Evening star., 1939-04-09
Roosevelt Hos New
Anti-HitIer Complaint
BIZ OUen L. Scott.

President Roosevelt Is scheduled to
find on his return to Washington that
he has new ground for grievance
against Adolf Hitler, the German die
tator
Hitler already has forced Mr.. Roose-
welt to turn his major attention from
domestic affairs to European affairs and
to rearmament. He has helped to drive
France to a dictatorship and Britain to
the brink of CONSUMPTION Of man power
and of industry as defensive measure.
Now it appears from actual develop
ments, and from the testimony the Pres
tdent is to receive from his best-informed
advisers, that Hitler likewise has sue
ceeded in dealing real blow to budding
economic recovery within the United
States, just at a highly critical time.
The result is the return of moderate
amount of official gloom and a revision
of ideas concerning methods that may be
required to deal with economic difficulties
that are continuing to beset this country.
AS President Roosevelt pointed out
with much detail in his message to Con-
gress on the state of the Union, and as
he has reiterated since, the New Deal Is
seeking recovery through large scale
investment by the Government in w.
P. A. and P. w. A. and U. S. H. A. and
A. A. A. ard other enterprises that are
financed with borrowed money. Through
this Government investment" the Presi-
dent has expected to generate enough
business activity to inspire revival Of
private investment and private spending
that will carry forward the recovery
movement as the Government withdraws
its support for this movement.
This method first was used after the
collapse of the N. R. A. boom back in the
fall of 1888. Government spending of
borrowed money was enlarged deliber-
ately during 1884 and 1885 to produce
increased business activity. At the start
of 1896 the planners recommended
reduction in Government spending owing
to evidence that business spending was
definitely catching hold. Just at that
critical juncture, Congress voted to pay
the soldiers bonus and $4,000, 900 900 in
spending money was dumped into the
pockets of individuals who spent it In
hurry.
A rapid recovery followed with strikes
and rising wages and rising prices of
goods. Maladjustments appeared and
the boom collapsed.
Mr.. Roosevelt last year induced Con-
gress to try this method of "compensa-
tory spending" or investment as
means of overcoming the depression that
followed the 1887 collapse. w. p A.
spending was started again on a huge
scale. P. w. A. spending was greatly
enlarged. Farm subsidies were increased
And there followed a sharp recovery in
industrial activity and in trade that even
shook off the shock of the 1888 Euro
pean crisis.
The Governments spending under this
investment program now is approach
ing its peak. 1t is essential to success of
that program that at this juncture pri-
vate investment by individuals and by
business increase sharply to take over
before the Government investment con-
tracts
the Governments planners were highly
optimistic over the prospect for a sue
cessful transition from public spending
to private spending. Orders for indus
trial equipment were rising. Inventories
OF industrial goods had been we'll worked
of. There were boom signs in the
home building field. The automobile in
6llStrv fOlln6 its hp Sp1ljry
lily. The stage appeared to be set for
resumption of the recovery that had
started in vigorous fashion last fall and
had been consolidated during the first
part of this year
Then Hitler moved again and the whole
situation was Jared. Security markets
were upset. Commitments that had
been planned were postponed The auto
mobile industry found cars to be selling
less readily The whole country seemed
to 60 on guard against war
Does this mean that one more vast
Government spending program is going
to play itself out without providing re-
covery?
The President will be told when he
catch hold, but that it has suffered set
back just at the most critical time. The
critical nature of the situation is shown
by the fact that the peak of Government
spending of borrowed money now is be-
ing reached. About $3.50 900 900 month
is being poured into the stream of pur-
chasing power
AT midyear the volume of this spend
ing OF borrowed money will start to
contract. w. P. A. is to be trimmed
down. The public works administration
is to enter period of gradual contrac-
ton. farm subsidies are to continue
large. but lower livestock prices promise
to offset increased Government payments.
The result is that if private spending
should fail to take hold at this time, the
prospect of further business improve
ment would be narrowed.
X X
New Deal planners think that the
Government at this stage should
be developing ideas and blueprints for
plans that would enable Government in
vestment to fit snugly into fields of con-
struction particularly railroads and
loW-cost housing-that are neglected by
private investment Emphasis is turning
more to Government interest in enter
prises that produce some income rather
than in enterprises like w. P. A. that call
merely for debt croo tio,, u,;+l,o,,4 .a,, l.,