Evening star., 1939-09-10
Depression Held
Wartime Asset
BIZ OtDen L. Scott.

temporarlly-to the problems ana tne
arguments Of recent years.
Strange as it may seem, the very de-
preston that has plagued America be-
comes, in wartime, a positive asset. Be-
cause of depression, the United States
stands today as the one nation in the
world best equipped to serve as supply
base for warning nations.
Men who have been idle now are avail
able for work in war industries without
taxing the Nations labor supply. Ma
chimes that have been idle now can be
turned to war use to fill the demand
rials that have been in what looked like
endless abundance now can be drawn
upon.
The result is that, instead of sudden
pressure on the Nations capacity to pro-
duce-with an accompanying imitation
there now is the prospect that more
orderly even if highly unstable, re-
covery can develop. The United States
is all set to become the great reservoir
of productive capacity that readily could
become decisive factor in war
Two sources of demand appear to as
sure strong measure of recovery.
First is the demand from Britain and
France for goods. These two nations
possess about $1,000 600 900 in ready as
sets available to be turned into dollars
OF this total, $4,000, ,0O0, 900 is in gold
The last war saw those two nations
spending $4,000, 900 900 here If this
war is prolonged and if Britain and
France run out of dollars, there then
will come test of American willingness
to deny loans.
Second is the demand that will rise for
increased national defense. Mr. Roose-
welt always has found that all factions
in Congress were ready to appropriate
money for the Army and the Navy. A
more dangerous world is going to in
crease the incentive to expenditure in
this field.
Out of those two situations can grow
a war prosperity that will last as long
as the cash and the loans hold out
provided that Germany is restrained
from an effective blockade around Brit
ain. Best military opinion here is that
she can be restrained
Ofsetting the prospect of increased
spending for war supplies are some fac
tors.
For one thing, trade with Central Eu-
rope will be ended to all intents and
purposes. This trade is small For an
other thing, many people at home will
postpone entering into commitments to
buy houses or to buy other types of
goods that involve going into debt SO
long as the outlook is uncertain.
However, the net effect of war orders
will work magic in the field of argument
over New Deal policies.
War and increasing war orders will
bring with them rising business With
rising business will go rising Government
revenues. With rising Government reve-
nues will go an approach to a balanced
Government budget. With this will go
the end of an argument over the ap-
proach to bankruptcy under the New
Deal.
Further:
War and war orders will bring rising
employment. Rising employment will
bring decreasing relief rolls Decreasing
relief rolls will bring a contraction of
w. P A. A contraction of W. P. A. will
end an argument over what to do about
the unemployed.
Then, too:
War and war orders will increase
business confidence. Increased business
confidence will tend to refute the idea
that President Roosevelt is destroying
confidence An end to the argument
that Mr. Roosevelt is destroying conf
dence would leave little ground for argu-
ment against the New Deal. The real
fact will be that, if anything should de-
stroy confidence it is war; yet war will
appear to revive confidence.
And SO it goes.
With a gradual end to one set of argu-
ing recent years will go the develop
ment of another set of arguments to
divide the Nation in the period ahead.
There will be arguments over the kind
of neutrality law that should guide the
United States. There will be arguments
over taking the profits out of those in
dustries that get their profits from war
orders. There will be arguments over
lending to Britain and France or to
corporations that do business with Brit
ain and France.
All of these arguments will head up
if Great Britain and France suddenly
should run out of dollars, as they did
not long before the United States en-
tered the war in 1917.
Strange as it may seem, President
Roosevelt in this new period is likely
to be found on the side of businessmen
rather than on the side of the New
Dealers.
Many of those young men who de-
signed and who have helped to guide
the New Deal are "nationalists" AS
"nationalists," these New Dealers argue
that the United States should go it
pretty much alone in the world, organ
izing her internal economy and prepar-
ing to let other nations work out their
own salvation. The New Deal is a mild
venture in nationalism, involving as it
does some measure of control over
finance and agriculture and industry.
Mr. Roosevelt has been interested in
the New Deal, but he is not interested
| in avoiding world commitments or in