Evening star., 1938-01-02
Roosevelt Now Seeking
the Magic Formula
BY OVEN L. SCOTT.

aple MIN 10 recapCure nearly lOSt leader.
ship. So far-the facts show-his search
is proving quite fruitless. But the same
facts disclose that the cropping goes on.
1t looked just one year ago as though
the building of second New Deal would
assure the opportunity for four years of
active leadership. There were record
Democratic majorities in Congress to
carry out record d-breaking Endorsement
OF the Roosevelt leadership. Prosperity
seemed to be returning fast. The preSi.
Dental prestige never was so high.
But the record since that time has
been one Of an unbroken series of dam
aging setbacks.
There was the amazingly bungled at
tack on the Supreme Court. In April,
there was the deliberate puncturing Of
the imitation on which the New Deal
largely rested. There was the handling
Of labor disputes In q manner that of :
Tended both organized labor and en-
ployers There was the appointment Of
a former member of the Ku Klux Klan
to the Supreme Court. There was the
coldly received effort In Chicago to rally
this country to an attempted world
leadersh = OF a crusade against dictator
ships.
And all Of this time the air was seep-
ing out Of the punctured recovery boom,
much to the dismay and discomfort Of
the President and the country.
So there followed the attempt to re-
; gain leadership by seeking the co-opera- =
ton of business men in return for
promised modification of tax policies. of
utility policies and of spending policies,
Mr.. Roosevelt set out to give business
what 1t wanted, hoping thereby to start
the country on the march again under
his direction.
The indexes continued their nose dive.
John L. Lewis became increasingly
suspicious. So did the real New Dealers
In Congress. And business men warmed
up not at all to the presidential offering.
To complicate matters, the farmer labor
coalition, on which the Presidents DO
litical strength had been built, suddenly
broke down. The farming groups knitted
the labor groups over wages and hours,
thereby distressing Henry Wallace as
well as Mr.. Roosevelt
The result Is that, when he confronts
Congress on Monday, President Roosevelt
will view scene OF wreckage that hardly
seemed possible last January.
Recovery is gone. The New Deal is a
shambles. Congress is hostile and SEEM
ingly popular because Of that hostility.
The farmer-labor coalition is we'll shat
tered. The Supreme Court continues
to shine In all Of its power and glory.
Only the Presidents leadership is
dimmed.
What to do?
The President already has felt it neces-
sary to call In left-wing Senate leaders
to give them assurance that he is not
abandoning the New Deal. Revenue de-
mands make 1t necessary for him to be
an 1ndian-giver in the matter of tax
changes. taking away more than he gives.
industrial price fixing is making neces-
sary revival OF the idea of trust bust
ing.
Mr.. Roosevelt probably would be
amazed to learn what his own leading
followers think Of the course he has
been following. They say that he never
mas quite made up his mind about the
direction he really wanted to take. To
them, his policies have looked like
combination Of imitation and deflation.
OF encouragement to monopoly and at
tack on monopoly. of attempted eco
nomlc planning and opposition to plan
nlng. The result has been a zig-zag
course that finally has produced trouble
and disillusionment.
At this stage. the President is told
that just three basic courses lie open.
There are advocates of all three among
his advisers
The nrst course open is that of de-
hation. This involves deliberate at
tempt to force competition all along the
line and to drive prices down to a level
that would restore that balance needed
for free flow of goods. 1t involves
scrapping OF A. A. A., the Guffey Coal
Act and every other price-supporting
measure. 1t involves more effective
enforcement Of antitrust laws than ever
has been tried. 1t calls for balancing
OF the Government budget at any cost
by cutting expenditures and increasing
taxes. 1t means wiping out of vast
amounts OF debt. since the def1ation after
1879 really did not make much of a dent
IN the country's private debt total.
Mr.. Roosevelt has been toying with the
idea Of denation. He is urging Congress
to cut expenditures. He has encouraged
Robert jackson, the Assistant Attorney
General IN charge of antitrust prose-
cutlons, to make attacks on monopoly.
He is showing sudden interest in
undermining the antitrust laws. His
emphasis IN talking with visitors is on
getting prices lower rather than raising
prices. But deflation is highly painful
and there are those who think that the
Presidents interest in this course is
based upon desire to demonstrate its
dif11culty rather than to use 1t as a cure.
Inc second course is that of imitation.
rms was the course of the first New
deal. 1t involves an attempt to float the
country back to prosperity on wave
OF Government deficit spending and of
cheap money. It called for bounties to
underprivileged groups, for huge direct
Government purchases from business
men, for the wide use of Government
credit to fill in where private credit was
lacking. The objective of imitation is
TO create activity and to bring about a
gradual increase in prices so that the
burden OF accumulated debt will not
seem SO burdensome. Imitation is pleasant
while it lasts.
And Mr.. Roosevelt again is interested
IN this course. too. He is studying the
idea OF big expenditures on armament
to follow the inflationary path set by
Great Britain and Germany and other
nations. He is investigating the idea
OF large-scale Government spending on
loW-coSt housing. He wants farm con-