Evening star., 1938-04-10
DOUGLAS AND GILL
URCEU.S.S SPENDING
US. Chamber at Same Time
Demands CIear-Cut
Policy.

Administration moves for increased
Government spending to prime the
pump" and start flow of needed
funds to business and Industry were
given impetus yesterday by William
o. Douglas, chairman of the Securi-
ties and Exchange Commission, and
Corrington Gill, assistant works prog
ress administrator.
At the same time the United States
Chamber of Commerce emphasized in
preparing for its annual meeting next
: month that fear psychology" is
predominant depressing influence on
business and called for announce
ment of a "clear-cut Government
policy" to correct existing conditions.
The separate statements by Mr..
Douglas and Mr.. Gill came as the
latest developments in behind-the-
scenes struggle by "spenders" and
councils
Hits Fear Psychology"
Mr.. Douglas discounted fear psy-
chology' as the ma jor influence back
of the business recession, contending
a revival of purchasing power would
lead to sound recovery by paving the
way for long-delayed financing opera
tions and loosening of large amounts
Of frozen private capital. He held
new Government spending is needed
to boost mass purchasing power.
Mr.. Gill reported a W. P A. study
showed that until private capital out
lays increase substantially, Govern
ment must continue to assume large
responsibilities to meet the need for
. expanding purchasing power and to
provide for the necessary expansion
Of investment"
The Chamber Of Commerce state
ment said: AS business conditions
fail to improve, questions of policy
which have been responsible for the
depression call for continuance of
urgent attention. Business has not
created the conditions that exist. 1t
alone cannot correct them.
Outside Influences Exist.
Outside, depressing influences exist
A fear psychology predominates 1t
holds back private investment in job
making ventures and deters business
commitments in other directions. An
nouncement of a clear-cut Govern
ment policy is urged"
Results of the struggle within ad-
mlnlstration councils over spending
policies will be clearer when President
Roosevelt submits his administration
to Congress shortly.
For the moment, al least. the spend
ers appeared to be making headway
Mr.. Roosevelt already has acknowl-
edged he is seriously considering a
$500 100000 public works program
IN addition to relief outlay variously
estimated at Sl,250.00O 900 to s2.OO0,-
100000 for next fiscal year, and po-
tential $1,000, 100000 of loans to busi-
nesses and governmental subdivisions.
Have Not Given Up Fight.
However, the budget balancers have
not given up the fight and much is
expected to be heard from legislators
who side with them.
The pump-priming group includes
Works Progress Administrator Hop
N>iiio' INCo0iNF Dodlu u chairman EccleS
and Public Works Administrator Ickes.
Arrayed against them are the more
conservative advisers. led by Secre-
tary OF the Treasury Morgenthau and
Budget Director Bell.
The fight started at least five months
ago. Then Secretary Morgenthau ap-
peared to be winning With the Pres
ldents consent. he said the way to
restore business confidence was to bal
ance the budget as nearly as possible.
Give business a chance to pull itself
out OF this recession" was the theme
OF the conservative advice poured
into the Presidents ear. He agreed to
wait and see.
But business drifted lower and lower
until now the Federal Reserve Boards
index OF production is down to about
70, compared with 1T last August,
Mr.. Eccles early in January chal-
lenged the wait-and-s see idea telling
Senate committee "a billion dollars
OF increased spending, if it worked
quickly enough and went into con-
sumner buying power, would act as q
very great stimulus, in nv opinion
and would tend, I think, to stop the
recession"