Evening star., 1938-02-28
NEW DEAL POLICY
BLAMED FOR IDLE
IN BARUCH'S BLAST
Government Is Held More
at Fault Than Business
for Unemployment.
FINANCIER GIVES VIEWS
AT HEARING OF SENATE
Profits Taxes Hit-Feeling of Sc
curity Held Element Needed
for Upturn.
BACKGROUND

BACKGROUND
The Senate Unemployment Com
mittee Uas set up bu special res
olution Which proridcd it NTH
$4,000 to Investigate the ertent
and causes of unemployment When
the committees hearings arc
completed. the group is to make
recommendations to the Senate for
permanent legislation. Senator
Byrnes, Democrat, OF South Caro-
lima heads the committee, 1rhich
met today for the first time since
January %.
By the Associa ted Press
Bernard Baruch. New York finan-
cier, told Senate Committee today
that Government policy was more re-
sponsible for unemployment than any
thing else.
Il say it with regret. but I would
be less than candid if l failed to
express my opinion that unemploy-
ment is now traceable more directly
to Government policy than anything
cuclliSSo Sotttkl VA SlIOulu tO. Stlu We
white-haired witness, personal friend
of President Roosevel:S and some
times consulted by the Chief Execu-
tive on economic questions.
Mr.. Baruch testified before the
Senate Committee on Unemployment
He recommended enactment of wage
hour legislation which he said seems
to me a necessity of our times" but
criticized some other administration
policies. particularly the undistributed
profits and capital gains taxes.
Ample Credit. He Says.
These taxes he said, practically
arrest the creation and expansion of
new industries.
He said that there is ample credit
now to support much greater business
activity than that CT even 1929 and
added:
The single missing element in
great forward movement is a feeling
of security-a belief that money can
be spent or invested without confisca-
ton of reasonable profits by inordi-
nate taxation. A" 8 arbitrary change
in the value OF money =" further
disturbing assaults on business"
The combination vi millions OF
cautions caused by doubts about the
trend of Government he said, has
held back private spending.
"Of course" he said, "all this
depends on national policy.
has appeared to be, there is no hope
of Unemployment and substantial
recovery"
Hits Social Security Tax.
Mr.. Baruch criticized the social
security tax as tending to retard
business and cause unemployment.
In addition to deducting a tre-
mendous sum from the direct pur-
chasing power of the poorest classes"
he said, lit serves as a powerful in
centive" to employers to replace
workers with machines. He suggested
substitution of "a gross sales tax or
q machine hours levy.
Mr.. Baruch said he believed the
national income should be 100 billions
OF dollars yearly. goal discussed
recently by President Roosevelt, in
stead Of the present So billions.
Certainly" he declared, the real
goal to shoot at in relieving the ter
rble problems of unemployment is
that gap. Government expenditures
of two and half billions, or even
four billions, for relief do not begin
to cover the ground.
"As long as employment lags We
must spend for relief, but Government
expenditure isn't the way to cure
unemployment. There is only one way
to do that-full private expenditure
FOR consumption and investment in
(See UNEMPLOYMENT, Page A-5D