The Waterbury Democrat., 1937-11-27

Washington, Nov. 27 - RooSe- welt and the New Dealers have a plan for ending the depression be- fore 1t approaches disastrous pro- portions. The plan has curiously little in common with remedies pro- posed or described in most congress sional speeches and newspaper dis patches.
 The Presidents economists have told him that there isn't much chance of any pickup in business worth speaking of before some time next spring. The administration t now convinced that the country is in one of those fashioned econ- onic spirals of declining produc- tion and purchasing power -- and that nothing can actually be done about 1t until some sort of a new balance of prices, production anc purchasing power is achieved, al- though now is the time to plan. At Odds on Tax Repeal
 This is not c very common view point outside the inner circle of ad- visers. Congress is very likely, in the meantime, to take the word of business interests and conservative economists that there's no cure like repeal of the corporate surplus pro- fits tax.
 New Dealers scofR at that pro-
 p0sal and others of the sort,
 claiming that Wall Street is en-
 tirely, unrealistic in its sugges-
 tions as to the depresslon's causes
 and possible cures, But there will
 be a real fight over the surplus
 profits tax if Roosevelt sticks to his determination to COnfine ac-
 tion to alleviations for small bus- inesSes.
 During that other period which Democrats like to call the Hoo- yer depression" there were severa upturns in the spring - in 1880 1881 and 1882.
 Friends of MT. Hoover like to say that the depression really ended ir 1882 and that only the presidential campaign and Roosevelt's election prevented Q parade to recovery from continuing. Roosevelt's friends say the trouble was. that Hoover never had @ plan of action ready with which to take advantage of an upturn when he saw one.
 Predict Upturn by Spring
 Anyway Roosevelt's idea now is that there will be at least level- ing of of the declining industrial curve some time in the spring and that the government-promoted pri. vate house-building boom, pre- viously discussed in this column, can then take hold and provide inl- petus which will start industry spir- aling upward again. (Latest deci. sion is to ask Congress to get the FILA interest-service charge rate down from 6 IA per cent to around 1 1.2)
 Although the administration
 and its economists believe there's
 no chance of turning up the bus
 mess curve at once, that doesn't
 mean they expect the curve to
 keep going down at It's recent acc
 celerated rate. Christmas trade
 and extra dividend payments are
 expected to help. There might be
 some natural rebound from the
 present business blues and sure. ly, it's believed, talk and action toward . building boom will stim- ulate Q scramble for inventories.
 The spring adjustment" ex. pected to provide the psychological moment for the housing boom to be actually felt is anticipated partly as a result of an approach of prices and production levels to the normal unchanging purchasing power fol consumer goods. Thereafter, 1t i being figured, each billion dollar! that may be spent on housing will mean a three-billion increase in aa- tional income.
 Admit Bad" Decline
 Fear that the planned boon would lead to increased prices fol building materials explains Roose' velt's recent request that the Fed. eral Trade Commission investigate monopoly price-flXing. The inquiry is aimed primarily at building ma. terial prices, and perhaps especial. ly steel.
 New Deal economists take the
 position that unjustlfied, mOnopo.
 listic prices increases for building
 materials was practically all that
 spoiled 2 promising building
 boom" last spring.
 All of them admit there's bad decline and some even call 1t ter rife" But 1t isn't true that Wash ington is as scared and Respondent as Wall Street--not yet, at least. Copyright 1887, NEA Service, Incl