Evening star., 1937-09-12
Decision Necessary on
Economic Policy
BY OVEN L. SCOTT.

up their answers to practical questions
or admit their lack of a practical an
swer Issues of basic national policy are
getting out of the realm of theoretical
discussion and into the realm of actual
decision.
The choice facing this country is be-
coming apparent today in startling fash
ion on the farms of the Nation, particu-
larly those of the South. Large crops of
cotton and of wheat are coming to mar
ket. Those crops, If they are to be sold,
must find buyers not only within the
United States, but over the world as well.
Yet foreigners are showing relatively
scant interest in them. They will need
to buy 100000 bales Of cotton, nor
mally worth more than half a billion
dollars, and $50, 900 900 bushels of wheat,
normally worth as many dollars. If sur
pluses are not to start backing up again
on the farms OF the country. The mere
prospect of new unstable surpluses has
caused markets to nose-dive.
More than that: The price situation
and yells from farmers caused Congress
to move hastily during its closing days to
put on a new rescue act. Mr.. Roosevelt
was asked to provide new subsidies for
cotton farmers and, in return, Senators
and Representatives promised to set up
q whole new program of control for agri-
culture. This means more upset budgets
and renewal OF experiments.
That prospect, in turn, started the
Presidents opponents to bowling. Com
mentators saw this country moving
quickly toward dictatorship. Imitation
of Germany and Italy and Russia was
charged Apparently, substance was to
be given to the cry that the United States
under President Roosevelt was moving
toward the status of an authoritarian
state.
But it is right at this point that the
Presidents opportunity lies. He has only
to ask his critics for their prescription to
deal with the very practical situation
now confronting the country. In place of
criticism. he might ask for a detailed
bill of particulars. Head-scratching that
would be sure to follow could do much to
help this country to understand the
dilemma in which it finds itself today.
Il y
The trouble is this: Certain parts of
American industry, agriculture in par
ticular, must depend upon foreign mar
kets for an important part of their liveli-
hood. The price to be received in those
markets is determined by forces over
which the farmers of this country have
little control. Yet, at home, the farmers
must spend the money they get from for
eign sales and from domestic sales on the
basis of unprotected world prices, in pur-
chasing goods priced here on the basis of
a tariff protected market and on the
basis of price-fixing which Congress now
has approved for industry.
There are really Just two ways to deal
with that situation. One way is to put
all Of industry on the basis of an impor-
tant part OF agriculture. This would
mean writing down drastically, or elimi-
mating, tariffs. 1t would mean opening
American markets to world competition
on an every-man himself basis. 1t
would mean opening American capital
markets to foreigners who now find those
markets for new loans closed because
they haven't paid their old debts.
The other way is to revive Government
controls. This means subsidies for farm
ers comparable to the indirect subsidies
given to industry through tariffs. 1t
means the start of encroachment by Gov
ernment on the personal liberties of
farmers and of many other groups in the
population, who would need to give up
some of their liberty of action in return
for Government protection of their in
comes.
In other words, this issue simply is this:
Are the people of this country ready and
willing to tear down tariffs so that for
eigners can sell enough of their goods In
this market to get dollars with which to
buy the surplus products of American
farms and factories at prices on a par
with any remaining tariff-protected
prices2
Or are the people of this country going
to prefer to use the powers of govern
ment to set up controls over agricul-
ture and over portions of industry in an
effort to maintain an economic balance
on a nationalistic basis and protection
from world forces?
Either way promises to be difficult.
Before the war, when this country owed
money to foreigners it paid interest and
principal on the loans in cotton and
wheat and other commodities. That was
simple. But after the war, the rest of
the world owed this country money and,
when its gold ran out, had to quit buy
ing, unless something was done.
X X + r
During the 1920s the American policy
first was to lend the foreigners the dol
lars with which to continue paying.
When they couldn't pay interest on what
they had borrowed, that plan blew up.
Afterward, President Hoover, through
the Farm Board, endeavored to hold
prices of farm products high without
controlling production. That broke
down and then he tried the policy of
starving farmers out Of farming They
starved out with the greatest reluctance
Mr. Roosevelt tried production control
and regimentation.
But now it is clear that the New Deal
controls are causing the South to lose its
market for cotton. Since 100000
Americans are directly affected and mil
lions more are indirectly affected, this
situation is highly important 1t is
shown by steady and startling decline
in foreign use of American cotton and
an equally steady and startling increase
in the foreign use Of foreign cotton. The
figures on foreign production Of cotton
are even more amazing.
Thus, during the four years ended Au-
gust /, foreign use of American cotton
fell from 1881 900 bales to 5,400, 900 bales,
while the use of foreign increased from
IL 1897 900 bales to 17,500,000 bales And
during the last six years American cotton
production fluctuated between 100000
bales and 15,600,000 bales, while foreign
production skyrocketed year by year
from 100000 bales to 100000 bales.
~ X
There no longer is any doubt that