Evening star., 1938-12-18
New Deal Revivinq
Policies of Hoover .
By ODen L. Scott

alter all. Mr.. HOOVerS big idea, IN faot,
is being dressed up for a new appear
ance.
The former President gets credit for
the policy that's led during both the
Coolidge and Hoover administrations to
vast loans-or gifts-of American dol
lars to European and Latin American
and Asiatic nations. These loans then
were used to buy American products and
in that way contributed Importantly to
the prosperity era of the 1920s
Difficulty arose when American lend
ers, including the United States Gov
ernment, began to demand payment not
only of interest on their loans but of
principal as well.
But now that the defaults resulting
from this demand have occurred, lenders
have pretty much written off their losses
and the rather sad experience of 10 years
ago is barely remembered. 1t is just at.
this psychological moment that new
plans sponsored by the New Deal, are
formulated to make new loans-or gifts
to foreign nations so that once again
they can increase their purchases of
American products.
Henry Morgenthau, jr., Secretary of
the Treasury, announces that this Gov
ernment is at work on plans to set up
credits that Latin American nations may
draw upon to finance trade with the
United States. The Treasury Is plan
ming to make loan to China to be used
by that nation in buying American goods.
The Export-Import Bank is participate
ing in loans to corporations doing busi-
ness in Latin America, assuming much
of the risk in the name of American tax
payers. Pressure is increasing to alter
the johnson Act that now bars new
loans to nations that have defaulted on
debts to the United States Government
The mere presence of more than $14,-
000,0000 900 worth of gold, lying idle in
Treasury vaults, is creating an almost
irresistible incentive to find some use for
that gold.
Why not use it as backing for loans to
South America, who then could arm
against relationships, or to European
democracies for use in preparing to call
the bluff of totalitarian states, or to
China to use in obtaining materials that
can make the going a little tougher for
the Japanese?
After asking that question, the high
about providing its answer by plans for
foreign lending
Ever since 1888, several officials point
out, the National Government has been
applying the Hoover technique at home
instead of abroad. 1t has been lending
and giving away money to Americans.
Men have been put to work on w. P. A.
and P. w. A. and otherwise, building
roads inside the United States, construct
ing low-cost housing projects, erecting
dams and doing a multitude of other
things that improve the physical plant
of the Nation.
This activity, however, instead of be-
ing applauded, in the way that foreign
loans were applauded, has been subject
to constant criticism. The $11 900 900 900
that went to Europe and South America
and Asia to provide jobs indirectly for
American workmen created no political
hAShbhSh az VIC tlllC Lie OIL
that have gone to provide work at home
have generated endless pickering and
now are held to be responsible for vio-
lent anti-New Deal political kickback
Political-minded New Dealers, once
scornful of the political acumen of
President Hoover, now are crediting him
with real understanding of American
psychology.
AS compliment to Mr.. Hoover's
judgment, the New Deal intends now to
give his methods of lending to foreigners
further trial. This time there is every
prospect that borrowers will accept
money with a rather definite under
standing that it doesn't need to be paid
back. There even are hints that the ex-
perlence of American corporations which
developed enterprises in Mexico only to
have these enterprises confscated, might
be duplicated elsewhere. But the idea
is that If money can be syphoned abroad,
then foreigners will spend 1t here and in
that way will give jobs to American
Workmen who can be taken off relief
rolls. The result could be politically
painless way of providing indirect relief.
A modification of that plan already is
being worked quite successfully in the
case OF agricultural products.
Foreign buyers who once purchased
large quantities of American wheat Just
about ended those purchases when the
United States no longer loaned them the
money with which to buy The New Deal
then undertook to cut down the produc-
ton OF wheat and other crops in order
to adjust production more nearly to the
home market. The idea was that there
is no particular point in working to fill a
market that does not exist.
But again political difficulties arose
and this year the Federal Government is
using modification of the pre-New Deal
technique. In the case of wheat, the
Government is letting this country's tax
payers pay for wheat that then is given
to foreigners at a nominal cost. The
taxpayers appear not to object and the
Europeans find that the gift wheat is
fine.
Many Congressman now are deeply in
terested in extending this idea to all
crops.
In other words, instead of finding ways
to provide more and better clothing and
more and better food for American
children and adults, the idea is to give