The Waterbury Democrat., 1937-11-11
RY LYLE o. WILSON

United Press Stan COrrespondentl
 Washington, Nov. n = (UP) - Emergency brakes gripped govern Enent spending machinery today in a vigorous new deal effort to revive business confidence and check the downward spiral of c business re. cession. Secretary of Treasury Henry Mprgenthau, Jr., Q qualified spokes- man for President Roosevelt, pre-. sented before the Academy of Po- htlcal Science in New York Q pre-. view of 0 balanced economy budget for l0S0-So. Mir. Roosevelt In Wash- ington organized Q big business com. mittee charged to tempt millions or billions of dollars of private capital into Q program of housing construc- ton. Congressional sentiment ape peared to be swinging toward re. vision of the capital gains tax and possibly the corporation reserve tax as c gesture of goodwill toward bus" mess and finance.
 Break With Free spenders
 Morgenthau's public break with the free spenders raised immediate political problems. MT. Roosevelts formal endorsement of his recoln- mendatlons would strain White House ties with many new deal Democrats and with such Independ- er1t biz spenders as the La Toilette brothers of Wisconsin.
 There was no specific promise In Morgenthau's speech of modification of the capital gains and losses tax or the levy on corporation funds which are not distributed aS divi- dends.But Morgenthau baked at higher taxes. He promised simpllfl- cation of the tax structure and ad- jistment of inequities.
 There was 0 hint that the treas- ury would recommend lower income tax exemptions to swell the number of low-bracket payers both to raise revenue and to increase the number of persons whose appreciation of the value of Q government dollar IS based partly on their annual exper- fence in paying some of their own income directly into the treasury Some hidden consumer tax" may be abolished.
 Managed Currency
 Retarded business, fear of In. creased unemployment and slump. Ing farm prices revived Capitol Hill talk of managed currency or sim. liar infiationary efforts but without justify!ng belief that such projects would 70 beyond excited oratory during the next few months. :.
 Federal underwriting or Q limited guarantee of private capital which ventures into big scale housing ex. penditures was Q possibility along with aid for hard hit railroads.
 DevelopmentS indicated four days before an extraordinary session Of congress that MT. Roosevelt had dee clded federal "purnp priming" now mast be abandoned, the budget bal. anced, business confidence restored and private capital persouaded into active servlce-to speed industrial activity and create jobs.
 Morgenthau said that the adnlin- Istration would continue to seek Q wisaer distribution of the national income, He offered business and in- dustry the alternatives of cooperate Ina In the private spending drive or a continuance of federal defacit fin- ancing.
 Protect The Weak
 The secretary said the administra- tion would permit no one to starve and would maintain its policies to ''protect the weak"
 MT. Roosevelt proposed that pub- lic utilities voluntarily or by con- pulsion through legal action place ! fair valuation upon their properties and base their rates on the lowered capital structure which thereby would Do set up.
 MT. Roosevelt feels that pressure fot government operation of eloctri- cal power utilities would face under those circumstances. But MT. RooSe. welt and the utility companies do not agree upon what Is fair valua: ton. and until some new and ,nightily altered decision k render. cd, the supreme court must support