The Key West citizen. [volume] (Key West, Fla.) 1879-current, 1937-01-08
VARIOUS ISSUES
ARE NOW FACING
ADMINISTRATION
ONE OF OUTSTANDING Is
TO CUT DOWN LOAD OF
RELIEF AND GOVERNMENT
EXPENSE
By PRESTON GROVER
lBy Associated Pressl

WASHINGTON, Jan. 8.-The
administration, and for this pur-
pose that includes congress, must
show some time soon just how
brave it is.
The test will come not only in
cracking down on the big fellows,
but upon the little ones. The jobs
involved are:
To control the prosperity
rise before it explodes into a
boom.
To cut down the load of re-
lief and government expense,
or increase taxes.
Several measures of courage
already have been displayed in
dealing with the possible boom.
Less political heroism has been
indicated so far in cutting down
the burden of relief and govern
ment expense.
Months ago the banks were or
dered to put about $1.300.000, 900
more reserves back of deposits.
That wasn't meant to make the
deposits safer. No fear is felt fol
them. 1t was to tie up money that
otherwise might have been
pumped into the security mar
kets.
Federal Reserve In Action
Political courage was read into
the governments issuing public
warnings that there was danger
to the stability of American mar
kets from the influx of about
seven billions of foreign capita
which might be withdrawn precip-
itaCely. That was followed up by
treasury action "sterilizing" all
new and foreign gold receipts so
they cannot swell bank reserves
81 dCllfSly.
The federal reserve board also
pulled on the reins by increasing
marginal requirements. in other
words, reducing the amount of
cash that could be borrowed on
stocks for speculative purposes.
The reserve board still has au-
thority to require another billion
OF so to be set aside as bank re-
serves. There is talk Of asking con-
gress to give the reserve board
and the Securities and Exchange
commission still further power to
handle the boom.
But now check up the economy
talk. President Roosevelt himself
discouraged many persons ambi-
tious to cut government costs when
he let it be known that his reor-
ganization plans called more for
efficiency than economy.
Harry Hopkins, WPA admins
traitor, has indicated he wanted
even more than the half billion
dollars the President had in mind
to carry on for the balance of this
fiscal year. Yet, on the saving
side, when he sought recently to
cut WPA rolls in New York, he
was overridden.
Many Are Pessimistic
In light of many experiences,
it is difficult for observers = to-
look to congress to volunteer any
real cutting of government costs.
The trouble lies in this: One-third
of the senators and all house men,
bers are up for reelection in less
than two years. Their experience
is that cutting costs in Washing
ton also cuts votes back home.
Yet if costs are not cut. the
government will need courage to
retain or increase present tax lev
els to retire the depression debt.
Time-seasoned Senator King of
Utah does not conceal his pes
simism at the prospect. He doubts
that either the administration or
congress will really cut costs.
Pessim;sm isn't universal in
Washington, hut back of good
many official smiles is concern
over whether the courage will be
available when it is needed.