Evening star., 1940-02-25
Controlled Economics
:. Seen After War
BY Owen L. Scott.

IOpc dIe unlIOIMly peSS1mlStlc ABOUT any
future return to normal" in world af-
fairs. Their idea is that even an end
to war today would leave the world
struggling with problems that could not
be solved except on the basis of the most
drastic changes In economic machinery.
The reason for this situation is one
that has been increasingly apparent
since 1888. That reason is found in the
fact that armament has gradually alb
sorbed an increasing proportion of the
energy Of the people Of Europe. until
today more than one-third of the effort
OF Europe's principal nations is devoted
to that unproductive enterprise. Any
break in this armament boom, with
peace, would bring devastating de-
preston, and with it fierce new COM
petition for available markets.
In the light of these circumstances
there obviously is little chance that the
United States can escape the effect Of
world developments regardless of wheth-
er or not this Nation enters the war. II
the United States is forced into war, or
If this country turns heavily to arma-
ment on its own account there will be
the appearance Of recovery.
But once the fighting stops and once
the armament building slows, the real
problems will appear and the real issues
of policy will develop.
At that time the United States will be
forced to adopt the conservative course
Of underwriting world reconstruction and
world recovery as the one Nation with
adequate capital for that task, or the
United States will be forced to adopt the
more radical course of nationalism with
its internal planning and its really dras-
tic New Deal
President Roosevelt is choosing the
conservative course in laying plans for
the future policy Of this Nation. If the
President does decide to seek a third
term, the decision will be influenced by q
desire to guide the United States along
this path Of international collaboration.
A hint of the presidential thinking and
of the thinking of those who are advising
him is given by Adolf A. Berle, jr, Assist
ant Secretary of State.
E* -
Essentially the proposals that Mr..
Berle makes are these:
/. That the United States return to
policy of international lending as means
Of getting to Europe the goods that will
be needed and that will be available in
abundance in this country.
q That the United States make a gift
of large part of its gold to the rest Of
the world to underwrite return to q
stable system of international exchange.
ut seems fantastic today" he said ito
suggest handing over some of our accum-
ulated gold as free gift to re-establish
international currency. to let other ma
tions set their houses in order and there
by re-establish trade and normal life.
But this may not seem nearly so fan
tastic few years hence" Here Is the
use to which the President apparently
expects this country's vast gold hoard
to be put. ..~sa... -.-4-a-,s4
3. That the Federal Reserve System
use Its credit resources to help straighten
out the affairs OF the rest of the world.
4. That trade agreements be used as a
means Of bringing down tariff barriers
so that the nations getting all Of this aid
from the United States may be able to
pay for that aid, at least In part, by
working to produce goods that could be
useful to the people Of this country.
"The weakness Of our situation will be
that many of our economic institutions
will no longer mesh with the institutions
overseas" Mr.. Berle explains. "Our
financial system will still be, compare
lively speaking, along classic lines, at
time when almost everywhere else in
the world currency and credit will be on
a wholly different basis. We shall still
be feeling for that necessary understand
ing between business and Government.
The millions of men and an industrial
machinery which were formerly used
both in Europe and here to provide war
materials will be thrown out of that en-
ployment; and both because of this and
because of competition from overseas,
our problems will be very great"
AS matter of fact, many people in
this country will disagree with the pro-
posals that Mr. Berle makes Many Of
these peopla will be conservative busi-
nessmen. Yet his proposals are basically
conservative and represent the alterna-
tive to much more radical steps, modelled
on advanced New Deal lines.
The alternative to American UNDER
writing of world ehabilitation-some-
what along the lines of the postwar
period following 1918-is a program of
controlled nationalism. This is the pro-
gram that Germany and Japan have
pushed in recent years and the program
that the British and French Empires
now are embracing. That program calls
for business and financial controls
through government It includes con-
trolled currency, controlled production,
planned distribution, controlled prices,
directed investment.
As a matter Of fact, this country has
avoided much more drastic experiment
with nationalism than anything the New
Deal has represented only because In re-
cent years its Treasury has been willing
to accept unlimited quantities Of gold IN
exchange for surplus commodities moved
ohroad Whey the time comes for 4 halt