Evening star., 1939-03-24

Cy IN CrOuDlOuS
times of international stress, but for
economic recovery as a social and
humanitarian endeavor.
The statement issued by Chair
man Eccles of the Federal Reserve
Board apropos of the difference OF
opinion between Congress and the
President is in some respects one OF
the most remarkable that has come
from key executive in the Federal
establishment. 1t is as fortnight
as it is unprecedented.
For Mr.. Eccles comedies that a
majority of both houses of Congress
believe business recovery can come
from a curtailment of expenditures
and balanced budget, and he chal-
lenges the legislative leadership to
go ahead and cut the budget. He
says that, believing as he does in
democracy, the majority should
have its way, much as he disagrees
that budget cutting can produce the
desired result.
Minority Viewpoint.
What Mr.. Eccles is saying in effect
Is that the position of the execu-
tive branch of the Government is a
minority. viewpoint. In parlla-
mentary government, of course, un-
der the analogous circumstances, the
executive would resign and make
way for an administration in har-
mony with the majority of the leg
islators. AS head of the Federal
Reserve Board, Mr.. Eccles occupies
q position of large responsibility and
his discussion is not related to party
politics or factional strife. He has
defended deficit spending" as an
emergency measure and has indi-
Gated that until private spending is
able to take care of the unemployed,
the maintenance of purchasing
power through continued public
spending is logical and inevitable.
Mr.. Eccles knows enough about
politics, however, and the opera
tions of pressure groups to believe
that q budget cutting program Of
fered in Congress will hardly ma
terialize. So far as spending is con-
cerned, the record of Congress is
lust as extravagant as. that OF any
Executive. 1t probably would have
been a better way for Mr.. Eccles
to have stated the situation had he
announced that Congress feels the
impact of American public opinion,
which wants spending stopped. but
does not have the nerve to curtall
expenditures.
Ought to Be Cooperation.
There would have been nothing
new in such an assertion, for Con-
press has not taken the matter OF
appropriations in hand heretofore.
Senator Byrd, Democrat, OF Vlr-
einia has been persistently pointing
out the danger of lump-sum appro-
priations and wants Congress 10
take back it's power to appropriate
for specific items.
But the Virginia Senator, like Sen
ator Pat Harrison. chairman OF the
Senate Finance Committee, feels
that the budget cutting should not
be a case of small-boy tactics, with
one side trying to put the other IN
the hole. Both these Senator'S ana
others on Capitol Hill are saying
there ought definitely to be- cooper
alton between the Democrats on
Capitol Hill and the White House.
Evidently the conferences which
have been held thus far are not re-
earded as. "co-operative," but as
merely a reflection of the battle that
is going on as between the propo-
nents of deficit financing" ana the
budget balancers.'
Recently it has been apparent that
even the school of thought which
wants spending reduced is not ar
puing for an immediate balancing
of the budget; but wants to see
definite trend in that direction es-
tablished-a reversal of the tide OF
public spending. If this is to be the
policy, the administration insists
that a start should not be made on
the relief rolls, but in other f1elds
of expenditure, yet the moment any
particular series of appropriations
is touched there is a hue and cry
from those affected.
Coming to Climax.
The situation here is rapidly COM
ing to a climax, because these
months are crucial ones for the DEM
ocrats. The Republicans, in rather
sardonic glee, think that the more
the Democrats fight among them
selves, the more disgusted will pub
lie opinion become as it demands
complete change in government in
the elections next year. If the Re-
publicans had been mischievously
planning it, they could not have
wished for better exhibition of how
not to run the majority party, which
i. has the full responsibility in the eyes
OF the people for the present busi-
ness situation.
Will the Democrats who believe
tax revision and curtailment of ex-
penseS is sound policy now take
the initiative and, acting with the
aid Of Republican votes, put through
such a program?
What the suffering public will not
be able to understand is why, with
declining tax receipts due to bad
business conditions, there is any
hesitancy to revise business taxes
so as to provide incentives to re-
covery. For, the philosophy ex-
pressed by many of the administra-
ton folks, has been that business
makes mistake to hold up its prices
limit its output and throw people
out of work when depressions come
Yet the Federal Government is do
ing precisely that thing when il
refuses to reduce tax rates, which
in itself would increase production
increase profits, increase tax re-
ceipts and furnish the confidence sc
essential to business recovery. II
certainly is a time for submerginj
Of all differences in the common in
terest and for real round table o1
party leaders, conservatives ane
liberals. Otherwise there may bt
such serious economic crisis as tt
y,ooka a. rorfo IN tho Doy,, evil