Evening star., 1939-03-05
Spending Fight
May 0bstruct
Hopkins Plans
Wall Street Active
In Coalition for
Economy Drive
BY HENRY PAYNTER,
Associated Press Writer

"a ~ LIND
Associated Press Writer
NEW YORK, March Am i'm
mediate showdown fight on in
creased Government spending may
becloud the business recovery pro-
gram Of Secretary of Commerce
Hopkins, some business and finan-
cial leaders said today.
The decision of some of these
executives to fight now has arisen,
they said, out of number of "por-
tents" reaching the business COM
munity from Washington indicat-
ing that the administration may
have up its sleeve" new economic
measures which, if carried out,
would greatly temper their general
attitude towards the Hopkins re-
covery plan.
Not in months, they said, have
so many leading figures in Wall
Street taken such an active interest
in current political proceedings at
Washington, and spokesmen have
been active here for an economy"
coalition of Democrats rallying be-
hind Senator Harrison, Democrat. of
Mississippi, who issued call for less
spending on Thursday
In this roundabout fashion a
number were told that an influen-
! tial key cabinet member has in the
last few days aligned himself with
the Harrison group and promised
to endeavor to win over the Presi-
dent.
Some leaders, otherwise impressed
greatly by the Hopkins program,
said they were disappointed because
they had been told he would take
vigorous stand in his Des Moines
speech against further Government
spending and had not.
Large Outlays Feared.
Moreover. some said they had re-
ceived new ''portents' indicating the
administration both Immediately
and for a more distant period plans
greater and greater borrowing and
spending.
Not the least of these "portents,
it was said. is a pocket-sized hand
book brought back from Washington
by some recent visitors to the Cap
itol during the period of the Hop
kinS consultations with business
leaders in the belief, mistaken or
not, that it represents the first
authentic attempt to tell compactly
in simple language the complete
economic and social theology of the
New Deal"
This book, AN Economic Program
for American Democracy" publish
ed by the Vanguard Press, lists as
authors seven Harvard and Tufts
economists, but a foreword says:
Besides those whose names ap-
pear on the title page there were
several taking an active part in the
work of preparing this book who
because of their present connections
with various branches of Govern
ment service, did not feel free to
afflx their signatures to recon-
mendations on questions of policy.
Parts Are Approved.
Parts of the program were en-
Enthusiastically approved by some in
dustrial leaders who took an active
part in the shaping of the Hopkins
program. Among these were:
l. An Endorsement of the "pri-
vate enterprise system.
2. A firm stand against higher in
come taxes for the rich.
3. Opposition to immediate redjs-
tribution of wealth (even though
opposition is expressed as tempo
rary}.
4. Elimination of tax exempt Sc
curities.
5. A recognition of the impor-
tance of helping the steel industry
and other heavy industries Gnclud-
ing emphasis on continued housing
program.
6. Recommendation the power
companies remain under private
ownership and control.
Some leaders said the statement
of these aims in this form had been
instrumental in deciding support
for the Hopkins plan. These and
others of similar import have been
publicly enunciated, since the book S
appearance, by the President, Hop
kins and others.
Opposition Aroused.
| However, there were other doc
trines in the book which have pro-
duced reactions ranging from ex-
pressions of mild alarm to vigorous
protest.
Chief among those are insistence
on resumption of heavy spending
directly to consumer channels
chiefly through the Works Progress
Administration on a scale calcu-
lated to raise the national income
above $70,000,000,000 year.
The program also calls for a per-
manent policy of ever greater bor-
rowing for Government spending for
investment, and ridicules as selfish
political devices the raising of a
question as to overextending Gov
ernment credit. These statements,
viewed in this light as representing
the New Deals aims, have played an
immediate part, they said, in rally
ing support to the Harrison "econ-
omy" bloc.
Some other expressions in the
book, which have not proved popu-
lar in high financial circles, are the
following:
Railroads.&c. would be cheaper
for the country as a whole to have
the Government take over the rail-
roads at whatever price is consid-
cred adequate to protect security
holders and then reduce rates to a
level that will attract an optimum
flow of traffic" The program also
calls for naturalization of the rail-
roads because regulatory efforts
have failed"
Government debt What we
(see SPENDING, Page ESD