Show 11 I I I M N IN O S Q I I. I ID I DES U Pi t E C S-I S Q T T U I I C F F. F C The B Bv By News New elJ PAUL Behind h MALLON Lt the News 1 W WASHINGTON A A sage economic eco ceo mechanic around the White WhiteHouse WhiteHouse WhiteHouse House sized up the situation now confronting the president in this apt way President Roosevelt spent his first four years getting a sick hoss started He will st spend end the next four trying to keep it from running away The important thing about that is the second purpose requires s an exactly opposite opposite opposite site technique from the first You operate at a different end of the horse The methods used for getting the beast going are ate Inflation spending credit expansion an unbalanced unbalanced unbalanced un un- un- un balanced budget seizure and distribution distribution distribution dis dis- dis- dis of corporate earnings seizure of big incomes and distribution distribution dis dis- of them to the needy artificial stimulations to develop purchasing power But the generally known method method method meth meth- od of dealing with a runaway call for Devaluation contraction of spending and credit a balanced budget and abstinence from sUm sUm- If these fundamentals are de desirable desirable desirable de- de as is now said you are going to see an entirely different new deal in the next four years Steps The experts who plan ahead are already discussing what can be done The first thing would naturally be to pass around the word that the immediate outlook is none too good that prices are going I I too high and may cause reaction This tends to hold things down It has already been started The new deal news writers are be beginning beginning beginning be- be ginning to speculate about it Official Official Official Of Of- spokesmen are taking it up Next you can hike the requirements requirements requirements require require- ments on banks so they will have to keep keei a large amount of cash cashin cashin in reserve and cannot lend it out This also has been done It will willbe willbe willbe be done again next month Then you can move to limit the influx of foreign capital into this country from war-frightened war Europe Europe Europe Eu Eu- rope and cut down that stimulant stimulant stimulant lant to our markets Mr Roosevelt Roosevelt Roosevelt Roose Roose- velt has talked about this Steps will be taken very soon Po Powers ers These preliminary steps are the known ones There are others which have not been mentioned in public They can move to in increase increase increase in- in crease interest rates through the federal reserve board and treasury treasury treasury treas treas- ury policy They can enlarge Mr authority over the stabilization fund so he can manipulate it in an ary way They can buy fewer government government government gov gov- bonds in the open market market mar mar- ket 1 et and thus put out less cash They can start to cut down gradually gradually gradually grad grad- on government spending and move toward a balancing of the budget All these and some other minor technical steps have been discussed discussed discussed dis dis- dis- dis cussed and perhaps these will eventually be taken A significant thing about them themIs Is that tha virtually no new l legisla legisla- gisla- gisla tion would be needed to carry them out A technical technical amendment amendment might have to be adopted by congress congress congress con con- gress to enlarge Mr Morgen Morgen- thaus thau's stabilization powers and nd the rate of spending of if course will be partly determined by con con- gress But no new big legislation is being discussed at this time Determination The big question is how effective effective effective tive these moves will be Nobody knows They have never been tried before Consequently no one can possibly have any provable notion of how much they will ac ac- ac- ac Their application re requires requires requires re- re quires very careful handling because because be be- because cause the purpose is not to stop the progress of the old hoss but butto butto butto to moderate his gait so he will not again exhaust himself and col col- col- col lapse It is true the government could not handle him before and the reins now are not as strong as they might be But government has learned a lot in the last seven years It is alert and knowing All of these fellows here in charge of thinking for the new deal are not They have found out more about practical economics economics eco ceo in the last four years than government officials previously learned in a lifetime They have havethe havethe havethe the fresh experience in their minds of what happened before It is anybody's guess how successful successful suc sue they will be The main thing is they are determined Copyright 1936 for The Telegram |