Evening star., 1937-03-17

broad hint at the s:$$$##a
remedy, but the D.v,.I
text of his pro-
nouncement is by far the most i'm
portant expression that has come out
of a Government official since Presi-
dent Roosevelt began his attack on
the Supreme Court six weeks ago.
Many persons, including this cor
respondent, have had occasion here
tofore to criticize Eccles for his belief
that monetary reform and spending
policy by the Government could bring
recovery. But whatever was said in
the past must be forgiven in the light
Of Eccles' acceptance now of the time
tested doctrine that recovery cannot
come by monetary expedients, but by
q progressive increase in production.
A Frank Warning.
Eccles does not dare to become en-
tangled In the details of adminlstra-
ton policy in fields other than his
own, as, for instance, in the effect
of the New Deals labor policy in
forcing prices upward. But with as
tonishing frankness the governor OF
the Federal Reserve Board issues
warning as to what will happen If
increases in wages and shorter hours
are followed as matter of blanket
policy without regard to what this
does to the price level or to the atti-
tude of the consumer, whose cost of
living is unduly advanced. He says
first:
The way to control unjustiflable
price advances is by increasing pro-
duction. This can be done SO long
as there is idle labor willing to work,
50 long as there are unused natural
resources and an abundance of money
at reasonable rates. All three of these
conditions are present at this time"
But is there idle labor willing to
work.? An investigation of condi-
tions in the w. P. A., where Gov
ernment wages are held up to pre-
vailing wage levels, would answer
that query. Also what Of the mil
lions of persons who want to work,
but who are forced out Of their jobs
by "sit-doWn" strikes? Eccles real
ICES, of course, he must touch some
what on the labor problem as mex
tricably related to the present rise in
prices. He says:
Increased wages and shorter hours,
when they limit or actually reduce pro-
duction, are not at this time in the
interest Of the public in general or
in the real interest of the workers
themselves"
Daring View.
Is there anybody in the admins
tration, beginning with the President,
who would dare publicly to tell the
workers anything like that? Has there
ever been labor controversy in which
the National Labor Relations Board
or the Labor Department has taken
cognizance of what will happen to the
consumer if arbitrary advances in
wages are made without regard to
the effect on the capacity of busi-
ness or its markets, from an economic
standpoint, to absorb such increased
costs? But, to quote Eccles further:
When wage increases are passed
along to the public and particularly
when industries take advantage of
any existing situation to increase
prices far beyond increased labor
costs, such action is short-sighted and
indefensible policy from every stand
point.
Wage increases and shorter hours
are justified and wholly desirable
when they result from increasing
production per capita and represent
a better distribution of the profits Of
industry. When they retard and re-
strict production and cause price in
flation they result in throwing the
buying power Of the various groups in
the entire economy out OF balance,
working particular hardship upon
agriculture, the unorganized workers,
the recipients of fixed incomes and all
consumers"
Defines Imitation Dangers.
No better definition of the dangers
Of imitation has been written by any
official Of the New Deal, though the
pages Of history are filled in con-
formation with what Eccles has Just
said
When it comes to remedy, how
ever, Eccles leans in the direction
taken by those members of the French
Parliament, who in the disastrous in
flation of the eighteenth century, in
sisted on passing laws fixing prices
and threatening Jail to those who re-
fused to sell at fixed prices-a cir
cumstance that led to riots among
the poor and the pillage of shops
and stores as the value of paper cur
rency went to naught.
What of Expenses?
Governor Eccles proposes higher
taxes to balance the budget, but he
doesn't say word about reducing
expenses, especially since every year
Of the last four the Government budg-
get has been growing on the expense
side so that even this years great
record Of tax receipts will not catch
up with the expenditures. He gives
hint Of future policies:
"Other means than restrictive
money policy must be used under
present conditions to control unwar-
ranted price advances which result
In the rise Of the cost Of living.
"The remedy lies not In restric-
tive monetary policy but in vigorous
Government intervention with all the
powers at its command to deal di-
rectly with the causes that might en-
danger the process Of a stable and
enduring recovery"
Why not? asks the average man.
As unemployment grows and hard
ships for the poor people increase
because their pay envelopes will not
buy necessities of life, the demand
arises for the extinction Of all op-
position to the Government, no mat
ter from what quarter
Nobody In the administration wants
10 bring about such conditions, Of
course, and everybody, including John
Lewis. In the labor world Is denounc-