Evening star., 1938-11-20
Old Economic Order
Held Gone Forever
= BIZ O1Den L. Scott.

real lowdown on the present plight of
the New Deal.
That plight obviously, is far from
happy. An immense amount of energy,
nearly twenty billion borrowed dollars
and not far from six years have been
spent on the New Deal program. Yet
today the farm problem is as acute as
ever, ranks of the unemployed are nearly
as large as ever, and the public-as the
November 8 election returns showed-is
as dissatisfied as ever.
The explanation of the failure of the
New Deal to solve the Nations problems
is described as relatively simple. This
explanation is that the broad new pro-
grams of pump printing and farm con-
troll and credit condition were based upon
the expectation that the Nations eco
nomic troubles were fleeting and would
disappear as soon as the world returned
to normal. All planning rested upon the
idea that the world economic system that
had functioned for so long was only tenn
porarily out OF gear.
Now it turns out that this fundamental
assumption was wrong.
Germany is pulling farther and farther
away from traditional capitalism and is
moving into radical form of state capi-
talism. The same is true of Italy and
Japan. Russia long ago forsook capital
ism for state socialism. France even
now is in the midst of developments that
suggest an early end to the free economy
of that nation. Great Britain's growing
troubles make uncertain her future
methods.
Instead Of the sort of world that the
New Deal had looked for, today's world
is one that has been subjected to revolu-
tionary change since the. 1888 plans were
laid.
A great deal of oficial comment now
is to be heard telling how the new Brit
ish-American trade agreement may be
expected to reverse the world trend and
lead to the revival of trade that can spell
success for the Governments policies
Actually, few Of those who negotiated
this agreement believe that its economic
effects will be anything but small Even
now, before the agreement has taken ef-
feet, much of its importance is nullified
by the fact that the British currency is
in trouble. The British pound worth
S5 03 when Cordell Hull set out after a
trade agreement now is worth $40,
with an extremely uncertain future
A cheap British pound tends to make
it more difficult to sell American goods
in England and makes it easier for
Americans to buy British goods The
tariff advantages that American farmers
are supposed to get in the British market
thus are at least partially offset by the
currency depreciation.
Over much of the world, old trade rcla-
tionships have been disintegrating. with
this disintegration speeded up since the
British and French surrendered to the
Germans at Munich.
Throughout Central Europe. Germany
is assuming domination. with a promise
to edge other traders out Japan has
bottled up China at Canton and Shang-
hal, dominating that Far Eastern mar
ket. In Latin America totalitarian ma
tions with their barter arrangements are
threatening to upset the free exchange
methods upon which this countrys trade
is based.
Essentially. the meaning Of these de-
velopments is that the problems that
the New Deal expected to be temporary
appear now to be permanent. If the
markets of the world are not again to be
opened to the free exchange of goods on
the basis of stable currencies and lower
tariffs, then vast economic readjust-
ments will be required within the United
States just as they are being made in
side other nations. Cordell Hull, Secre-
tary Of State, and Henry Wallace, Secre-
tary OF Agriculture, have been trying to
explain this fact to the Nation for sev-
eral years.
The New Dealers feel that now is the
time that President Roosevelt should ex-
plain what has happened and should let
the Nation know that mere outpourine
of new billions of borrowed money in
wolves no long-range solution of the
difficulty
1t is here that the National Economic
COMMITTEE, soon to open hearings, can
take on added significance
Businessmen have been inclined to re-
gard the functioning of what is known
as the Monopoly Committee" as puni-
tive in purpose In reality this highly
important committee plans to be objec-
tive in its approach and is seeking not
to prove any point but to find out why
it is that breakdowns have occurred in
the business and financial system.
Members of this committee will con-
slider that their major purpose has been
served if they can convince the Nations
businessmen that something funda-
mental has taken place in the world
since 1929 to make necessary at least a
partial change in the relationship be-
tween business and Government.
One of the men who helped design the
original New Deal and who now admits
that world developments leave the origi-
nal New Deal standing on shaky foun-
dation, with little to show for the billions
it has poured out now has the following
to say:
There are about 200 men in this
country, making decisions for the largest
basic enterprises and for the largest labor
unions, whose attitude can do much to
assure that the recovery now starting in
the United States will continue with rela-