Evening star., 1938-05-15
What Will FOllOwAnOth
SsShOt in the Arm''?
BY OWEN L. SCOTT

One simple but important fact is
dawning on the White House and on
some members of Congress, now that q
new venture into Government spending
is on the way toward approval.
The finally recognized fact Is this:
If the Government now does nothing
more than spend a larger number of
dollars. the result can be a check to
declining business and some impetus to
revival. But. once the money runs out,
unless underlying depression causes are
removed all of todays troubles can come
right back again.
A seventeen billion dollar shot in the
national arm was needed to teach this
lesson. Now that the money is gone,
most of the troubles of 1882 are back
again.
The Governments planners hope that
the country won't soon forget what it
learned at such large cost in the past
five or six years. But those planners
are in almost violent disagreement about
what needs to be done to make the new
spending and lending plan something
more than just another shot in the arm
OF uncertain duration.
\
President Roosevelt has just ducked a
chance to take sides in the argument.
Instead, he Is stating the problem and is
asking Congress to pick the answer.
The problem, as stated by the Presi-
dent, is this:
One-tenth Of per cent Of the corpo-
ratlons making tax returns in 1885 owned
81 per cent Of the assets of all reporting
corporations. Furthermore, one-tenth of
per cent of the corporations making tax
returns earned so per cent of the total
net income reported by all corporations
In addition. Al per cent of all American
families and single individuals are found
by the Government to have had incomes
OF less than $1,000 for the year 1856.
while u per cent of the country's fami-
lies at the top of the heap had as much
income as the Al per cent of the families
at the bottom.
+
When these reported facts are set
against the background of between H.
100000 and 100000 unemployed, the
character Of the Nations problem is
more clearly understood. That problem
Is one Of concentrated economic power
so great that it enables corporation man
ayers to substitute their personal judg-
ment for the decisions that once were
mace by the free market of competitive
capitalism.
Business men are contending that. If
corporation management is just left
alone, this problem will solve itself.
They like to believe that the competition
OF the once free market continues auto
matlcally to make the price adjustments
that enable industry to scale the bar
rlers that rise from time to time.
The Governments economists and
planners do not agree with the business
men, but at that point they begin to
fight among themselves.
one group believes that there must be
new laws that can really compel the
giant units in history to compete freely
They would revive trust busting actiyi-
ties and would use Government to force
the competition that the free market
once created automatically. This group
includes Harry Hopkins W. P. A. admin
istrator; Robert Jackson, solicitor gen.
eral; Ben Cohen and Tom Corcoran.
White House advisers, the Federal Trade
commission and group of Senators, in
Guiding Senator Borah.
IT they have their way, antitrust laws
will be streamlined. tariffs NAV be re-
duced drastically and Government buv
ing will be used to break up price COM
binations.
The trust-busters point to what has
happened in industry during recent
months and to what still is happening.
The steel industry has cut production
~ per cent and yet has cut prices not at
all. Instead, large numbers of workers
nave been ploWed into the street in order
that prices may be held The automo-
bile industry has cut production about
5o per cent, while prices have been held
unchanged and very large numbers of
workers have been plowed under. In
all OF industry. production has been cut
an average of about 40 per cent as prices
OF the finished products of industry have
been little changed and about 1000 600
workers have been added to the total of
unemployed.
In other words, there is little evidence
that the free market that once governed
capitalism is working as it is supposed to
work, SO far as industry is concerned.
But this free market continues to work
to an important degree in agriculture.
The result is that cotton production shot
up and the price has been cut almost in
half despite Government efforts: wheat
production promises to be higher and
the price is half of what it was a wear
ago; hog production is rising and prices
are declining. All of this Is as it should
be in free market.
One wing of Government advisers in
sists that Government should use its
power to bring to industry the competi-
ton that still is evident in agriculture.
That always has been a highly popular
idea in this country from a political
viewpoint
The second wing of Government advis-
ers thinks that the trust-busting ap-
proach to the problem raised by concen-
trated industrial control may be highly
popular idea, but that it is likewise high
ly impractical. This wing includes Mar
riner Eccles, chairman of the Federal
Reserve Board; Henry Wallace, Secre-
tary OF Agriculture, and Donald Rich
berg, former N. r. A. general counsel
Most OF the Government economists 20
along with them.
These advisers insist that Government
must recognize the fact of concentrated
economic power and must endeavor to
deal with that fact through regulation
and through planning, rather than
through any attempt to pulverize indus
try into smaller competing units. They
believe that NJ r. A. contained the germ
OF an important idea, if only the law had