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Show Eccles' Theory Assailed I By JOHN T. FLYNN 1 business preceding that collapse. Two great problems faced the nation na-tion as a result One was to reform re-form th abuses which had fouled the system. The other waa to atimulate recovery. Many, like tha writer, urged that reform ahould come first, that it should be directed at as- NEW YORK There Is a vlo- lent argument in progress, of which Mr. Marrlner Eccles Is the center, on the effect which the government's spending program pro-gram haa had upon the course of business. Mr. Eccles says such recovery as we have had waa th result of government spending and that without It the country would have been ruined. Hia critlca say had It not been for the government's spending -policy private investment would have gotten Into action and that nil recovery haa been prevented by government spending. Both sides Ignor some Important Impor-tant factor. Ther I no doubt that Mr. Eccles ia right when he says tha recovery we have had haa been due to government apending. He I also right when h say that without government apending the country would have been ruined. Hia critica weaken themselves when they attempt to deny these facts. Government's Case Weak But whether the government spending haa produced any "real" recovery ia another matter. Whether the apending haa been wis is also another story. And even more Important ia the question ques-tion whether the policies accompanying accom-panying government spending hav been calculated to aid recovery. re-covery. On theae points th verdict ver-dict must be against the government. govern-ment. Private Investment la essential to the functioning of the capitalist aystem. The government spending spend-ing program waa designed to take the place of private Investment. Now private Investment had completely com-pletely collapsed by 1931. This was not the fault of the government govern-ment but of the folly of private aentiala and should be carried through swiftly. Then recovery ahould be In order. Th necessity for carrying through essential reforms swiftly Is obvious sine a commercial system sys-tem cannot possibly flourish in th midst of continuous reform. This, however, waa not done. An example is the fact that only now is the administration getting around to Wall Street and th exchange. Possibility ef Private Investment With the system reformed and the public appriaed that reform Mtaa at an and and that government govern-ment would then devote Its energies ener-gies to consolidating and stabilizing stabiliz-ing the system, private Investment Invest-ment might have been resumed. Instead, almoat everything in the world waa done to Introduce uncertainty into affaire the half-baked. half-baked. Ill-digested money policies, th uncertaintiea about devaluation devalua-tion and, above all, the president's presi-dent's appallingly unnecessary loose talk big tajk about doing things he never had any intention of doing. The spending program wa unavoidable. un-avoidable. But it wa never Intelligently In-telligently planned. The same stimulation could hav been obtained ob-tained with half the money. . But worst of all was th attempt at-tempt to us the spending program pro-gram to bolster prices and t create the impreaaion that the pending program would be uaed to regulate and direct the economic eco-nomic system. This created the greatest fear of aU the fear of Inflation. In the atmosphere created by . the president private Investment waa utterly Impossible. Copyright, 1939, for The Telegram |