie would some day look upon Tugwell
as the pioneer martyr to cause. For
his self-effacement does not erase the
fact that his policies have been put
into effect and some of his proposals
will be written into law in the next
Congress, but will bear the name of
Representatives and Senators who will
take all the credit.
Tugwellism Not Gone.
It is essential for every conserva-
tive, every progressive and every busi-
ness man and every labor leader to
study Tugwellism. For whether MIR.
Roosevelt ever publicly comedies it or
not. his next messages to Congress
will embody the Tugwell principles.
How can one probe such an asser-
ton? The answer is that DR.. Tugwell,
as the father of the present tax on
undistributed surpluses of corpora
tions, has just achieved the most no
table vindication that any man in
public life could hope for. Conserva-
tives in the United States Senate, like
Chairman Pat Harrison of the Finance
Committee, are now singing the praises
of the law they originally opposed and
are saying that the distribution of
dividends and wage increases shows
what a fine piece of legislation it
really is.
Rex Tugwell is too serious-minded
and to modest to gloat or chuckle over
what is happening but one might
hazard the guess that if he we're to
speak his mind, he would ask, IF I
was right on the corporate surplus
tax, why am I not right on the other
parts of my plan to regulate the allo-
cation of capital in America and pre-
vent the growth of booms or the COM
ing of severe depressions?"
Flashback 20 1888.
Let us re-read what DR.. Tugwel
wrote in 1888 before most people in
the business or labor or political world
really knew how much President
Roosevelt was leaning on the young
professor of economics in Columbia
University. The book is called 'In-
dustrial Discipline" and was published
by the Columbia University Press and
Its chapters, read in the light Of what
has happened since, constitute the
fulfllment of prophecy far more
potent than the lucky prediction made
by Jim Farley on the electoral votes
of a national election. Mr.. Farley
guessed the mathematics of an Or
ganized voting machine of national
proportions but Tugwell guessed the
economics Of capitalistic evolution
to which word some people are
tempted to prefix the small letter "r."
How then, asked DR.. Tugwell in
1888, shall the problem of capital
ALLEGATION be attacked? Here was his
answer:
"In general, the principle invoked
would be to drive corporate surpluses
Into the open investment market; for
most of the trouble comes from self
ALLEGATION occurring strictly within q
single organization. 1t is overop-
timistic internal expansion and the
use of funds, earned in the past, to
commit the concern to increased ac-
kivity which cause the problems of
surplus which yearly grow more acute.
Changes Reinvestment.
ITO meet this problem, it is fire.
euently suggested that tax be i'm
posed on funds, over and above re-
placement, which are kept for expan-
sion purposes. If taxation forced
these funds into distribution as divi-
dends they would have to seek re-
investment through the regular cham
nels and concerns plans for expan-
sion would be subject to check In the
investment market. It might be said
incidentally, also, that. a salutary
. check upon present practices in issu-
ins stock dividends and concealing