Evening star., 1939-03-12
InfIution Risk Seen in
New Scrip Plan
BIZ OUen L. Scott.


on one more New Deal experiment. This
newest experiment is going to cost money,
1t is going to represent an added sub
sidy to the unemployed and yet it prom
ises to carry business support at time
when business processes to be economy
minded
Here, in other words is the latest
New Deal technique for selling the cash
subsidy-or bootstrap lifting-system to
businessmen, who have until now been
the strongest opponents of that system,
in theory.
The new idea. on paper is found by
Government planners to carry a wide
appeal
That idea starts with the familiar fact
that large groups in the American popu-
latlon are ill-clad and ill-nourished in
the midst Of such an abundance of farm
products that the very abundance is i'm
poverishing farmers by bearing down on
prices.
When first the New Deal recognized
this fact there was strong pressure to
utilize the labor of the unemployed and
the machinery of idle factories to turn
these surplus products into goods of the
type that the millions of idle persons
could use. Harry Hopkins, now Secretary
of Commerce, sponsored this production
for-use program.
That program cracked up when busi-
nessmen recognized the outline of
system of production based upon some
thing else than the profit incentive
Now the idea is to attack the same
problem through the existing business
machinery of the Nation Instead of
attempting reform, or OF seeking to Gre
ate a separate miniature economic sys-
tenn operated by those not engaged in
the regular system, the planners think
they have another way to deal with the
problem of want in the midst of plenty.
Apparently. to take this way the Gov
ernment needs little more than plenty Of
cash-a need that shows up more and
more in Government ventures.
The experiment about to be undertaken
rests upon a study made of expenditures
for food on the part of families on work
relief, on direct relief and in the low
income groups of the country That
study disclosed expenditures averaging
about 81 a week per person for food
when an adequate diet would require an
estimated expenditure of S15O. This
means that an average W. P. A. family
with $50 monthly income is able to
spend $40 Of that income for food,
whereas $50. would be required to pro-
vide adequate nourishment
The conclusion was reached that If the
people had means Of acquiring enough of
the right things to eat there really would
be no serious farm problem.
Starting at this point. the experts en-
ployed by Henry Wallace, Secretary of
Agriculture, set out to devise a method
OF getting more food to those families
that most need it. They hit upon
scheme now to be tested out in five or six
cities ranging in size from 10000 to 25O, 900.
The scheme is this:
Work-relief employees, people on State
and local relief and persons getting old
age assistance are to be classified as
eligible for participation. At present a
w. P. A. worker gets an average monthly
income of $50, of which $40 on an aver
age goes for food. One version of the
plan is to give the worker $50 month in
cash and $40 month in scrip-special
money-that can be used to buy food, as
at present. Then, in addition to the $40
of scrip, which the relief worker would be
free to spend on any type of food desired,
there would be $40 additional given to
him in special scrip to be spent for
foods designated by the Government as
in surplus.
The scrip, in the cities to be included
within the experiment, is to be used in
regularly established stores. with all mer-
chants eligible to participate. Scrip will
buy foodstuffs at the regularly estab-
lished prices and will be exchangeable
for any of the brands or qualities Mer-
chants collecting scrip will redeem it for
cash through Government channels.
This means added spending in the
stores and, in effect, is merchant relief
as well as unemployment relief and farm
relief. BY including businessmen directly
in the relief setup. New Dealers expect
w SAliAoC Po"Ci4ul 1OI lIt SuDSlUy
idea where before they encountered op-
position.
At present the plan is to be tried out
on foodstuffs alone and in few locali-
ties. but the idea is later to include
clothing and to broaden the coverage.
Many, and serious, questions are raised
by this latest venture into an experiment
with subsidized abundance
The first question is cost. Scrip will
really be special form of money and as
such will either have to be honored
through borrowing or through tax re-
ceipts or through the use of the print
ing press. How much money would be
involved is cleaned from the fact that an
estimated 100000 families are receiving
public assistance within the United States
at present. A scrip payment of $40 to
each OF these families over and above
existing payments would cost $60,OO00O0
a month or s72O,OOOOOO year. Adding
$72O0OO,O00 year to budget already
nearly $4,000 900 a year out of bal
ance might raise new problems.
The second question involved is that of
farm relief. Farmers get only fraction
OF the dollar spent by consumer for
ffc