Evening star., 1938-07-31
New. Deal Mistakes
the Power of Words
BY OWEN L. SCOTT.

| alRn OIllCldlS 1TOIn TTeSlQenC HOOSe.
| velt on down for nearly five years went
along saying things that needlessly Of
| Tended business men and financiers and
| other important groups in the popu-
| lation. Antagonisms grew, suspicion
ruled conduct, and the country suf-
| fered.
Then, recently, came a lesson in .ap-
piled psychology. attributed to Thur
man Arnold, new Assistant Attorney
| General Mr. Arnold Long has been i'm
| with the popular susceptibility to IA
miliar expressions. He even wrote a
book on the subject. After writing his
| book, Mr.. Arnold was drafted into Gov
| ernment service.
Almost Immediately magic word
made its appearance on the lips of Off
| cial after official. This word was Co
| operation"
If an industry was to face prosecu-
| ton for antitrust law violation, this
| prosecution, officials assured, was wholly
| in the interest of cooperation. If
| the death sentence" of the Utility Hold
| ing Company Act was to be given it's
| first application, the utility industry soon
| learned that the Government was merely
cooperating with that industry to re-
| move a trouble spot, Or, If the toes
| of business men are to be stepped upon
| in establishing minimum wages and linn
| iting hours of work, the Government
| wants it understood that its action is
| wholly cooperative.
In the past, one official after another
| has delighted in making disparaging
o,Leo Oh b,,ci ,.,b ;1tt
| object to Government policies. Business
men came to feel that they had no
opportunity to tell their side of the
story before one experiment after an
other was foisted on their backs. There
grew up a feeling of abuse and of
resentment against abuse
Most Importance attaches to the
changed technique because of the ap-
preaching investigation of this countrys
whole business structure.
Business men, and the general public
as well. are going to- get a lesson in
practical applied modern economics. If
this lesson is to have value and is to
be taken to heart, it must have the
| sympathetic cooperation of business.
| That explains why the msnamed Anti
| monopoly Committee" like other Off
cial agencies. stresses its desire to Co
operate" with business rather than to
lead punitive expedition.
The fact is that nearly 40 years have
passed since the National Government
made a thorough investigation of this
country's economic system to discover
| what changes have occurred.
Recent years have produced scores of
theories about what has gone wrong
with this system.
Business men blame Government for
the recent breakdowns. Government
blames business men and flnanciers.
Others assert that tariffs, or money
policies. or disturbances abroad, or even
sunSpotS are the cause of the trouble.
A committee representing Congress and
the executive branches of the Govern
ment is starting out-armed with an
initial appropriation of 0,000-to dis
cover who, if anybody, is right.
This committee, known as the Ma
tional Economic Committee. with Sena-
tor Joseph C. O'Mahoney as chairman
and Leon Henderson, former head of
the N. r, A. Division of Research and
Planning, as secretary, is getting set to
do a vastly important job Of research.
That research may upset many popular
theories held by business men. and the
committee wants the sympathetic inter-
est rather than the antagonism OF busi-
ness.
It's aim is to find answers to ques-
tons like these:
Should government have an interest
in the fact. revealed by corporation tax
reports, that one-tenth of ! per cent
of the corporations making tax returns
in 1885 owned 50 per cent of all assets
of all reporting corporations. or that
tenth of l per cent of all corpora
tions making returns earned so per cent
of all net corporation income?
Is it true that few corporation eX-
ecutives, without any direct public re-
sponsibility. arbitrarily fix prices Of
many of the basic products used by
nearly all the people, thereby exercis-
ing what amounts to a private power
Of taxation? Who determines whether
this Nations vast corporations are going
to cut down production, throwing hun
dreds of thousands or even millions of
men out of work, rather than cut prices
in an endeavor to maintain production
and jobs?
Do corporations with huge accumu-
lated reserves really use those reserves
to maintain employment? Do this Ma
tion's giant corporations give steadier
employment to their workers than small
er corporations and are their wages
actually higher on the basis of annual
income of workers? Do the big cor
porations bury patents in order to
prevent their development?
X X X
What part do insurance companies
play in deciding where the private saw
ings of the country are to be invested?
Have officials of these companies sy-
phoned investment of heir policy hold
ers' money into corporations of which
these officials are directors and is there
any evidence that these officials have
received financial favors from corpora
tionS in which they have invested policy
holders funds? Do big banks and in
surance companies hold the power to
decide which regions shall have capital
for development and which shall not?
Broadly, the investigators want to find
out who runs this country's economic
machinery and how it is being run. They
want to learn what makes the gears OF
that machinery mesh and what makes
those gears, at other times, clash.
Those are very important questions.
The New Deal has been shot in the
dark in an effort to solve problems be-
fore all the facts were known and under
stood. The result has been resentment