Evening star., 1939-02-22
Need Of Encouraging
Capital Is Voiced
By Wallace
Secretory's 'Appeosement'
Statement Lists More
Business as Goal
By BLAIR BOLLES.

Secretary Wallace said today that
we must encourage private capital
to 60 back to work" In the same
mood for appeasement of capital
which the President demonstrated
few days ago, the Secretary added
that "the Nation needs more bust
mes, and that should be our first
goal"
Encouraging private capital, Mr..
Wallace explained, lis the sound
way, and the only sound way, to get
the increase in business activity and
national income which will increase
Government revenues, decrease
Government expenditures and
achieve the balanced budget which
all of us so earnestly desire"
The Secretary's amiable attitude
toward private business was revealed
on the eve of the speech which is
expected to define the administra-
tons program for business appease-
ment-Secretary of Commerce Hop
kins' address in Des Moines, Iowa,
Friday night. Mr.. Wallace recently
spoke friendly words about business
in the same city, but what he said
was overlooked by the press.
Proposes S1O0, ,OO0. .0OO, 900 Goal.
Proposing that s100,000,000, 900 be
set as the goal for our annual ma
tional income, Mr.. Wallace suggest
ed that if Government activity in
business is to be reduced, business
must act for itself, in part at least.
He explained:
Business men who are worried
sbout the flow of Government capi-
tai might we'll spend more time and
thought on how to get private capi-
tai to flowing in volume once more
end how to keep it from flowing too
much when it does start to move
faster"
In his suggestion for a national
Income of 100000 100000 Mr.. Wal
lace went several steps farther than
the President who not long ago set
100000, 100000 as the goal. 1t is now
about $65 ,O0O,OOO,000 year. The
Secretary explained:
Studies have shown that 81 per
cent of the national income is paid
out IN wages and salaries. In other
words, If the national income were
what it ought to be, and if this
same proportion were maintained,
nearly $25 900 100000 more would be
going into the pockets OF city
workers.
30 Per Cent for Food.
Farmers would like to see this
happen, for out of every dollar that
the wage Garner gets. 80 cents goes
to the grocer and butcher for food.
An increase of $35 900 100000 of the
national income would mean an in
crease of $1,000, 100000 expended for
food at retail.
"Out of this amount, farmers
would get about half. In other
words, raising the national income
to 100000, 100000 would put $780,
100000 more money into the far
nlers' pockets than they received in
1888"
The first requisite for getting this
huge national income is balanced
fow of capital, Mr.. Wallace said.
The second requisite is confidence,
rot the confidence of the 192O's,
(which proved to be based on sand,
but confidence that is based on the
firm foundation of policies we'll
thought out" The Secretary added:
"One school of thought holds that
as long as the Federal Government
is paying out more than it is taking
In, theIe can be no confidence. This
school points out that the contribu-
ton to business activity represented
by $3,000,0OO,0O0 borrowed by the
Government is only fraction of the
contribution that would be made by
private business if private business
we're investing at its normal rate.
Other Theory Cited.
''The opposing school holds that
there can be no confidence if mil
Hons of people are in fear from day
to day and week to week of having
their means of livelihood suddenly
cut off. This opposing school points
to the fact that every time the flow
OF Government money is drastically
cut down, business goes into slump.
MY own view is that in a sense
both schools are right. I believe it
Is just as important for Government
to follow stable and Well-considered
spending and investment policies for
productive and social purposes as for
private business to do so.
That means, first, Government