Evening star., 1939-01-07

the Government, $##%$%8
but it is also true @
that Mr.. Roose- David lawrence
welt plainly con-
ceded that his program was tempo
rarv and that permanent recovery
must come out of the released ener-
gies of private capital. Thus, these
sentences stand out:
"The first duty of our statesman
ship today is to bring capital and
man power together
1--WE suffer from great unem-
ployment of capital -
: The object is to put capital-pri-
vate as we'll as public-to work
1--WE want to get enough capital
and labor at work to give us a total
turnover of business, total national
Income of at least $4,000, 900, 900
year.
Mentions Electric Power.
In admitting, as the President did,
that 1.-The factors in attaining and
maintaining that amount of national
income are many and complicated"
there was no opportunity for him
to discuss in detail the ways and
means of achieving bigger turn
over in business, though he did sug-
gest some principles, not the least
significant of which was 1.-The work
ing out of new neutrality-suspicious.,
State and Federal-to protect the
public interest in and to develop
wider markets for electric power"
Here was the first hint that the
administration recognized the vital
necessity of giving stimulus to the
durable goods industries, which
have Jagged in recent years largely
because of the fight between the ad-
ministration and the utilities. Needed
expansion of facilities requiring
heavy expenditures for. raw mate
rials and labor has been seriously
delayed by political wrangling which,
1t may be hoped. has now been super
seded by a realistic need of getting
the problem solved in the public
interest.
In fairness to the Presidents posi-
tion on the so-ealled spending
policy, it might be pointed out that
lending" and spending" are not
the same thing, even though they
are grouped and Jumped together in
. single budget. Expenditures for
capital purposes, for instance, are
written off in a single year, ire
Bpective of the length of time the
bridges or the buildings may be used
Likewise, when the Government
guarantees the lending of private
funds for housing, the money comes
out of private banks, but the capital
reserves set UP here to Offset possible
losses are considered expenditures
or spending"
Classified Items Discussed.
There has been considerable dis
aussion here as to whether the m
come and outgo statement of the
Government should not be itemized
and classified in such way as to
indicate clearly the expenditures
which lead to wealth-producing re-
suits, and those which merely fur
nish stimulus to what are known as
customer industries. 1t is true, of
course, that this point has been
raised under preceding administra-
tions and that any reclassifcation
should go back couple decades so
that the public could make compara-
tive analyses. But that the present
budgets give an impression of far
more spending" for non-reimburs-
able or unproductive purposes than
is warranted by a careful study of
the individual items is also appar-
ent from even surface reading of
the Presidents budget figures.
What is vitality important now is
how the administration policies
will be applied so as to permit pri-
Vate capital to make more profits out
of which more taxes can be COL
lected. The present tax rates have
about reached point of diminishing
returns unless new ways of stim-
ulating business expansion can be
found. The year 1889 will see many
Instances of Government co-opera-
ton in policies leading to higher
rate of business activity, for while
nobody in the administration any
longer doubts the moral effect of a
balanced budget, there is at least a
bringing together of the two schools
of thought in realization that
since expenses are not to be cur
tailed, the only possible way to
achieve a balanced budget from tax
receipts is to permit the business
structure to have a gross income OF
100000, 100000 year. Hence the
administration has assumed, as the
Presidents message plainly indicates
the obligation of pushing the ma
tional income up, and that means a
much more sympathetic understand
ing of the processes by which gross
income and business turnover are
brought about than has been ap-
parent here in more than five years
OF experimentation with the eco
nomlc system
e0opyright. 1890