Evening star., 1937-01-11
WORK HOUR CUT
ADVISED AGAINST
Would lmperiI Opportunity
for Industrial Expansion,
Says Brookings Report.

The Brookings Institution, private
organization of economic research, to-
day warned the Nation against what
1t termed the mistaken theory" that
slashes in working hours are desirable,
Instead of raising standards of Ev-
ing, such cuts would imperil the op-
portunity for great industrial ex-
pansion, the institution argued in a
report on essentials for further re-
covery.
This stand was taken less than a
week after President Roosevelt had
reaffirmed faith in the broad objec--
tives of the outlawed N. r. A., which
included shorter working hours and
higher wages.
The institution contended that re-
duction Of hours would cause a sharp
rise in costs. This, it said, would re-
suit "either in rapid rises in indus
trial prices, with profoundly disturb
ing effects upon the operation of the
economic system as a whole, or the
immediate halting of business activ-
ity with consequent increase in un-
employment"
Lists Essential Steps.
Reporting that the opportunity for
a great industrial expansion has never
been greater than it is today, the in
stituuon listed the following as es-
sential steps to realize that expansion:
l. "The re-establishment of a bal
anced Federal budget.
2. THE continuance of the present
policy of maintaining a fixed price
Of gold and the establishment through
international cooperation of a sys-
tenn of stable foreign exchanges.
3. "The extension Of the program Of
reciprocal trade agreements as the
most practical means of reducing ar
tiflcial barriers to commerce and re-
opening the channels Of international
trade.
4. THE preservation Of the gen.
orally favorable ratio of prices and
wage rates, in the interest of progress
sively expanding the real purchasing
power Of workers and creating a de-
mand for added production and en-
ployment-placing emphasis upon
price reductions as a means of carry
ing the benefits of chronological prog
ress to all groups within the Nation.
5. The maintenance, in general, of
prevailing hours Of labor, as the only
means of meeting the production re-
quirements involved in restoring dur
ing the next few years the standards
of living of the laboring masses and
promoting the economic advancement
Of the Nation as whole.
6. THE elimination of industrial
practices and policies-private and
public-which tend to restrict output
or to prevent the increase OF pro-
ductive efficiency.
z. Shifting the emphasis in agri-
cultural policy from restricted out
put and rising prices to the abundant
furnishing of the supplies of raw
materials and foodstuffs required by
gradually expanding markets"
Many Favorable Factors.
The institution reported many IA
vorable factors in the present situa-
ton. 1t said lendable funds were
abundant at low interest rates, and
the purchasing power of the laboring
population has been steadily ex-
panded."
1t attributed material improvement
in the balance between agriculture
and industry "in part to normal re-
covery from the extreme depths
reached during the depression, in
part to the effects of dollar devalua-
ton, which raised the prices of staple
export commodities. in part to
weather conditions and in part to
the Government program Of restrict
ing agricultural production"
The report hailed the administra-
tion's policy of monetary stability"
and its efforts toward stabilization Of
foreign exchange.
On "the darker side of the pic
ture" the economists contended that
"the possibility of a serious breakdown
in Government, finance still exists"
Concerning the international sit
uation. they reported:
The threat of new wars not only
forecasts the possibility of renewed
wealth destruction, but also consti-
tutes a barrier to the re-establish-
ment Of constructive international
economic policies"