Evening star., 1939-08-02
Exit Pump-Priming

The House action killing the ad-
ministration's new lending spending
bill is commendable on several
grounds, but by far the most i'm
portant of these is the reputation
in the vote of the New Deals pump
printing philosophy. 1t will be
argued, and with some force, that
Government spending should not
have been terminated so abruptly.
But If, in the present temper of Con-
gresS, abandonment of the thor
oughly discredited theory that
nation can spend itself out of
depression with borrowed money
had to be accomplished in such
arbitrary fashion, the attainment of
the end is still of sufficient i'm
portance to Justify the means.
Since 1888 when President Roose-
velt turned his back on economy to
embrace the purchased recovery
formula, the Government has been
piling up debt which has no peace
time precedent anywhere in the
world. Oblivious to the menace of
national bankruptcy, the admins
tration on four occasions sought and
obtained from Congress authority to
borrow large sums of money to
prime the pump" of industry. The
successive failures of these "shots
in the arm" to produce the desired
results only Whetted the appetites of
the New Dealers for more and still
more money
Until this session of Congress,
there had been no effective opposi-
ton to the spending orgy. Some
independent economists warned that
the Nation was destroying itself, but
little heed was paid to them. Senator
Byrd of Virginia took up the fight
for economy several years ago, but
his was a voice crying in the wilder
ness until the victory of this week.
Gradually, however, the voters
throughout the country, realizing
that the long promised recovery was
not materializing, began to heed the
words OF those who declared that
private industry would not function
normally so long as the Government
continued to spend so far in excess
OF its income. That sentiment was
conveyed to the members of Con-
gress and stiffened the legislators in
their determination to defy the
President.
There were, of course, other factors
IN the House vote. The lending
spending bill had been pretty thor
oughly emasculated in the Senate.
AS it left that body, the bill should
not have been passed, despite the in
clusion of such desirable amendments
as the Tydings ban on political con-
tributions by unions out of general
revenues, the Byrd authorization for
issuance of taxable Government
bonds and the OMahoney amend
ment to prevent further Government
competition with private business.
After the Senate had finished its
pruning operation the bill was little
more than another subsidy for the
already generously subsidized farm
ers. AS such it would almost certainly
have resulted in another failure to
produce the long-sought industrial
recovery.
Another important factor was the
growing determination in Congress,
and particularly in the House, to
assert the Legislatures independence
OF the Executive after functioning for
the greater part of the New Deal in
rubber stamp role.
Viewed in all it's aspects, the House
action is the most encouraging omen
OF better times that the country has
had in the past six years. But while
the opponents of the spending policy
are celebrating their victory, there is
one note of caution that should be
sounded. The refusal to authorize
further Government spending is
predicated on the assumption that
private industry, with the threat of
national insolvency removed, will so
expand its operations as to provide
work for those who would have bene-
fitted from the public expenditures.
If private industry fails to perform
that function, the Nation, in all
probability, will turn back to the
spending theory, and possibly on a
more elaborate scale.