The Waterbury Democrat., 1937-03-31

welt Advisers as Only Real
Hope of Averting Next De-
preston - Would Expect
Move to Level Wealth and
Hold Up Purchasing Pow
er.
Washington, March 81 - Smart
boys here aren't laying any bets
that the administration won't ask
for new taxes at this session Of
congress.
Roosevelts cautious 'hope" that
new taxes win not be necessary
can only be taken as q warning
that he may decide later they are
needed.
Indicated failure Of the income
tax yield to come up to expecta-
tons with the discrepancy esti-
mated at somewhere around $780,
600, 0OO-has not done anything to
encourage those who want no new
! taxes.
The most powerful factor figur-
ing in the possibility Of increased
levies, however, is the growing
feeling In high places here that
the only simple weapon; by which
the economic system can be kept
In balance Is the taxing power.
This isn't merely q visionary or
sentimental notion about sharing
the wealth"
The theory simply is that mass
purchasing power must be kept at
fairly constant level If the coun-
try is to avoid a spiral into de-
preston; that the best way to
achieve that is to put taxes up to
a certain level and Siphon off sur
plus income and profits SO they
can be poured back to lower-in-
come or no-income groups which
are without purchasing power.
Other methods Of meeting the
threat of price initiation and coll
lapse have been brought forward.
But taxes have become .ncreas-
ingly a favorite method among
New Dealers who are most artic-
ulate, and sometimes most influ-
entail behind the scenes.
Drain Pockets of Poor
The recent statement of Federal
Reserve Board Governor Mar
riner Eccles, made after discussion
with Roosevelt, has come to show
up clearly as a victory for those
who oppose budget balancing
through cuts In relief expenditures
and those who oppose revival of
MIRA with its old monopoliStic and
prive-fixing features.
David Cushman Coyle, author,
economist and close friend Of Ec-
cles, Celebrates by declaring that
thigh prices to organized labor,
organized capital and organized
farmers are draining the pockets
Of the poor"
Heavy income taxes, according
to the Coyle viewpoint which
has come to be widely shared
here-would draw off surplus
income" and keep 1t from stock
speculation while throwing it to
the poorest classes and thus sus-
tanning mass purchasing power.
They would enable the govern
ment to keep on spending for re-
lief, balance the budget and start
reducing the national debt. Coyle
and others say that's the only way
you can avoid initiation and SUBJ
sequent crash.
Higher Wages, Higher Prices
The administrations friendship
for organized labor and its de-
sire for higher wage levels are
complicated by the fact that wide
spread strikes cause decreased
purchasing power, as well as the
fact that corporations further cut
down real purchasing power when
they pyramid the costs of wage
increases into higher prices. Most
workers have little if any pur-
chasing power while they are on
strike, although any wage in
creases they get increase their
purchasing power thereafter - If
that isn't offset by rising prices.
( Administration emphasis, how
ever, will be placed primarily on
the need for keeping price levels
within bounds and for discourag-
ing inevitable tendencies toward
concentration Of wealth.
ROOsevelt's decision; to meet
with leaders Of Congress and dis
cllss the strike situation was a di-
rect reult Of urgent c0mmunica-
tions from conservative congress
sional leaders who were becoming
panicky about various aspects of
the sitdown strikes, especially In
Michigan. Vice President Garner
and Majority Leader Joe R0bil;-
son are said to have. telegraphed
to him. There is no evidence,
either ON the surface or below the
surface-as far as can be ascer-'
tained-that the President HIM
self was especially alarmed. either
by actual developments or by the
many letters and kilograms he re-
ceived. The missives demanded
that he take some action or make
some public statement.
The President Is fairly quick to
sense important trends of public
sentiment, according to his adj
visers, and could be expected to
act or speak in an effort to pre-
serve his prestige at any time he
felt it was threatened, at the
same time being careful not to
ALLEVIATE his organized labor sup
port.
copyright, 1887, NEA Service, Inc.)
Native batik makers of Netherland
India are feeling the return Of pros