Evening star., 1938-03-20
National Recovery Is Still
Around the Corner
BY OWEN L. SCOTT.

into the country to report to the PreSi-
dent that people everywhere appear to
look to him to produce a new formula
for recovery.
mot long ago. in talking witlD business
men. their chief plant was that they
wanted to be left Alone" one such off,
cial, just back from long trip. reported.
Now, in talking with the same business
men, there is an evident fear that the
Government intends to let them alone"
The turn of events at home and
abroad is reported to have produced an
intense bewilderment among the people.
Yet those who report bewilderment out
In the country find that 1t is duplicated
several times over inside the White House
and inside the halls of Congress. The
Government here is at a loss to know
which way to turn.
AS result President Roosevelt Is be-
Ing subjected to an unusual amount of
pulling and hauling.
One day very recently, Mariner Eccles.
head Of the Federal Reserve Board, read
Mr.. Roosevelt the riot act on the dangers
OF policy Of drift in the midst of fast
moving events. He urged that the Presi-
dent make up his mind to positive
course OF action, designed to stimulate
private Spending by measure of care
fully directed Government spending, and
to drive ahead on that course
The President was impressed. Then he
took one look at Congress, lying in wait
to obliterate almost anything he suggests,
and he hesitated. The hesitation was
prolonged when son James Roosevelt ad-
Vlsed caution and when Henry Morgen-
thau, the Treasury Secretary, pointed 10
the sad state OF the budget. President
Roosevelt after that, let another visitor
Know that he hoped to get Congress out
OF Washington in go days. This meant
that ne had no new depression cures to
offer at the present stage.
\ X
Mr.. Morgenthau, who hesitated to in
slst upon budget balancing back In late
1885 and IN 1896 when it might have been
possible. now is in full cry at time when
his job is like that of Treasury Secre-
taries under Herbert Hoover: The harder
ne tries to catch the elusive balance, the
more 1t escapes behind the cover OF
deflation.
So the formula that the President
tried in late l933'and again in 1935-that
OF compensatory spending recon-
mended at first by John Maynard Keynes
the British economist-is out for the
time being
Mr. Roosevelt now looks with favor on
the international trade agreement pro-
gram OF Cordell Hull, his Secretary of
State. as a possible "out" in overcoming
depression.
Secretary Hull has II Of these agree
ments, with their tariff adjustment pro-
visions. and has his biggest one on the
fire. This will be an agreement with the
United Kingdom. But something is
always arising to spoil the pleasure of
this international approach to peace ana
prosperity. For example, Just when tie
Hull program seemed to be slipping along
smoothly, up popped the House of Repre-
sentatives the other day to vote to slap
nigh tariff on imports of pork products.
revealing the basic sentiment for ma
tionalism
NOW. when a deal Is under way with
Britain Germany has taken Austria. and
Italy and Germany are progressing in
their attempt to make Fascist nation of
Spain.
The Britain with which this country
is seeking every possible tie has Just been
warned by her prime minister, Neville
Chamberlain, that she may be forced to
take some totalitarian measures herself.
with the result that the sort of freer
trade envisioned by Mr.. Hull may not be
possible.
france, at the same time, is rapidlv
Shipping into the sort of control over
foreign exchange and over internal prices
tnat would place her. economically. in
the class with Germany and Italy Here
are two of the chief adherents to the old
system of modified laissez-faire RAPIDLY
slipping into the camp of the planners.
But. in the face of an irresistible tide,
Mr Roosevelt lends a hand, while Mr..
Hull. like King Canute, tries to reverse
mat tide with trade agreement broom.
FOR each tiny wave of nationalism that
is swept back, an endless number of
others sweep forward to inundate the
internationalists
The United States, under its last three
Presidents. did its best to encourage
world nationalism.
Now. when the reward for that policy
is being reaped and when the trend ap-
pears to the Governments best econo-
mists to be irrevocably set, this country
suddenly is interested In trying to expert
ment with plans for reversing its course
We prepare to spend billion dollars
building Navy to protect $4,000, 900
worth of Chinese trade and we get set
to retain dominion over the Philippine
Islands at the price of almost certain
war and at very high annual cost to
taxpayers, even in peacetime. This coun-
try is pouring s50,000,0 900 a year into the
Philippine Treasury to give it budget
situation far brighter than that of the
mother country.
The fact Of the matter Is that no really
informed high official-outside the White
House and the State Department-pos-
sesses grasp of the way the world eco
nomic machinery works, has any idea
that the reciprocal trade program in
wolves any chance Of producing recovery
by itself. Rather, nation after nation
including Britain, which once ran the
world economic system-are pulling out
to go increasingly nationalistic.
That leaves Mr.. Roosevelt and Mr. Hull
holding the bag unless they are willing
to give vast sums of money to foreign
nations, under the guise of loans, to pro-
mote boondoggling or armament abroad
in the expectation of getting some indi-
rect benefits in the form of increased ex-
ports. This method was tried during the
1920s, when American dollars built low
cost housing projects, swimming pools,
municipal buildings and other public
works for Europeans, who then conven-
iently forgot to pay the bill.
The result is that 1t Is going to be ex-
tremely difficult to sell Congress on the