CONFIDENCE SHAKEN

Evening Star, Issue 22806, 15 November 1937, Page 12

CONFIDENCE SHAKEN

AMERICA'S RECOVERY INSECURE SPECIAL SESSHHi OF CONGRESS TO BE HELD FATE OF PRESIDENT AT STAKE Press Association—By Telegraph—Copyright WASHINGTON, November 12. President Roosevelt confirmed the report that one of the most important points in bis business rejuvenation programme would be legislation to encourage a large building boom. Unique features will be an increase in the permissible Government loans to private persons from 20.000 to 200.000 dollars per structure, reduction of interest rates, and large scale mass buiding.

A special session of the Congress will be convened on Monday, not only in an atmosphere reminiscent of March, 1933, the depth of the depression, but with the added aspect of the personal fate of President Roosevelt very much at stake. If the President wishes reelection in 1040 —and it has now become increasingly evident that he is likely to seek a third term—then what the Congress does will have a very great effect' thereon. There; is no longer any concealing the fact that recovery in America was apparently as insecure as a house on stilts, and whereas, in the words of one observer, “ to manage a slow and orderly reduction in the heights of our stilts ought nof to be difficult,” the situation is infinitely more serious than Americans are apparently willing to admit themselves. PROPOSED MEASURES. President Roosevelt spent the weekend writing a long message to the Congress setting out proposals which, in his opinion, are necessary to rectify the condition, but so many conflicting forces seem to be at work that it may he questioned whether even, a docile Congress adopting unquestioningly his entire programme would produce a solution. Measures which President Roosevelt will apparently ask from the Congress include farm relief arising from large crops, a Wages and Hours Bill, a national land conservation scheme, governmental bureau reform, strengthening the antitrust laws, a huge housing campaign in order to stimulate business and ship subsidies. President Roosevelt is apparently still taken up with the necessity of long-range planning and undertakings, hut he may face a runaway Congress. From a wide variety of sources demands are being made that something must be done immediately to reassure buinesss, re-establish confidence, and reduce taxes,* notably on undistributed profits and capital stocks.

Mr Morganthau’s assurances concerning a reduction of expenditures and the balancing of the Budget are taken in some quarters as an indication that President Roosevelt is now seeing the wisdom of changing his tactics. Mr Walter Lippman, the noted publicist, said: “ There is good reason to believe that President Roosevelt is no longer acting on the assumption that his electoral majority gave him a mandate to execute his personal programme.” Mr Lippman continued: “We may look forward now tp something much better than a vindictive, destructive, and indecisive quarrel between Conservatives and Reformers.” GOVERNMENT ACTION DEMANDED. The National Republican Congressional Committee to-night issued a statement demanding that a special session should devote itself exclusively to immediate business amelioration. Democratic Congressmen, with an eye to the Congressional elections of 1938, also widely urge that the Government should abandon reform, relax the reins on private initiative, and give business and industry the opportunity and incentive to expand. However, it is far from certain that President Roosevelt has abandoned his long-range programme. His addresses on his recent western trip indicate clearly that he is prepared to make few basic concessions to the so-called economic royalists, and that he hopes to end the vindictive, destructive, and indecisive quarrel. Conservatives and Reformers probably will be disappointed because the minor tax reform and other amelioratives may be insufficient to cure a sudden, serious economic illness. BUSINESS MEN PERTURBED. Generally high prices to consumers for commodities, plus grave shortages of meat and other staples, heavy recessions in the steel and other large industries, the seasonal merchandise fac-* tories’ output, which has shrunk suddenly to the lowest point for years, the large-scale lay-off of workers in many basic industries, extremely high taxation which must remain high due to the necessity of meeting continued distress relief, and the sharp distrust by foreign business of American conditions are factors seriously affecting the foreign trade, and a deep psychological lag has overtaken the minds of business men. All these influences may compel President Roosevelt, under pressure from Western and Southern Liberal groups, to reintensify the New Deal fight. A crisis in President Roosevelt’s career may occur before the end of the year.