THE "NEW DEAL"

Ashburton Guardian, Volume 54, Issue 198, 4 June 1934, Page 8

THE "NEW DEAL"

COMPLICATED POSITION, / A HIDDEN ANTITHESIS. 7> NEW YORK, May 18. Is prosperity "shelving" the New Deal? Is the improvement in American economic conditions dooming the basic reform which, even more than immediate recovery, was President Roosevelt's avowed, purpose? - These are momentous questions for the idealists, who looked upon President' Roosevelt's undertaking as one of the grandest experiments in human affairs—namely, the grafting of a sense of noblesse' oblige to the individualistic mentality of those having the greatest wealth and power. The revolution and :'overturn of these colossi would be comparatively easy. The other thing was infinitely more delicate and immensely more difficult.

Regretfully, but inevitably the idealists are beginning to. realise that there was a hidden antithesis in the New Deal. If the.plan for immediate economic- recovery succeeded it would, in the national mind, obviate the need for long-view reform to persist toward basic changes in the economic system. In such circumstances it would require zeal not influenced by political considerations and a zealot whose fibre is unwearied by a year in the hardest office in the world. Evidences of Recovery. • Evidence of returning economic wellbeing are accumulating. Ira 1932 there were 49,500,000 persons in America capable of gaining employment; bufc only 34,000,000 were in employment. To-day the latter number has grown to 38,500,000. There has been a 40 per cent increase in prices for finished goods since March, 1933, and prices for .primary products have also shown a gratifying upward trend. Production in basic industries and of durable goods ishows gains in 1 the following fields: — Automobile manufacture, building and construction, iron and steel, bituminous coal, electric energy and textile and apparel manufacture. It is true that probably 50 per cent of the increase in employment is due to the Government public works programme and that, even if industry were at the peak of its production, at, say, in 1929, the technological position is such that there would still be 6,000,000 unemployed. It is also true that, whereas there has been a 40 per cent increase in price for finished goods, wages have nowhere increased at the same rate; and that prices for farm goods at 76 per cent of ilie pre-war level; while.goods the farmer must purchase are at 120 percent. It is similarly true that many industries are still in the dangerous dormancy into which they fell.

Still more is it true that the_ American people are already pledged an expenditure of 16,000,000,000 dollars for this recovery; and they have been warned that more may be asked—indeed, last month there'were more persons on subsistence relief in urban centres than at any time since November, 1953, the increase in the period being 11 pier cent, and the total being 2,000,000 families. However, even the most reluctant cannot escape the conclusion that the leayen of economic recovery truly is at work at last, and there is genuine improvement. ' Reduction of Codes. The president of the American] Federation of'Labour (Mr William Green) recently said: "It is a striking fact that, as the employers begin to feel the. force of recoyery starting, they are less willing to co-operate in the President's programme." * A WalKStreet magazine recently stated: "As time has gone on, the feeling has gained among business men that the National Recoyery Act policy emphasises business reforms more; than business recovery, and has become a deflationary rather than a inflationary force." ,

Whatever the sentiments of the concerned parties may be, the vital fact is that White House has already begun an unmistakable retreat from the controversial front. Official reports from Washington confirm that a drastic reduction in the number of National Recovery Act codes, to occur shortly/will bring them to about 40, covering only large manufacturing, retail and wholesale activities. Thus there will be abandoned the grandiose original plan to place about 7000 industries under separate codes, with 4000 code authorities, one of the most ambitious regularisation schemes since, the dawn ,of world industry.