U.S. ECONOMY

Evening Post, Volume CXXXIX, Issue 49, 27 February 1945, Page 4

U.S. ECONOMY

FUTURE POLICY

A LIVELY DEBATE

By George Waraecke (Former Australian Journalist)

WASHINGTON, Feb. 16. A national debate concerned with America's entire economic future is taking place in the United States. At the heart of the discussions is an issue that has become more and more prominent in this country ever since President Roosevelt used Federal powers to combat the depression in 1933. As popularly debated it is a question of "private enterprise" versus "Government leadership" in economic affairs. The high light of the debate is opposition in Congress to the President's decision to remove Jesse Jones, veteran business man, from control of the Government's numerous business enterprises and to replace him with Henry Wallace, former Vice-President and outspoken advocate of the rights of the "common man." The three historic pre-war debates in the United States were about amendment of the Neutrality Act of 1939, passage of the Compulsory Military Service Act of 1940, and enactment of Lend-Lease in 1941. There was no I direct debate on the nation's final enti'y into the war, as Japan's surprise attack at Pearl Harbour created unanimous support for a campaign to the finish against all Axis aggressors. j THE FUTURE STRUCTURE. In giving the Wallace-Jones conflict prominence equal to or exceeding prewar debates, many newspapers take the view that the basic post-war political, economic, and social structure of the United States is now being decided. The "New York Times" said editorially that the head of the Government's business enterprises "will have a more important role than any other member of the Government, the President alone excepted, in directing the tremendous post-war task of shifting wartime control of American economy to peacetime restoration of free enterprise." The Government owns three-quarters of the plants and other facilities which are turning out America's tremendous war supplies. As a result of this vast investment of public money, America is today producing nearly twice as much as she had ever produced before the war. Mr. Wallace believes the United States should make history by converting this huge war capacity to civilian purposes, thereby providing the same full employment in peacetime as is now given by manpower demands of war industries and the Army and Navy. "I know, and you know," he told the Committee of Congress which in~ vestigated his qualifications, "that if we can produce a large flow of ships, guns, planes, and tanks we can also produce an abundance of houses, cars, and clothing, and provide education, recreation, and the other good things of life for all Americans." "UNTRIED" IDEAS. Mr. Jones, in giving evidence to show why Wallace should not succeed him as head of the Reconstruction Finance Corporation, the biggest Federal body involved, declared that "certainly the RFC should not be placed under the supervision of any man willing to jeopardise the country's future with untried ideas and idealistic schemes." It is around the phrase "untried ideas and idealistic schemes" that the most heated debate rages. Wallace's own reply to Jones is equally significant: "The real issue is whether or not the powers of the RFC and its giant subsidiaries are to be used to help 'little business' and to help carry out the President's commitment of sixty million jobs." . The United States Reconstruction Finance Corporation was originally established by President Herbert Hoover to bolster business during the depression. Its functions were greatly expanded by President Roosevelt in carrying out the "New Deal" programme, which helped restore American prosperity and provided jobs for millions of unemployed. Many conservative bankers and business men have denounced the New Deal lending and spending policies as "socialistic" and a departure from American tradition. Nevertheless, the RFC burgeoned during the pre-war period and much more so since the war. to become today the largest individual financial enterprise in the world. The conservative view is that wartime enterprises* of the Reconstruction Finance Corporation should be liquidated by the United States Government in order to allow free scope for private enterprise after the war. Jones himself has testified to the magnitude of Government business undertakings. "The RFC and its subsidiaries," he said, "conduct the most gigantic business enterprise or series of business enterprises that the world has ever seen." Again he asserted: "It is bigger than General Motors, General Electric. Montgomery Ward, and everything else put together." MAGNITUDE OF JOB. Wartime ventures of RFC are so numerous that a typed list of them took three-quarters of an hour to read at committee hearings. Plants include steel, magnesium, aluminium, chemical, and synthetic rubber. Nearly a thousand plants are owned outright. Another 970 plants are partly owned. Some plants are operated by the Government, others are leased to private industry. To procure enough raw materials, the RFC has subsidised about 3400 mines that produce copper, lead, zinc, and other minerals. The magnitude of the job done by RFC is so great that the American public has no real conception of the part played by the Government in the war effort. An earlier Congressional investigation headed by Vice-President (then Senator) Harry S. Truman reported: "In order to provide the capacity to produce war goods in the volume desired by procurement agencies, the Government expanded approximately fifteen and a half billion dollars.' and industry expended approximately four and a half billion dollars."

The resolution to separate RFC control from the Department of Commerce was moved by Senator George, who made it quite clear that Congress consented to the Government's participation in industry in a big way only because of its confidence in Jesse Jones's business outlook. Senator George said: "I have been willing to give these agencies extensive! powers

only because I had confidence in the business experience and business judgment of Mr. Jones." ASSURING JOBS FOR ALL. Mr. Wallace replied to his opponents by stating that private companies alone might be unable to provide full employment in peacetime. To assure post-war jobs for everybody in accordance with the President's pledge, Wallace listed the following items, all of which require co-operation between the Government and private enterprise—Government aid to investors; trebled foreign trade; public • works when necessary; higher wages; fair farm prices; no unfair competition; restriction of monopolies; a broad socialsecurity programme; decent housing; better health services; better schools. On the question of private enterprise Mr. Wallace declared: "If we are going to have remunerative jobs for all, we must have expanded private industry capable of hiring millions more men." He proposed that the Government do its part in helping private enterprise expand the nation's peacetime industrial plants, just as the Government helped during the war. The paramount factor that should not be overlooked in the rest of the world is that many economic reforms developed in America over the past twelve years are accepted by a majority of both big political parties, thereby ensuring the basic stability of the national economy, although leaving wide roon/ for differences in the degree of application of Government [ measures^