FOUR QUESTIONS.

Auckland Star, Volume LXVI, Issue 106, 7 May 1935, Page 18

FOUR QUESTIONS.

NEW DEAL POINTS. STAGGERING FIGURES. (By PAUL MALLON.) WASHINGTON, April 4. The current condition of hesitant public opinion regarding the New Deal could be condensed into four simple questions. They occurred to a wondering news editor in the west who wrote in to ask: What is the New Deal reaily aiming at in the way of business stability? Ilow does President Roosevelt propose to pay off his stupendous mounting debt? Has he any limit on how high it will go? What is holding back the circulation of money and credit? These four fundamental questions were submitted privately to the four men in Washington best able to answer. The four men are not politico* of the New Deal who go running around the country bellowing clouds of economic speeches or who write high-toned books, wandering through fields of ethereal economics and confusing everyone. These four are tho ones who do the real thinking for the New Deal, also the work. If anyone knows the answers thev do.

Their identities cannot be disclosed for obvious reasons, but the following represents their balanced viewpoint, expressed with the sincerity which confidence guarantees. The fundamental idea is to attain an indefinite higher price level, equal to tho level under which existing debts were incurred. The precise point is unknown, but the administration believes prices are still too low. Roughly, prices now are at 80. and about 100 is sought. The goal cannot be fixed more definitely because the maturity of the indebtedness and its original dollar value are not exactly computable. Nor is it accurate to say they want a 25 per cent increase in all prices above existing levels. Some existing prices are almost high enough (building materials, foodstuffs). Some are too low (rubber, shoes, zinc, tics). To state it technically, what they really want is an equalised level restoring the 1020, 1028 and 1020 balance between production and consumption. No Plans for Inflation. Mr. Roosevelt does not intend to pay off the debt. lie will let his successors do it. lie has no plans for monetary inflation to pay it. If inflation comes it will be accidental.

Hio unannounced plan calls for three methods of payment. First, with the net recoverable assets on Government advances (about £080,000,000). This money has been loaned out by the Governmeift. It will be applied to the debt Inter when repaid. Secondly, he will use the £400,000,000 of gold profit which he has not vet used. Together, these two items will pay übout five billion dollars, which is only a small part.

The rest will be fiaid by a new gradual tax programme. This may have to begin before Mr. Roosevelt retires. The chances arc he will have to start it within the next three years. The process of retiring the debt will require perhaps 20 years.

The unofficial ceiling of the debt is £10,000,000,000. There is no official ceiling. Publ'slied plans coll for a top limit of £0.800.000.000 at .Tune 30. 1030. It is bound to go higher after that. The £10.000.000 limit implies that t lie president can boost it twice again as much as he has so far, without running into trouble.—N.A.N.A.