Evening star., 1938-05-29
Plenty of Money to
Be Put to Work
BY OWEN L. SCOTT.

IlOn OF coming dttcNlptS ny Vic OOVCAh-
ment to produce recovery where today
there is continued depression.
The bewilderment Of recent months Is
giving way to some measure OF backstage
assurance. Until recently, the tendency
Of the President has been to regard the
country's troubles as part of q "reces-
sion." purely temporary and largely psy-
Geological in character. Now, however,
a definitely serious view is taken at the
White House of a situation that all along
has been serious.
The pump-priming program moving
through Congress is one gesture OF re-
sponse. But more attention is paid to
diagnosis Of the central cause Of today's
trouble in search for more certain
remedies to be used in treating that trou-
BILE. Two little-noticed developments of
recent days helped to provide that dag
nosiS.
On one day, the Commodity Credit
Corp, the New Deal substitute for Presi-
dent Hoover's old Farm Board, needed
5000 900 900 to use in making loans to
farmers. In the past, this corporation
simply asked the United States Treasury
for money. This time 1t went to the
public, asking for loan of 5000 0,000,0 900
for 18 months at an interest rate of
three-quarters of l per cent. Instead
of this sum, the public offered more
than $4,000, ,0O0, 900.
Then, a few days later, the Recon-
struction Finance Corp.-which also had
been getting its money out Of the Gov
ernments Treasury-Wanted the small
amount of $25 5000 900 to provide capital
for new national mortgage association.
The r. F. c. wanted this money for five
years and it offered to pay per cent a
year interest. But instead of getting a
paltry SOS, 900, 900, the r. F.. C. was del
uged with offers OF more than a bill
lion dollars.
Here, then, were two agencies OF Gov
ernment in which the public is supposed
| not to have confidence simply over
whelmed by that same public with offers
OF its hard cash. Those offers, too, were
at extremely low rates Of interest.
All Of this raised some very important
questions that today are getting inten-
sive official attention.
First of all, it is apparent that this
country simply is overfloWing with money
that wants chance to earn a living.
The supply of money in cash and check
ing accounts. is $4,000, ,0000 900 greater
than it was in 1929. This supply totals
more than s32 900 900 900, but those dol
lars are not working the way they once
worked.
Al this point the questions are raised
Why are these money supplies not work.
ing as they should work? What can be
done to put them to work?
The countrys big business men and
fro cio hat l,a
is not doing what it can do is that the
Government keeps doing things that
frighten and discourage the owners of
that money At first, New Deal taxes
were said to be the center of trouble.
Those taxes were drastically revised.
Yet business continues to contract. Next,
business spokesmen said that capital
would 60 to work if only Congress would
master Mr.. Roosevelt. So Congress did
as told and licked the President on the
issue of reorganizing the Federal Gov
ernment. But still nothing happened.
Even before all of this, the Senate had
beaten the President on the issue Of
Supreme Court reorganization and the
House had beaten him-temporarily, as
it turns out-on the issue of Government
control over minimum wages and maxi
mum hours.
~ **
Now Congress is told that, If it will
just bar any more Government loans
to local governments that want to build
power plants, recovery will develop auto
matically. But individual Congressman
are becoming bit skeptical of the auto
matte recovery theory.
Robert H. Jackson, Solicitor General,
contends that the country really is enjoy
ing "sit-down strike" of private capital.
James A. Farley. Postmaster General, is
expressing much the same view in his
statements that the men who hold the
big money bags have a crouch against
the Government. Most of the Govern
ment economists, however, say that the
real reason why money is not going to
work in new private ventures is that the
economic machinery is so filled with
monkey wrenches-put there by private
monopoly and by labor and by tariffs
that it no longer can work automatically
the way it once worked.
There now is coming to be agreement
in the high reaches of the Federal Gov
ernment that recovery lies in the prob
lem OF putting money to work, regardless
OF the obstacles that must be overcome
AC thlS point, the answer to the prob
lem, as it is taking shape in official
minds assumes the following form:
If private industry, with its big ac-
cumulations of capital, or private finance,
with its access to huge amounts of money,
is either unwilling or unable to venture
and thereby to provide the Nation with
the activity that means recovery. then
the Government will be forced to take
over a larger and larger part of the task.
In other words, Government must be-
come the enterpreneur, assuming the
risks that individual enterprisers once
assumed in the case of huge new ven-
lures.
Owners of large amounts of money
apparently are prepared to have the
Federal Government take their money
at cheap price to do the venturing that
individuals once did. Government SIM
ply needs to make up its mind about the
type of ventures in which to engage
these funds that are available but poorly
employed.
Until now spending has been concen-
trated largely on activities like w. p A.
that appear to the public not to repre-
sent paying investments. The national
debt rises as a result of these expendi-
lures and the country has some i'm
provement to show in return, but there
Is no continuing annual income to meet
the interest on money borrowed to pay
for tho nrniects