Evening star. [volume] (Washington, D.C.) 1854-1972, 1938-08-07
New Deal Now Turning
Sharply to the Right.
By OWEN L. SCOTT.

| BY OWEN l.. SCOlI.
The New Deal, after five years OF
| plodding down one road in the search for
| an elusive recovery. now is about to turn
| down another road in the same search.
The turn this time is to be sharply to
the right.
When much the same choice was Of
fered back in 1888, President Roosevelt
| and Congress-with the blessing of buSi-
| ness men-turned to the left.
The choice concerns the part that Gov
| eminent is to play in helping to make
the Nations economic machinery func-
ton. Whether people like 1t or not,
events at home and abroad are forcing
Government to take one or another of
! two broad courses.
One course leads to overall planning,
with Government exercising strong
and even dominant influence over the
policies of large corporations and finan-
cial institutions, controlling prices and
directing the flow of investment.
The other course leads to an attempted
| revival Of real competition, with Govern
ment combining itself to devising new
rules Of the game that will foster and
protect initiative and remove special
privileges of whatever kind so that bust
ness units, no matter how large or pow
erful, will be forced to compete, thereby
establishing automatic controls that
Government otherwise would be COM
PEELED to operate on planned basis.
Government pump printing, or ''refia-
tion," helps to give the country a breath
| ing spell by enabling it to live on its
savings while making up its mind con-
corning the road to be chosen.
Back in 1888 the choice was for
for agriculture and N. r. A. provided the
beginning of controls for industry. Each
plan was based upon the idea of self gov
eminent. with business men given
grant of Federal power to be used in
controlling prices and limiting produc-
ton. 1t was not long before this whole
experiment was deeply mired in the
trouble that normally grows out of the
human desire to get rich quick, particu-
larly when bulwarked by Government
aid.
One group Of New Deal officials favors
moving back again to the planning idea,
but with Government rather than trade
associations this time exercising the con-
trolls and with the whole plan limited to
key industries rather than to oil in
dustries.
Mariner Eccles, chairman of the Fed
eral Reserve Board, and Henry A. Wal
lace, Secretary Of Agriculture are the
leading advocates Of planning. They
believe that overall direction of basic
policies in industry and finance must
inevitably be enforced by Government in
the future if there is to be economic sta
bilty. While they abhor the repressive
and the political tactics of Fascist states
they recognize that these states have
devised set of controls in the economic
field that could be adapted to democracy.
The Agricultural Adjustment Admin
istration represents such a type of con-
troll. So does the bituminous Coal Act,
through which the Government sets out
to regulate every minute phase of coal
mining and the fixing of prices on COAL
So, too. does the Wisconsin State licens-
ing law. which is designed to guarantee
profit to automobile dealers and to limit
competition in that field.
This road of planning points to the
left. as Government is forced to move
deeper and deeper into control of every
phase of business
But ascendancy at the moment is 90
ing to the groups Of officials who oppose
planning and who want to devise ways
and means to revive the good old days
when rugged individualists had chance
to fight 1t out among themselves, with
success going to the most fit. These
officials would use Government to take
away the special powers and the special
privileges now exercised by giant cor
porations and by giant financial insti-
tutions, whether banks or insurance COM
panies or investment trusts
Among those sharing this view are
Robert Jackson, Solicitor General; Thur
man Arnold, Assistant Attorney General
In charge of antitrust prosecutions:
Leon Henderson. now executive secre-
tary OF the National Economic Commit
tee. who learned about N r. A. and PLAN
ming from the inside as director of the
N. r. A. Division of Research and Plan
ming. and an imposing array of con-
gressional leaders headed by Senators
OMahoney and Borah.
This group has succeeded in selling
President Roosevelt its idea The idea
is that old fashioned capitalism, of the
kind that American business says it
wants, can be made to work if only a
new set Of rules. Government-enforced.
are devised. To devise those rules there
first must be thorough understanding
of all phases of the problem. To get that
understanding there now is to be made
an exhaustive investigation of the coun-
try's whole economic system and of its
existing controls.
Here is to be definite turn sharply
to the right.
If business men really do desire to
maintain the system of private CAPT.
talism. then. opponents of planning say,
these business men should whole heart
eddy support action by the Government
to produce new rules that will force the
competition that makes Government
planning and control unnecessary.
As it has turned out. business appears
not to know quite what it does want.
There is fear that the new anti-monopoly
committee is going to make little ones
out of big ones" by busting trusts and
penalizing efficient large corporations in
order to keep alive inefficient corpora
tons. whether little or big. That, def
nitely. is what those now in the ascend
ancy do not have in mind.
What they do have in mind is this: